Echo Energy Regulatory News (ECHO)

29 Mar 2006 07:02

Independent Resources PLC29 March 2006 29 March 2006 Independent Resources plc Trading Update • Significant advances since admission • Positive progress on environmental and technical assessment at Rivara • Unsolicited third party approaches re Rivara partnership • New evidence corroborating gas content at Fiume Bruna • Planning progressing for re-entry of Sidi-Toui 3 Independent Resources plc ("Independent" or the "Company"), the internationalgas storage and oil and gas exploration energy company is providing a tradingupdate in advance of the announcement of its interim results for the periodending 31st March 2006, scheduled for June 2006. Since the admission of the shares of the Company to AIM in December last year,the board of Independent (the "Board") believes that the Independent ResourcesGroup (the "Group") has made important progress in relation to its upstream oiland gas and gas storage facility development projects. Additional technical studies at Rivara, the proposed underground gas storagefacility in northern Italy, have provided encouraging data and the Groupcontinues to engage in talks with possible strategic partners for Rivara. Workis also progressing well on the Ksar Hadada exploration permit onshore Tunisiawith a view to retesting of the Sidi-Toui 3 well later this year, and on theFiume Bruna coal bed methane (CBM) project in Tuscany. An individual update in respect of each of the projects of the Group is set outbelow. Rivara gas storage project ("Rivara") Since admission, significant advances have been made in the technical assessmentof Rivara, the progress of environmental assessment studies and regulatoryapproval processes, and the negotiation of commercial partnership arrangements. (i) Technical assessment Additional technical assessment of Rivara performed since admission has providedmeasured confirmation of the sealing efficiency of the Rivara structure. A soilgas study and shallow water well analysis commissioned by the Group over theRivara structure showed low readings of radon and helium, providing confirmationof the seal properties of Rivara. This study was performed by the INGV(Istituto Nazionale di Geofisica e Vulcanologia). An observed determination of the reservoir's fracture direction has also beencompleted. This, together with an analysis of the optimal drainageconfiguration, and the measured permeability at the nearby Bignardi-1 well hasenabled the formulation of a well-development plan which the directors believeshould be extremely efficient and which is now the subject of review by adrilling management company. The existing San Felice sul Panaro well is now planned to become the project'sfirst appraisal well. Independent's drilling manager has produced a plan tore-enter, recondition and test this well. This well and its results areintended to be paired with a subsequent new well to complete the formaltechnical appraisal phase which will immediately succeed the final regulatoryapprovals to be granted following the project's environmental impact study. An ideal site has been identified for the project's surface facilities.Approximately 6.6 hectares have now been formally secured. (ii) Environmental assessment and regulatory approvals The environmental impact study is in its last stage and is expected to besubmitted in April. In practice this study will form the final and formal basisfor all levels of governmental and regulatory bodies to irrevocably approve theproject's merits. The Company has made several advance presentations to governmental andregulatory bodies, at the national, regional, and local levels. Thesepresentations have been received very favourably, particularly in light of thesevere Italian gas storage crisis. Both the gas market Regulator and the energy secretariat of the Ministry ofProductive Activities have encouraged the Company to continue progressing asquickly as possible and for these reasons the directors believe that theapproval phase will be favourably expedited, with a conclusion before the end ofthe year. (iii) Commercial partnership arrangements The directors believe that the commercial potential of Rivara has beencorroborated by the interest shown in this project by potential strategicpartners. Discussions with a large integrated European gas utility continue.The Company has also received unsolicited approaches in relation to Rivara fromother attractive potential partners. The Board will carefully explore all itsoptions and seek optimal value for shareholders. The Company will update themarket regarding material developments in this regard as appropriate. Ksar Hadada onshore permit ("Ksar Hadada Permit") The Tunisian government has now provided its formal written approval ofIndependent's farm-in to the Ksar Hadada Permit and this has been registered asrequired by Tunisian law. On 20th March 2006, the joint operating agreement and farm-out in relation tothe Group's interest in the Ksar Hadada Permit were signed by Petroceltic KsarHadada Limited (a subsidiary of Petroceltic International plc and the Operatorof the Ksar Hadada Permit) and all other parties to the permit. The directors continue to see good progress toward the re-entry and testing ofwell ST-3 on the large Sidi Toui prospect. Tunisian exploration activity ingeneral remains buoyant and, as a consequence, rig demand is likely to remain ata high level for some time. However three rigs have now been identified aspossible candidates for use and based on discussions to date the directorsexpect the date to spud to be during Q3 2006. The Directors will seek toaccelerate the timing of this event if possible. Collection from ETAP (the state energy company of Tunisia) and appraisal of thenew data needed for re-mapping additional prospects and leads already identifiedin the permit area has begun. Separately, Independent is in the final stages of selecting a company to providedrilling management services to oversee the whole ST-3 drilling process. Fiume Bruna CBM project ("Fiume Bruna") Significant advances have been made in relation to Fiume Bruna since December.The technical assessment of the project performed for admission has now beenaugmented with observed determinations of the coal's gas content at shallowdepth. The directors believe that this has removed much of the uncertaintyabout the potential for the resource. An ideal site has been identified to drill an exploratory stratigraphic wellthat is expected to produce vital data for the project's environmental impactstudy. This exercise is expected to provide further, valuable data on thenature of the resource, albeit at shallow depth. The directors believe thatthis data will assist the group in a more expedient completion of theenvironmental impact study and should yield a more timely response fromregulatory authorities. In addition, the directors also believe thatacquisition of this data will facilitate a more efficient appraisal andsubsequent development plan. The Company has recently engaged Norwest Questa Engineering of Colorado asspecialist CBM consultants to the Fiume Bruna Project. Questa are one of theleaders in this field and bring a wealth of knowledge and experience to thewhole CBM exploitation process from exploration to full field development. For further information: Independent Resources Ian Foster (First City PR) 020 7436 7486Stephen Staley 01332 865 253 07771 838 753 Grayson Nash 00 39 02 3655 960 Deloitte Corporate FinanceJonathan Hinton 020 7936 3000Feilim McCole This information is provided by RNS The company news service from the London Stock Exchange