InfraStrata is pleased to announce that further to its announcement on 19 November 2010, the Company has been formally awarded a petroleum exploration licence PL1/10 (Central Larne - Lough Neagh Basin) in Northern Ireland (Licence PL1/10). The licence covers an area of 663 square kilometres. The initial licence term will be five years with a decision on drilling a well required within three years. The award is in response to an application made to the Department of Enterprise, Trade and Investment (DETI) in Northern Ireland in August 2010. This follows a decision by the Company in 2010 to broaden the scope of its activities to include petroleum exploration, where there are synergies with its existing UK gas storage projects.
Infrastrata is also pleased to announce that it has completed a funding exercise for its proposed £10m (gross) UK petroleum exploration programme for 2011/12.
There are several elements to the funding as follows:
1. A private placing of shares has been completed to raise £3.0 million before costs, split equally between two previously wholly owned subsidiaries of InfraStrata: IS E&P Limited and IS NV Limited (the "IS Companies"). Following the placing of new shares in the IS Companies, which was managed by Seymour Pierce Limited, the new investors hold 50% of the issued share capital of each of the IS Companies, with the balance retained by InfraStrata. Under agreements between InfraStrata and the IS Companies, InfraStrata will assign 40% of its rights for Licence PL1/10 to IS E&P Limited and 12% of any future exploration rights close to the gas storage project at Portland, Dorset to IS NV Limited. The funds raised will be used to fund the IS Companies' share of seismic acquisition, technical evaluations and the drilling of two wells. The Executive Directors of InfraStrata have invested £190,000 in the placing in aggregate.
2. InfraStrata has farmed out to Nautical Petroleum plc 20% of its exploration rights under Licence PL1/10 and 10% of any future exploration rights close to the gas storage project at Portland, under similar commercial terms to those for investors in the private placing.
3. The Company has farmed out an additional 10% of its exploration rights under Licence PL1/10 to Terrain Energy Limited, under similar commercial terms to those for investors in the private placing.
Subject to the approval from DETI for the various licence assignments, the partners for Licence PL1/10 will be as follows:
InfraStrata plc (operator) 30%, IS E&P Limited (50% owned by InfraStrata plc) 40%, Nautical Petroleum plc 20%, and Terrain Energy Limited 10%.
The Larne-Lough Neagh Basin is covered by Tertiary basalts of up to 600 metres thick. The Company will be applying recent developments in seismic acquisition and processing techniques developed for exploration below thick basalt sequences West of Shetland, and elsewhere, to delineate prospects. The Company believes the area holds significant untapped potential with a prospective sedimentary section of over 4,000 metres in the most deeply buried parts of the basin below the basalt.
Seismic data will be acquired during 2011 and it is expected that interpretation of this data will lead to an exploration well being drilled in 2012.
Commenting on the funding, Andrew Hindle, CEO of InfraStrata plc said:
"We are pleased to be awarded our first exploration licence in Northern Ireland and with our co-venturers, we look forward to evaluating the petroleum potential of the area.
We believe that it is one of the few remaining areas in the UK with the potential for the discovery of a giant field. Preparations will immediately be underway for the 2011 seismic survey which will be focused on a large undrilled anticline mapped using surface geological data. There are three principal reservoir objectives in the area in the Triassic, Permian and Carboniferous sequences. Additional data will also be acquired over the remainder of the licence area and the joint venture hopes to identify a number of potential drillable prospects.
The Company is delighted to have secured funding for its proposed exploration activities, which include the acquisition in Northern Ireland of a 250 km seismic programme in 2011 to identify a drilling location for a proposed well during 2012. At the same time we have also secured funding for future proposed exploration activities in Dorset, including the drilling of a second well".