Acquisition of additional equity in Islandmagee

RNS Number : 6258J

Infrastrata PLC

13 September 2016

 

 Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR).

13 September 2016                                                                 

InfraStrata plc

("InfraStrata" or the "Company")

Acquisition of additional equity in Islandmagee Storage Limited

InfraStrata plc (AIM:INFA), the independent petroleum exploration and gas storage company, is pleased to report that its wholly owned subsidiary, InfraStrata UK Limited ("IS-UK"), has acquired an additional 25% equity stake in Islandmagee Storage Limited ("IMSL"), the developer of the gas storage facility in Northern Ireland which is a joint venture with Moyle Energy Investments Limited ("Moyle"), a wholly owned subsidiary of Mutual Energy Limited ("Mutual").

Following the acquisition IS-UK will own 90% of Islandmagee Storage Limited with Moyle holding 10%.

These changes in interests are achieved by IMSL issuing IS‑UK with an additional 250 ordinary shares fully paid for cash at par. For Moyle, who joined the project in May 2008, the transaction will mean that at Final Investment Decision ("FID") it will no longer have the shareholder obligation to advance its share of outstanding funding to date to IMSL of approximately £2m plus interest (LIBOR + 1%) to retain its interest. This sum has been loaned to IMSL by IS-UK. Instead going forward Moyle will be required to advance IMSL 10% of any future shareholder loans made by IS-UK prior to FID. IMSL will however remain liable to repay all existing funding provided by IS-UK.  

Gas storage is essential for storing surplus gas for use during high demand periods and to offset any interruptions in the supply chain. It is envisaged that the Islandmagee gas storage facility will play an important role in future gas supply to Northern Ireland, Republic of Ireland and Great Britain, particularly the fast supply of gas to meet short-term demand surges. High injection and withdrawal flow rates are two unique properties associated with fast acting salt cavern gas storage such as Islandmagee.

The Company is seeking to complete funding arrangements to sit alongside a grant of up to €4.024m from the EU in order to commence a Front-End Engineering Design ("FEED") and commercialisation process by year end, in order to proceed to a FID for the project in late 2017. The Company is in receipt of €1.6m from the EU as the initial 40% advance of the €4.024m.

Commenting on the acquisition, Andrew Hindle, CEO of InfraStrata said:

"InfraStrata represents the only AIM-listed company with a focus on gas storage and this focus, and the importance of the project, has never been greater as we look to complete funding for a FEED and commercialisation process. There has been much reporting recently in the press about the potential for a structural change in the gas storage market partially due to the reduction of capacity at the Rough facility, which accounts for approximately two-thirds of UK storage capacity. Management believe that there has not been a better rationale for investing in gas storage for a number of years and the importance of new modern facilities to provide the necessary security. The acquisition of the additional interest in Islandmagee Storage Limited is part of a strategy for a focus of management resources on the successful delivery of maximum value from the project to InfraStrata's shareholders.

The Company will make further announcements on progress in due course and we look forward to updating shareholders."

Commenting on the acquisition, Paddy Larkin, CEO of Mutual said:

"Mutual is delighted that it will continue to have a key role in this strategically important project for Northern Ireland. The new shareholding level is better aligned with our long-term interests and capability and we look forward to working closely with all project stakeholders to make the project a success."  

The Front End Engineering & Design (FEED) and Insitu Downhole Testing programme for the Islandmagee gas storage project is co-financed by the European Union's Connecting Europe Facility.

Disclaimer releasing the European Union from any liability in terms of the content of the dissemination materials:

"The sole responsibility of this publication lies with the author. The European Union is not responsible for any use that may be made of the information contained therein."

For further information please contact:

InfraStrata plc

Andrew Hindle, Chief Executive Officer                                                                   020 8332 1200

Stewart McGarrity, Finance Director

Nominated Adviser and Broker - Allenby Capital Limited

Jeremy Porter / Alex Brearley / Liz Kirchner                                                           020 3328 5656

Financial PR - Camarco

Billy Clegg / Gordon Poole                                                                                      020 3757 4980

Notes to Editors:

Background on InfraStrata plc

InfraStrata is an independent petroleum exploration and gas storage company focused on Northern Ireland.

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

Background on the Islandmagee Storage Project

The Islandmagee gas storage project is owned 90% by a wholly owned subsidiary of InfraStrata plc and 10% by a wholly owned subsidiary of Mutual Energy Limited. Work commenced in 2007 with the acquisition of 3D seismic data to image the Permian salt in the Larne Lough area. During 2012, planning permission was granted for the project and a gas storage licence was issued by the Utility Regulator. In October 2013, the gas storage project was granted a 'Project of Common Interest' ("PCI") status by the European Commission.

Further information is available on the project company's website www.islandmageestorage.com.  

 

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