Amendment to Infrastrata Loan

RNS Number : 5914H

Baron Oil PLC

19 August 2016

 

19 August 2016

Baron Oil plc

("Baron" or the "Company")

Amendment to terms of Loan and Option Agreement with Infrastrata

Baron is pleased to report that it has received repayment of its loan to Infrastrata plc ("Infrastrata") and agreed an amendment to the Convertible Loan Facility Agreement ("Agreement") with respect to the Islandmagee gas storage project in Northern Ireland.

Under the terms of the Agreement, originally announced in May 2015, Baron provided a loan for €1.8 million to InfraStrata. These funds were used as working capital to bridge the receipt of the European Commission grant, 70% of which (€1.8 million) was received on completion of the work programme as announced on 25 May 2016. The programme included the drilling of the Islandmagee-1 well, drilled successfully in May/June 2015, together with subsequent rock mechanical testing of salt cores and engineering work. The loan was subject to an interest rate of 8% of the funds drawn down. Baron originally had a right to extend the loan period until 31 December 2016.

Baron had an accompanying option to convert the entire balance of the loan into an equity participation of 15% of the share capital in Infrastrata's subsidiary, Islandmagee Storage Limited ("IMSL"). Should the option be exercised, the equity would be provided pro-rata by InfraStrata and its project partner, Moyle Energy Investments Limited ("Moyle"), as the other shareholder of IMSL. The amendment to the Agreement results in the option continuing to 31 March 2017, but the loan has been repaid effective 1 August 2016 from the balancing monies received from the European Commission.  The option as amended enables Baron to acquire a 15% interest in the IMSL project for a payment of £1,536,498.

Malcolm Butler, Chief Executive, commented as follows:

"We are pleased to have secured an extension of the option to 31 March 2017, as this will give us more time to assess progress on the Islandmagee storage project as the situation in the field unfolds, keeping an eye on the impact the closure of the Rough gas storage facility, in the UK North Sea, may have on gas prices in the UK.  Additionally the early repayment of the Loan provides Baron more financial flexibility for us to begin to investigate new projects."

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

For further information:

Baron Oil Plc

Bill Colvin (Chairman)                                                    Tel: [phone]

Malcolm Butler (CEO)                                                   Tel: [phone]

Cantor Fitzgerald Europe

Nominated Adviser and Broker

Sarah Wharry (Corporate Finance)                                 Tel: [phone]

Alex Pollen (Corporate Broking)

 

END

 

 

MSCAKFDNPBKDKFD