Saltfleetby to Resume Production Sooner than Expected

The latest advice which ROC has received from the operator of the Theddlethorpe Gas Terminal is that a replacement engine for the inoperative gas compressor has been sourced and compression could be operational by early March, 2004, subject to successful commissioning. This latest schedule is a substantial improvement on the initial advice and expectation that the gas compressor would not be operational until 2Q04. The Saltfleetby Field, located, onshore United Kingdom, is currently producing at a 75% reduced rate due to the problems with the gas compressor.

Roc Oil emphasizes that the mechanical failure of the gas compressor at the third party owned Theddlethorpe Gas Terminal affects only a very small proportion, less than 5%, of the gas processed at Theddlethorpe, because the production from the many other North Sea gas fields that feed into Theddlethorpe does not go through that particular compression facility.

Commenting on the gas compressor situation at Theddlethorpe, ROC's Chief Executive Officer, Dr John Doran, stated that:

"It is not often that mechanical problems in the resource business are fixed up ahead of original expectations, but that is what seems to be happening in this case, thanks to the efficiency of ConocoPhillips, the operator of the Theddlethorpe facility. If the compressor is back on by early March, in line with the latest advice, ROC's operating cashflow is likely to be reduced by approximately A$1.2 million, rather than the A$5 million estimate provided earlier.

ROC is pleased to advise that the contract prices for gas produced from the Saltfleetby Gas Field for the Contract Year commencing October 1, 2004 have been agreed with Innogy Plc. The actual contract price varies with each quarter and, on average, are approximately 18% higher than the existing contract. The higher contract prices reflect continuing strengthening of the UK gas market.

Commenting on the new contract gas prices, ROC's Chief Executive Officer, Dr John Doran, stated that:

"This is the third year in a row that the continuing strengthening of the UK gas price has been reflected in stronger contract gas prices for Saltfleetby gas, approximately 50% of which is sold under the contract terms. From a revenue point of view, the strengthening of the contract price will go someway towards offsetting the natural field decline as Saltfleetby enters its more mature productive years."
Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE


Most Popular Articles
Related Articles


Brent Crude Oil : $53.89/BBL 1.67%
Light Crude Oil : $50.84/BBL 2.14%
Natural Gas : $3.7/MMBtu 2.77%
Updated in last 24 hours