Gas Storage and Oil & Gas Exploration in County Antrim

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1 Gas Storage and Oil & Gas Exploration in County Antrim Dr Andrew Hindle InfraStrata plc 17 October

2 Agenda Introduction Islandmagee gas storage project PL1/10 licence oil & gas exploration 2

3 Introduction Significant growth in energy developments over the past 5 years in County Antrim, building on good existing infrastructure: natural gas storage compressed air storage oil & gas exploration World-class engineering expertise, particularly in the Belfast area. This talk will focus on the Larne-Lough Neagh Basin where there has been a rapid growth of data acquisition during past 5 years for storage and oil & gas exploration. InfraStrata is the operator of the PL1/10 exploration licence and shareholder of Islandmagee Storage Limited, working alongside strong and very experienced project partners. 3

4 County Antrim - storage projects and petroleum exploration licences Rathlin Energy oil discovery 2008 Gaelectric Compressed Air Storage Islandmagee Gas Storage 4

5 Seismic and drilling in the Larne-Lough Neagh Basin prior to

6 Seismic and drilling in the Larne-Lough Neagh Basin during 2007/8 6

7 Seismic and drilling in the Larne-Lough Neagh Basin during 2009/10 7

8 Seismic and drilling in the Larne-Lough Neagh Basin during 2011/12 8

9 Gas storage project (Islandmagee Storage Limited) 400 million salt cavern natural gas storage facility. First gas operations 2017, subject to planning and other consents/approvals. Granted a gas storage licence by the Utility Regulator in October million cubic metres (18 bcf) capacity when fully operational - 60 days of peak NI demand. Potential to create around 200 construction jobs during its 7-year development, and long-term operational posts - would provide a much needed economic boost for the East Antrim area. Economically and strategically important energy project for the island of Ireland. Facility will make a significant contribution to security of energy supplies as well as helping to meet the greater short-term demands placed on the gas network to support increased intermittent renewable generation. 9

10 Integral to the wider gas market Working with the Government and regulatory authorities north and south, and in Great Britain, to deliver the regulatory environment essential to allow the project to proceed in a timely fashion, and to ensure Islandmagee can operate on a level playing field with gas storage elsewhere on these islands. Reverse flow at Moffat Appropriate tariff structure 10

11 Islandmagee project partners Company Current interest (%) If BP option is exercised (%)* InfraStrata Mutual Energy BP Gas Marketing * January 2012 that IMSL had entered into agreements with BP Gas Marketing Limited ( BPGM ) regarding appraisal of the project and the option to acquire a % equity interest in IMSL. Under the terms of a Joint Appraisal Agreement, BPGM agreed to fund the activities necessary to develop the project, including the drilling of the first borehole, up to the point where a decision can be made on whether to proceed with its detailed engineering design. 11

12 Permian salt only location on island of Ireland suitable for fast-acting cavern gas storage Source: InfraStrata and DETI Commissioned Report, CR/10/069 (2012) 12

13 Excellent infrastructure connections adjacent to gas and electricity grids 13

14 Salt caverns to be constructed 1,400 metres below the surface Initial activity will be the drilling of the first well from the site in order to recover data on the Permian salt. First well planned for first half of Core samples and other technical data from the well will enable the design of the caverns to be finalised, and confirm the necessary data to support the consenting process for the marine aspects of the project. 14

15 Oil & gas Exploration (Licence PL1/10) Licence awarded from Department of Enterprise, Trade and Investment in Petroleum system similar to East Irish Sea Basin Permo-Triassic sandstone reservoirs and seals, Carboniferous source rocks. Under-explored basin, previous drilling primarily for coal exploration and geothermal feasibility. Principal challenge - presence of surface basalts New seismic data processing technology opening up a very exciting new play. Principal risk generation of hydrocarbons Carboniferous source rocks encountered on the margins of the basin, but no deep drilling in the basin centre below the Permian to confirm presence and maturity of the source rocks. Mature oil-prone source rocks anticipated. Large leads identified after 2011 survey. New infill seismic data acquired in 2012 to refine prospect mapping and identify a drilling location. Following stakeholder consultation, it is hoped that the first exploration well could be drilled back-to-back with Islandmagee well during

16 Exploration project partners Company Interest (%) InfraStrata 30 Cairn Energy 20 Brigantes Energy (40% owned by InfraStrata) 40 Terrain Energy 10 16

17 Comparison of geology with the prolific East Irish Sea Basin 17

18 New seismic acquisition successful imaging below the Antrim Basalt Seismic data processing completed October Interpretation on-going. 18

19 Thank you to County Antrim project partners, consultants and all stakeholders 19

20 Disclaimer This document has been prepared by InfraStrata plc (the Company ) for use in a presentation at a seminar in Dublin. The information contained in this document has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. None of the Company, shareholders nor any of their respective affiliates, advisers or representatives shall have any liability whatsoever for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document. The forward-looking information contained herein has been prepared on the basis of a number of assumptions which may prove to be incorrect and, accordingly, results may vary. This document does not constitute an offer or invitation to purchase or subscribe for any shares and neither it, nor any part of it, shall form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. 20