INFA.L Regulatory News (INFA)

8 December 2015 For Immediate Release

InfraStrata plc

("InfraStrata", the "Company" or together with its subsidiaries, the "Group")

Final results for the year ended 31 July 2015

InfraStrata plc (AIM:INFA), the independent petroleum exploration and gas storage company, is pleased to announce its final results for the year ended 31 July 2015.

Overview and highlights

Islandmagee Gas Storage Project - County Antrim

· Concluded a grant agreement with European Union's Connecting Europe Facility for €2.5million (£1.9m) being 50% of the cost of a £3.8 million salt core programme of work comprising the drilling of a well to obtain salt cores and subsequent testing and engineering work.

· Salt core programme was completed on time and within budget and reporting back to the European Commission is imminent.

· Feasibility phase of project has now addressed all key technical risks and InfraStrata will now progress the monetisation of the de-risked project in early 2016.

· European Union grant was available by virtue of the projects designation as a Project of Common Interest ("PCI") which was renewed for a further two years in November 2015 - the only gas storage project in NW Europe to have this designation. As a PCI the project benefits from accelerated permitting procedures, improved regulatory conditions and continued eligibility to apply for financial support from the European Union.

· InfraStrata retains a 65% interest in the project reducing to 55.25% should Baron Oil plc exercise their option to acquire a 15% interest in the project.

Oil & Gas Exploration

· Secured Consent to Drill for Woodburn Forest-1 well on PL1/10 in County Antrim. Design and procurement of the well is substantially complete in anticipation of drilling in H1 2016 following completion of funding arrangements.

· InfraStrata with partner Brigantes seeking to farm out a combined 45% interest in the licence to complete the 60% outstanding funding for the well.

Divestment of Exploration Assets

· In November 2015 disposed of substantially all of the Group's exploration interests, including shareholdings in associated companies Brigantes Energy Limited and Corfe Energy Limited to Corallian Energy Limited,

· Immediate cash receipt of £240,000 with a further £300,000 contingent upon the completion of the funding of the Woodburn Forest-1 well on licence PL1/10. Consideration also includes Net Profits Interest instruments in assets sold providing upside in the event of successful exploration but without a commitment to pay future exploration costs on the assets sold.

· InfraStrata expects to retain a 10% interest in the PL1/10 licence fully carried through the Woodburn Forest-1 well.

· Primary focus of InfraStrata's business going into 2016 is the Islandmagee Gas Storage project in County Antrim and the monetisation of our interest in the project.

Financial

· Loss for the year ended 31 July 2015, £6,106,070 (2014: loss £1,246,701) after making impairments of £6,072,785 to reflect the cash proceeds from the exploration asset divestments.

· No value ascribed to Net Profit Interests retained in exploration assets - but they provide upside in the event of exploration success.

· Cash cost of project management and company administration for the year ended 31 July 2015 £1,065,161 (2014: £1,126,482). Following further salary reduction and other cost savings annualised project management and company administration costs now running at less than £800,000, before any recoveries as licence operator.

· Capital costs of Islandmagee storage project during the year £3,663,514 funded by proceeds from £2.1million placing completed in February 2015 and a €2.5 million grant from the European Union.

· €1.8 million loan facility (£1 million drawn at 31 July 2015) from Baron Oil plc to bridge payment profile on European Union grant - convertible to 15% interest in Islandmagee Storage Limited.

· Cash and cash equivalents at 31 July 2015 £430,199 (2014: £1,648,955)

· Appointment of Allenby Capital Limited as Nominated Advisor and joint broker.

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

"The successful drilling of the Islandmagee salt core well and subsequent testing and design development is testament to our ability to deliver on time and within budget. With the European Union's Project of Common Interest designation renewed for a further two years we are now firmly focused on delivering the best outcome for our shareholders' investment in the project.

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 where we have built up strong stakeholder relationships over 9 years of operations on our projects in County Antrim."

A copy of the annual report for the year to 31 July 2015, which will include notice of the Company's Annual General Meeting to be held on 26 January 2015, will be posted to shareholders shortly and will be available on the Company's website, www.infrastrata.co.uk.

For further information please contact:

InfraStrata plc

Andrew Hindle, Chief Executive Officer 020 8332 1200

Stewart McGarrity, Finance Director

Anita Gardiner, Commercial Development Director

Nominated Adviser and Joint Broker - Allenby Capital Limited

Jeremy Porter / Alex Brearley 020 3328 5656

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.

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 Andrew Hindle BSc, MSc, PhD, a Chartered Geologist with 30 years' experience, a Fellow of the Geological Society of London, and a member of the American Association of Petroleum Geologists and the Petroleum Exploration Society of Great Britain.CHAIRMAN'S STATEMENT

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. The company has responded by embarking on a strategic review resulting in the disposal of the majority of our exploration assets whilst retaining an interest in future exploration success. As a result, the operations of InfraStrata going forward into 2016 are focused on the delivery of value to shareholders from our gas storage project at Islandmagee. 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.

At Islandmagee we have successfully completed the drilling of the Islandmagee-1 salt core well, subsequent salt testing and design development; all on time and within budget. The completion of this programme of work is testament to our small management team's ability to procure and operate a well successfully and effectively manage the relationships with the permitting and licencing agencies and the local community. The programme of work at a total cost of £3.8m was 50% funded by the European Union ("EU") Connecting Europe Facility with the balance provided by InfraStrata shareholders. Bridging finance for the programme was provided by our new partner Baron Oil plc who have an option to convert their loan into a 15% interest in the project.

The EU funding was available by virtue of the project's status as a Project of Common Interest ("PCI"). In November we were delighted to announce that the project's PCI status has been renewed for another two years until 2017. This is a major advantage for the project providing as it does support for permitting and continued access to funding through grants for further studies or financial contributions to the construction of the project. We will continue to pursue the advantages of the project's PCI status in a way which ensures the project remains funded and our shareholders' investment in it is secured.

The news in August 2015 that Larne Oil and Gas Limited was unable to meet its funding obligations in respect of licences PL1/10 and P2123 placed the Company in unexpected financial difficulties. This, coupled with continuing deterioration in the oil and gas investment market, culminated in our November announcement that we had entered into agreements with Corallian Energy Limited ("Corallian") to dispose of most of our exploration interests for £240,000 in cash plus retained Net Profits Interest ("NPI") instruments in each of the assets sold. A further £300,000 will be received if we achieve full funding of the Woodburn Forest-1 well to be drilled on licence PL1/10 in County Antrim in which it is expected InfraStrata will retain a 10% interest fully funded through the well. The Board believes these transactions provide absolute clarity regarding the Company's long stated strategy of not using its own cash resources to fund major exploration expenditure whilst in the process of monetising the gas storage project. No further investment is expected to be required by InfraStrata in the assets sold, but the Company retains an upside in the event of any successful exploration through the retained NPI instruments and the retained operated interest in licence PL1/10.

With respect to the Woodburn Forest-1 well our management team's efforts have resulted in a fully permitted and procured well which we hope to drill in H1 2016, again demonstrating our excellent working relationship with the relevant agencies in Northern Ireland. This project provides an excellent near term opportunity targeting significant and economically viable resources even with currently depressed oil prices.

The cash consideration from the Corallian transactions provides short term capital for our immediate working capital needs. However uncertainties remain including the timing and extent of the additional £300,000 element of the cash consideration from Corallian. The Company remains dependent upon direct investment in our projects and, where necessary and appropriate, will seek additional funds from existing and new shareholders both to meet working capital requirements and to progress the delivery of our projects. The Board have prepared the financial statements on the basis that such support will continue for the foreseeable future.

I'd like to thank again our small management team who continue to show the skill and dedication to take our projects forward in very difficult market conditions whilst implementing cost reduction which have resulted in our internal project management and company administration costs reducing to less than £800,000 on an annualised basis, a 35% reduction since October 2014. Your Board is now firmly focussed on securing best value from the Islandmagee gas storage project in 2016 and, as ever, I offer my thanks to shareholders for their continuing support in this endeavour.

Ken Ratcliff

Non-executive Chairman

7 December 2015

STRATEGY AND BUSINESS MODEL

Strategic review

During 2015 InfraStrata, like many small companies with oil and gas exploration activities, has faced a very difficult market in which to secure new funding for its exploration activities. This has been precipitated by poor market sentiment following the very significant fall in oil prices since the summer of 2014. For InfraStrata this was exacerbated by confirmation from Larne Oil & Gas Limited in August 2015 that they were unable to meet their funding obligations on the PL1/10 and P2123 licences in Northern Ireland.

With upcoming expenditure commitments in 2016 across the portfolio of exploration assets, the Board determined that the transfer of substantially all future commitments associated with the exploration assets in exchange for a cash consideration and a retained interest in the assets represented the best outcome for shareholders. This strategy means future expenditure on these assets will be funded by specialist investors and avoids dilution in the Islandmagee project for shareholders through equity fundraising for the purposes of exploration at a time of depressed share prices. The strategy of divesting the exploration assets in exchange for cash and a retained interest also enables the Company to focus on the development and monetisation of its gas storage project in 2016.

In February 2015 we raised £2.0 million from a placing which together with £0.4 million from a data licensing agreement provided us with enough cash to meet our approximately £1.9 million commitment to the capital costs of the Islandmagee salt core programme and to meet project management and other costs to the end of 2015. The disposal of our exploration assets will provide short term capital for our immediate working capital needs and allow InfraStrata to sustain and add value to the Islandmagee gas storage work programme in the near term, as the Company seeks to optimise the timing and nature by which value can be secured from the project for shareholders.

Divestment of exploration assets

On 16 November 2015, we announced that we had signed Sale & Purchase Agreements ("S&P Agreements") to sell substantially all of the Group's oil and gas exploration interests, including its interest in its two associates, to two newly formed special purpose vehicles Corallian Energy Limited ("Corallian") and its subsidiary Osmington Holdings Limited ("Osmington"). The initial disposal, covering the Group's UK oil and gas exploration interests and the two associates, Brigantes Energy Limited ("Brigantes") and Corfe Energy Limited ("Corfe") resulted in an immediate cash inflow of £240,000. The Group also retained a Net Profits Interest ("NPI") in the licences and the former associates. Following this disposal, the Group now has no exposure to any future exploration costs, including cost overruns, in these assets, but, through the NPIs, will participate in any future profits.

The second disposal is expected to complete in February 2016 and relates to the part disposal of the Group's Northern Ireland licences (the "NI Agreement"). This disposal is dependent on the Woodburn Forest-1 well being fully funded (see below). If this disposal completes, it will generate a cash inflow of £300,000. The Group is expected to retain a 10% interest in the PL1/10 licence for which it will be fully carried on the Woodburn Forest-1 well.

Following satisfactory completion of all the transactions above and in addition to the retained NPI instruments, InfraStrata's business will comprise its 65% interest in the Islandmagee gas storage project in Northern Ireland and a 10% interest in onshore licence PL1/10, fully carried through the Woodburn Forest-1 well. InfraStrata will remain as operator on PL1/10 and will be compensated accordingly. The cash proceeds from the transactions are being applied to the ongoing work programme on the Islandmagee gas storage project in preparation for monetisation during 2016, both on external costs and contributing to the Group's own project management costs incurred on progressing the Islandmagee work programme.

InfraStrata's business going forward

The main focus of InfraStrata's business will now be the Islandmagee Gas Storage Facility (currently 65% owned) where our work programme during 2015 has been to de-risk the project to the maximum extent possible through the completion of the feasibility study phase. We are now seeking to secure value for our shareholders through a monetisation of our interest in the project.

Our retained 10% interest in PL1/10 provides us with material upside in the event of a successful Woodburn Forest-1 well and completing the farmout process followed by efficient and economic drilling of the well in 2016 remains a priority, albeit with the overriding conditionality that all well costs are borne by partners. InfraStrata's NPI instruments in licence interests P1918, P2222 and P2235 together with its NPI interests in Brigantes and Corfe also provide upside in the underlying exploration activities in the event of successful exploration but without a commitment to pay exploration costs on the assets disposed of.

OPERATIONAL REVIEW - GAS STORAGE DEVELOPMENT

Islandmagee project - County Antrim

Outline

Islandmagee Storage Limited ("IMSL") is an independent Northern Ireland registered company and is a joint venture between a wholly-owned subsidiary of InfraStrata (currently 65% shareholder) and Moyle Energy Investments Limited ("Moyle"), part of the Mutual Energy group of companies (currently 35% shareholder).

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 1,400 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.

No other location on the island of Ireland is suitable for the development of salt cavern gas storage; Northern Ireland has a valuable geological asset which when developed for underground salt cavern gas storage will make a significant contribution towards security of gas supplies to the wider region, including the north and south of the island of Ireland and mainland Great Britain.

The global supply chain for gas is lengthening as the need for more flexible gas is growing. Rapid deliverability of gas supplies will become increasingly important to support the intermittent renewable power generation already deployed and planned across the island of Ireland and Great Britain. The increasing amount of wind generation in the system is putting significant strain on the gas infrastructure in Ireland with periods of peak demand rising year-on-year as gas-fired power stations respond to the great swings in output from the intermittent renewable power sources. The gas storage facility would help alleviate these infrastructure pressures and make a key contribution to policy objectives on renewable power - through its ability to rapidly inject and withdraw gas it can provide the short term flexibility needed to support the intermittent nature of wind generation.

Natural gas will also have a key role to play as a bridge to a zero carbon economy with more reliance being placed on gas to backup wind and other renewable sources as coal generation is closed. Increasingly storage will be required to provide fast delivery of gas to the system.

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. The estimated timescale for the project is approximately seven years, with the first cavern becoming operational after five years.

The strategic importance of the Islandmagee gas storage facility and the contribution it could deliver in terms of security of gas supplies and as a key enabler to meet policy objectives on renewable energy and CO2 reduction is reflected in the project being awarded Project of Common Interest ("PCI") status by the European Union. PCI status also means that the project benefits from accelerated permitting procedures and improved regulatory conditions making it more attractive to investors. In addition, a PCI can apply for significant financial support from the European Union's Connecting Europe Facility ("CEF"). A budget of €5.35 billion has been allocated under CEF for 2014-20 for PCI projects. Assistance may be in the form of direct grant or other forms of financial backing from institutions such as the European Investment Bank.

In November 2015 the status of the project as a PCI was reconfirmed with the adoption of the latest PCI list by the European Commission. The list of PCIs is reviewed and updated every 2 years and continued inclusion is a significant boost for the project. Islandmagee is the only gas storage project in NW Europe to be awarded PCI status.

Development progress & Outlook

The development of the 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. A wellsite was constructed in the summer of 2013. During 2014, a sub-surface agreement for lease was signed with The Crown Estate and all other land rights required for the project were secured. Also during 2014, the project was granted marine licences by the Department of Environment for the offshore elements of the project, including a discharge consent.

In May and June 2015 a data gathering well (Islandmagee-1) was successfully drilled to a total depth of 1,753 metres obtaining wireline data and cores of the 185.8 metre Permian salt sequence encountered. Core samples were sent to Germany to undertake laboratory analyses and the test results on the salt cores and rock mechanics have now been incorporated into the subsurface and surface facility preliminary design and cost estimates for the project have been updated.

The overall results from the technical programme of work are positive and the objective to confirm the feasibility of the development of an underground gas storage facility in salt caverns in this location has been met. The thickness and depth of the Permian Salt were both within 10% of pre-drill estimates. The Permian Salt average thickness over the area of the proposed caverns is approximately 200 metres at a depth of approximately 1,300 metres sub-sea. The rock mechanical properties of the salt determined from the core data are in line with data for Permian Salt at other locations across Northern Europe where caverns for gas storage have been constructed and are in operation.

The five stages of the £3.8million programme of work co-funded by a £1.9m (€2.5 million) grant from the CEF have been successfully completed, on time and within budget. The project was eligible to receive this grant assistance by virtue of being a PCI and is eligible for further grant assistance in the future.

In May 2015 the Company concluded a Convertible Loan Facility Agreement with Baron Oil Plc ("Baron") under which Baron has provided a loan for €1.8 million (£1.3 million) to InfraStrata which has been be used as working capital to bridge the receipt of the CEF grant, the outstanding 70% of which (€1.8 million) will be received in the first quarter of 2016 following reporting on the outcome of the work programme completed in 2015. Baron has an accompanying option to convert the loan balance into an equity participation of 15% of the share capital of IMSL. Should the option be exercised, the equity would be provided pro-rata by InfraStrata and Moyle which would give rise to a revised participation in the project of InfraStrata 55.25%, Moyle 29.75% and Baron 15.00%.

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. The thickness and depth of the salt and the proximity of key services (electricity supply, water and the gas network) give the project a significant unit capital cost advantage with an estimated capital cost of £274 million. We anticipate that the next stage will provide InfraStrata with the opportunity to monetise our interest in the project.

Portland project - Dorset

The transfer of licence P2235 to Corallian involved an amendment of the Asset Exchange Agreement with Fyrd Energy Limited ("Fyrd") announced on 16 December 2014 (the "Fyrd Agreement") under which InfraStrata was to acquire a 25% interest in licence P2235 and other assets, in return for a 77.5% interest in the intellectual property in the former Portland project. Under the revised Fyrd Agreement and subject to government consent, Fyrd will transfer its remaining 75% interest in licence P2235 to InfraStrata, and in exchange, InfraStrata will transfer its 22.5% retained interest in the rights and intellectual property in its former Portland project, excluding the gas pipeline rights and associated intellectual property, to Fyrd. The entire P2235 interest is to be transferred under the S&P Agreements to Corallian as described above. In addition, the Portland gas pipeline rights and associated intellectual property will be transferred by InfraStrata to Osmington as part of the S&P Agreements.

OPERATIONAL REVIEW - OIL & GAS EXPLORATION

Following the completion of the S&P Agreements as anticipated, InfraStrata's retained interest in exploration will comprise:

· 10% interest in onshore PL1/10 in Northern Ireland, fully carried until the end of the Woodburn Forest-1 well.

· Net profits interest ("NPI") instruments in each of P1918, P2222 and P2235 of 0.5%, 0.5% and 1% respectively of the gross, representing 4% of Corallian's anticipated interest in the licences at the time of drilling the first well on the licences.

· 4% share of any future profits derived by Osmington from the transferred 40% shareholdings in Brigantes and Corfe, again in the form of NPI instruments.

The operational review below details the progress made on these exploration activities during the period.

County Antrim - Onshore PL1/10, Offshore P2123

Petroleum Licence PL1/10 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 JV group believes is a highly prospective largely unexplored sedimentary basin. Subsequently in December 2013 the JV group were awarded adjacent offshore Petroleum Licence P2123 by the Department of Energy and Climate Change ("DECC") for a period of four years, covering an area of 613 square kilometres. The joint venture group recognises combined un-risked P50 prospective resources in the Triassic, Permian and Carboniferous sandstone reservoir intervals of over 500 mmboe.

The well planning and design have been completed for the Woodburn Forest-1 well in PL1/10. Permitted Development rights provide a window for commencement of site construction activities between September and February inclusive. In February 2015 a 'Consent to Drill' was granted by DETI following a separate consent issued by the Northern Ireland Environment Agency (Water Management Unit) under the Water (Northern Ireland) Order 1999, which regulates the well in terms of surface water and groundwater impacts. All of the relevant regulatory approvals for the well have now been granted. InfraStrata and its partners are committed to carrying out this conventional exploration in an environmentally-responsible manner and in compliance with all conditions associated with regulatory approvals.

In August 2015 we reported that Larne Oil and Gas Limited had run into funding difficulties and was unable to meet its funding obligations to earn a 33.33% interest in the licence PL1/10 by funding a disproportionate share of the Woodburn Forest-1 well. Larne were also to acquire a 33.33% interest in Licence P2123.

Since August 2015 InfraStrata, together with Brigantes, have focused on farming out a combined 60% interest in the PL1/10 licence in order to complete the 80% outstanding funding for the Woodburn Forest-1 well. In November 2015 we signed an agreement, together with Brigantes, with Ermine Resources Limited ("Ermine") whereby Ermine will acquire a 15% interest (paying 20% of the Woodburn Forest-1 well costs) in the PL1/10 licence, subject to the full well funding being completed. InfraStrata and Brigantes are in discussions with a number of other parties with regard to completing the farm-out process for the remaining 45% so that the well can be drilled this coming winter.

Should the well be fully funded as anticipated then the NI Agreement with Corallian will proceed and InfraStrata will retain a 10% interest in PL1/10 fully carried until the end of the Woodburn Forest-1 well. In the event that the funding of the Woodburn Forest-1 well is not completed then the NI Agreement will not complete. A request has been submitted to DETI to continue the licence into the second term beyond 4 March 2016 and part surrender 50% of the licence area, as required under the terms of the licence, to focus on the most prospective acreage. InfraStrata is awaiting a response from DETI.

InfraStrata will remain as Operator on the PL1/10 licence until at least the end of the Woodburn Forest well for which we will be compensated accordingly. However we will have no commitment to pay drilling costs.

The JV group have a work programme for P2123 for 2016 including the acquisition of new 2D seismic data before the initial term of the licence expires in December 2017. Should the NI Agreement not complete then InfraStrata will seek to farmout its obligation in respect of the P2123 work programme costs and any PL1/10 expenditure or otherwise transfer these assets to another party without commitment of cash to new exploration costs. In November the JV group made a part surrender of 68% of the licence area, again to focus on the most prospective acreage on the P2123 licence. InfraStrata's entire interest in P2123 is to be transferred under the NI Agreement to Corallian.

Dorset - Offshore P1918

Petroleum licence P1918 initially comprised Blocks 97/14, 97/15 and 98/11, covering an area of 584 square kilometres, and was awarded in February 2012 by the Department of Energy and Climate Change ("DECC") for a period of four years. In October 2015 blocks 97/14 and 97/15 and part of Block 98/11 were relinquished leaving 105 square kilometres in Block 98/11. At the same time DECC granted a one year extension to the first term of the licence until 30 January 2017. Work during the period continued to focus on two prospects, the Purbeck and Colter Prospects.

Planning permission was granted in 2013 for an exploration well, California Quarry-1, on the offshore extension of the Purbeck Prospect within Block 98/11 targeting prospective resources within the licence estimated by the joint venture at 10 mmbo. Drilling of the California Quarry-1 well is dependent upon the acquisition and processing of 2D seismic data over the Purbeck Prospect and this is anticipated to take place this coming winter. Further the proposed California Quarry-1 well is an onshore to offshore well and since it is necessary for the area from which a well is drilled to be held under a petroleum licence, either InfraStrata or a third party will need to be awarded a licence over the area as part of the UK 14th Landward Licensing Round before drilling can commence. The licence awards in this area remain pending.

The current partners in the project are Corallian Energy Limited, Southwestern Resources Limited ("Southwestern"), Ermine, Corfe and Brigantes. Southwestern have met the costs of 3D seismic reprocessing work on the Colter Prospect and a proportion of the 2D seismic acquisition on the Purbeck Prospect under a farmout agreement which also gives Southwestern the option to fund the drilling of a well in return for a further interest in the licence. The balance of the 2D seismic costs will be met by Ermine under a farmout agreement. The Colter Prospect is located within a fault block immediately to the south of the giant Wytch Farm oilfield.

InfraStrata will remain as operator under the licence until the formal assignment of the licence interest to Corallian has been approved by the Oil and Gas Authority ("OGA"), expected to be in H1 2016. However we will have no commitment under the S&P Agreements to pay exploration costs and InfraStrata will receive payment for services rendered during the 2D seismic work programme.

East Shetland Basin - Offshore P2222

The licence contains the undeveloped Oulton oil discovery (3/11-1 and 1ST) estimated to contain approximately 16 million barrels of recoverable oil. The discovery was made over 40 years ago by Amoco, and flowed in excess of 1000 barrels of 41 degrees API oil per day on test from Jurassic Emerald sandstones. The use of modern offshore technologies combined with access to nearby infrastructure are expected to enable Oulton to be successfully developed in the near future. Funding for a well will need to be concluded prior to December 2016 in order to proceed into the last two years of the initial term of the licence and drill a well prior to December 2018. InfraStrata's entire interest in P2222 is to be transferred under the S&P Agreements to Corallian. InfraStrata will remain as licence administrator until the formal assignment of the licence interest to Corallian has been approved by OGA.

Moray Firth - Offshore P2235

P2235 comprises Block 11/24b (part) and contains the Wild Boar Prospect, 3 kilometres north east of and structurally updip of the producing Lybster oilfield within the Moray Firth. Prospective resources have been estimated as 70 mmbo. The prospect lies close to the coast and there is the potential to drill an exploration well from onshore to offshore. Funding for a well will need to be concluded prior to December 2016 in order to proceed into the last two years of the initial term of the licence and drill a well prior to December 2018. InfraStrata's entire interest in P2235 is to be transferred under the S&P Agreements to Corallian. InfraStrata will remain as licence administrator until the formal assignment of the licence interest to Corallian has been approved by OGA.

Corfe & Brigantes

Corfe and Brigantes have interests in licence P1918 and Brigantes has interests in PL1/10 and P2123. Corfe and Brigantes are seeking to farmout their commitments to further exploration costs including drilling on all these licence interests and the interests are therefore expected to reduce accordingly. Corfe and Brigantes also hold interests in PEDL201 (Leicestershire), PEDL237/PL090 (Dorset) and PEDL070 (Hampshire). InfraStrata's shareholdings in both Corfe and Brigantes have been transferred under the S&P Agreements to Corallian's subsidiary Osmington.

OPERATIONAL REVIEW - FUNDING

Financing

The success of our projects and therefore the carrying value of the projects on InfraStrata's statement of financial position are dependent not only on the underlying economics of the projects but also on our continuing success in attracting investment into the projects. We do not make financial commitments to significant project development costs in the absence of such investment.

On the Islandmagee gas storage project gross capital expenditure during the year to 31 July 2015 was £3,663,514. Of this total £1.9 million was funded by InfraStrata shareholders through a placing completed in February 2015 with the balance to be funded by a grant from the European Union. Our share of expenditure on our oil and gas exploration licences during the year to 31 July 2015 was £179,732 out of a total gross expenditure of £421,999. These costs were mostly related to the planning, permitting and consultation processes as well as paying annual licence fees.

The book value of the Group's intangible Exploration and Evaluation assets immediately before the divestments to Corallian was £4,006,798 comprising £3,364,909 being the fair value of well and seismic data and a P1918 licence interest recognised in 2012 when the Group acquired 50% of Portland Gas Limited, £361,012 being the consideration for the cancellation of eCORP's NPI in P1918 in 2014 and £280,877 being the Group's share of the historic net cash investment in licence interests after adjusting for the proceeds of disposals. Impairments of £3,577,659 have been recognised to reflect the net cash sales proceeds from the S&P Agreements excluding the NI Agreement. Should the NI Agreement complete the Group will realise a profit of approximately £131,000 on the remaining book value of Exploration and Evaluation assets in future periods.

The book value of the Group's interest in associated companies Brigantes and Corfe immediately before the divestments to Corallian was £2,495,726 comprising £2,495,126 fair value adjustments recognised in 2011 net of the Group's share of subsequent losses of the associated companies and the Group's historic net cash investment in the associated companies of £600. Impairments of £2,495,126 have been recognised to reflect the net cash sales proceeds from the S&P Agreements. The impairments had no impact on the Group's cash position.

No value has been ascribed to any of the NPI instruments retained in the Group's financial statements as it is not possible to determine a fair value for these instruments.

On 21 January 2015, following approval at the Company's AGM, each existing ordinary share of 10 pence was subdivided into 1 New Ordinary Share of 1 penny and 9 Deferred Shares of 1 penny. The Deferred Shares do not carry any rights to vote or any dividend rights and holders will only be entitled to a payment on return of capital or winding up of the Company after each of the holders of the Ordinary Shares has received a payment of £10,000,000 on each such share.

On 23 February 2015, following approval at a General Meeting of the Company, the Company issued 52,500,000 new Ordinary Shares of 1 penny each at 4 pence per share to raise £2,100,000, before expenses, to institutional and other shareholders including members of the Board of directors. The net proceeds of £1,984,196, taken together with £400,000 received in February by the Company's subsidiary Islandmagee Storage Limited in relation to a data release agreement, at that time was forecast to provide the Group with sufficient cash to meet our approximately £1.9 million share of the costs of the Islandmagee salt core programme (50% of the total) and to pay InfraStrata management and other costs to the end of 2015. The Islandmagee salt core programme was delivered on time and within the original budget and our management costs to the end of 2015 are within the estimates we presented in February.

The balancing 50% (£1.9million or €2.5 million) of the costs of the Islandmagee salt core programme have been met by the European Commission under a grant agreement concluded with the EU's Connecting Europe Facility in April 2015. Under the terms of the grant agreement 70% of the total grant (€1.8 million) is received on completion of the work programme and application for the balance. In order to bridge this working capital requirement, on 30 April 2015 the Company signed a Convertible Loan Facility Agreement ("Agreement") with Baron Oil Plc ("Baron") for €1.8 million. 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 and to convert it into equity participation of 15% of the share capital in subsidiary Islandmagee Storage Limited. £1 million of this facility had been drawn down at 31 July 2015 and the remaining £0.3 million was drawn down in August 2015.

The Islandmagee salt core work programme has been completed and the balancing €1.8 million of the grant is expected to be received before the end of the first quarter of 2016 at which time it will be held in escrow as security to satisfy the repayment of the Baron loan. However, if Baron excises its option, then the €1.8 million will be available as corporate funding for InfraStrata.

The Group's cash and cash equivalents at 31 July 2015 were £430,199 (2014 - £1,648,955) and net current assets were £42,122 (2014 - £957,491).

The divestment of exploration assets to Corallian announced on 16 November 2015 has provided the Company with additional cash resources of £240,000 which will provide short term capital for our immediate needs. The Company will receive an additional £300,000 should the conditions for the transfer of the Northern Ireland licence interests be met, including full funding of the Woodburn Forest-1 well. This additional cash would permit the Company to meet all committed expenditure until the end of April 2016 without further fundraising requirements.

In the event that the funding of the Woodburn Forest-1 well is not completed then the disposals of the Northern Ireland licences will not complete. A request has been submitted to DETI to continue the licence into the second term beyond 4 March 2016 and part surrender 50% of the licence area. InfraStrata is awaiting a response from DETI.

Forward cash flow forecasts reflect that all significant future exploration costs will now be borne by Corallian in respect of exploration interests transferred to that company and that any future costs associated with retained licence interests will continue to be funded by joint venture partners. With respect to the Islandmagee gas storage project, the Group now seeks new equity participation in the project or otherwise a monetisation of all or part of the Group's interest in the project. The exact nature of this monetisation is not yet determined and may involve continued management of the project's development with the continued support of the EU. There will be no commitments to significant new expenditure on the project in the absence of funding secured for that purpose.

The directors have prepared the accounts on the going concern basis which assumes that the Group will continue in operational existence without significant curtailment of its activities for the foreseeable future. Project management and administrative costs of the Group will remain at current levels (see below), consistent with the delivery of the Group's strategy and the management of challenges and risks associated with the Group's development programmes. The forecasts reflect that the Group requires an additional £600,000 to meet project management and administrative costs and committed project expenditure on the Islandmagee project until the end of December 2016 increasing to £900,000 should the conditional disposals of the Northern Ireland licence interests not proceed.

The directors anticipate that additional funding can be generated through an equity fundraising or by disposing of assets or data licensing; however, the success of such fundraising cannot be guaranteed. After preparing cash flow forecasts, making enquiries and considering the uncertainties described above, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis of accounting in preparing the annual financial statements. However, the success of any equity fundraising, asset disposal or data trade cannot be guaranteed and the directors have concluded that at the date of this report a material uncertainty must therefore exist that may cast significant doubt upon the Group's ability to continue as a going concern.

Project management and company administration costs

The Group's policy is to resource the delivery of our project management objectives to the maximum extent possible with our own management team, procuring more expensive external technical expertise only when it is necessary to do so. As such, every member of the management team has a hands-on project management role and makes an indispensable contribution to delivery of our strategy and effective management of the risks and uncertainties our business faces. Nevertheless, during 2015 the Company has continued to reduce project management and administrative costs. This has been led by voluntary reductions in salary costs recognising the need to conserve cash resources as much as possible. In addition members of the Board participated in the February 2015 placing.

The remuneration committee sets salaries and is acutely aware of the need to balance the financial performance of the Company with the need to maintain incentive and motivation for an executive which has delivered our 2015 work programme with dedication and a focus on the interests of our shareholders. During 2016 every member of the management team will be required to make indispensable contributions to effective delivery of our strategy, performance against our key performance indicators and effective management of the risks and uncertainties our business faces.

Following an overall 15% reduction in staff costs, which was implemented in February 2015, in October 2015 the Company implemented a Performance Incentive Scheme under which voluntary salary reductions have been taken in return for participation in the scheme. The salary reductions (including company pension contributions) implemented on 1 October 2015 comprise a reduction to £100,000 per annum for each of the Executive Directors (an aggregate reduction of 32% including a 41% reduction for the Chief Executive Officer) and a 25% reduction for the Non-executive directors and the Company Secretary.

The cash cost of management and administrative costs in the year to 31 July 2015 was £1,065,161 (2014 - £1,126,482). Our current annualised cash cost of management and administration, taking into account the salary reductions above and other significant reductions in general costs implemented during the year, is now less than £800,000 and this will be further reduced by operator overhead recoveries when the Woodburn Forest-1 well is drilled and by time related cost recoveries for services rendered to Corallian in relation to the ongoing management of assets sold to that company.

On behalf of the Board

Andrew Hindle,

Chief Executive Officer

7 December 2015

InfraStrata plc

Consolidated statement of comprehensive income for the

year ended 31 July 2015

InfraStrata plc

Consolidated statement of financial position

as at 31 July 2015

InfraStrata plc

Consolidated statement of changes in equity

for the year ended 31 July 2015

InfraStrata plc

Consolidated statement of cash flows

for the year ended 31 July 2015

Significant non-cash transactions

As disclosed in note 9, at 31 July 2015 the Group has accrued £1,066,306 as the portion of the Grant from the European Commission in respect of the Islandmagee gas storage project attributable to work done at that date. This accrual is a non-cash item, as are the impairment charges of £6,072,785 (2014 - nil); therefore these items do not appear in the statement of cash flows.

During 2014 the Group acquired the preference shares held by eCORP in subsidiary Portland Gas Limited for a non-cash consideration of US$600,000 satisfied by the cancellation of a debt of US$600,000 payable by eCORP at that time.

InfraStrata plc

Notes to the financial information

for the year ended 31 July 2015

1. Basis of accounting and presentation of financial information

The financial information set out in this announcement does not comprise the Group's statutory accounts for the years ended 31 July 2015 or 31 July 2014. The financial information has been extracted from the statutory accounts of the Group for the years ended 31 July 2015 and 31 July 2014.

The auditor, Nexia Smith & Williamson, has reported on the statutory accounts for the years ended 31 July 2015 and 2014; the reports were unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006. However, in their report on the statutory accounts for both the year ended 31 July 2014 and 31 July 2015, the auditor drew attention to the material uncertainties which exist with respect to the ability of the group to continue as a going concern, the carrying value of the Islandmagee gas storage facility should further funds to develop the project not be secured and the carrying value of the PL1/10 license should funding not be received or for the year ended 31 July 2015, the licence is not allowed to continue to its second term and for the year ended 31 July 2014, the drilling commitment date not be extended. These uncertainties are further explained below.

The statutory accounts for the year ended 31 July 2014 have been delivered to the Register of Companies; those for the year ended 31 July 2015 were approved by the Board on 7 December 2015 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 2015, 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 material change to the Group's accounting policies for the year ended 31 July 2015 as compared to those published in the statutory accounts for the year ended 31 July 2014.

Going concern

In accordance with market practice for infrastructure development and oil and gas exploration groups, the Group has been historically funded on a project and milestone basis. As of the date of this report the directors believe the Group has sufficient cash resources to be able to continue to pay its creditors as they fall due until February 2016. Cash flow forecasts reflect that the Group requires an additional £600,000 to meet project management and administrative costs, project costs on the Islandmagee project and other working capital requirements till the end of December 2016 increasing to £900,000 should the conditional disposals to Corallian Energy Limited in respect of the NI Agreement not complete (see note 11).

The directors anticipate that additional funding can be generated through an equity fundraising or by disposing of assets or data licensing; however, the success of such fundraising cannot be guaranteed. After preparing cash flow forecasts, which include fundraising, making enquiries and considering the uncertainties described above, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

However, the directors have concluded that the uncertainty of fundraising indicates that a material uncertainty exists which may cast significant doubt upon the Group's ability to continue as a going concern and therefore the Group may be unable to realise its assets and discharge its liabilities in the normal course of business. Were the Group no longer a going concern, adjustments may be required to the carrying value of assets, provision would be required for the future liabilities arising as a consequence of the Group ceasing business and assets and liabilities currently classified as non-current would be reclassified as current.

In the event that the funding of the Woodburn Forest-1 well is not completed then the disposals of the Northern Ireland licences will not complete. A request has been submitted to DETI to continue the licence into the second term beyond 4 March 2016 and part surrender 50% of the licence area. InfraStrata is awaiting a response from DETI. In the absence of such an agreement by DETI, then the licence would need to be relinquished and re-applied for. In any event no significant new expenditure commitments will be made unless they are fully funded by partners.

The directors remain confident that the Woodburn Forest-1 well will be fully funded to meet the requisite construction and drilling programme. However, the well funding cannot be guaranteed and the directors have therefore concluded that a material uncertainty exists with regard to the completion of the sale of the Northern Ireland licence interests and, subsequently, the Group's ability to retain the licence.

Forward cash flow forecasts reflect that all significant future exploration costs will now be borne by Corallian in respect of exploration interests transferred to that company and that any future costs associated with retained licence interests will continue to be funded by joint venture partners.

With respect to the Islandmagee gas storage project, following the successful completion of the EU co-financed drilling testing and engineering programme during 2015, the Group now seeks new equity participation in the project or otherwise a monetisation of all or part of the Group's interest in the project. The exact nature of this monetisation is not yet determined and may involve continued management of the project's development with the continued support of the EU. There will be no commitments to significant new expenditure on the project in the absence of funding secured for that purpose.

Should the Group not be successful in obtaining future funding for its projects or realising value for them in excess of current book value, the Group's capitalised project development costs may become impaired in value. The directors are confident that such funding will continue to be secured.

Having reviewed the value of gas storage and exploration and evaluation assets in accordance with the principles below, the directors are of the opinion that these assets are not impaired in value.

Review of gas storage project asset carrying values

The assessment of capitalised project costs for any indications of impairment involves judgement. When facts or circumstances suggest that impairment exists, a formal estimate of recoverable amount is performed and an impairment loss recognised to the extent that the carrying amount exceeds recoverable amount. Recoverable amount is determined to be the higher of fair value less costs to sell and value in use. The key assumptions are the net income expected to be generated from the facilities, the cost of construction and the date from which the facilities become operational. Management assigns values and dates to these inputs after taking into account market information, engineering design costing and the project programme. A discount rate of 8% is applied in determining gas storage project net present values. Salt cavern gas storage projects are long term investments and cash flows are therefore projected over periods greater than 5 years. Engineering design provides for a project life of 40 years. It is assumed that 100% of a project's capacity will be sold from the date that the capacity becomes operational, therefore no cash flow growth is used when performing cash flow projections.

Review of exploration and evaluation asset carrying values

IFRS 6 requires that exploration and evaluation assets be assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. Management therefore consider annually whether there are any such facts and circumstances and, if so, undertake an impairment review. In making the initial judgements, management consider the outcome of exploration and evaluation activities to date and, in particular, data from any seismic surveys and drilling activities. Management also consider the continuity of the licence interests and market data, including oil and gas prices.

Where an impairment test is required, a comparison is made between the carrying value of the assets at the reporting date with the expected discounted cash flow from the Group's license interest. For the discounted cash flows to be calculated, management use production profiles based on its best estimate of reserves and a range of assumptions, including oil/gas prices and discount rates.

Note 1: As disclosed in note 11, subsequent to the end of the reporting period the Company entered into agreements to dispose of its interests in exploration licences P1918, P2222 and P2235 for a cash consideration and a retained Net Profits Interest in each licence interest. The carrying value of the Group's interest in these licences has been impaired such that it equates to the attributable net sales proceeds of £239,400. Should the conditions be met for the further disposals of a 10% interest in Northern Ireland licence PL1/10 and the entirety of the Group's interest in licence P2123 for £300,000, the Company will realise a profit of approximately £131,000 in future periods.

No value has been ascribed to the Net Profits Interests retained on each of the licence interests as it is not possible to determine a reliable fair value for these instruments.

Note 2: In June 2012 InfraStrata entered into agreements as part of which its licence interest in P1918 became subject to a net profits interest ("NPI") equivalent to 3.75% on the whole licence in favour of eCORP Oil & Gas UK Limited ("eCORP"). On 14 March 2014 eCORP's NPI in P1918 was cancelled (and InfraStrata UK Limited acquired the related preference shares held by eCORP in our subsidiary Portland Gas Limited) for a consideration of US$600,000 satisfied by the cancellation of the US$600,000 (£361,012) still payable by eCORP under the terms of the June 2012 agreements.

Note 3: On 17 March 2014, associated company Brigantes agreed to acquire an 18% interest in licence P1918 for a consideration of US$600,000 (£360,000 received), subject to DECC approval.

Re-classification of Gas Storage Development assets and liabilities

Until 24 January 2014, the gas storage development costs were classified as held for sale while BP Gas Marketing Limited (BPGM) had an option to acquire a controlling interest in Islandmagee Storage Limited in return for funding development costs. On 24 January 2014 BPGM relinquished its option and the assets and liabilities were reclassified under the appropriate heading in the Group's balance sheet. No element of the amounts paid by BPGM was repayable and the balance of amounts paid and payable by BPGM at that date amounting to £2,033,450 were transferred from Non-controlling interests to Retained earnings.

Impairments

As disclosed in note 11, subsequent to the end of the reporting period the Company entered into agreements to dispose of its interests in both Corfe Energy Limited and Brigantes Energy Limited for a cash consideration and a retained Net Profits Interest in future profits derived from the disposed shareholding in each company. The carrying value of the Company's interest in these associates has been impaired such that it equates to the attributable net sales proceeds of £600. No value has been ascribed to the Net Profits Interests retained on each of the interests in these associates as it is not possible to determine a reliable fair value for these instruments.

Grant receivable

In April 2015 the Company concluded a Grant Agreement with the European Commission's Connecting Europe Facility for a maximum €2.5 million (£1.8 million) up to 50% of the costs of a programme of work to progress the Islandmagee Gas Storage project. The programme of work comprises the drilling of a data gathering well to obtain salt cores and subsequently undertake testing and engineering design work at an estimated aggregate cost of approximately £3.8 million. Under the conditions of the Grant Agreement 30% of the maximum grant amounting to €750,000 (£533,694) was received in May 2015 and the remaining €1.75 million (£1.3 million) will be received once the work programme has been completed in late 2015 and an application for the balance submitted to the European Commission.

The drilling phase of the work programme was completed satisfactorily in June 2015 and the directors consider there is reasonable assurance that the Company will comply with the conditions of the Grant Agreement and that the remaining €1.75 million (£1.3 million) will be received. In addition to the £533,694 received in May 2015, a further £1,066,306 of the total grant has been accrued at the year end. The total of the grant accounted for at 31 July 2015 is therefore 90% (£1,600,000) of the total grant representing the proportion of the total costs of the related work programme which has been incurred at that date. Grant monies received and accrued have been credited against Intangible assets - Gas Storage Development (note 7).

Short-term convertible borrowings

On 30 April 2015, the Company concluded a €1.8 million Convertible Loan Facility Agreement with Baron Oil Plc ("Baron") for the purposes of providing bridge finance until receipt of the €1.75 million balancing grant from the European Commission. The loan is drawn-down as Sterling fixed at £1.3 million of which £1 million had been drawn-down at 31 July 2015 with the balance drawn-down in August 2015. The loan accrues interest at a fixed rate of 8% which is payable when the principal on the loan is repaid. The balance on the loan is repayable on 1 May 2016. Baron has the right to extend the loan period until 31 December 2016.