18 May 2015
Baron Oil plc
("Baron Oil" or the "Company")
Commencement of drilling operations - Islandmagee-1 salt well
Baron Oil notes the announcement released this morning by Infrastrata plc ("Infrastrata") regarding spudding of the Islandmagee-1 salt well. As announced on 1 May 2015, Baron Oil signed a Convertible Loan Agreement ("Agreement") with InfraStrata with respect to the Islandmagee gas storage project in Northern Ireland. Under the terms of the Agreement, Baron provided a secured loan of €1.8 million to InfraStrata with an option to convert the loan balance into an equity participation of 15% in Islandmagee Storage Limited ("IMSL"), a subsidiary of InfraStrata.
The full text of today's announcement from Infrastrata follows:
"InfraStrata plc (AIM:INFA), the independent petroleum exploration and gas storage company, is pleased to announce the commencement of drilling operations at the Islandmagee-1 well in Northern Ireland.
The Islandmagee-1 well began drilling ("spudded") at 18:00 hours on 15 May 2015.
Drilling operations are expected to take around 5 weeks. The well will be drilled to a total drilled depth of approximately 1,700 metres.
The objective of the well is to confirm the feasibility of the development of an underground gas storage facility in salt caverns, by obtaining wireline data and core samples of the Permian salt to undertake laboratory analyses, including rock mechanical tests, to further define the design parameters and cost estimate for the project.
These results will enable the project developer, Islandmagee Storage Limited (InfraStrata 65% shareholder), to complete this phase of work in Q4 2015.
The costs of this 2015 work programme are being funded 50% by the European Commission under their Connecting Europe Facility."
For further information visit: www.baronoilplc.com or contact:
Baron Oil plc Bill Colvin, Chairman and Chief Executive |
+44 (0)7780 684 108 |
Cantor Fitzgerald Europe (Nomad and Broker) Sarah Wharry, Corporate Finance Richard Redmayne, Corporate Broking |
+44 (0)20 7894 7000 |
Background on the Islandmagee Storage Project
The Islandmagee gas storage project is owned 65% by a wholly subsidiary of InfraStrata plc and 35% 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. PCI status means recognition by the European authorities that the Islandmagee gas storage project brings benefits not only to the Member State in which it is located, but to a much wider area. The next investment step in the project is the drilling of the data gathering well (Islandmagee-1) to approximately 1,700 metres depth to obtain cores of the salt sequence and subsequently undertake further engineering design work. This €5 million work programme is being funded 50% by the European Commission under the Connecting Europe Facility. Following the drilling of the data gathering well and further engineering design work all key technical risks will have been addressed and the future CAPEX and OPEX better defined, enabling a Final Investment Decision to be taken after that point.
Further information is available on the project company's website www.islandmageestorage.com.
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.
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"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."
