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Infrastrata PLC Half-year Report

17/04/2019 7:00am

UK Regulatory (RNS & others)


Infrastrata Plc Ord GBP0.0001 (NEX:INFA.GB)
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TIDMINFA

RNS Number : 4126W

Infrastrata PLC

17 April 2019

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"). With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

17 April 2019

InfraStrata plc

("InfraStrata" or the "Company")

Interim results for the six months ended 31 January 2019

InfraStrata plc (AIM: INFA), the independent gas storage company, announces its unaudited interim results for the six months ended 31 January 2019.

John Wood, Interim Chairman & Chief Executive Officer of InfraStrata plc commented:

"The six-month period covered by this results statement has seen a number of milestones, as detailed below, being completed. More importantly, it has set InfraStrata Plc ("Company") and the Islandmagee Gas Storage Project ("Project") on the path to constructing and commercialising the Project. In addition, we are considering various other projects unrelated to Islandmagee that, in time will make good additions to our portfolio.

We look forward to announcing further business developments to the market."

Interim Chairman and Chief Executive Officer's Statement

FEED and post FEED Developments

As announced previously, the Front-End Engineering and Design (FEED) of the Project was successfully completed in December 2018. The P90 cost estimates for the Project came in under what was originally envisaged. The FEED study along with its numerous sub-reports have been shared with potential equity partners of the Project. Each potential equity partner has conducted its own third party technical due diligence (DD). The Company is pleased to report that the Project has successfully gone through extensive technical DD with numerous independent third parties agreeing with the analyses and conclusions of the FEED study and reports. This clearly highlights the quality and accuracy of work undertaken by the Company and its FEED partners in that the FEED work has successfully stood up to rigorous independent third-party scrutiny.

Going forward, the Company is working closely with Costain with a view to possibly further reducing Project CAPEX costs and increasing the potential performance of the facility through the process of value engineering.

Equity and debt discussions

As previously reported, the Company has been in discussions with several potential equity and debt partners. The most developed term sheet from one of the potential equity partners was received in December 2018. At the same time, a new equity partner approached the Company with a view to investing in the Project subject to successful conclusion of technical and commercial DD. The Company took the view that the tabled term sheet did not substantially increase shareholder value to an acceptable level in the long run. It was, therefore, decided to provide the new potential equity partner the opportunity to undertake its DD and offer suitable terms thereafter.

The Company is pleased to announce that, having completed technical DD, it is now in advanced discussions with the shortlisted two potential equity partners with a view to agreeing terms of investment.

For the avoidance of doubt, any equity investment forthcoming will be at the Project level and not at the Company level. Post investment, the Company will retain a minority stake in the Project and will be involved in the construction and on-going operations of the facility post construction. It is the Company's intention to negotiate a management contract for the construction of the facility potentially providing an income stream in late 2019.

The Company undertook discussions with potential debt providers during Q3/Q4 2018. The Company is pleased to announce that it has now received indicative terms from two banks. Additionally, the potential equity partners have also discussed providing a portion or all of the debt requirements of the Project. Subject to terms that are satisfactory, bringing the combined equity and debt requirements under one roof would reduce the time taken to reach Final Investment Decision (FID). The Company believes that is now in a strong position to negotiate the most optimum financing structure between the potential equity partners and debt providers.

Offtake discussions

During 2018, The Company had interest from six parties seeking storage capacity of the Project. Since then, the Company has had numerous discussions with all six and has now narrowed the field down to three potential offtake partners. The decision to focus on three offtake partners is predicated upon the synergies that the Company believes it has between itself and the potential offtake partners. These synergies include, inter alia, the length of the offtake agreement and the capacity charge that each potential offtake partner would be willing to pay during the life of the offtake agreement. The Company's decision to focus on the three potential offtake partners has also been driven by counterparty requirements of the potential equity partners.

The Company is pleased to report that it is now in an advanced stage of contract negotiations with all three potential offtake partners, with a view to agreeing definitive terms in conjunction with agreeing terms of investment with potential equity partners soon.

EPC tender discussions

Following on from the completion of FEED, the Company issued an Expression of Interest (EOI) in August 2018. The EOI was well received and the Company received a total of 26 responses to the EOI. Subsequent to a review of all 26 participants, the Company has narrowed the number of participants down to six. An Invitation to tender (ITT) was released in December 2018 to these six organisations. The Company requested for bids to be submitted by the middle of March 2019. Following a request from the selected parties for more time to prepare and submit bids, the Company granted a further extension until the end of March 2019.

The Company is pleased to report that it has now received the responses to the requested ITT and is in the process of evaluating each response. A preliminary review suggests that the P90 cost estimates per the FEED study and report will be met at the time of awarding the contract to the most suitable party. The Company hopes to award the construction contract around the time that definitive financing and offtake agreements are being put in place.

Post to period end, the Company also issued an ITT package on 07 February 2019 in order to appoint an Owner's Engineer contractor to oversee the construction of the Project. The ITT returns have now been received from the Parties who had received the ITT in February. The Company is currently evaluating these bids in conjunction with the bids received against the construction tender.

Placing and use of proceeds

The Company, via a placing of shares on 24 January 2019, raised a sum of GBP1.5 million towards a defined set of activities that included, inter alia, land acquisitions, further engineering design works, land surveys and initial onsite enabling works.

Post to period end, the Company is pleased to report that it has awarded an engineering design works contract to Costain plc on 19 March 2019 to enable the circa GBP65 million cost savings identified during the FEED process. The contract covers sixteen specific work areas to refine the engineering design of the Project and this piece of work is scheduled to be completed prior to Final Investment Decision (FID).

As part of the use of proceeds received from the placing in January 2019, the Company has also served notice to exercise and complete its easement options that are required to progress the Project. The Company has also exercised further land acquisition options that is scheduled to be completed by the end of June 2019. With the exercise of the easement and land acquisition options, the Company has now completed an important stream of work that needed to be completed prior to equity and debt funding for the Project being put in place.

Licensing, permitting and public engagement

Whilst planning a Project such as the Islandmagee Gas Storage Project, numerous applications are made to the relevant authorities, with permissions and licenses issued and required at different points within the Project lifecycle. All approvals and draft approvals are subject to certain conditions, some of which have been addressed during the FEED process and some that will be carried right through to the end of the construction process and beyond. This will provide all concerned parties confidence that the Project is being undertaken in a highly regulated environment which is normal for gas storage facilities.

The Company is focussed on converting its draft marine license into a full marine licence. This draft license was issued after numerous communications, consultations and detailed discussions at a marine stakeholder group meeting hosted by Northern Ireland's Department of Agriculture, Environment and Rural Affairs' (DAERA) equivalent at that time. The Company was notified of certain actions that would be required to be undertaken prior to conversion of the draft license to a full licence. Therefore, as a result of the work undertaken during FEED, the Company has now submitted to DAERA, an updated Brine Dispersion Model, Shadow Habitats Regulation Assessment and a detailed Diffuser Arrangement. This work is being carried out with independent verification of the brine dispersal model by a third party and will be submitted shortly. The Company has also provided a draft marine monitoring plan, which includes live monitoring of brine discharge and will facilitate its shut-down should license discharge rates be exceeded.

The environmental experts commissioned by the company to undertake this work believe all the studies show better results than previously indicated and are within the current regulatory guidelines. Hence the Company believes that the draft marine licence will be converted into a full marine licence at the appropriate time. We are not aware of any reason, at this point in time, that will preclude a marine license being granted, in a timely fashion, for these works.

Further, DAERA has provided the Company with clear guidance that any changes to its initial submission would result in a delay to the proposed construction timeframe, but the Company is pleased to report that it has reconfirmed to DAERA that nothing material has changed from its initial application and that it is progressing as planned.

As part of DAERA's long standing requirement, the company has an obligation to undertake various further public engagement and consultation activities, one of which is a mandatory 42-day consultation period on the new information provided to DAERA prior to granting a full marine licence. The company takes its environmental and community engagement activities very seriously. Therefore, in addition to the mandatory sessions the Company has conducted a series of meetings and workshops in Islandmagee and surrounding areas with a view to sharing technical details and responding to questions that the general public and councillors of the region might have. Accordingly, the Company conducted a one-day workshop on 01 March 2019 in which it invited local councillors and explained the Project in detail to them as well as fielding queries that they had. The Company also hosted day surgeries on 20 and 21 March 2019 which were open to the general public. The day surgeries provided an opportunity to the local residents to meet with the Company's management and technical personnel and raise any queries that they had in relation to the Project. The feedback received by the company from most people that attended was that these sessions were well received and helpful.

This type of consultation is part of the normal process in a project such as ours. We will continue these types of consultations through the entire duration of the construction process and until the completion of the marine monitoring programme construction. The Company plans to have a further open session in May at which it will invite, once again, local residents with the intention of providing details about the Project and field any further questions that they might have. A booklet with updates on progress of the project has been produced and is in the process of being distributed to local residents.

We continue to support local good causes where we can. Work is underway to establish a local community fund which will commence activities once our Final Investment Decision (FID) is taken.

EU Grant funding

The Company is currently in the process of submitting its final set of documentation to the EU Commission towards recovery of the balance grant monies, per the Grant Agreement financed under the Connected Europe Facility (CEF). As part of this process, the Company has now appointed two separate entities to conduct an independent financial and technical audit respectively, a condition that has been stipulated by the Department of Economy, Northern Ireland. Following completion of these audits, the Company will submit its final documentation pack. The completion of the two audits and final documents is expected to take place by the end of May / first week of June with the balance grant monies paid to the Company 6-8 weeks immediately thereafter.

Board changes

The Company announced on 08 March 2019 that Graham Lyon was stepping down as Chairman of the Company with immediate effect in order to concentrate on other projects. The Company also announced on 25 March 2019 that Malcolm Groat was appointed as a Non-Executive Director of the Company with immediate effect and would also be the Chair of the Audit Committee. Additionally, it was announced on the same day that Arun Raman, who was already a Non-Executive Director, would be appointed as the Company's new Chief Financial Officer with immediate effect and would continue to remain on the Company's Board. The Company would like to place its thanks to Graham Lyon for his invaluable contribution over the past year and wishes him the very best in his future endeavours. As the shape of the "Offtake" and "Equity" agreements develop we will be looking to strengthen the board further to facilitate the company's evolution as we move ahead. We are currently undertaking a search for a new Chairman who will guide us in our future endeavours. The Company is also in the process of recruiting a small number of high-performing executives to join the team, as the workstreams being undertaken to take the Project to FID become more complex, detailed and as we prepare to commence construction activities.

For further information, please contact:

 
 InfraStrata plc                               c/o Yellow Jersey 
  John Wood, Chief Executive Officer            +44 (0)20 3735 8825 
 Allenby Capital Limited (Nominated Adviser 
  & Broker) 
  Jeremy Porter / Liz Kirchner                 +44 (0)20 3328 5656 
 Financial PR - Yellow Jersey 
  Tim Thomson                                  +44 (0)20 3735 8825 
 

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.

Notes:

Background on InfraStrata plc

InfraStrata is an independent gas storage company focused on the UK and 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 a proposed salt cavern gas storage facility located on Islandmagee in County Antrim, Northern Ireland.

The Board of InfraStrata believes that the proposed 500 million cubic metres Natural Gas Cavern Storage facility will provide over 25% of the UK's Natural Gas Storage once constructed, and will be situated adjacent to the Scotland Northern Ireland (gas) Pipeline (SNIP) and the Moyle 500-Megawatt Electricity Interconnector.

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 2015 a well was drilled to core the salt and confirm the technical feasibility of the project, supported in part by the Commission. To date approximately GBP11.5m has been invested in the project.

Further information is available on the project company's website: www.islandmageeenergy.co.uk.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 31 January 2019

 
                                              Notes        Six months        Six months       Year ended 
                                                             ended 31          ended 31          31 July 
                                                              January           January     2018 Audited 
                                                       2019 Unaudited    2018 Unaudited 
                                                                  GBP               GBP              GBP 
 Continuing operations 
 Revenue                                                            -                 -                - 
 
 Cost of sales                                                      -                 -                - 
                                                     ----------------  ----------------  --------------- 
 
 Gross profit                                                       -                 -                - 
 
   Management and administrative 
   expenses                                     2           (652,647)         (340,458)        (863,413) 
 
 
 Operating loss                                             (652,647)         (340,458)        (863,413) 
 
 Finance expense                               5             (42,000)          (50,000)        (100,000) 
 
 Finance income                                5              200,000                 -                - 
 
 
 Loss before taxation                                       (494,627)         (390,458)        (963,413) 
 
 Taxation                                                           -                 -                - 
 
 
 Loss for the period from continuing 
  operations                                                (494,627)         (390,458)        (963,413) 
 
 Revenue for the period from discontinued 
  operations                                    3             100,000                 -                - 
                                                     ----------------  ----------------  --------------- 
 Loss for the period attributable 
  to the equity holders of the 
  parent                                                    (394,627)         (390,458)        (963,413) 
 
 Other comprehensive income                                         -                 -                - 
 
 
   Total comprehensive loss for 
   the period attributable to the 
   equity holders of the parent                             (394,627)         (390,458)        (963,413) 
 
 Basic and diluted earnings per 
  share                                        4 
 Continuing operations                                        (0.04)p           (0.09)p          (0.15)p 
 Discontinued operations                                            -                 -                - 
 Continuing and discontinued operations                       (0.04)p           (0.09)p          (0.15)p 
 
 
 
 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 31 January 2019

 
                                    Note             31 January             31 January              31 July 
                                                 2019 Unaudited         2018 Unaudited         2018 Audited 
                                                            GBP                    GBP                  GBP 
 
 Non-current assets 
 Intangible fixed assets: 
   Gas Storage Development                            9,297,732              6,656,250            7,479,690 
  Property, plant and equipment                         728,375                440,100              440,100 
  Deferred liability                  5                       -                      -                    - 
 Total non-current assets                            10,026,107              7,096,350            7,919,790 
                                               ----------------       ----------------       -------------- 
 
 Current assets 
 Trade and other receivables                          1,556,738                 54,441              222,491 
 Deferred liability                  5                        -                 92,000               42,000 
 Cash & cash equivalents                                342,544              1,633,676            1,790,979 
 Total current assets                                 1,899,282              1,780,117            2,055,470 
 
 Current liabilities 
 Trade and other payables                           (1,902,038)              (167,746)            (840,523) 
 Grant received in advance                          (1,411,842)            (1,411,842)            (924,642) 
 Short-term borrowings                                (540,221)                      -            (163,344) 
 Short-term financial liability                               -                      -            (200,000) 
                                               ----------------       ----------------       -------------- 
 Total current liabilities                          (2,442,259)            (1,579,588)          (2,128,509) 
                                               ----------------       ----------------       -------------- 
 Net current assets                                   (542,977)                200,529             (73,039) 
 Financial liability                 5                (200,000)              (200,000)            (200,000) 
 
 Net assets                                           9,283,130              7,096,879            7,646,751 
 
 Shareholders' funds 
 Share capital                                       10,943,584             10,865,960           10,919,117 
 Share premium                                       17,726,323             14,742,393           15,719,784 
 Merger reserve                                       8,988,112              8,988,112            8,988,112 
 Share based payment reserve                              6,847                616,096                6,847 
 Warrant reserve                                        203,215                      -              285,432 
 Retained earnings                                 (28,584,950)           (28,115,682)         (28,272,541) 
 
 Total equity                                         9,283,130              7,096,879            7,646,751 
                                               ================       ================       ============== 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the six months ended 31 January 2019

 
                                        Share                   Share 
                                      premium                   based 
                           Share                   Merger     payment    Warrant       Retained                  Total 
                         capital                  reserve     reserve    Reserve       earnings                 equity 
                             GBP          GBP         GBP         GBP        GBP            GBP                    GBP 
 
   Balance at 31 
   July 
   2017               10,853,460   14,297,307   8,988,112     616,096          -   (27,725,224)              7,029,751 
 
 Loss for the 
  period                       -            -           -           -                 (390,458)              (390,458) 
 
 
   Total 
   comprehensive 
   loss for the 
   period                      -            -           -           -          -      (390,458)              (390,458) 
 
 Shares issued            12,500      487,500           -           -          -              -                500,000 
 
 Share issue 
  costs                        -     (42,414)           -           -          -              -               (42,414) 
 
 
   Balance at 31 
   January 
   2018               10,865,960   14,742,393   8,988,112     616,096          -   (28,115,682)              7,096,879 
 
 
   Loss for the 
   period                      -            -           -           -          -      (572,955)              (572,955) 
 
 
   Total 
   comprehensive 
   loss for the 
   period                      -            -           -           -          -      (572,955)              (572.955) 
 
 Shares issued            53,157    1,336,573           -           -          -              -              1,389,730 
 
   Share issue 
   costs                       -     (73,750)           -           -          -              -               (73,750) 
 
 Warrant issue                      (285,432)                            285,432                                    -- 
 
 Share Option 
  expense                                                       6,847                                            6,847 
 
 Transfer on 
  forfeiture 
  of share 
  options                                                   (616,096)                   616,096                      - 
 
 Consolidation 
  adjustment 
  Moyle Inv.                                                                          (200,000)              (200,000) 
 
 
 Balance at 31 
  July 
  2018                10,919,117   15,719,784   8,988,112       6,847    285,432   (28,272,541)              7,646,751 
 
 
 
   Loss for the 
   period                      -            -           -           -          -      (394,627)              (394,627) 
 
 
   Total 
   comprehensive 
   loss for the 
   period                      -            -           -           -          -      (394,627)              (394,627) 
 
 Shares issued            24,467    2,135,849           -           -          -              -              2,160,316 
 
 Share issue 
  costs                        -    (129,310)           -           -          -              -              (129,310) 
 
 Warrant exercise              -            -           -           -   (82,217)         82,217                      - 
 
 
 Balance at 31 
  January 
  2019                10,943,584   17,726,323   8,988,112       6,847    203,215   (28,584,950)              9,283,130 
 
 

CONSOLIDATED CASH FLOW STATEMENT

for the six months ended 31 January 2019

 
                                                      Six months             Six months            Year ended 
                                                        ended 31               ended 31               31 July 
                                                         January                January          2018 Audited 
                                                  2019 Unaudited         2018 Unaudited 
                                                             GBP                    GBP                   GBP 
 Operating activities 
 Operating loss for the period                         (652,647)              (340,458)             (863,413) 
 Depreciation                                                  -                      -                     - 
 Decrease in trade and other 
  receivables                                            165,753                 44,277             (123,827) 
 Increase (Decrease) in trade 
  and other payables                                     932,205                 18,121               690,952 
 Shares issued in lieu of fees                            46,682                      -                89,750 
 Exchange differences                                     26,001               (29,070)              (26,590) 
 Share option expense                                          -                      -                 6,847 
 Cash (used in) discontinued                                   -                      -                     - 
  operations 
 
 Net cash (used in) continuing 
  and discontinued operating activities                  517,994              (307,130)             (226,281) 
                                                ----------------       ----------------       --------------- 
 Investing activities 
 Interest received                                             -                      -                     - 
 Purchase of assets:                                 (2,768,664)               (69,949)           (1,378,069) 
   Gas Storage Development Intangible                  (288,275)                      -                     - 
   Land 
 Proceeds from sale of Net Profit 
  Interests                                              100,000 
 
 Net cash (used in) generated 
  from investing activities                          (2,956,939)               (69,949)           (1,378,069) 
                                                ----------------       ----------------       --------------- 
 Financing activities 
 Proceeds on issue of ordinary 
  shares                                                       -                457,586             1,683,816 
 Proceeds from warrant exercise                          613,634                      -               163,344 
 Drawdown of short-term borrowings                       376,877                      -                     - 
 
 Net cash generated from (used 
  in) financing activities                               990,511                457,586             1,847,160 
 
 
 Net increase (decrease) in cash 
  and cash equivalents                               (1,448,434)                 85,507               242,810 
 
 Cash and cash equivalents at 
  beginning of period                                  1,790,979              1,548,169             1,548,169 
 
 
   Cash and cash equivalents at 
   end of period                                         342,544              1,633,676             1,790,979 
 
 Cash and cash equivalents consist 
  of: 
 
   Cash at Bank                                          342,544              1,633,676             1,790,979 
                                                ================       ================       =============== 
 

Significant non-cash transactions

As disclosed in Note 5, the Group has recognised a financial liability in respect of contractual payments which may become due in any future disposal of its assets and a corresponding deferred asset which has been amortised. These transactions are non-cash items and do not appear in the statement of cash flows. This is consistent with the accounting treatment and disclosure in the financial statements for the year ended 31 July 2018. In the six months ended 31 January 2019 there were no material non-cash items.

NOTES TO THE INTERIM RESULTS

for the six months ended 31 January 2019

   1.     Basis of preparation 

The interim financial information in this report has been prepared using accounting policies consistent with IFRS as adopted by the European Union. IFRS is subject to amendment and interpretation by the International Accounting Standards Board (IASB) and the IFRS Interpretations Committee and there is an ongoing process of review and endorsement by the European Commission. The financial information has been prepared on the basis of IFRS that the Directors expect to be adopted by the European Union and applicable as at 31 July 2019.

Non-statutory accounts

Financial information contained in this document does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.

A copy of the statutory accounts of the Company for the year ended 31 July 2018 has been delivered to the Registrar of Companies. The audit report on these accounts is unqualified and did not contain a statement under Sections 498(2) or (3) of the Companies Act 2006. In their report, which was not qualified, the auditors drew attention, to material uncertainties which existed with respect to the ability of the group to continue as a going concern and the carrying value of the Islandmagee gas storage facility should further funds to develop the Project not be secured. The current position regarding these uncertainties is detailed below.

The financial information for the six months ended 31 January 2019 and 31 January 2018 is unaudited.

The group has chosen not to adopt IAS 34 "Interim Financial Statements" in preparing the interim financial information'.

Accounting policies

The interim financial information has been prepared under the historical cost convention. The same accounting policies, presentation and methods of computation are followed in preparing the interim financial information as were applied in preparation of the Group's financial statements for the year ended 31 July 2018.

Going concern and carrying value of Islandmagee gas storage project

The Company carried out a share placing in the period in order to fulfil funding and liquidity requirements per the use of proceeds announced on 24 January 2019.

The Company is now in a position to move ahead with the various workstreams as announced and all focus is concentrated on implementing this in a timely and cost-effective manner, with a view to a smooth transition into the construction of the main project itself.

The directors have prepared cash flow projections which indicate that, including the proceeds of the most recent placing, the Group and parent Company have sufficient funding arrangements in place to meet ongoing project related costs and their corporate costs. For these reasons, they continue to adopt the going concern basis of accounting in preparing the interim financial statements.

The directors remain confident that the project is economically viable and that following the completion of the FEED and commercialisation programme, further new investment for the Company and the project will be secured. Having reviewed the value of gas storage assets in accordance with the principles set out below, and the value of balances due to the parent Company from its subsidiaries, the directors are of the opinion that these assets are not impaired in value.

NOTES TO THE INTERIM RESULTS

for the six months ended 31 January 2019 (continued)

   2.       Administrative expenditure 
 
                                      Six months        Six months    Year ended 
                                        ended 31          ended 31       31 July 
                                         January           January          2018 
                                  2019 Unaudited    2018 Unaudited       Audited 
                                             GBP               GBP           GBP 
 
 Administrative costs 
  which are paid in cash                 595,115           340,630       764,811 
 Non-cash items: 
 
   *    Share based payments              46,682                          96,597 
                                               -                 -             - 
   *    Depreciation 
 
   *    Exchange differences              10,850             (172)         2,005 
                                         652,647           340,458       863,413 
                                ================  ================  ============ 
 
   3.       Profit from discontinued activities 

Discontinued activities comprise the Group's former petroleum Exploration and Evaluation activities.

 
                                      Six months          Six months        Year ended 
                                        ended 31            ended 31           31 July 
                                         January             January              2018 
                                  2019 Unaudited      2018 Unaudited           Audited 
                                             GBP                 GBP               GBP 
 
 Revenue                                       -                   -                 - 
 Management & administrative 
  expenses                                     -                   -                 - 
 Profit on disposal of                                                               - 
  Exploration and Evaluation             100,000                   - 
  assets 
 Impairment of Exploration 
  and Evaluation assets                        -                   -                 - 
                                         100,000                   -                 - 
                                ================    ================    ============== 
 

The Company announced in October the disposal of its net profits interests in three offshore UK oil and gas licences (the "Net Profits Interests") to Westmount Energy Limited.

This follows the Company's announcement of 16 November 2015, where the Board (as then constituted) announced that InfraStrata would retain Net Profits Interests of 0.5% in P1918, 0.5% of P2222 and 1.0% of P2235, together with associated future profits agreements. No value was ascribed to the Net Profits Interests in the Company's most recently published annual accounts for the year ended 31 July 2018.

NOTES TO THE INTERIM RESULTS

for the six months ended 31 January 2019 (continued)

 
          Earnings per share 
   4. 
                                              Six months      Six months       Year ended 
                                                ended 31        ended 31     31 July 2018 
                                            January 2019    January 2018          Audited 
                                               Unaudited       Unaudited 
                                                     GBP             GBP              GBP 
         (Loss) profit 
          The (loss) profit for 
          purposes of basic 
          and diluted (loss) profit 
          per share being 
          the net (loss) profit 
          attributable to equity 
          shareholders: 
  Continuing operations                        (394,627)       (390,458)        (963,413) 
         Discontinued operations                       -               -                - 
  Continuing and discontinued 
   operations                                  (394,627)       (390,458)        (963,413) 
 
           Number of shares 
  Weighted average number 
   of ordinary shares for 
   the purposes of basic 
   earnings per share                      1,073,465,536     446,014,425      647,957,629 
 
           Basic and diluted earnings 
           per share 
  Continuing operations                          (0.04)p         (0.09)p          (0.15)p 
         Discontinued operations                       -               -                - 
  Continuing and discontinued 
   operations                                    (0.04)p         (0.09)p          (0.15)p 
 
 
 

For the six months ended 31 January 2019 and 31 January 2018 and for the year ended 31 July 2018 share options were not dilutive as a loss was incurred.

NOTES TO THE INTERIM RESULTS

for the six months ended 31 January 2019 (continued)

   5.      Financial liabilities 
 
                                         Six months             Six months         Year ended 
                                           ended 31               ended 31            31 July 
                                            January                January               2018 
                                     2019 Unaudited         2018 Unaudited            Audited 
                                                GBP                    GBP                GBP 
 
 Current liabilities 
 Baron Loan                                       -                      -            200,000 
  Costain Loan                              540,221                      -            163,344 
 
                                            540,221                      -            363,344 
                                   ----------------       ----------------       ------------ 
 
   Non-current liabilities 
 Baron Loan                                       -                200,000                  - 
 Moyle Investments                          200,000                      -            200,000 
                                            200,000                200,000            200,000 
                                   ================       ================       ============ 
 

Baron Loan

A liability of GBP200,000 to Baron Oil has been written off in full as this expired during January 2019. Amortisation for the six-month period ended 31 January 2019 of GBP42,000 has been classified as a finance expense in the statement of comprehensive income.

Costain Loan

In April 2018, IMEL concluded a Secured Development Loan Agreement with Costain Oil, Gas & Process Limited "Costain"). The loan is secured on the assets of Islandmagee Energy Limited ("IMEL"). The Costain loan required to be repaid, together with 10% per annum, on the earlier of FID being taken to proceed with the Project; or any sale of IMEL or the Project itself; or 31 December 2019.

At 31 January 2019, IMEL had drawn down GBP540,221 of this loan and this is disclosed as short-term borrowings in the Interim accounts.

Moyle Investments

In December 2017, The Company's wholly-owned subsidiary, InfraStrata UK Limited increased its ownership in IMEL from 90% to 100% by acquiring the remaining interest from Moyle Energy Investments Limited at par value. In recognition of the support by Moyle of the gas storage project at Islandmagee, InfraStrata plc will pay Moyle GBP200,000 on first gas storage.

NOTES TO THE INTERIM RESULTS

for the six months ended 31 January 2019 (continued)

   6.      Issue of shares during and subsequent to the interim period 

On 24 January 2019, InfraStrata announced a placing of 125,000,000 new ordinary shares of 0.01 penny at an issue price of 1.2 pence each to raise GBP1,370,690 after expenses. Consideration was received on 7(th) February 2019 so at 31(st) January this sum was included in Other Debtors.

At 31 July 2018 there were 255,208,333 warrants outstanding in relation to previous share issues. 112 215 424 warrants were exercised during the period raising funds of GBP613,634. An adjustment was made to the warrant reserve in relation to this. The following warrants have been exercised during the period to 31 January 2019 and subsequently:

   --      On 24 August 2018, 10,416,666 warrants at 0.48p 
   --      On 29 August 2018, 5,833,333 warrants at 0.6p 
   --      On 29 August 2018, 4,166,666 warrants at 0.48p 
   --      On 4 September 2018, 4,166,666 warrants at 0.48p 
   --      On 29 November 2018, 18,617,666 warrants at 0.6p 
   --      On 06 December 2018, 333,333 warrants at 0.6p 
   --      On 11 December 2018, 1,049,000 warrants at 0.6p 
   --      On 14 December 2018 1,356,162 warrants at 0.48p 
   --      On 17 December 2018 4,693,466 warrants at 0.6p 
   --      On 2 January 2019 1,768,838 warrants at 0.48p 
   --      On 3 January 2019 6,139,867 warrants at 0.6p 
   --      On 3 January 2019 4,508,427 warrants at 0.48p 
   --      On 4 January 2019 5,000,000 warrants at 0.6p 
   --      On 4 January 2019, 6,250,000 warrants at 0.48p 
   --      On 14 January 2019, 5,757,090 warrants at 0.48p 
   --      On 18 January 2019, 20,833,335 warrants at 0.6p 
   --      On 18 January 2019, 11,987,360 warrants at 0.48p 
   --      On 25 January 2019, 2,083,334 warrants at 0.48p 
   --      On 5 February 2019, 54,791,669 warrants at 0.48p 
   --      On 29 March 2019, 2,083,334 warrants at 0.48p. 
   7.      Dividend 

The Directors do not recommend payment of a dividend for the half year to 31 January 2019.

   8.      Publication of the interim report 

This interim report is available on the Company's website https://www.infrastrataplc.com

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

IR UNRKRKVASAAR

(END) Dow Jones Newswires

April 17, 2019 02:00 ET (06:00 GMT)

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