Paladin Gets DTI Approval for Wood Field Development

Paladin Resources and its joint-venture partner Energy North Sea Ltd., a subsidiary of Marubeni Corporation, have received DTI approval for the development of the Wood oil field, which is located close to the Montrose, Arbroath and Arkwright ('MonArb') field complex, at an anticipated cost of approximately £80 million.

The Wood Field was discovered by Amoco U.K. in 1996 by well 22/18-6, which penetrated 146 ft of oil bearing Jurassic Fulmar Sandstone. The field will be produced by a single horizontal development well tied back to the existing Montrose production platform 9.5 km away. A compression module will also be installed on the Montrose platform to compress and export associated gas from the Wood Field. Associated gas from the MonArb complex, which is currently being flared, will in future also be compressed and exported using the new facilities. Oil from Wood will be transported to shore via the Forties Pipeline System, whilst gas from Wood and the MonArb complex will be exported via the CATS gas pipeline system. Production will start in late 2006, peaking at over 5,000 bopd of oil and 21 MMscfd of export gas.

Joint-venture partner interests in the Wood Field development and in the Montrose, Arbroath and Arkwright Fields are Paladin Expro Limited (operator) 58.97 percent and Energy North Sea Ltd. 41.03 percent.

Colin Reid, Paladin's Aberdeen-based UK General Manager, commented:

'The Wood Field development is further proof of the growth potential which lies around mature North Sea infrastructure and of how focused innovative companies can exploit previously discounted opportunities. In this case, a dual benefit has been realized through the development of the Wood oil and gas reserves and the sale of gas which would otherwise have been flared.'

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