EnCore Oil says that following an extensive evaluation of the results of the recent Esmond well, Star Energy Group plc, a wholly owned subsidiary of Petronas (Star Energy) and EnCore have concluded that from a technical perspective its use as a gas storage facility would appear to be viable, albeit with a somewhat more complex development and start up phase. Star Energy has, however, indicated that from an economic and strategic perspective it does not meet their current investment criteria, and as such they no longer wish to proceed into the Front End Engineering and Design phase as required in the farm-in agreement with EnCore.

Alan Booth, EnCore's Chief Executive Officer, said, “Whilst we are naturally disappointed with this outcome, we can understand that Star Energy now has a broader strategic remit and potential investment portfolio within Western Europe. We would like to thank them for the extensive work and effort that they have expended on the project over the last two years to help move the project forward and we wish them well.

“EnCore is not alone in believing that the UK is woefully short of gas storage capacity, only recently highlighted by the supply disruptions in Eastern Europe. The work carried out to date indicates that the project is technically viable and we will seek to move the project forward, although the constraints caused by the current capital and debt environment make it difficult to assess the likelihood of attracting further investment in the near term.”

Tags: EnCore Oil plc