NUOG.L Regulatory News (NUOG)

ENEGI OIL PLC

AIM ticker: 'ENEG'

OTC ticker: 'EOLPF'

6th February 2014

Enegi Oil Plc

("Enegi" or "the Company")

Chairman's AGM Statement

Enegi, the independent Oil and Gas Company with a portfolio of projects located in the UK North Sea, Newfoundland, Canada, Ireland and Jordan, is pleased to provide an update, in advance of the Company's AGM being held later today, on the two major areas that are its current focus, operations in western Newfoundland and the development of marginal fields through ABT Oil & Gas ('ABTOG'), its joint venture with ABTechnology ('ABT').

Highlights

Western Newfoundland:

· Production reinstated at Garden Hill following recruitment of new wellsite supervisor.

· Good pressure recovery and lack of pressure depletion seen, reinforcing Company's confidence in the potential of Garden Hill.

· Working closely with BSE to finalise the drilling schedule for Garden Hill, as well as ensuring all technical and regulatory aspects of the upcoming programme are addressed.

· One year extension of Period 1 on EL1116.

Marginal Field Development:

· Huge value can be created through application of appropriate and proven technology to develop marginal fields.

· Negotiations with Wood Group PSN progressing well under the exclusive option announced.

· ABTOG's range of buoyant solutions has been extended further.

· Significant engineering work has been completed on the solutions and on application to the Fyne field.

· Further field studies/projects anticipated in the near future.

· ABTOG identifying and evaluating assets available for 28th Seaward Licensing Round for the UKCS.

· Encouraging progress on Block 3/23a by Azimuth, further work to be carried out by partners to finalise conclusions.

· Work has commenced in evaluating feasibility of Helvick and Dunmore discoveries, North Celtic Sea.

Alan Minty, CEO of Enegi, commented:

"The Company made significant progress in 2013 and I am pleased that the momentum we built up has been carried over into 2014 and looks set to gather pace, particularly in relation to our marginal field initiative and our assets in western Newfoundland.

We are excited that BSE share our vision for the future of western Newfoundland and believe that consolidating production at Garden Hill is the logical first step towards delivering a regional development programme for western Newfoundland that will benefit not only Enegi, but all those involved in exploration and development activities in the area. We are very pleased to be moving things forward through our focus on conventional targets at a time when the moratorium on fracking is slowing progress on many other developments in the area.

The progress that we have seen in our marginal field initiative in such a short period of time has been fantastic. We are already involved with two large projects and, given the interest and discussions we have had to date, expect to make further announcements in time. We believe that we have the appropriate technologies, the partners and the business model to ensure that we will play a significant role in this arena and in shaping the future of the UKCS.

I would like to thank all our shareholders for their continued support and look forward to what we believe will be a highly significant year for the Company."

Update

Western Newfoundland

We have now reinstated production at the Garden Hill site, which had been suspended for a period following the unfortunate sudden death last year, from natural causes, of Steve McIntosh, Garden Hill Site Operations Manager. Many of us had worked closely with Steve for several years and his death came as a shock to us all; our first concern was to ensure that we did everything we could to assist his family at such a difficult time. Of course, we also had to plan for the future on site, and we took the appropriate time and care to recruit and train a Wellsite Supervisor who is now overseeing the continuation of the ongoing testing of the PAP#1-ST#3 well ('the Well'). We also took the opportunity to ensure that the site and facilities were in the best possible condition for the upcoming drilling programme as well as for ongoing testing activities.

Good pressure recovery was observed over the period during which the Well was shut in. Initial pressure recovery following production periods has so far also been extremely encouraging, allowing the Well to flow freely at high rates for short intervals in line with the sustained production process that was established last year. The lack of observed pressure depletion continues to reinforce the Company's confidence in the potential of the Garden Hill field and the possibility of booking reserves. It also justifies the decision, made in conjunction with Black Spruce Exploration ('BSE'), to commence the planned drilling programme by targeting the known reservoir from the Garden Hill site.

We continue to work closely with BSE to ensure that all technical and regulatory issues relating to the upcoming programme are appropriately addressed. We are also, with BSE, currently reviewing and confirming the schedule for drilling of the first well at Garden Hill, in light of the work required to ensure that BSE's rig is suitably equipped for all the anticipated wells and also taking into account the particularly harsh winter conditions that have been experienced in western Newfoundland this winter, which look set to continue.

In addition, Enegi has received confirmation from the Canada-Newfoundland and Labrador Offshore Petroleum Board of the one year extension to Period I of Exploration Licence EL1116, as announced on 17 January 2014. Drilling of an onshore to offshore well to target the St. George's Bay prospect is planned for later this year, following drilling at the Garden Hill site and as part of the drilling programme to be undertaken by BSE in fulfilment of their farm-in obligations. Planning for this well is well advanced and discussions have commenced with regulators as part of the process to obtain the necessary approvals and permissions.

Marginal Field Development

As I have indicated previously, we believe that huge value can be created through the application of appropriate and proven technology for the economic development of marginal fields, and Enegi is pursuing this through ABT Oil and Gas ('ABTOG'), the joint venture established between Enegi and ABTechnology. This continues to be a primary area of focus for the Company, and we are extremely encouraged by the strong interest that we are receiving from the market. Negotiations with Wood Group PSN are ongoing and progressing well, and we hope that agreement will be reached, under the exclusive option announced previously, to extend Wood Group's participation in the marginal field initiative.

Over the last few months, ABTOG has been extending the range of buoyant solutions available to the joint venture, whilst retaining the core principles and attributes of lower capex, lower opex due to normally unattended operation and redeployability. Significant engineering work has also been completed, by Wood Group PSN on the application of the production buoy to the Fyne field and by GMC, a strategic partner of ABT, on the implementation of their buoyant platform, or Self-Installing Floating Tower ('SIFT') in North Sea conditions. In addition, ABTOG have informed us that they are in discussion with a number of operators on the applicability of the solutions to well appraised fields in the UKCS and are commencing feasibility studies.

ABTOG are also currently identifying and evaluating assets available in the 28th Seaward Licensing Round for the UKCS that are suitable for development using ABT's buoyant solutions, as conventional development solutions may not be economically feasible. As previously, our focus in selecting opportunities is on well-appraised assets where there is a clear indication of the presence of hydrocarbons, remoteness from available infrastructure, which favours a small, standalone development solution, and a physical environment that will allow successful implementation.

These criteria served us well in the 27th Licensing Round and we have been very encouraged by the progress that Azimuth have made under farm-out agreements covering each of the two Licences awarded to the Company in that round, and the results of the work that they have undertaken to date.  Enegi and Azimuth intend to carry out further work together in the coming months to build on and finalise conclusions from this promising study.

Finally, work has commenced on evaluating the feasibility of implementing buoyant solutions to develop the Dunmore oil discovery and Helvick oil field, under the farm-out agreement with Providence Resources and its partners. We are awaiting confirmation that Lease Undertakings applied for by Providence for these discoveries will be granted by the Petroleum Affairs Division of the Department of Communications, Energy and Natural Resources in Ireland ('PAD') but are confident that the projects will proceed and that the solutions will be shown to be appropriate and viable.

Going Forward

As I indicated in December, the Company has made excellent progress in the last year but I believe that 2014 could be even more significant, not least as a result of the drilling programme that BSE will be undertaking, which we expect to start to realise the full potential of our Newfoundland assets and justify our long standing commitment to the region.

The management's strategic focus remains on the development of marginal fields, through our involvement in ABTOG, and we plan to leverage the technology available to us to access interests in low risk well appraised and in some cases developed fields that can provide production in short order. In the meantime, we are also investigating other opportunities to acquire production, which will provide revenue and improve our access to finance going forward.

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Qualified Persons

The information in this release has been reviewed by Barath Rajgopaul MSc (Mech. Eng.) C. Eng, a member of the Advisory Panel of Enegi. Mr. Rajgopaul has over 30 years' experience in the petroleum industry.

About Enegi Oil

Enegi Oil Plc is an independent oil and gas company whose strategy is to build a diverse portfolio of assets with a strong emphasis on acquiring interests in marginal fields. These marginal fields are low risk highly-appraised projects and consequently the Company's entry cost will be low. Enegi will look to develop these assets utilising ABTechnology's buoyant solutions, which are appropriate and change the development economics of a project. This is also expected to enable the early booking of reserves. The Company's current portfolio is made up of operations focused on opportunities around the Port au Port Peninsula in Newfoundland, Canada, the Clare Basin in County Clare, Ireland, the UK North Sea and Jordan. The Port au Port Peninsula is located in western Newfoundland, which, although lightly explored, is in an active petroleum system with light oil having been discovered on a number of occasions. The Clare Basin is located in western Ireland and initial technical studies show that it has the potential to contain shale gas. The Company's licences in the UK North Sea have discovered hydrocarbons on them and have been selected based on buoy technology operating criteria. The Company has also entered into the highly prospective Dead Sea and Wadi Araba Block in Jordan with its partner Korea Global Energy Corporation.