Partnership brings Enegi’s losses down
ENEGI Oil’s partnership deal with Dragon Lance Management Corporation, which is developing its most advanced well in return for a share of the profits, has meant that the Manchester-based company dramatically reduced its losses in the year to June 30.
Enegi declared a pre-tax loss of £2.3m for the period, compared with £17.2m a year earlier. Moreover, with its most advanced well at Garden Hill South now found to be able to produce at least 200 barrels of oil per day (potentially more if modifications are made), chairman Alan Minty declared that the firm “can look forward to the year ahead with much optimism”.
He said that the past year had been important in terms of securing a viable future for the business. Alongside the agreement with Dragon Lance, which will earn a 30% share of the profits in return for developing the well, Enegi raised £2.9m via a new share placing and secured an extra £490,000 through the sale of assets held on security by a company which had pledged to take up shares in its IPO but then failed to provide the necessary funds.
Moreover, a positive report on another site close to the coast of Newfoundland found the potential for the recovery of shallow shale gas. However, rather than attempt a risky venture to recover the gas itself, the firm concluded a deal with Canadian Imperial Venture Corporation and Shoal Point Energy to acquire a 100% interest in its more conventional St. George’s Group play in exchange for the shallow shale venture.
Minty said that the the most advanced PAP#1 well at Garden Hill South were “important to the long-term future of the Group”. As such, they are being completed as diligently and quickly as possible but he described the initial results as “encouraging”.
“Until the workover has been completed and the well brought on stream the company will continue to ensure that its overheads are kept to a minimum,” he said.
“Our intention remains to bring the well on stream as quickly as possible but without jeopardising the integrity of the work programme therefore the company may require short-term bridging finance and, as shareholders would expect, the Board keeps the funding for the business under constant review.
“As can be seen from my actions in the past, I have supported the company through bridging finance when the Board deemed it to have been in the best interests of shareholders. I remain committed to the company and expect to be in a position to offer similar support in the future.”
