Supreme Court Rules in Star Energy's Favour in Dispute With Mohammed al Fayed's Bocardo

Outcome Welcomed By Entire UK Onshore Oil Industry

LONDON, July 30, 2010 - Star Energy Weald Basin Limited (and another) v Bocardo SA (Supreme Court
Judgment, 28 July 2010)

The Supreme Court has upheld a Court of Appeal decision in
favour of Star Energy Weald Basin Limited and another (Star Energy) in its
high profile dispute with Bocardo SA (Bocardo). The landmark case considered
the proper compensation to be paid by Star Energy, an oil company, to secure
their right to install deviated pipelines or wells beneath Bocardo's land.
Star Energy is the second largest onshore oil producer in the UK.

The case concerned an onshore oil field, partly located under
the Surrey estate owned by Mohammed al Fayed's company, Bocardo. Star Energy
has a licence to extract petroleum from the oil field and its predecessors
used deviated wells, as is common practice in the UK, drilled from adjacent
land belonging to Star Energy to do this. The deviated wells entered
Bocardo's land at depths of between 800 and 2800 feet below the surface which
Bocardo claimed amounted to trespass.

The Supreme Court upheld the Court of Appeal's decision that,
although the actions of Star Energy did constitute trespass, damages of only
GBP1,000 should be awarded on account of the applicable statutory regime
being compulsory purchase. This was a significant departure from the damages
awarded by the High Court (Peter Smith J) of 9% of all past and future
revenue from the oil wells in question, amounting to over GBP620,000 for past
trespass alone.

Bocardo argued that its power of control over the passage by
wells or pipes through their land gave a pre-existing "key value" to the
ancillary rights which Star Energy needed to acquire from them. The Supreme
Court by majority of 3:2 rejected this contention. Lord Brown (giving the
main judgment on damages, with whom Lord Walker and Lord Collins agreed) said
that "the GBP1000 awarded by the Court of Appeal can be regarded as
positively generous: compensation under section 8(2) of the Mines (Working
Facilities and Support) Act 1966 would have been assessed at no more than
GBP82.50 including the 10% uplift. There is frankly no coherent basis for any
intermediate award."

Roland Wessel, Chief Executive of Star Energy, said:

"Star Energy is pleased with the outcome of over three and a
half years of litigation. The Supreme Court's decision will be welcomed by
the entire UK onshore oil industry. Exploration in the UK onshore oil
industry was largely put on hold pending the final determination of this
matter. The industry will now have confidence in moving forward and
maximising our domestic fuel supply."

    Enquiries:

    Star Energy - +44(0)20-7925-2121
    Roland Wessel, Chief Executive
    Financial Dynamics - +44(0)20-7831-3113
    Ben Brewerton / Ed Westropp

Enquiries: Star Energy - +44(0)20-7925-2121, Roland Wessel, Chief Executive, Financial Dynamics - +44(0)20-7831-3113, Ben Brewerton / Ed Westropp