Dundee Energy Limited says that the Spanish authorities approved a Ministerial Order affecting the remuneration of underground natural gas storage projects. The key changes to the regulatory framework, as they apply to the Corporation's effective 24.6% interest in Escal UGS SL (Escal), the owner of the Castor Underground Gas Storage Project (the "Castor Project"), are outlined below.

• The approval confirms a 20-year amortization period for the return of capital. • The amendments deem July 5, 2012, the date of receipt by Escal of the Provisional Commissioning Act, as the end date for capital investments, other than for cushion gas. • The amendments provide for an annual inflation adjustment of 2.5%. • Escal will receive a return on its capital investment at a rate of 8.76% per annum on any unpaid balances, being the average rate of Spanish 10-year bonds plus 3.5%, calculated based on the 24-month period ended immediately before July 5, 2012. • After the 20th amortization year, and throughout any remaining useful life of the Castor Project, Escal is entitled to receive a per annum amount equal to 50% of the payment received in the last amortization year. • The amendments provide that the purchase and injection of cushion gas may be segregated from the construction of the project, allowing for a third party purchase. If purchased by a third party, the third party will be entitled to a corresponding interest in the remuneration base of the Castor Project. Escal has already initiated discussions with a third party for the acquisition of the cushion gas. • The period during which Escal has the right to relinquish the Castor Project to the Spanish authorities for any unamortized value has been extended from five years to 25 years.

Tags: Dundee Energy Limited