3rd Nov 2008 07:00
ENEGI OIL PLC
Trading symbols:
London Stock Exchange: ENEG
Bourse de Luxembourg: GB00B29T9605
3 November 2008
Enegi Oil Plc
('Enegi' or 'the Company')
Update on Garden Hill South drilling program and outstanding share subscription
Enegi, the western Newfoundland focused oil and gas company, is pleased to provide an update on its drilling program at Garden Hill South.
Garden Hill South is an onshore oil discovery that is 100% owned and operated by PDI Production Inc. ('PDIP'), the Company's 100% owned Canadian operating subsidiary. Previous production tests from Garden Hill South to date have produced over 24,000 barrels of high quality crude with a gravity of approximately 51° API. TRACS International has estimated that Garden Hill South contains mean unrisked resources of 8.6 mmboe.
Drilling of the PAP#1-ST#3 well commenced on 27 September. The PAP#1-ST#3 well is targeting the Aguathuna Formation, a dolomitized limestone formation of the Early Ordovician St. George Group. The Aguathuna Formation was penetrated by the PAP#1 well and the PAP#1-ST#2 well in two separate locations both of which produced oil.
On 31 October, PAP#1-ST#3 penetrated the Aguathuna formation as prognosed. The vertical portion of the well will now be cased before drilling of the horizontal extension commences. Drill cuttings from the Aguathuna indicate good porosity and some oil staining which is consistent with the cuttings from PAP#1 when it was drilled in 1995. PAP#1 flowed between 1,500 and 1,700 barrels of oil per day.
The well is expected to have a Measured Depth on completion of 4,448 meters, equal to a True Vertical Depth of 3,450 meters. The drilling program is expected to be completed within the next 30 days. Once drilling has been completed, the well will be logged and a well testing programme undertaken.
Alan Minty, Chief Executive Officer of Enegi, said: "Casing the well is the last milestone prior to drilling the horizontal leg of PAP#1-ST#3 through the Aguathuna formation. The initial signs from the Aguathuna formation are encouraging. We will continue drilling the horizontal side track with the expectation that PAP#1-ST#3 will be brought on to production by the end of the year."
In the announcement of the Company's preliminary results for the year ended 30 June 2008, the Company stated that an institutional investor had not met its obligations under the placing at the time of the Company's IPO. This institution failed to meet its obligations in full by 31 October 2008 and the Company has initiated proceedings to exercise its rights under the security arrangement which it has in place with this institution. The directors are confident that, whatever the outcome and timing of the action being taken to recover this debt, the Company has sufficient funds to complete the current drilling program at its core site of Garden Hill South. The directors do not expect the delay in receiving these funds to have any impact on the Company's current drilling operations at Garden Hill South. A further announcement will be made in this regard in due course.
Enegi Oil Tel: + 44 161 817 7460
Alan Minty, CEO
Kevin McNair, CFO
Cenkos Securities Tel: + 44 207 397 8900
Joe NallyStephen Keys
Fox-Davies Capital Tel: + 44 207 936 5200
Daniel Fox-DaviesRichard Hail
College Hill Tel: + 44 207 457 2020Nick ElwesPaddy Blewer
www.enegioil.com
Qualified Persons
The information in this release has been reviewed by Barath Rajgopaul MSc (Mech. Eng.) C. Eng, a director of Enegi. Mr. Rajgopaul has over 25 years experience as a petroleum engineer.
The Company
Enegi Oil Plc is an independent oil and gas group whose objective is the identification, development and operation of hydrocarbon opportunities. The Group's current operations are focused on assets on and around the Port au Port Peninsula in western Newfoundland, which, although lightly explored, is in an active petroleum system with light oil having previously been discovered there. The Group's assets include a proven discovery, Garden Hill South, and four prospects: Shoal Point, Garden Hill Central, Garden Hill North and Lourdes.
Related Shares:
NUOG.L