10th Jul 2006 07:00
Star Energy Group PLC10 July 2006 Monday 10th July 2006 Star Energy Group plc("Star Energy" or the "Company") Star Energy farms into onshore Denmark Star Energy announces it has signed a Letter of Intent with Tethys Oil DenmarkAB ("Tethys") to enter into a farmout agreement whereby Star Energy will obtaina 20% interest in two onshore Denmark licences operated by Tethys. The farmout arrangement covers onshore Denmark licences 1/02 and 1/03 and callsfor Star Energy to pay 20% of historical costs and 40% of the cost of anexploration well on licence 1/02, programmed for Q4 2006. The total cashconsideration is estimated at £1.02 million, including drilling costs. The Karlebo-1 exploration well is planned to test a thick sequence of clasticreservoirs in the Lower Cretaceous and Triassic formations with the LowerCretaceous Vedsted Formation and Triassic Bunter as primary targets. The areais relatively under-explored; the nearest wells, albeit 50km distant from thetarget, have proved excellent reservoir quality. The hydrocarbon source rock isbelieved to be the organically rich Cambrian Alum Shale, with gas the mostlikely charge. The target structure has the potential to contain in excess of 1TCF of gas reserves. Star Energy's clear focus has been, and remains, the development of UK onshoregas storage. However, with the UK's increasing dependence on imports fromcontinental Europe, the company has been seeking opportunities to participate ingas production and potential gas storage in several countries that contribute tothe dynamics of the European gas supply equation. The two licences in questionlie close to infrastructure linking Denmark with the major northern European gashubs. Thus the participation with Tethys offers significant potential upside ina strategically important location. Roland Wessel, Chief Executive of Star Energy commented: "This is an exciting development for Star. Our 20% interest potentiallyprovides us significant upside from what is a high risk well, in a strategicallyimportant location." Enquiries: Star Energy 020 7730 6663 Roland Wessel, Chief Executive College Hill 020 7457 2020 Nick Elwes / Paddy Blewer This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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