Encore Engages Gas Storage Project with Star Energy

EnCore Oil furthers developments in its gas storage business by entering into additional agreements with Star Energy Group, providing for future management of the gas storage project, and varying the terms of the existing farm-out agreements already in place with Star Energy.

Star Energy has now exercised its options, and after completion of the regulatory process, will hold 50 per cent. in the decommissioned gas fields, Esmond and Gordon, located on southern North Sea blocks 43/13a and 43/15a & 43/20a respectively, and will assume operatorship of both fields.

The effect of the variations to the farm-out agreements is that EnCore will retain a 75 per cent. interest in the Forbes field and licence, and the conditions in respect of Star Energy’s option to acquire an interest in Gordon have been relaxed to enable this option to be exercised immediately. EnCore is currently pursuing alternative options for the use of the decommissioned Forbes field located on southern North Sea block 43/8.

On 14 November 2007, the Company announced its intention to demerge its gas storage business into a separately quoted company. Completion of the demerger is targeted to be before the end of the first quarter of 2008.