Star Energy Regulatory News (STAR)

18 Jan 2007 07:01

Star Energy Group PLC18 January 2007 Star Energy Group plc Trading Statement Star Energy Group plc, the energy company with interests in gas storage andonshore UK oil and gas production, will announce its preliminary results for theyear ended 31st December 2006 on 2nd April 2007. In advance of these results,Star Energy is providing the following trading update. Gas Storage Star Energy remains committed to becoming a significant multi-site gas storageoperator, with the objective of commissioning up to of 80 bcf of new onshorestorage capacity in the UK within the next 5 years. With the UK now a netimporter of gas, and with reliance on imported gas expected to increase toapproximately 50% of the UK's gas requirements by 2010/11, the case foradditional gas storage to manage variations in demand and provide security ofsupply continues to be strong. Having experienced what the Company believes are unreasonable delays to itsplanning applications, in October 2006 the Company announced its intention touse the 1965 Gas Act for all of its UK onshore gas storage applications. The Company believes that the use of the 1965 Gas Act will provide a morecertain timeline and cost for future gas storage planning applications, and tothis end the Company anticipates submitting planning applications under the Actin the first half of 2007 for Welton and Albury Phase 1, and for Gainsborough inthe second half of 2007. The Humbly Grove 10 bcf facility in Hampshire, commissioned in late 2005,continues to perform in line with expectations. The Company plans to installadditional compression equipment to enhance the performance of the gas store in2007. Oil and Gas Production Total daily production for the Star Energy Group averaged 4,600 boepd for theyear, boosted by a successful well drilled at Stockbridge. An appraisal well wasalso drilled at Avington, and it remains the Company's intention to drilladditional oil production wells in 2007. Financial Outturn 2006 For the year ended 31st December 2006, the Board expects, subject to audit,turnover to be approximately £56.5 million, including a one-off benefit of £8million relating to the sale of natural gas at Humbly Grove. Turnover fell belowexpectations by approximately £2.5 million due to lower than anticipated oilproduction in the last quarter of the year. This was caused by unscheduled welldown-time and the inability of one of the oil refineries to receiveapproximately 32,500 barrels of produced oil from the Company at the end of2006, which was delivered to the refinery earlier this month. As a result ofthe lower oil revenues, together with slightly higher operating costs, pre-taxprofit will be in the region of £14.5 million. 18th January 2007 Enquiries: Star Energy 020 7925 2121Roland Wessel, Chief Executive College Hill 020 7457 2020Nick Elwes / Paddy Blewer This information is provided by RNS The company news service from the London Stock Exchange