Infrastrata Share Discussion Threads

[holism] 14/9/2010 09:33

I dont know what to suggest mina123- we are in a corporate culture which allows Directors immense freedom to protect their jobs at hugely inflated salaries. INFA is a good example of this. The company has made no money, the directors have failed to deliver the business model they so heavily promoted, yet Hindle earns over £200000 per annum.I just dont get it.I think many of us here wanted the company to sell the Portland project after planning permission was granted and I for one suspected that Hindle was not the man to commercialise the project. There are so many examples of this, in property planning permission enables an uplift in value to be realised, in mining a JORC resource does the same thing, building out planning permissiion or developing a mine requires very different skills and new management. INFA matches this scenario, but what can you do, learn from this unfortunate experience and dont repeat the mistake made.My average cost is near £1 per share so if I sell now I will achieve 44p per share.In two months time the share price will probably be down to 15p as PIs sell an illiquid stock. At that time it may be worth having another look provided new management is in place.

[mina123golf2] 13/9/2010 20:00

Much as I hate to admit it - I think now the game is up. At 23p I am getting out. Its been a pain in the proverbial owning this share - I wish that, as they say lessons had been learned - and yes, perhaps they have. I will never invest in anything like this again especially when there is a Board of Incompetents in charge of proceedings. Good luck to all of you in the future.

[mina123golf2] 12/9/2010 12:21

Not a particulary promising future then!!!! If the current share price doubled or tripled most if not all we PIs would be sitting on losses of a substantial nature. Is it not amazing how over a 2 year period the picture can change so dramatically?? Myself? - I am a firm believer that our fate was sealed when Hindle was in effect in charge - the only problem being we did not know of his serious shortcomings 2 years ago. HE wont be particularly bothered as he still cleans up with £0.25m every year to sooth away any stress.

[eacn] 12/9/2010 09:02

I would agree with clearsoup's opening summary: there is little or no appetite for independent gas storage projects at present.

The UK has a surfeit of regas capacity, which given current LNG demand, means that regas terminals are currently being used for gas storage. This situation will change if LNG usage increases: at high (or indeed low) utilisation rates regas facilities are no longer effective gas stores.

There is currently a global glut of LNG supply, courtesy of the recession and the development of unconventional (shale) gas supplies in the US. The glut is likely to remain until Asian demand for gas increases. Even then there is scope for significant increases in LNG supply capacity, so the supply glut is likely to continue for some time.

While the glut continues the UK will be able to source relatively cheap LNG in sufficient quantity to fill the gap left by the decline in domestic gas production. This will keep a lid on spot gas prices for the forseeable future.

However, as the UK's dependence on LNG increases, regas utilisation rates will increase and regas facilities will no longer act as gas stores. Without increased gas storage capacity, price volatility will increase, particularly in shorter term rates. This favours short cycle storage.

This is why all of the UK's major vertically integrated combined power suppliers (i.e. gas, wind, etc.) companies, with the exception of RWE, are developing short cycle gas stores.

However, what has thrown a spanner in the works is third party access. Ofgem has indicated that it may withdraw the exemption from third party access granted to the likes of Caythorpe. If that happens many of these short cycle stores may never be built, since their owners are only interested in using these stores as an internal hedge, both against intermittancy in supply from renewables and volatility in the spot gas market.

As clearsoup says, currently INFA's future as an independent supplier of gas storage does not look promising unless there is regulatory intervention. The forward curve is flat for the next four years with a summer/winter spread of only 10p/therm and minimal volatility. Until there are strong price signals from the market, no one can make a case for gas storage in any form.

However, by 2014/15 I expect we will be looking as a very different picture. By then lending will be beginning to return to normal, European activity will have started to return to historic norms and Asia will have moved ahead markedly. UK and Euopean gas demand will have increased, not least because the forecast renewables boom will be way behind projections, and LNG supply and regas capacity will be more in balance. The forward curve will look a lot less benign. In these circumstances it will only take a 1 in 5 or a 1 in 10 winter for UK gas supplies to come under severe pressure.

As a point of clarification: at the conference it was suggested that short cycle gas storage users typically achieve only 10% to 30% of the theoretical potential extrinsic value. My studies suggest that this is true and that on average users will only achieve 20% of the theoretical value. However, the theoretical extrinsic value of a short cycle store is roughly five times the intrinsic value of the summer/winter differential. Thus short cycle stores generally generate half of their income from intrinsic differences and half from extrinsic value.

In conclusion INFA's job is to survive until the market turns, either through regulatory intervention (unlikely) or as a result of favourable changes in the dynamics of the underlying market for gas (probable). Today we are at a low point for gas but I strongly suspect that in a couple of years time gas supply will appear more constrained and INFA will be in a marginally better place. They may also have a different CEO better equipped to make the deals that will return value to shareholders. For most investors that is too long to wait. For those not inclined to take loses or with stakes too large to sell there is no alternative but to tuck the shares in the bottom draw on the off chance that one day they will double or triple in value.

[kooba] 10/9/2010 14:16

seems to have gone down well!!!!
shareprice down again...more money burnt by management at the expense of shareholders as we go nowhere slowly.
they can't even convince anyone of the merits of their projects in an organised promotional event it seems to have led to more selling.

[clearsoup] 10/9/2010 12:41

I quite sympathise, Mina: but I went. Still, I came away with the strong impression of a disconnect between those convinced of the strategic imperative for more storage (most of the consultants, and also Mr. Hindle, I presume) and those concerned with the economics of gas storage projects (bankers and shareholders). There really are a lot of uncertainties with regard to the latter. The fundamentals of supply and demand are full of unknowns: unconventional gas, LNG, wind, clean coal and nuclear all likely to impact over the relevant time-horizon. More importantly, to my mind, the feed-through into gas storage pricing of those fundamentals is v. hard to forecast. Regulatory interventions are a regular feature of the gas market; and value-capture by storage providers has in the past been only a small proportion of the theoretical value created by the storage they provide.
Some of the presentations were interesting, and most provided useful facts and figures. They can all be seen/downloaded from the INFA website.

[kooba] 06/9/2010 15:32

anyone out there going to the shareholder funded seminar?

On behalf of the Directors of Infrastrata plc and the London Energy Group you are cordially invited to attend the above seminar on Thursday 9th September 2010, commencing at 2pm at the office of Buchanan Communications, 45 Moorfields, London, EC2Y 9AE.

The Security of the UK's energy supplies is a very topical subject and the contribution that gas storage will make in the coming decade to these supplies will be central to the day's events. The seminar provides an opportunity to hear from range of experts from the industry. A panel discussion at the end of the day should lead to a lively debate on the subject of 2020 gas price and volatility predictions.

large ones all round after such a sucessful couple of years.

[kooba] 20/8/2010 16:04

some demand for gas storage in europe!

At Least 3 Bidders 2nd Round Of BEB Gas Storage-Sources
By Eyk Henning, Jan Hromadko and Martin Rapp
Of DOW JONES NEWSWIRES

FRANKFURT (Dow Jones)--At least three bidders have proceeded to the second round of bidding in the planned sale of Royal Dutch Shell PLC (RDSB) and Exxon Mobil Corp.'s (XOM) jointly-owned gas storage business in Germany, several people familiar with the matter told Dow Jones Newswires.

The bidders that have made it to the next stage include France's GDF Suez SA (GSZ.FR), Deutsche Bank AG's (DB) RREEF and Allianz SE's (ALV.XE) infrastructure funds, the people said.

Allianz and GDF Suez declined to comment. RREEF wasn't immediately available to comment.

The infrastructure fund of Australia's Macquarie Group Ltd. (MQG.AU), which was also made an offer in the first round of bidding, didn't proceed into the next round, they added.

Exxon in Germany and UBS, which is running the sale for Shell and Exxon, declined to comment. Shell didn't immediately respond to requests for comment Friday.

The oil majors accepted a first round of bids for BEB Erdgas und Erdoel GmbH at the end of July.

Earlier Friday, news agency Bloomberg reported that the infrastructure investment units of AXA SA (CS.FR) and Prudential PLC (PRU.LN) are also among the bidders that may have proceeded to the next round of bidding.

AXA declined to comment. Prudential wasn't immediately available to comment.

The people familiar with the matter said bids came in at an unusually broad range of between EUR300 million to EUR700 million due to uncertainty over the further development of natural gas prices and demand.

One person said that gas storage capacity is set to increase to around 30 billion cubic meters over the next seven years from around 20 BCM at present.

"The targeted storage capacity exceeds existing demand considerably," the person said.

European gas markets have been heavily oversupplied over the past year as the economic downturn has weighed on demand, in particular from industrial customers that scaled down production during the recession. The fall in demand has massively eroded spot prices for gas.

Gas demand has recovered in 2010 in line with the recovery of the broader economy, but gas prices continue to be below pre-crisis levels.

The people familiar with the matter further said that BEB continues to be a tough sell to both corporate and financial investors.

BEB operates three underground facilities with capacity to store 2.8 BCM of natural gas, although the biggest of the three is not for sale.

The assets in themselves are high quality, but the existing contracts for gas stored in them are the problem: they aren't long enough for the infrastructure funds who typically look at assets like this, and paradoxically are too long for strategic investors like European energy companies, dampening enthusiasm at both ends of the market.

BEB derives revenue from fees paid to store gas--usually utilities build up stocks in the summer and draw them down in the winter. The bulk of BEB's storage contracts expire in three to five years, rather than the decade or more infrastructure funds prefer because the longer-tem contracts offer more certain income.

A further issue said to put off financial investors is the intention of Shell and Exxon to retain the management and administrative team associated with the assets after the divestment. As the management of the assets requires specialist knowledge, this poses an added problem.

"To overcome this problem many players have approached strategic investors over possible joint bids," one of the people said.


-By Eyk Henning, Jan Hromadko and Martin Rapp, Dow Jones Newswires; [phone]; [e-mail]

[kooba] 19/8/2010 13:20

eacn i was being a touch ironic there...just pointing out that we have had full planning permission for over 2 years and are going nowhere fast..in fact ecorp are not planning on drilling until next summer.
so as nice as it is to see directors spending their hard earned cash on shares it does actually mean that there is nothing price sensitive to be announced on the horizon on ecorp or seminar front,so current interest is not in advance of anything positive being announced....unless of course we get an opportunistic takeover offer.
am surprised that the directors consider themselves in a position to deal as they must be in possession of information on the failed talks..can't tell you confidentiality and all that...as well as the detail of the ecorp deal that the market has not been informed of...ie right of veto etc,and since the agreement has not yet be finalised or signed,it's a bit odd.

"The main agreed terms of the MOU, which are subject to final due diligence and
formal agreements being agreed"
last update so where does that place us??

[mina123golf2] 19/8/2010 12:23

Is this at last the long awaited turn around?? Frankly after all this time I am struggling to keep interest - in any event I am off to Switzerland for 2 weeks - so to hell with gas storage until early Sept

[bingham] 19/8/2010 12:04

Andy`s daughters are up two grand already.

[eacn] 19/8/2010 09:29

Kooba,

No. Very little capacity is being built, with many projects on hold. There are virtually no short cycle projects in the pipeline at present. If the second dash for gas does occur then spot gas price volatility will increase, even with increased LNG supply. But no one is thinking for the long term. The major players are sitting on cash waiting to see what happens to the regulatory environment and gas prices.

[kooba] 17/8/2010 10:08

will probably be up and running long before portland even though we have had full planning permission for over 2 years now.


LONDON (Dow Jones)--Centrica Storage and Perenco UK have been given planning permission for the onshore part of the Baird gas storage project off the Norfolk coastline in southeast England, the two companies said Tuesday.
The Bacton-based project has been given planning consent for the onshore gas reception terminal and pipeline landfall elements of the development, they said.
At 81 billion cubic feet, Baird would be the second largest gas storage facility in the U.K. after Rough--another of Centrica's facilities.
"As the U.K. becomes increasingly reliant on imported gas supplies, more storage facilities will be required. Baird could play an important role in this, but we need to ensure that projects are economically viable in the long term," said Simon Wills, managing director of Centrica Storage.

-By Angela Henshall, Dow Jones Newswires; [phone]; [e-mail]

[holism] 17/8/2010 09:29

What did Hindle pay for his shares I wonder, I know he bought a few at £1 but it would be interesting to know his average price, why oh why are we paying him £250k per annum? It is time to put pressure on brokers to get value for money.

[mina123golf2] 17/8/2010 08:05

23000 shares to each of his daughters?? What a gift - in a couple of years time if the trend continues they will be worth precisely ZERO.On the other hand with our directors throwing their money around like this surely this gives the market confidence in INFA - yea right!!!!!!

[kooba] 16/8/2010 17:04

yes but they will probably have a tax loss to carry forward...lucky ladies!!

i suppose he doesn't have to put good money after bad so maybe really thinks they are value here....he did buy some in the £1 placing less than a year ago too though so maybe not such a great judge!

[bionicdog] 16/8/2010 16:37

I bet his daughters are thrilled. When they reach 18 they'll be able to buy a pint.

[kooba] 16/8/2010 16:24

16 August 2010

Infrastrata plc

Directors' Share Acquisition

Infrastrata plc (the "Company") has been informed that Director Andrew Hindle
today purchased 46,000 ordinary shares in the Company at a price of 27.55p per
share being 23,000 for the benefit of each of his two minor daughters. Mr.
Hindle is now the beneficial owner of 6,695,791 ordinary shares, representing
9.07% of the current issued share capital.

Enquiries:

Andrew Hindle/Craig Gouws Tel: [phone]
Infrastrata plc

[mina123golf2] 13/8/2010 06:42

I deliberately kept well clear of reading about the remuneration picked up by people like Hindle as it makes me sick. These individuals have shown gross incompetence at our expense and yet pocket a £1/4m per annum. Its when you learn of this that you are inclined to the view, apart from never getting involved with INFA, NEVER gettiing involved with share markets at all.Some might say this is the chance you take buying shares in a venture of this type - NOT SO. For over TWO years shareholders have been given the message all was proceding according to plan with coy announcements being made from time to time to reinforce this picture. Then when nobody is apparently willing to finance this project it is given away for £22m to ecorp. I would be fascinated to know the detail of the "deal" - I would be astounded if even the slightest attempt to enhance shareholder value was included (personal enhancement for the few - most certainly)

[holism] 12/8/2010 16:02

It's time we shareholders took an active stance on these enormous salaries at a time when the company is earning nothing and has diluted shareholders so massively.No wonder Hindle is not concerned.

[kooba] 12/8/2010 09:16

gouws renumeration 129k in 2009...a pittence compared to our glourious leader hindle at 251k...what value for money!!

[mina123golf2] 12/8/2010 08:52

Usually when directors buy with such enthusiasm, the share price rises. Perhaps Mr Gouws effort with his massive 10000 shares has yet to be appreciated by the market - although somehow I dont think so. I am thinking of taking the loss and putting the remnants into GKP - at least they have a solid, savvy, BoD who have managed to produce 4, yes 4 very positive RNSs in the last few days and certainly know what they are about, unlike some we could mention.