Joint Development Agreement

On 23 October 2008 we were pleased to announce a Joint Development Agreement ('JDA'), supply and licence with Centrilift, a Baker Hughes company (RNS announcement 4894G07). The JDA has been established to fulfil the requirements of the Joint Industry Programme field trial which was announced on 9 June 2008, where the first Downhole Gas Compressor ('DGC') unit will be deployed by Eni SpA in Italy.

Since the announcement a year ago that the JIP Partners were satisfied with the testing in our “closed loop” facilities in Spadeadam, Corac has been focusing on the next goal, namely a field trial.

As previously reported, the first field trial had been planned for Repsol YPF in Argentina but, owing to the geo-political constraints in the region, it was not possible or sensible for Repsol YPF to proceed.  We at Corac had designed our DGC machine with that trial in mind.  

We were delighted that ENI SpA, who were also planning a field trial, accelerated their programme and ordered a DGC unit in June 2008 (RNS announcement 2326W07).  Their field trial will take place in a flowing well in Southern Italy.  ENI has engaged Halliburton to perform the well work-over and Baker Hughes to provide some of the cabling and surface equipment.

Our announcement on 23 October 2008 of the JDA with Centrilift marks a very important step in Corac’s development and gives the company additional income as well as increased experienced human resources.

Centrilift is the world's leading manufacturer and supplier of downhole power cables, connectors and electrical submersible pumps ('ESPs') for oil well applications.  They have substantial experience in the deployment, servicing and manufacturing of ESPs which is a complimentary technology to our DGC.  From this it will enable the DGC products to mature at a faster rate and minimize the risks associated with the field trials.  In true partnership spirit we will be working together to ensure that we achieve a global market reach and that our end customers will have a committed worldwide support organisation.

Corac is looking forward to an exhilarating year and feels confident in achieving the important goals of the field trials.