The company behind a proposed gas storage facility at Islandmagee has reported a loss of £6.1m in the last financial year.
Oil exploration and gas storage firm InfraStrata, which plans to create caverns deep under Larne Lough to store 500 million cubic metres of natural gas, said its pre-tax loss was significantly wider for the year ending 31 July, due to a number of impairments.
As reported in the Times, a test well drilled at Ballylumford Road earlier this year allowed the company to obtain samples from 250 million-year-old salt deposits a mile underground. Laboratory tests on the core samples have now confirmed the viability of the project.
However, this year was one of change for InfraStrata. Like many small companies with oil and gas exploration activities, it has faced a very difficult market in which to secure new funding for its exploration activities.
This has been precipitated by poor market sentiment following the very significant fall in oil prices since the summer of 2014.
For InfraStrata, this was exacerbated by confirmation from Larne Oil & Gas Limited earlier this year that it was unable to meet its funding obligations on the PL1/10 and P2123 licences in Northern Ireland.
With upcoming expenditure commitments in 2016 across the portfolio of exploration assets, the board determined that the transfer of “substantially all” future commitments associated with its exploration assets in exchange for cash and a retained interest. This will enable the company to focus on the development and monetisation of the Islandmagee gas storage project in 2016.
Chief executive of InfraStrata, Andrew Hindle said: “The successful drilling of the Islandmagee salt core well and subsequent testing and design development is testament to our ability to deliver on time and within budget.
“With the European Union’s Project of Common Interest designation renewed for a further two years we are now firmly focused on delivering the best outcome for our shareholders’ investment in the project.”
The gas storage project is currently envisaged to need around £274m in capital expenditure to progress.