1 May 2015 07:00
1 May 2015 For immediate release
InfraStrata plc
("InfraStrata" or the "Company")
Convertible Loan Facility Agreement signed with Baron Oil Plc
The Board of InfraStrata plc (AIM:INFA), the independent petroleum exploration and gas storage company, is pleased to announce that it has signed an Convertible Loan Facility Agreement ("Agreement") with Baron Oil Plc ("Baron") with respect to the Islandmagee gas storage project in Northern Ireland.
Under the terms of the Agreement, Baron is providing a loan for €1.8 million to InfraStrata. These funds will be used as working capital to bridge the receipt of the European Commission grant, 70% of which (€1.8 million) will be received on completion of the 2015 work programme. The programme includes the drilling of the Islandmagee-1 well, expected to commence drilling in May 2015. The loan is subject to an interest rate of 8% of the funds drawn down and is repayable by 1 May 2016. Baron has the right to extend the loan period until 31 December 2016.
Baron has an accompanying option to convert the balance into an equity participation of 15% of the share capital in subsidiary Islandmagee Storage Limited ("IMSL"). IMSL is the developer of the 500 million cubic metre natural gas storage project on Islandmagee. Should the option be exercised, the equity would be provided pro-rata by InfraStrata and its project partner, Moyle Energy Investments Limited ("Moyle") which would give rise to a revised participation in the Islandmagee Storage Project as follows:
InfraStrata 55.25%
Moyle 29.75%
Baron 15.00%
In addition, InfraStrata and Baron have commenced discussions on a possible participation by Baron in the forthcoming Woodburn Forest-1 well in Petroleum Licence PL1/10 in Northern Ireland.
Commenting on the Agreement, Andrew Hindle, CEO of InfraStrata said:
We are delighted to be working with Baron Oil to unlock the potential of the Islandmagee gas storage project. Baron is facilitating the development of a key piece of infrastructure for Northern Ireland, with strategic importance to the wider island of Ireland and Great Britain. The grant agreement with the European Commission has now been signed and we are eagerly anticipating the drilling of the Islandmagee-1 well to obtain cores of the Permian salt very shortly, the realisation of many years work by a dedicated team.
For further information please contact:
InfraStrata plc
Andrew Hindle, Chief Executive Officer 020 8332 1200
Stewart McGarrity, Finance Director
Financial PR - Buchanan
Richard Darby/ Anna Michniewicz 020 7466 5000
Nominated Advisor and Joint Broker - Arden Partners plc
Chris Hardie/ Michael McNeilly 020 7614 5917
Joint Broker - VSA Capital Limited
Andrew Raca/ Richard Buckle 020 3005 5004
Notes to Editors:
Background on InfraStrata plc
InfraStrata is an independent petroleum exploration and gas storage company focused on the UK and Ireland.
Further information is available on the Company's website www.infrastrata.co.uk.
Background on the Islandmagee Storage Project
The Islandmagee gas storage project commenced in 2007 with the acquisition of 3D seismic data to image the Permian salt in the Larne Lough area. During 2012, planning permission was granted for the project and a gas storage licence was issued by the Utility Regulator. In October 2013, the gas storage project was granted a 'Project of Common Interest' ("PCI") status by the European Commission. PCI status means recognition by the European authorities that the Islandmagee gas storage project brings benefits not only to the Member State in which it is located, but to a much wider area. It confirms the importance of the project at a European level. PCI status also means that the project must be given priority and quick passage by relevant Member States in the permitting process, and cooperation in its development. Importantly, projects of common interest can apply for significant financial support from the European Commission - this may be in the form of direct grant, such as that secured for the salt core well, or other forms of financial backing from institutions such as the European Investment Bank. The next investment step in the project is the drilling of the data gathering well (Islandmagee-1) to approximately 1,670 metres depth to obtain cores of the salt sequence and subsequently undertake further engineering design work. Drilling engineers Acona UK were appointed in May 2014. The well planning and design have been completed. RPS Consulting Engineers in Belfast have undertaken the environmental support work. Following the drilling of the data gathering well and further engineering design work all key technical risks will have been addressed and the project will be deemed "construction ready" enabling a Final Investment Decision to be taken after that point.
Further information is available on the project company's website www.islandmageestorage.com.
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