Offshore Project Update

2 Apr 2007 07:04

Star Energy Group PLC02 April 2007 Star Energy Group plc Offshore Gas Storage Feasibility Study Expanded - Potential for additional 100bcf of gas storage - Complex would double UK's existing gas storage capacity and be the UK's largest gas store Star Energy Group plc ("Star Energy") announces that it has entered into anagreement with EnCore (Forbes) Limited ("EnCore") to farm into EnCore's UKCSBlock 43/13a (the Esmond field) with an option to farm into EnCore's UKCS Blocks43/15a and 43/20a (the Gordon field) in order to extend the ongoing feasibilitystudy and 3D seismic survey to determine the fields' suitability as a gasstorage complex. Star Energy and EnCore announced in December 2006 the Forbes farm-in agreementand study to investigate that field's (UKCS Block 43/8) potential for conversioninto a seasonal gas store with up to 50 bcf of working gas capacity. Under the terms of the new farm out agreement, Star Energy will undertake anextended feasibility study and, if the feasibility study proves positive, asubsequent Front End Engineering & Design (FEED) study. Star Energy will pay anadditional £0.25m (in addition to the £1m already committed) towards the cost ofan extended low density 3D seismic survey to incorporate the Esmond field. StarEnergy will also pay the cost of drilling the first well on the above Blocksfollowing a positive feasibility study. Under the agreement with EnCore, theextended feasibility study must be completed by the end of 2007. As with theForbes agreement, this farm out allows Star Energy to earn up to 50% of thelicences and to become operator if the field is developed into a gas storagefacility. The extended feasibility study will be undertaken in conjunction with a nationaloil company and a further major trade partner. The Esmond field was originally developed by Hamilton Oil and lies in closeproximity to both Forbes and Gordon which were produced via a tie-back toEsmond. The original gas in place on Esmond was in the order of 350 bcf. Preliminary studies undertaken by Star Energy indicate the Esmond field has thepotential to be developed into a seasonal gas store with over 100 bcf of workinggas capacity. In accordance with the AIM Rules - Guidance for Mining and Oil & Gas Companies,the information contained in this announcement has been reviewed and signed offby the Technical Director of Star Energy, Dr Melvyn Horgan, who has 26 yearsexperience as a reservoir engineer. Roland Wessel, CEO of Star Energy, said: "The addition of Esmond to our ongoing Forbes feasibility study means we are nowassessing a gas storage complex with a potential working gas capacity of over150 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." 2 April 2007 Enquiries: Star Energy 020 7925 2121 Roland Wessel, Chief Executive Financial Dynamics 020 7831 3113 Ben Brewerton Ed Westropp This information is provided by RNS The company news service from the London Stock Exchange