2nd Apr 2007 07:04
Star Energy Group PLC02 April 2007 Star Energy Group plc Agreement to Dispose of Majority Stake in Singleton Oil Field - Providence Resources to acquire stake for US$22 million subject to contract - Companies agree strategic initiative for gas storage projects in Republic of Ireland Star Energy Group plc ("Star Energy" or "the Company"), the gas storage andonshore UK oil and gas E&P company, announces that it has reached conditionalagreement with Providence Resources PLC ("Providence") to dispose of its 79.125%share of the producing Singleton Oil Field. Subject to regulatory approval andcontract, Providence's interest in the Singleton Oil Field will increase from20% to 99.125%. The remaining interest in the field is owned by NobleResources. The UK onshore Singleton Oil Field has limited potential for conversion to a gasstorage facility and therefore is no longer core to Star Energy's business. Theproceeds from the disposal will be used to further the Company's strategy ofgenerating cash from the existing oil and gas assets to reinvest in thedevelopment of a significant multi-site gas storage business in the UK andWestern Europe. The principle terms of the transaction are as follows: • Total cash consideration of US $ 22 million, equivalent to $11 per boe of P50 reserves • A 50:50 JV on a proposed CNG Project at Singleton site • Star Energy retains first right of refusal to utilise the Singleton field for Gas Storage purposes working with Providence on a 50:50 basis • Both companies agree to work together on future gas storage opportunities in the Republic of Ireland on a 50:50 basis In accordance with the AIM Rules - Guidance for Mining and Oil & Gas Companies,the information contained in this announcement has been reviewed and signed offby the Technical Director of Star Energy, Dr Melvyn Horgan, who has 26 yearsexperience as a reservoir engineer. Roland Wessel, Chief Executive of Star Energy, said: "This disposal underlines the Company's strategy to focus on building asignificant multi-site gas storage business. Singleton is a valuable, producingasset but, with limited gas storage potential, it was no longer core to ourbusiness. The proceeds will be reinvested in pursuit of our gas storagestrategy. "Having worked with Providence for many years at Singleton, we look forward toworking with them to develop gas storage opportunities in Ireland." 2 April 2007 Enquiries: Star Energy 020 7925 2121Roland Wessel, Chief Executive Financial Dynamics 020 7831 3113Ben Brewerton / Ed Westropp This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Star Energy