Star Energy Regulatory News (STAR)

23 Nov 2007 07:00

Star Energy Group PLC23 November 2007 23rd November 2007 Star Energy Group plc ("Star Energy" or the "Company") Feasibility Study Confirms Commercial Viability of Offshore Gas Storage project - The Esmond Gordon fields show potential to form the basis of a 145 bcf gasstorage facility - Star Energy intends to exercise its option to increase its interest in theproject to 50% and become project operator Star Energy, the gas storage and onshore UK oil and gas E&P company, announcesthat it has completed the feasibility study for a gas storage project utilisingthe Esmond and Gordon fields in the southern North Sea. The Company is pleasedto announce that the results of the feasibility study have proven positive. TheCompany intends to exercise its option to increase its interest in the projectto 50% and become project operator. The Company commissioned AMEC to undertake a Conceptual Design Study, theresults of which were presented to the project partners at the end of September. The conclusions of the feasibility study are summarised as follows: • The Company believes the Esmond Gordon fields have suitable geologicalcharacteristics to form the basis of a gas storage facility with up to 145 bcfof working gas capacity, subject to the results of an Esmond appraisal well. • The AMEC study has confirmed a capital expenditure estimate of £1.15billion comprising two offshore platforms (with compression), a 200 km 42"pipeline and a terminal at Bacton (with compression and gas processing),excluding cushion gas. The Company will now move to the next stage of drilling an appraisal well on theEsmond field in Q1/Q2 of 2008 at a cost to the Company of approximately £7.5mand to proceed to project sanction. The feasibility study was undertaken inconjunction with EnCore Oil plc, currently the operator of the Esmond and Gordonfields, and Petronas. Roland Wessel, CEO of Star Energy, said: "The encouraging results from the Esmond Gordon feasibility study means we nowhave the potential to build a gas storage complex with a working gas capacity ofup to 145 bcf which would double the UK's existing gas storage capacity. "This has the potential to significantly enhance the UK's security of gas supplyduring a period when the country is becoming increasingly dependent on imports." - Ends - Enquiries: Star Energy 020 7925 2121Roland Wessel, Chief ExecutiveColin Judd, Finance Director Hoare Govett - Nominated Advisor and Joint Broker 0207 678 7106Andrew Foster Citi - Joint Broker 0207 986 0505Andrew Chapman Financial Dynamics 020 7831 3113Ben BrewertonEdward Westropp This information is provided by RNS The company news service from the London Stock Exchange