TPG.L Regulatory News (TPG)

Thursday 18 October 2012

CORAC GROUP PLC

("Corac" or the "Group")

Corac's subsidiary CET achieves most significant milestone to date in the DGC programme

Corac is pleased to announce that its subsidiary, Corac Energy Technologies (CET) has achieved its most significant milestone to date in the development and commercialisation of its Downhole Gas Compressor * (DGC).

A fully integrated prototype DGC system has successfully completed a test programme at the Spadeadam facility in Cumbria. The tests were carried out in the purpose-built flow loop, using methane at controlled temperatures, pressures and flow rates to represent the conditions that will be faced in the field deployment.

The team, which included representatives from our American development partner, performed a number of operational scenarios, followed by continuous operation over several days to confirm system function and steady-state operational performance.

Representatives from ENI were also present to observe the DGC in operation and discussions continue regarding a schedule for final testing and delivery of their DGC prototype system.

This is a significant achievement by CET engineers, who have resolved complex technical challenges facing the downhole electronics module operating in high temperatures. This means that development and testing on all six of the DGC subsystems is complete, and they have now reached a sufficient Technology Readiness Level (TRL) to go into downhole field trials.

The tested prototype DGC will now be prepared for transit to the United States where our partner will manage the deployment, commissioning and further testing in one of their live wells, supported by CET engineers.

As stated in the Group's half year results issued in September, the plan for the DGC development programme is to move the technology towards a less bespoke, core system specification that will satisfy higher volume deployments. Discussions have taken place to explore the potential for small batches of systems with a common configuration to operate in fields with wells of similar characteristics.  Initial estimates indicate a batch of five similar devices is possible.

* The DGC is a compact high speed turbocompressor using CET's patented technology, deployed several miles underground in a declining gas well with the intention of extending production life and recovering otherwise unavailable gas reserves.

Phil Cartmell, Chairman of Corac Group plc commented on this milestone:

"This achievement represents tangible progress for CET and the Group and reflects the commitment of our team and partners. We look forward to supporting the field deployment and testing phase for the American DGC.

"This is a major step towards achieving a commercial DGC proposition. This and our other compressor technologies will enable us to provide high value products to leading energy and industrial customers in attractive global markets."

Ends

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NOTES TO EDITORS

Corac is a UK based group of advanced technology and engineering companies. The Group produce innovative, diverse and valuable solutions in compression systems, atmosphere control and heat exchangers for government, energy and industrial users. It has traded shares on the London Alternative Investment Market (AIM) since July 2001.