Portland Gas plc, the AIM listed independent gas storage company, announces preliminary results for the year ended 31 July 2008.
On 16 January 2008 the Company was introduced to AIM via a demerger from its former parent company Egdon Resources Plc. The Company presents consolidated results for the financial year on a merger accounting basis.
Operational and corporate highlights
• Demerger from Egdon Resources completed successfully
• Dorset County Council and the Department for Business, Enterprise and Regulatory Reform granted approvals for the Portland Project
• With advice from NM Rothschild & Sons Limited a process commenced to raise the Portland Project financing requirements through the introduction of joint venture partners
• An exploration licence received and seismic data acquired for the Larne Lough Project
• Northern Ireland Energy Holdings Limited became a strategic joint venture partner in the Larne Lough Project
• Environmental Impact Assessment initiated for the Larne Project
• The Group has continued to evaluate international gas storage opportunities
Financial highlights
• Loss for period of £1,569,621 (2007; £208,515) inclusive of demerger costs of £430,610
• Loss per share of 2.33p (2007; 0.33p)
• Net cash as at 31 July 2008 £9,276,964 (2007; £3,436,695)
• Capitalised expenditure on gas storage projects during the year of £7,360,442 (2007; £5,005,778)
• Completion of institutional placing on 11 July 2008 to raise £8,640,000 net of expenses
Chief Executive’s Report
On 16 January 2008 Portland Gas demerged from the oil and gas exploration business of Egdon Resources Plc to form an independent sub-surface gas storage company listed on AIM and has now entered an exciting phase of the Group’s development.
On 11 July 2008 the Company completed a placing of 2,535,211 new ordinary shares of 10p each at 355p per share to raise £9 million before expenses. The net proceeds of the placing are to be applied to support the advanced work on the Portland gas storage project, to provide the funds to drill a confirmation borehole for the Larne Lough project and to provide funds to develop further storage opportunities. In addition 47,676 shares were issued to certain Directors at 409p in lieu of cash bonuses on 27 May 2008. Following the placing, the number of issued and fully paid shares increased to 70,384,727.
Portland Project
In May 2008 the planning committee of Dorset County Council granted planning permission to Portland Gas Storage Limited to build a deep underground salt cavern facility at Portland, Dorset. In July 2008, approval was received from the Department for Business, Enterprise and Regulatory Reform (BERR) to construct a 37 kilometre gas pipeline to connect the underground salt cavern storage facility at Portland to the National Transmission System. Permission was also granted for a 16 kilometre brine pipeline between Stafford Farm, near Dorchester, and Portland.
In August 2006 NM Rothschild & Sons Limited were appointed to advise upon the best means of raising the necessary finance to construct the Dorset project. The Group has embarked upon a process following the grant of planning permission to fund the development through the introduction of partners into a project joint venture structure.
Full construction of the Dorset project is anticipated to take seven years with initial gas storage operations commencing in 2011.
Larne Lough Project
In May 2008 the Company announced that it had entered into an agreement with Northern Ireland Energy Holdings Limited to become a joint venture partner in the Larne Lough project. 3D seismic data was acquired in the year and has indicated that the area should be suitable for the creation of a sub-surface gas storage facility under Larne Lough where Portland Gas NI Limited was granted an exploration licence in 2007. An Environmental Impact Assessment is currently being undertaken.
Storage asset portfolio development
The Group has continued to evaluate international gas storage opportunities, particularly in the liberalised markets of Europe.
Outlook
The 2008/9 financial year will again be an active time for the business.
The Group looks forward to the introduction of joint venture partners to the Portland Project and to continuing the development and construction of the Upper Osprey site.
Portland Gas NI Limited plans to drill a borehole at Larne Lough in order to confirm the suitability of the salt sequence for the creation of caverns for gas storage and to complete the Environmental Impact Assessment. It is anticipated this will result in an application being made for planning permission during 2009.
In addition the Group will continue in its stated objective of developing an international gas storage business.
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