new delay for safety

Downhole Gas Compressor ('DGC')

In June 2008, the Company announced that ENI SpA ('ENI'), a Joint Industry Programme ('JIP') partner, had committed to the first field trial downhole gas compressor ('DGC') unit to be deployed in one of their gas wells in Italy. The Company was aiming for deployment of the DGC field trial unit in Q1 2009.

Corac has been working closely with contractors engaged by ENI. These specialist suppliers have highlighted the need for additional safety equipment which will be delivered by third parties. This, unfortunately, will increase lead times. Corac is modifying its control systems to facilitate this and the combined impact will be a delay in deployment from Q1 2009 to a target of Q4 2009. The Company will use the time for continued testing at Spadeadam in Cumbria to improve reliability and reduce deployment risk.