LONDON (Alliance News) - InfraStrata PLC on Tuesday said its pretax loss was significantly wider in the last financial year due to a number of impairments, and said it is focused on monetising its interest in the Islandmagee gas storage project next year.
The oil and gas exploration company, which is focused on the gas storage project in Northern Ireland, said its pretax loss in the financial year ended July 31 swelled to GBP6.9 million from GBP1.4 million a year earlier.
That was after InfraStrata booked GBP2.5 million in impairments against its investments in Corfe Energy Ltd and Brigantes Energy Ltd, alongside a GBP3.6 million impairment against exploration and evaluation assets. A year ago, it didn't book any impairments against its investments or against its assets.
InfraStrata generates very little in revenue, but said it booked GBP414,106 in the period compared to only GBP17,764 a year earlier. That revenue was mainly derived from licensing its seismic data.
The year was one of change for the company after it decided to dispose of "substantially all" of its interests in its exploration assets. As part of that decision, InfraStrata has signed a deal to sell its stake in Corfe Energy and Brigantes Energy post-period end.
InfraStrata said it would retain its 10% stake in the PL1/10 licence which contains the Woodburn Forest-1 well.
Chief Executive Andrew Hindle said: "We are committed to the drilling of the Woodburn Forest-1 well in County Antrim and expect to have a 10% interest in the licence fully carried through the well providing potentially material upside for shareholders in the event of success. The divestment of our other exploration assets has provided clarity for InfraStrata shareholders with the future focus on Northern Ireland."
The decision to divest from most of its exploration assets was to allow the company to raise funds, minimise funding commitments, and so it could focus on the Islandmagee gas storage project, which it is now trying to monetise.
"The past year has seen great progress towards the monetisation of our 65% interest in the Islandmagee gas storage project but has also seen continued negative market sentiment towards investment in oil and gas exploration, none more so than for AIM-listed companies, and this is reflected in share prices and the challenges associated with raising new capital to invest in exploration," said Chairman Ken Ratcliff.
InfraStrata has drilled the Islandmagee-1 salt core well and addressed the technical risks at the project to allow the company to seek investors for the project. Fellow London-listed Baron Oil PLC provided InfraStrata with some bridging finance for the project and has earned an option to acquire a 15% stake in the project.
If Baron Oil converted that option, InfraStrata's stake would fall to 55.25% whilst partner Moyle would see its stake stay at 29.75%.
"The feasibility phase of the project has now addressed all key technical risks enabling us to move forward to seek the investors who will take it through detailed design and on to full construction," said the company.
The gas storage project is currently envisaged to need around GBP274.0 million in capital expenditure to progress.
InfraStrata shares were up 0.2% to 2.51 pence per share on Tuesday.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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