PRESS RELEASE
For 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 ("Star
Energy") for Star Energy to farm into Virgo's UKCS Block 43/8 Forbes field in
order to undertake a feasibility study and a 3D seismic survey to determine the
potential to use the Forbes field as a gas storage facility.
As announced on 25 October 2006, EnCore has entered into an agreement to acquire
Virgo, together with three other companies. The acquisitions are subject to the
usual regulatory consents. Completion of the acquisitions is expected in the
near future.
Under the terms of the farm out agreement, Star Energy will undertake a
feasibility study, and, if the feasibility study proves positive, a subsequent
Front 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 and
assign 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 Forbes
licence and to become operator if the field is developed into a gas storage
facility.
The Forbes field was originally developed by Hamilton Oil and produced via a
tie-back to the Esmond field. The field produced approximately 48 bcf of gas
prior to abandonment. The original gas in place was in the order of 100 bcf.
Preliminary studies undertaken by Star Energy indicate the field has the
potential to be developed into a high performance gas store with up to 50 bcf of
working gas capacity. Under the farm out agreement, the feasibility study must
be 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 in
Hampshire and a further 80-90 bcf of onshore projects under development. Forbes
is an excellent candidate technically; the reservoir is high quality, it has
cushion gas in place and is close to major infrastructure. We believe there will
be sufficient industry support for a 50 bcf offshore gas store that justifies
the 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. The
recently announced DTI review of offshore gas storage recognises that the UK
needs to increase its gas storage capacity. We feel that this new partnership
with Star Energy will provide an opportunity for our shareholders to participate
in an increasingly important part of the UK's future energy strategy. The
acquisition of 50% interest of Eskdale (PEDL 002) will also increase our onshore
portfolio in the North of England."
For further information, please contact:
EnCore Oil plc www.encoreoil.co.uk
Alan Booth, Chief Executive Officer +44 (0)20 7224 4546
Eugene Whyms, Chief Financial Officer
Aquila Financial Limited www.aquila-financial.com
Peter Reilly +44 (0)20 7202 2601
Hanson Westhouse LLP
Tim Feather +44 (0)113 246 2610
This information is provided by RNS
The company news service from the London Stock Exchange
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