Feasibility Study Confirms Viability of Offshore Gas Storage Project
EnCore Oil announces that the Gas Storage Feasibility Study, which was conducted by Star Energy Group, has demonstrated that the Esmond and Gordon fields show potential to form the basis of a 145 bcf gas storage facility. Star Energy has confirmed its intention to exercise its option to increase its interest in the project to 50 percent and become project operator. EnCore will retain a 50 percent interest in the project.
A conceptual design study, conducted by AMEC as part of the feasibility study, confirmed a capital expenditure estimate of £1.15 billion comprising two offshore platforms (with compression), a 200 km 42" pipeline and a terminal at Bacton (with compression and gas processing), excluding cushion gas.
The next stage of the project will be the drilling of an appraisal well on the Esmond field in Q1/Q2 2008, the cost of which will be met by Star Energy.
On November 14, 2007, the Company announced its intention to demerge its gas storage business consisting of the decommissioned Forbes, Esmond and Gordon gas fields into a separately quoted company. Completion of the demerger is targeted to be before the end of the first quarter of 2008.
Alan Booth, EnCore Oil's Chief Executive Officer, commented:
"Confirmation of the technical and economic viability of the gas storage project is a very significant milestone for EnCore. Star has indicated that, subject to satisfactory results from the well into the Esmond field in 2008, the Partnership would then expect to sanction the development of what would be the UK's largest gas storage facility. This result supports the Board's recent decision to progress with the demerger and listing of EnCore's gas storage business."
Sanction for development of gas storage is subject to the necessary regulatory consents.
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