Italian partner for Rivara
Independent Resources PLC
25 April 2008
Independent Resources plc
('Independent Resources', 'IRG' or the 'Company')
Italian multi-energy group ERG becomes partner in Rivara project
April 25, 2008: ERG Power & Gas SpA, a subsidiary of the Italian energy firm ERG
SpA, will help develop AIM-quoted Independent Resources' underground gas storage
facility at Rivara in the Po Valley.
Independent Resources has entered into a partnership agreement with ERG Power &
Gas SpA ('ERG') to draw on the Italian Group's extensive experience as a
reliable operator in the energy sector and to help ensure that the Rivara
project meets the high technical and environmental standards required. ERG will
become a 15% equity shareholder and future customer of the company owning the
Rivara asset.
ERG will invest €9.5 million (approximately £7.6 million) in cash into a new
joint venture company ('Newco') in exchange for the 15% equity interest. IRG
will transfer the Rivara asset to Newco in exchange for the 85% balance of the
equity. The timing of the investment will be phased, with 25% paid upon, inter
alia, establishment of Newco and entry into a shareholders agreement reflecting
the terms and conditions of the partnership agreement. The balance will be drawn
over time and applied to the costs of developing the Rivara asset. The
transaction values IRG's 85% participation in Rivara at €53.8 million (£42.9
million).
The costs of developing Rivara will be met partially from the ERG investment and
partially from further funds injected by ERG and IRG pro-rata to their equity
share in Newco. ERG will receive preferential rights to use its part of Rivara's
future storage capacity.
IRG is currently seeking environmental approvals ahead of the planned
development of Rivara, a deeply buried fractured limestone structure ideally
suited to efficient gas storage thanks to the presence of an active aquifer that
provides constant natural water drive. Rivara has a nameplate working gas
capacity of 3.2 billion cubic metres and the ability to deliver in excess of 32
million cubic metres of gas per day back into the Italian pipeline system.
IRG is planning the Rivara development against a background of severe mid-winter
gas supply disruptions in Italy, and has appointed the oilfield services group
Schlumberger to advise on and manage the subsurface development programme.
Rivara is located next to the key convergence point between Italy's gas
transmission network and trans-continental pipelines, further enhancing its
long-term strategic potential as a physical trading hub.
IRG Executive Chairman Grayson Nash said: 'We are delighted to have reached this
agreement with ERG Power & Gas. We share a common vision for this large and
growing gas market and our skills and corporate profiles are particularly
well-matched. ERG's long-term commitment to build on its reputation as a
successful operator will enhance this exciting project. Its track record and
credibility in Italy are superb, and the group's entrepreneurial spirit will
allow us to go forward with confidence.'
ERG Power & Gas CEO, Raffaele Tognacca, said: 'We are delighted by the
agreement reached with Independent Resources, which allows our company to
achieve a major step forward in implementing its growth strategy as regards the
gas market.'
IRG was admitted to AIM in December 2005 and is pursuing an integrated and
asset-backed gas trading business in Italy with midstream components in Italy
and upstream components within Italy and in North Africa. The Company aims to
pursue this long-term strategy in the most environmentally-sustainable way, by
incorporating from the outset the permanent geological sequestration of CO2
emissions into its future commodity production and trading. IRG has focused on
developing both conventional oil and unconventional gas production, and building
a profitable portfolio through wholly-owned initiatives and partnerships.
Independent Resources was advised by Banca IMI, the investment bank of Intesa
Sanpaolo Group, and Ashurst, the international law firm.
For further information contact:
Stephen Staley, Managing Director, Independent Resources plc: 01332 865 253
07771 838 753
Allan Piper, First City Financial Public Relations: 020 7242 2666
David Smith, Deloitte Corporate Finance (Nomad) 020 7007 8177
This information is provided by RNS
The company news service from the London Stock Exchange
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