EnCore Oil ..

I thought I’d try and start a discussion re our current plans with Star Energy on the proposed Gas Storage on 43/8.

To quote Roland Wessel CEO of Star Energy

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

The following has been taken from the DTI consultation document on Gas Storage from November 2006
The document is available at:

1.9 The Government has been clear about the need to create an
appropriate regulatory regime for offshore gas supply
infrastructure. The then Secretary of State, Alan Johnson,
announced on 12 January 20067 that the Government would be
taking forward measures to increase the potential for gas supply in
the UK. He set out plans for the revision of the legal regime
covering new offshore gas storage and offshore gas unloading,
and noted that as soon as parliamentary time allowed, legislation
would be announced to achieve this, if required.

From Encore press release December 2006 (43/8 is 22LR)
A technical review of the 22nd Round promote licences to be acquired within the portfolio of licences has been encouraging and applications have been made to the DTI to convert all five 22nd Round promote licences into traditional licences. With the DTI’s agreement, EnCore would commit to drilling three firm wells and two contingent wells on the acreage within two years.

Back to the DTI
Conversion of depleting hydrocarbon fields
4.15 Where a storage activity was to be undertaken within a
hydrocarbon feature already licenced under the Petroleum Act, the
licence issued by the Secretary of State would remain valid. It
would be necessary to obtain a Natural Gas Storage Licence in
addition to a Petroleum Licence, but there would be no duplication
of provisions, and the process would not be burdensome. Developers
would need to obtain an authorisation from The Crown Estate for
the use of the porous space and it would be obtained on whatever
competitive requirements The Crown Estate required, though in 28
practice it is likely that an authorisation would be awarded without
recourse to competition.
Development of storage facilities over or near to a producing hydrocarbon field

4.16 It is intended that a Natural Gas Storage Licence could be
issued in areas already held under a Petroleum Licence of a different
company (i.e. a suitable non hydrocarbon feature has been identified
for storage over or near a producing hydrocarbon field). The reverse
would also be true. Operations of either licensee, such as drilling,
will only be consented to if they do not interfere with the activities
of another licence holder sharing the same region.
END DTI

Some details on Centrica’s Rough storage field, can hold 100 BCF and accounts for over 75%* of the UK’s gas storage at the moment.
*Taken from the DTI document paragraph 69


* The Rough offshore platforms and Easington terminal were originally developed to produce natural gas from the Rough field in October 1975. Following assessment of the reservoir's potential, the field was converted to a gas storage facility in 1985, enabling gas to be stored within the reservoir, some 9000 feet under the seabed and withdrawn at short notice to meet peaks in demand.

• Rough is the largest gas storage facility in the UK, with a total storage capacity of over 30 TWh (100 billion cubic feet (bcf)), a deliverability rate of 455GWh (1.5 billion cubic feet (bcf) per day) and an injection rate on average 160GWh (0.55 billion cubic feet (bcf) per day). Gas is stored within the reservoir at pressures of over 200 bar.

Now for the best bit, in the first SIX (6) months of 2006 the 100BCF storage made 93 MILLION POUNDS PROFIT !



Year-on-year the average SBU price was up 49% to 47.1p (2005: 31.7p). Operating profit* before the exceptional charge for the half year was up 63% to £93 million (2005: £57 million).