INFA.L Regulatory News (INFA)

3 December 2013 For Immediate Release

InfraStrata plc

("InfraStrata" or the "Company")

Final results for the year ended 31 July 2013

InfraStrata plc (AIM:INFA), the independent petroleum exploration and gas storage company, is pleased to announce final results for the year ended 31 July 2013. 

Operational highlights

· Continued refocussing on exploration activities in Northern Ireland (licence PL1/10) and Dorset (licence P1918) whilst completing our programme to realise value from Islandmagee gas storage project in Northern Ireland.

· Drilling of two exploration wells and one gas storage well anticipated in 2014.

· Funding model continues to manage risk by attracting investment by quality partners - currently seeking to farm-out remaining share of exploration well costs.

· On PL1/10 a site for an exploration well has been selected and negotiations with landowners and process of obtaining necessary consents at an advanced stage.

· On P1918 Dorset County Council have resolved to grant planning permission for the California Quarry-1 exploration well subject to conditions in the normal course of business.

· Two new petroleum licences offered by UK Department of Energy and Climate Change in November 2013.

· At Islandmagee;

o Securing of land has been substantially completed and application for necessary marine and environmental consents submitted.

o Drilling of the fully funded gas storage well will proceed once delayed regulatory framework for the project has been confirmed.

o Secured EU 'Project of Common Interest' status and pre-qualification for HM Treasury's 'UK Guarantee Scheme'.

· Potential for Portland project gas pipeline to provide an export route for gas production from the Company's P1918 licence. The Company will continue to seek opportunities to realise value from historic investment in the project.

Financial highlights

· Gross exploration costs during the year of £392,195 of which the Company funded £146,128.

· BP Gas Marketing cumulative funding of Islandmagee gas storage project was £1,427,277 (£951,588 during financial year) and they will fund the forthcoming well.

· Administrative expenditure, including allocation to Islandmagee gas storage project, was £1,251,306 (2012: £1,198,237) stated before Portland gas storage lease costs and transaction legal fees of £750,774 (2012: £190,659).

· eCORP funding of Portland Gas Limited was £899,608 during the financial year offsetting Portland gas storage lease costs until the lease was terminated on 1 June 2013.

· Loss for the year of £1,642,760 (2012: loss of £19,727,362 which included net losses of £18,420,125 write-down of assets and assumption of control of joint venture relating to the Portland gas storage project).

· Cash and cash equivalents at 31 July 2013 of £774,745 (2012: £1,918,201).

· Post year end placing on 23 September 2013 raised £800,000 before expenses and provides adequate working capital in advance of completing farm-out of exploration well costs.

Commenting on the results and outlook, Andrew Hindle, CEO of InfraStrata plc said:

"During the past year significant progress has been made on all our projects and, having effectively managed a number of challenges to the programme on each of them, we now look forward to a busy 2014 during which we expect to see the drilling of two exploration wells and one gas storage well. The prospectivity of our exploration licences and the unique characteristics of the Islandmagee gas storage project continue to offer the potential for very significant upside in shareholder value which we are committed to securing in the shortest possible timeframe" 

For further information please contact:

InfraStrata plc

Andrew Hindle, Chief Executive Officer 020 8332 1200

Stewart McGarrity, Finance Director

Financial PR - Buchanan

Richard Darby/Gabriella Clinkard/Tom Hufton 020 7466 5000

Nominated Advisor and Broker - Arden Partners plc

Richard Day/Katelin Kennish 020 7614 5917

Notes to Editors:

Background on InfraStrata plc

InfraStrata is an independent petroleum exploration and gas storage company. The Company is focused on two areas in the UK, in Dorset, England and Antrim, Northern Ireland.

Further information is available on the Company's website www.infrastrata.co.uk.

In accordance with the AIM Rules - Note for Mining and Oil and Gas Companies, the information contained in this announcement has been reviewed and signed off by the Chief Executive Officer of InfraStrata plc Dr Andrew Hindle, a Chartered Geologist with over 25 years' experience.

CHAIRMAN'S STATEMENT

Last year I reported on your Company's successful transition from a single project gas storage development business to one with an increasing focus on oil and gas exploration. In 2013 our small and dedicated management team has made considerable progress further mitigating delivery risk associated with each of our three major projects - the exploration licences located in Country Antrim, Northern Ireland (PL1/10) and Dorset (P1918) plus the Islandmagee natural gas storage project in Northern Ireland. This has been achieved against a background of increasing public scrutiny and legislative regulation on-shore in the UK, which has had the inevitable consequence of creating some delay in bringing projects to maturity. Although the availability of new funding for oil and gas exploration on this scale has also been disappointing across the entire sector during this period I am pleased to report that continued shareholder support has enabled the company to weather the delays and remain well placed to face the coming year.

In Northern Ireland on licence PL1/10 we are at an advanced stage of securing the necessary consents and approvals to drill having earlier identified a suitable site for a first exploration well and engaged with the landowners. The prospectivity of this licence is very exciting indeed, offering the potential for very significant upside in shareholder value. We have made tremendous progress on the offshore Dorset licence P1918 where Dorset County Council resolved to grant planning permission for a first exploration well after year end. We plan to drill from an on-shore location at California Quarry to the offshore Purbeck Prospect. The licence is in an area where successful exploration has been carried out in the past and there is a proven petroleum source.

On both our exploration projects we have now reached a stage where we can be confident that subject to successful completion of funding arrangements we can look forward to drilling the wells during 2014. This may be later than we had originally anticipated but the opportunity to unlock significant shareholder value on each remains undiluted.

We have also progressed the Islandmagee natural gas storage project in Northern Ireland, funded by BP Gas Marketing since early 2012, with the intention of disposing of an interest in the project when a new developer to complete the construction has been identified. An issue that continues to hinder progress on this project is lack of confirmation of the cross-border regulatory regime within which the facility will operate. Once received this will trigger drilling of the first well and that in turn will move us towards the intended disposal of an interest in the project. In this context it was, however, extremely encouraging to see the project identified as being of significance in the broader European context when it was listed as a Project of Common Interest by the European Commission and was then prequalified for potential debt guarantee support under HM Treasury's UK Guarantee Scheme. These are both very significant elements in enhancing the attractiveness of the project to potential investors.

Your Company's priorities remain focussed upon the delivery of value to shareholders on each of our three main projects in the short-term. Strategically, we are also turning our minds to the future and the longevity of our business. The abilities and experience of our management team are unique and we believe they offer a real advantage through the selection and assessment of exploration opportunities and the hands-on management of the pre-drilling project programme to bring a project to maturity far quicker than would otherwise be the case. New business would ultimately require a reinforced management team and reliable source of funding to pursue new opportunities. We will keep shareholders informed as our thoughts develop on this subject and in the meantime the Board is grateful for their forbearance and continued support.

I would like to conclude by offering my thanks to Andrew Hindle and the rest of the executive team for their tremendous effort and achievements during the year. I would also like to record my thanks to Craig Gouws who was CFO of the Company from inception in 2007 until his departure in September 2013 to live overseas. Stewart McGarrity was appointed Finance Director in September 2013 and has been very quick to engage with Andrew Hindle and the team in driving our programme of work forward.

Ken Ratcliff,

Non-executive Chairman

2 December 2013

CHIEF EXECUTIVE'S OPERATING REVIEW

InfraStrata has continued to refocus its activities on oil and gas exploration in its two operated licences within the United Kingdom, County Antrim in Northern Ireland and Dorset in Southern England. The Group also has non-operated interests in exploration licences in Hampshire, Dorset and East Midlands England through associated companies Corfe Energy Limited ("Corfe") and Brigantes Energy Limited ("Brigantes").

The Company has also been engaged in the development of a gas storage project in County Antrim in Northern Ireland with a view to realising fair value for our interest in the project as soon as practicable.

InfraStrata works alongside strong and experienced partners in all projects and the Company's small management team is supported by a highly effective network of service delivery specialists.

During the past year significant progress has been made on all our projects and, having effectively managed a number of challenges to the programme on each of them, we now look forward to a busy 2014 during which we expect to see the drilling of two exploration wells and one gas storage well. A detailed review of the Group's business is provided below.  

OIL AND GAS EXPLORATION

County Antrim - PL1/10

Petroleum Licence PL1/10 (Central Larne - Lough Neagh Basin) was awarded in March 2011 by the Northern Ireland Department of Enterprise, Trade and Investment ("DETI"). The five year licence covers an area of 663 square kilometres over what the Company believes is a very prospective largely unexplored sedimentary basin.

Following the sale of a further 5% interest in the licence to our associated company Brigantes (40% owned by InfraStrata) announced in March 2013, InfraStrata has a direct operated interest of 25% and is now carried in respect of all but 10% of the costs to drill the first exploration well and is seeking a further farm-out to complete the funding of the well costs. Brigantes now holds a 45% interest in the licence - resulting in an overall net licence interest for InfraStrata of 43%. The other partners in the licence are Cairn Energy (20%) and Terrain Energy (10%).

The Larne-Lough Neagh Basin is a SW-NE trending Permo-Triassic Basin, overlying an older Carboniferous sequence. The basin has historically received little attention from explorers, primarily due to the thick development of Palaeocene Antrim Flood Basalts overlying the target horizons. This has been a barrier to effective seismic imaging but with the recent technological advances in data processing, exploration in the basin is now entering an exciting phase.

Only one exploration well has historically been drilled in the centre of the basin covered by the PL1/10 licence, back in 1971, before any seismic data had been acquired. Drilling in the area over the past 40 years has largely been for coal exploration and geothermal feasibility. However this has confirmed the development of good sandstone reservoirs and seals within the thick Permo-Triassic sedimentary section. Oil-prone source rocks have been identified on the margins of the Basin within the Carboniferous section, and gas-prone coals have also been mined to the west in the Coalisland area, and along the North Antrim coast. The basin is also along trend from the Midland Valley of Scotland where oil and gas prone rocks of Carboniferous age are well known. It is anticipated that in the more deeply buried areas of the Larne-Lough Neagh Basin the Carboniferous will have been buried sufficiently to generate oil and possibly also gas.

Substantial progress has been made in the de-risking of the Larne-Lough Neagh Basin play following two seismic surveys undertaken by InfraStrata in 2011 and 2012 acquiring over 400km of new 2D seismic data which revealed a basin very similar in structural style to the prolific East Irish Sea Basin with a large number of undrilled structures. In March 2013, the Company published a prospectivity review of the PL1/10 licence prepared by project geoscience Merlin Energy Resources Limited. Merlin has identified combined un-risked P50 prospective resources on the PL1/10 licence in the Triassic and Permian sandstone reservoir intervals of over 450 million barrels of oil ("mmbo") (net InfraStrata over 194 mmbo at 43%).

During the year a suitable site from which to drill the well was selected and substantial and satisfactory progress made in both negotiations with the landowner and the progression of the necessary consents. The un-risked P50 prospective resources targeted by the first exploration well have been estimated by the joint venture at 40 mmbo (net InfraStrata 17 mmbo at 43%), an increase on the previous estimate of 25 mmbo following further detailed mapping of the seismic data. Preparation for procurement of the drilling activities is progressing with the final programme dependant on completion of consents and farm out activities.

The PL1/10 partners submitted an application for an adjacent prospective area in the 27th UK Offshore Round in 2012 and the licence was offered by the UK Department of Energy and Climate Change ("DECC") on 29 November 2013. Un-risked P50 prospective resources of 150 mmbo have been identified within the application area.

Dorset - P1918

Petroleum licence P1918 comprises Blocks 97/14, 97/15 and 98/11 and was awarded in February 2012 by DECC. Following the farm-out of a further 8% interest in the licence to our associated company Corfe (40% owned by InfraStrata) in August 2012, InfraStrata now has a direct operated 70% interest and Corfe holds a 20% interest in the licence - resulting in an overall net licence interest for InfraStrata of 78%. This is subject to a net profits interest equivalent to 3.75% on the whole licence in favour of eCORP Oil & Gas UK Limited ("eCORP"). The other partners in the licence are Cairn Energy with a 10% interest. The Company is seeking a further farm-out to complete the funding of the costs of the first exploration well.

Within and immediately adjacent to the licence area there are a number of active oil and gas seeps. A total of seven wells have previously been drilled within the licence area, including the first UK offshore well in 1963 on Lulworth Banks in Block 97/14. Six of these wells encountered oil or gas shows and three flowed oil or gas on test. The advances in technology and higher petroleum prices mean that we are hopeful of being able to develop one or more of the existing discoveries profitably as a base from which to appraise the full potential of the area. The prospective resources on the licence have been estimated by the joint venture at 93 mmbo (net InfraStrata 73 mmbo at 78%).

The focus for a first exploration well is the offshore extension of the Purbeck Prospect, an anticline in the east of the licence, up dip of the onshore well Southard Quarry-1, which encountered oil and gas shows within Jurassic and Triassic intervals. Only the Sherwood was tested but failed to flow. The Purbeck Prospect immediately overlies the kitchen area for the giant Wytch Farm oilfield. This large structure lies largely within Licence P1918. During the year we reprocessed 156km of onshore and offshore 2D data to further define the sub-surface target location. In June 2013, ocean divers collected gas samples from an active gas seep above the Purbeck Prospect. Isotopic analysis of the gas indicates that the gas was generated at the base of the oil window as expected.

Following two public information events held in June 2013, a planning application for drilling and testing of the California Quarry-1 well was submitted to Dorset County Council ("DCC") in July 2013 and DCC resolved to grant planning permission for the well on 29 November 2013, subject to conditions in the normal course of business.

The well, to be drilled from onshore to offshore within licence P1918 will target prospective resources, within licence, estimated by the joint venture at 10 million barrels of oil equivalent (mmboe) (net InfraStrata 8 mmboe at 78%). The planning conditions preclude construction or drilling activities between March and September and consequently we currently anticipate the well will be drilled in late 2014.

The P1918 partners submitted an application for adjacent prospective areas in the 27th UK Offshore Round in 2012 and the licence was offered by DECC on 29 November 2013.

Non-operated exploration interests

The Company has non-operator exploration interests via its shareholdings in associated companies Corfe and Brigantes as follows:

· PEDL201 (Leicestershire) - Corfe 12.5% interest (net InfraStrata 5%) with planning permission for a first well (Burton on the Wolds-1) expected to be drilled during 2014 and targeting prospective resources estimated by the joint venture of 4 mmbo (net InfraStrata 0.2 mmbo)

· PEDL237/PL090 (Dorset) - Corfe 12.5% interest (net InfraStrata 5%) expecting to complete interpretation of surveys in 2014

· PEDL 070 (Hampshire) - Corfe and Brigantes combined 10% (net InfraStrata 4%). Avington field currently producing around 70 barrels of oil per day.

GAS STORAGE

Islandmagee project - County Antrim

Islandmagee Storage Limited ("IMSL") is an independent Northern Ireland registered company and is a joint venture between a wholly-owned subsidiary of InfraStrata plc (65% shareholder) and Moyle Energy Investments Limited, part of the Mutual Energy group of companies (35% shareholder). During 2012, IMSL was granted planning permission for a natural gas storage facility at Islandmagee, County Antrim and a Gas Storage Licence from the Utility Regulator.

IMSL plans to create seven caverns, capable of storing up to a total of 500 million cubic metres of gas in Permian salt beds approximately 1,500 metres beneath Larne Lough. The project has unique advantages including being immediately adjacent to gas and electrical infrastructure, the salt being at an optimum depth for gas storage and close to a water source for solution mining of the salt to create the caverns. The project is also designed to access the extrinsic value of the gas storage market in the UK and Ireland by being able to respond to short-term volatility.

The proposed gas storage facility will make a significant contribution to the security of gas supplies for the whole island of Ireland. Ireland is dependent on gas for around 65% of its electricity generation with 90% of the island's gas imported via a single pipeline from Scotland. The facility, when complete, will store enough gas to satisfy Northern Ireland's demand for around 60 days. Northern Ireland has a target to generate 40% of electricity from renewables by 2020 - this will primarily be achieved through wind-powered generation. A shift to renewable energy sources is likely to result in an increasing reliance on gas-fired power stations to support the inherently intermittent supply from wind. Rapid cycle gas storage facilities, such as this planned project, will be important to respond to the increasingly fluctuating demands for gas to fuel this electricity generation requirement.

The estimated timescale for the project is approximately seven years, with the first cavern becoming operational after five years. The drilling of a well is planned, subject to confirmation on the regulatory framework for the project, to collect samples of the Permian salt to provide the final design parameters for the caverns.

In January 2012 IMSL entered into agreements with BP Gas Marketing Limited ("BPGM") for the appraisal of the project and the option for BPGM to acquire a 50.495% equity interest in IMSL. Under the terms of a Joint Appraisal Agreement, BPGM is funding the activities necessary to develop the project up to the point where a decision can be made on whether to proceed with its detailed engineering design.

During 2013, work was substantially completed on securing the land rights necessary for the construction and operation of the facility and applications were submitted for the necessary marine and associated environmental licences to the Department of Environment and Northern Ireland Environment Agency. The well site construction for the Islandmagee-1 gas storage well commenced in May 2013 and was completed shortly after the financial year end. IMSL had received £1,427,277 from BPGM at 31st July 2013 under the Joint Appraisal Agreement.

The next step is to drill the well, which will be fully funded by BPGM and will provide the core samples of Permian salt to confirm the depth, thickness, rock mechanical properties and composition of the salt to finalise the design of the caverns and will complete the projects credentials and facilitate the realisation of InfraStrata's interest in IMSL. Procurement of the well will commence once the delayed regulatory framework for the project has been confirmed. We now expect the well to be drilled in mid-2014.

On 16 October 2013, we were delighted to announce that the importance of the project had been acknowledged by the European Commission which had given it Project of Common Interest ("PCI") status requiring Member States to give priority and quick passage in the permitting process and cooperation in its development. It also means the project is eligible to apply for significant financial support from the European Union in the form of direct grant or other forms of financial backing from institutions such as the European Investment Bank. The project has also been 'pre-qualified' (deemed eligible for support) under the Treasury's 'UK Guarantee Scheme' which is making cover of up to £40 billion available to ensure that key infrastructural projects across all sectors in the UK, those that really ought to go ahead, are not held back due to any difficulty in obtaining finance. Under the scheme the Government will guarantee a certain proportion of the capital required to fund projects, so that banks can lend more freely in today's risk-averse lending environment. Both of these developments give us further confidence that the full development of the project can commence within reasonably short timescales.

The assets and liabilities of IMSL have been classified as held for sale in the Group's balance sheet since inception of the Joint Appraisal Agreement in January 2012, in firm expectation that BPGM will exercise the option to acquire a controlling interest in IMSL and at that point InfraStrata will seek the disposal of an interest in the project to a new partner who will take the full development of the project forward.

Portland project - Dorset

Last year we reported that the poor seasonal gas storage market, a different market to that being targeted by the Islandmagee project, meant that it is unlikely that the Portland gas storage project will be realised in the near term and we fully impaired our historical investment in the project, with the exception of data obtained from seismic surveys and drilling which are key for the development of the petroleum exploration play.

With the decision not to pursue the gas storage project, the Portland site leases were terminated at their break date on 1 June 2013. The Company, through its subsidiary, Portland Gas Transportation Limited, will continue to renew the gas pipeline construction authorisation with DECC as a potential means of exporting future gas production under the P1918 licence. The Company will continue to examine this and other opportunities which may arise to realize some value from our historic investment in the project.

In June 2012 we restructured the funding obligations of eCORP, formerly joint venture partners in the Portland project, into an obligation to provide a further US$2.88 million through monthly subscriptions of US$120,000 for preference shares in our subsidiary Portland Gas Limited.In return eCORP will earn a 7.5% share of the future profits from the Portland project. Amounts received from eCORP during the financial year totalled US$1,440,000 and the balance due of US$1,200,000 is included on the Group balance sheet at 31 July 2013.

FUNDING

InfraStrata continues to have no debt and to operate a funding model for our projects which manages risk for our shareholders by attracting investment by quality partners and thereby minimising our own commitments to pay the costs of exploration and other project development costs.

The sale of a 5% interest in licence PL1/10 to Brigantes (40% owned by InfraStrata) announced in March 2013 raised £150,000, together with a commitment by Brigantes to carry 5% of InfraStrata's share of the first exploration well. Gross aggregate expenditure during the year on the PL1/10 and P1918 licences was £392,195 of which InfraStrata's share was £146,128. We are currently in the process of seeking further partners to fund the balance of InfraStrata's share of the costs of drilling the first exploration wells on each of these licences.

The Group's associated companies, Corfe and Brigantes are self-funded and therefore we have no commitments to fund exploration costs on our non-operated exploration interests. InfraStrata director William Colvin represents the Company's interests on the Board of each of these associated companies.

BPGM fully funded the expenditure on the Islandmagee gas storage project amounting to £951,588 during the financial year under the terms of the Joint Appraisal Agreement and are expected to continue funding the development of the project through the drilling of the well.

The process of securing new partners for the Islandmagee gas storage project, including a lead developer for the main construction of the project, has been initiated with expressions of interest received from a number of potential investors. The next focused approach to potential new partners will be following the drilling of the first well in 2014. Securing a new partner should present the opportunity to realise cash for all or part of InfraStrata's 65% shareholding in IMSL. Securing a new partner and commencement of construction would also trigger the payment to InfraStrata of approximately £1.3m in settlement of partner Mutual Energy's share of the shareholder's loan account to IMSL.

As explained above, eCORP continues to subscribe for preference shares in our subsidiary Portland Gas Limited. Aggregate receipts during the financial year were £899,608 (US$1,440,000). This has offset the payments made in respect of the Portland site leases totalling £750,000 during the financial year. These leases were terminated at their break date on 1 June 2013. 

Post year end, on 23 September 2013, the Company completed the Placing of 8,000,000 new ordinary shares at 10p per share and raised £800,000 before expenses. The proceeds of the Placing have improved the Company's balance sheet and enable the Company to be flexible about the funding of exploration costs in advance of the completion of the farm-out of exploration well costs. Any balance of the Placing proceeds will be used for contingency and general working capital purposes.

OUTLOOK

The Group's activities during the year ended 31 July 2013 and since the year end have been focused on the activities which de-risk our three main projects including the delivery of the various agreements with third parties, obtaining consents and approvals and the continuing assessment and refinement of the prospectivity within our exploration licence areas.

Management's focus going into 2014 now switches to the completion of the farmout processes on PL1/10 and P1918 and the procurement and drilling of exploration wells on each these two exploration licences as well as the well at the Islandmagee gas storage project. Each of our main projects has the potential to lead to a steep change in valuation and future opportunities. 

Andrew Hindle,

Chief Executive Officer

2 December 2013

Significant non-cash transactions

There were no significant non-cash transactions in the year. The significant non-cash transaction for the year ended 31 July 2012 was the assumption of control over the previous joint venture.

Cash flows arising from discontinued activities

Cash flows arising from discontinued operations are analysed in note 5.

InfraStrata plc

Notes to the financial statements

for the year ended 31 July 2013

1. Basis of preparation

The financial information set out in this announcement does not comprise the Company's statutory accounts for the years ended 31 July 2013 or 31 July 2012. The financial information has been extracted from the statutory accounts of the Company for the years ended 31 July 2013 and 31 July 2012.

The auditor, Nexia Smith & Williamson, has reported on the statutory accounts for the years ended 31 July 2013 and 2012; the reports were unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006. The statutory accounts for the year ended 31 July 2012 have been delivered to the Register of Companies; those for the year ended 31 July 2013 were approved by the Board on 2 December 2013 and will be delivered to the Registrar of Companies following the Company's Annual General Meeting. InfraStrata plc adopted International Financial Reporting Standards (IFRS) as adopted by the European Union effective in July 2013, as the basis for preparation of its financial statements. The financial information has been prepared under the historical cost convention as modified by the revaluation of certain financial assets. There was no change to the Group's accounting policies for the year ended 31 July 2013 as compared to those published in the statutory accounts for the year ended 31 July 2012.

The Directors have prepared the financial statements on the going concern basis which assumes that the Group will continue in operational existence for the foreseeable future.

The Islandmagee gas storage project, in which InfraStrata plc currently holds a 65% interest, is funded by BPGM. Under the terms of a Joint Appraisal Agreement, BPGM agreed to fund the activities necessary to develop the project, including the drilling of the first well, up to the point where a decision can be made on whether to proceed with its detailed engineering design. Subsequent to this decision, it is expected that BPGM will exercise its option to acquire 50.495% of Islandmagee Storage Limited leaving InfraStrata with a 32.18% holding. The directors believe that a further disposal of an interest in Islandmagee Storage Limited is the best way of maximising shareholder value by allowing an entity other than InfraStrata plc to develop this project. It is expected that such a disposal will provide working capital for the Group and will transfer responsibility for funding future development of the Islandmagee gas storage project to the new shareholder.

The Group generally seeks to farm-out the costs of exploration on its directly operated licences to manage risk and minimise cash requirements. The Group is currently seeking to farmout its current paying interests on exploration licences PL1/10 and P1918 prior to commitment to drilling exploration wells.

On 1 June 2012, eCORP agreed to subscribe for US$2.88 million of Portland Gas Limited preference shares over the following two years. The funds received to date have enabled the Company to settle existing commitments including lease payments in respect of land at Portland.

On the 23 September 2013 the Company issued 8,000,000 new ordinary shares of 10 pence each at 10 pence per share to institutional and other shareholders and raised £800,000 before costs. The proceeds of the Placing have improved the Company's balance sheet and enable the Company to be flexible about the funding of exploration costs in advance of the completion of the farm-out of exploration well costs.

After making inquiries and considering all the relevant factors in relation to the Group, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

The Group has 40% interests (2012: 40%) in both of Corfe Energy Limited and Brigantes Energy Limited which are involved in the hydrocarbon exploration. The associates are private companies, incorporated in England and Wales and are not listed on any public exchanges.

3. Investments (continued)

The following table summarises the Group's share of the assets and liabilities of each of these associates as recorded in each associates' audited financial statements made up to 31 July 2013 and after making adjustments to align the accounting policies of the associates with those of the Group:

Brigantes Energy Limited

At 31 July 2013 BPGM has paid an amount of £1,427,277 to Islandmagee Storage Limited in relation to their option to acquire an interest in that Company and this amount is classified as a Non-controlling interest in the Group's balance sheet. Should BPGM exercise its option this amount will form part of the consideration for the equity issued to BPGM.