Star Energy Regulatory News (STAR)

15 Dec 2006 07:58

EnCore Oil PLC15 December 2006 PRESS RELEASEFor immediate release: 15 December 2006 EnCore Oil plc ("EnCore") Offshore Gas Storage Feasibility Study EnCore Oil plc (LSE:EO.) is pleased to announce that Virgo Energy Limited("Virgo") has entered into an agreement with Star Energy Group plc ("StarEnergy") for Star Energy to farm into Virgo's UKCS Block 43/8 Forbes field inorder to undertake a feasibility study and a 3D seismic survey to determine thepotential to use the Forbes field as a gas storage facility. As announced on 25 October 2006, EnCore has entered into an agreement to acquireVirgo, together with three other companies. The acquisitions are subject to theusual regulatory consents. Completion of the acquisitions is expected in thenear future. Under the terms of the farm out agreement, Star Energy will undertake afeasibility study, and, if the feasibility study proves positive, a subsequentFront End Engineering & Design (FEED) study. In addition, Star Energy will pay£1 million towards the cost of a 3D seismic survey on the Forbes field andassign 50% of its interests in the Eskdale (PEDL 002) onshore licence to Virgo.The farm out agreement allows Star Energy to earn up to 50% of the Forbeslicence and to become operator if the field is developed into a gas storagefacility. The Forbes field was originally developed by Hamilton Oil and produced via atie-back to the Esmond field. The field produced approximately 48 bcf of gasprior to abandonment. The original gas in place was in the order of 100 bcf. Preliminary studies undertaken by Star Energy indicate the field has thepotential to be developed into a high performance gas store with up to 50 bcf ofworking gas capacity. Under the farm out agreement, the feasibility study mustbe completed by the end of June 2007. Roland Wessel, CEO of Star Energy, said: "Star Energy has an operational 10 bcf gas storage facility at Humbly Grove inHampshire and a further 80-90 bcf of onshore projects under development. Forbesis an excellent candidate technically; the reservoir is high quality, it hascushion gas in place and is close to major infrastructure. We believe there willbe sufficient industry support for a 50 bcf offshore gas store that justifiesthe much higher capital costs associated with offshore projects." Alan Booth, Chief Executive Officer, commented: "We are delighted to be working with Star Energy on this exciting project. Therecently announced DTI review of offshore gas storage recognises that the UKneeds to increase its gas storage capacity. We feel that this new partnershipwith Star Energy will provide an opportunity for our shareholders to participatein an increasingly important part of the UK's future energy strategy. Theacquisition of 50% interest of Eskdale (PEDL 002) will also increase our onshoreportfolio in the North of England." For further information, please contact: EnCore Oil plc www.encoreoil.co.ukAlan Booth, Chief Executive Officer +44 (0)20 7224 4546Eugene Whyms, Chief Financial Officer Aquila Financial Limited www.aquila-financial.comPeter Reilly +44 (0)20 7202 2601 Hanson Westhouse LLPTim Feather +44 (0)113 246 2610 This information is provided by RNS The company news service from the London Stock Exchange