ENI DGC Update

Corac Group Plc

("Corac", the "Company" or the "Group")

ENI DGC Update

Corac's Downhole Gas Compressor system (DGC) has today completed a two-week test programme at the Company's methane test facility at Spadeadam in Cumbria.

This follows extensive testing at our workshop facilities in Uxbridge, where the integrated system was assembled for the first time in November. The tests consisted of three compressors, controlled by Corac's unique downhole electronics module, reaching full speed driven by the surface power supply over the full 2km of power cable with downhole communications and control. The protocol for the test was prepared in collaboration with ENI SpA (ENI) who were present to witness the system tests and with whom we agreed plans for the subsequent Spadeadam tests.

ENI were working on site with the Corac team this week; however the tests were impacted by the severe weather conditions and therefore did not achieve the intended results. The causes are under investigation and the DGC will return to Uxbridge to explore a number of potential contributory factors such as transportation, extreme low temperature exposure (approximately -20 degrees C) and on site power supply configuration in Spadeadam.

The investigation will begin once the DGC arrives in Uxbridge and continue into January, followed by relevant rework, assembly and re-testing. The Company will provide a further update in January.

Chairman and Chief Executive Phil Cartmell commented;

 "We have made major strides forwards in the project, including running a DGC compressor at full speed in the downhole configuration at Spadeadam. This puts us in a good place from which to move forward in partnership with ENI towards the deployment phase of the programme in Italy. The outcome of the tests reinforce our plans, under the recent fundraising, to improve our base facilities - the Spadeadam test site is an excellent facility for testing with methane, but is a 600 mile round trip and lacks the necessary workshop facilities. This means the DGC and our technical team must return to Uxbridge to deal with the issues that arose from the tests. In securing new facilities with more space and greater test cell capacity, more of the test programme can be completed at our base location, making us more effective in proving the technology."

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