Learn from the past - Provide for the future
Infinity Energy SA is an Investing Company under the AIM Rules.
The Board notes the UK government’s policy for self-sufficiency in energy and that it is looking increasingly to shale gas to displace imported gas. The Board is firmly of the view that tremendous opportunities exist in this area and consequently intends focusing the bulk of its investing activities in on-shore UK oil and gas opportunities. Target investments will include a variety of investing and acquisition activities in private companies which hold interests in Petroleum Exploration and Development Licences (“PEDLS”). The Company will seek to co-invest with such companies in exchange for an economic interest. As noted above, such co-investments include the provision of financing by way of farm-ins, earn-ins, loans, equity and other forms of financing and investments. As it is highly likely that UK gas prices will reduce if large scale onshore gas production is successful, the Company will also consider investments in associated infrastructure that may include electrical generation from gas. Electricity prices are expected to rise due to a shortage of generating capacity in the UK caused by high emission stations closing. As new nuclear stations will take time to bring online, a viable short term solution would be modular gas fired generating stations that can be built quickly. Investments in such infrastructure will support the investment strategy as, in the face of falling gas prices, onshore producers are likely to be in a competitive position vis a vis imports and offshore gas producers.
The Board expects that such investments might typically represent in excess of 80% of the Company’s portfolio at times and in certain circumstances may be represented by a single investment. The Board recognises the inherent risks of such investments but believes that these offer Shareholders significant upside potential.
In order to offset some of the risk as well as to provide the Company with access to working capital, the Board intends investing part of its portfolio in large, stable diversified quoted oil and gas and commodities companies. Shareholders should be aware however, that such investments may only represent a small portion of the Company’s portfolio at any point in time.
It is expected that returns to Shareholders would be initially in the form of capital appreciation but the Directors will consider the payment of dividends if and when the Company has sufficient cash resources and distributable reserves.
The key strengths of the Investing Policy are:
- Discoveries and exploration investments are very attractive for growth prospects; and
- The UK on-shore oil and gas market, in particular unconventional gas prospects, offers potential for significant returns.
The potential risks of the Investing Policy are:
- Any significant and sustained falls in various resource materials and oil and gas prices may adversely affect the performance of the Company’s portfolio;
- Oil and gas exploration and development requires significant financial resources and the projects will require additional funding. The Company will need to raise further funds in order to progress future development plans; and
- Exploration is a high risk business and there can be no guarantee that any of the investments envisaged will result in returns to Shareholders.
Investment Committee and Investment Decisions
The Investment Committee comprises John Killer and Bruce Vandenberg. All individuals have considerable experience in the area of oil and gas exploration and investment management. If required, the Investment Committee will seek additional expertise.
The Investment Committee is responsible for:
- approving every investment, sale or purchase prior to the transaction being agreed by the Board;
- appointing and delegating specialist activities such as investment advisers, legal and accounting professionals;
- negotiating terms for investment; and
- monitoring performance of investments and reporting to the Board.
Audit & Remuneration Committee:
The Audit and Remuneration Committee consists of two Directors, John Killer and Gary Neville.