Operations

Longanesi

This Longanesi gas discovery (formerly known as Abbadesse) in the 100% owned San Marco and Casale Cocchi permits in the eastern Po Valley and the adjacent ENI permit, San Potito, is currently in the final stages of development planning. Substantial progress has been made in the last year, with Stratic reaching agreement with ENI on commercial terms allowing for the development of this field.

Under the agreement, ENI will operate the development, and is currently finalising the detailed development plan for submission to the Italian authorities. Stratic will bear 33.5% of the costs of all development work. Following the drilling of the first development well, and after the acquisition of a 3D seismic survey over the field, there will be a technical
redetermination of resource split between Stratic and ENI, with the costs and reserve split adjusted accordingly.

ENI has committed to submit the field development plan to the Italian authorities at the end of June 2008, which then
commences the process of government approvals, in particular approval of the development plan and approval of the environmental impact assessment. This process culminates with the award of a production concession, at which point development work in the field can commence. First gas is expected in the second half of 2010.

Proved reserves of 86.5 bcf (23.7 net to Stratic) and proved and probable reserves of 141.0 bcf (44.5 bcf net) have been booked for the Longanesi field.

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