InfraStrata inks exploration agreement
RICHMOND, Surrey -- InfraStrata Plc (InfraStrata) reported that, together with joint venture partners Brigantes Energy (Brigantes) and Terrain Energy (Terrain), it has signed an agreement with Larne Oil and Gas (Larne) with respect to onshore Northern Ireland licence PL1/10 and adjacent offshore licence P2123 (the Agreement).
Larne is a wholly owned subsidiary of Larne Basin Exploration, a recently formed U.S. based investment company set up for the purpose of investing in oil and gas exploration in the Larne Basin, Northern Ireland. Larne is working in partnership with Ardent Oil (Ardent) a UK oil exploration company that is providing technical support to Larne.
Under the terms of the Agreement, Larne has purchased an exclusive option to farm in to both licences. If the option is exercised Larne will be credited with the option price and will then fund a disproportionate share of the forthcoming costs for the proposed Woodburn Forest-1 exploration well in licence PL1/10 to earn a 50% interest in the licence. Should the well cost exceed the Authorisation For Expenditure (AFE) by more than 10% then all partners would pay their respective percentage share of such excess. However, InfraStrata has pre-existing farmout agreements with partners Brigantes and Terrain with respect to the Woodburn Forest-1 well, which mean that any excess cost accruing to its interest in the well would still be carried.
Assuming that the option is exercised before mid-September 2014 then, following agreement of the AFE and Completion of the agreement, the licence interests in both PL1/10 and P2123 will be as follows:
InfraStrata (operator) - 20.83%
Larne - 50.00%
Brigantes (40% owned by InfraStrata) - 16.67%
Terrain - 12.50%
The Agreement is subject to approval for the licence interest assignments by Department of Enterprise, Trade and Investment for licence PL1/10, and Department of Energy and Climate Change for licence P2123.
In P2123, Larne will be assigned a 50.00% interest and will at Completion reimburse its share of certain costs to existing partners.
Woodburn Forest-1 will be the first exploration well on the licence area since 1971, a prospect with three conventional sandstone reservoir targets in the Triassic, Permian and Carboniferous. Combined Prospective Resources for the Triassic and Permian reservoirs have been estimated by the joint venture at 40 MMbbl of oil.
Commenting on the update, Andrew Hindle, CEO of InfraStrata said: “We are very pleased to welcome Larne to the joint venture as we enter the next very exciting phase of exploration in the Larne-Lough Neagh Basin of Northern Ireland. Work on the necessary consents is progressing with a view to drilling the well before the calendar year end. Larne working together with Ardent brings to the project many years of oil and gas investment and technical experience in the U.S., the North Sea and Europe together with a strong investment base.”