LONDON, July 30, 2010 /PRNewswire/ -- 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

SOURCE: Star Energy Weald Basin Limited

CONTACT: Enquiries: Star Energy - +44(0)20-7925-2121, Roland Wessel, ChiefExecutive, Financial Dynamics - +44(0)20-7831-3113, Ben Brewerton / EdWestropp