ECHO.L Regulatory News (ECHO)

25 Apr 2008 07:01

Independent Resources PLC25 April 2008 Independent Resources plc ("Independent Resources", "IRG" or the "Company") Italian multi-energy group ERG becomes partner in Rivara project April 25, 2008: ERG Power & Gas SpA, a subsidiary of the Italian energy firm ERGSpA, will help develop AIM-quoted Independent Resources' underground gas storagefacility at Rivara in the Po Valley. Independent Resources has entered into a partnership agreement with ERG Power &Gas SpA ("ERG") to draw on the Italian Group's extensive experience as areliable operator in the energy sector and to help ensure that the Rivaraproject meets the high technical and environmental standards required. ERG willbecome a 15% equity shareholder and future customer of the company owning theRivara asset. ERG will invest €9.5 million (approximately £7.6 million) in cash into a newjoint venture company ("Newco") in exchange for the 15% equity interest. IRGwill transfer the Rivara asset to Newco in exchange for the 85% balance of theequity. The timing of the investment will be phased, with 25% paid upon, interalia, establishment of Newco and entry into a shareholders agreement reflectingthe terms and conditions of the partnership agreement. The balance will be drawnover time and applied to the costs of developing the Rivara asset. Thetransaction values IRG's 85% participation in Rivara at €53.8 million (£42.9million). The costs of developing Rivara will be met partially from the ERG investment andpartially from further funds injected by ERG and IRG pro-rata to their equityshare in Newco. ERG will receive preferential rights to use its part of Rivara'sfuture storage capacity. IRG is currently seeking environmental approvals ahead of the planneddevelopment of Rivara, a deeply buried fractured limestone structure ideallysuited to efficient gas storage thanks to the presence of an active aquifer thatprovides constant natural water drive. Rivara has a nameplate working gascapacity of 3.2 billion cubic metres and the ability to deliver in excess of 32million cubic metres of gas per day back into the Italian pipeline system. IRG is planning the Rivara development against a background of severe mid-wintergas supply disruptions in Italy, and has appointed the oilfield services groupSchlumberger to advise on and manage the subsurface development programme.Rivara is located next to the key convergence point between Italy's gastransmission network and trans-continental pipelines, further enhancing itslong-term strategic potential as a physical trading hub. IRG Executive Chairman Grayson Nash said: "We are delighted to have reached thisagreement with ERG Power & Gas. We share a common vision for this large andgrowing gas market and our skills and corporate profiles are particularlywell-matched. ERG's long-term commitment to build on its reputation as asuccessful operator will enhance this exciting project. Its track record andcredibility in Italy are superb, and the group's entrepreneurial spirit willallow us to go forward with confidence." ERG Power & Gas CEO, Raffaele Tognacca, said: "We are delighted by theagreement reached with Independent Resources, which allows our company toachieve a major step forward in implementing its growth strategy as regards thegas market." IRG was admitted to AIM in December 2005 and is pursuing an integrated andasset-backed gas trading business in Italy with midstream components in Italyand upstream components within Italy and in North Africa. The Company aims topursue this long-term strategy in the most environmentally-sustainable way, byincorporating from the outset the permanent geological sequestration of CO2emissions into its future commodity production and trading. IRG has focused ondeveloping both conventional oil and unconventional gas production, and buildinga profitable portfolio through wholly-owned initiatives and partnerships. Independent Resources was advised by Banca IMI, the investment bank of IntesaSanpaolo Group, and Ashurst, the international law firm. For further information contact: Stephen Staley, Managing Director, Independent Resources plc: 01332 865 253 07771 838 753 Allan Piper, First City Financial Public Relations: 020 7242 2666 David Smith, Deloitte Corporate Finance (Nomad) 020 7007 8177 This information is provided by RNS The company news service from the London Stock Exchange