NUOG.L Regulatory News (NUOG)

Enegi Oil Plc

('Enegi' or 'the Company')

Garden Hill South Operational Update

Highlights:

·; Swabbing exercise to be undertaken to establish inflow rates from reservoir to well

·; Swabbing to take place prior to foam/acid frac

·; Suitable units for both have already been identified by DLMC

·; Enegi carried through swabbing costs

·; Well is economic at around 60bpd on current operational costs and WTI prices

Dragon Lance Management Corporation (DLMC), the Company's partner in the development of the the PAP1 ST#3 well, has provided an update of operations on Garden Hill South.

As part of the test programme currently being performed on the PAP1 ST#3 well, a swabbing exercise will take place to establish inflow rates from reservoir to the well. The inflow rate will give an indication of the continuous flow rate that can be expected from the well, prior to foam/acid frac. In addition, it will also add to our understanding concerning well performance, which will provide valuable input into the design of the foam/acid frac programme. The swabbing exercise is the final part of the test programme.

The swabbing process alone may enable the well to flow continuously; although the production rate is unlikely to be as high as post acid/frac. On current operational costs and WTI prices, even a continuous production rate as low as 60 barrels per day would make the well economical.

DLMC has identified a swabbing unit suitable for performing the exercise, and are currently in discussions to mobilise the swabbing unit to site over the coming weeks. The swabbing unit contractor has confirmed they would supply the needed personnel to operate the unit. Costs associated with the entire swabbing exercise will be borne by DLMC.

The foam/acid frac programme will commence imminently following the end of the test programme. DLMC has informed the Company that it has already identified a suitable contractor and coiled tubing unit (CTU) for foam/acid fraccing the well.

In carbonate reservoirs such as GHS, it is common that wells need to be stimulated using various fraccing techniques. Tests on the well to date have confirmed that the wellbore pressure declines when the well is flowed, but recovers when the well is shut-in. This indicates that the well can produce on an interval basis, and significantly, that the wellbore is in contact with a large volume of oil, but that connectivity is poor. Therefore, if the connectivity between the wellbore and reservoir can be improved, the well will produce at commercial rates on a sustainable basis. The intention is to achieve this by performing a foam/acid frac using a CTU.

An acid frac could make the well flow economically without the need to continuously swab the well, it may also substantially increase the continuous production rate that is achieved by swabbing alone. The contractor that DLMC has identified for the foam/acid frac has indicated that significant enhancement in flow rates can be achieved using the technique.

Prior to the acid/frac, the CTU will be used to run a suite of electrical logs in the well, which will give a better insight into reservoir characteristics such as porosity and permeability data. These logs will be used for geological and petrophysical analysis, to estimate the In Place Volume (IPV) with a much higher level of certainty. Such logs will also help the company to identify fracture networks and any minor faulting that may affect well performance. These logs will also give a broader dataset knowledge and understanding for possible further drilling activities into the same reservoir in the future. Mobilisation dates for the CTU and operational personnel will be finalised after the test programme.

In the event the well produces consistently on a commercial basis, the Company will be able to book the calculated reserves in contact with the well.

Alan Minty, CEO of Enegi Oil commented:

"We are delighted with the progress that we, and DLMC, are making. These developments should further increase our understanding of the well and the geology as we strive to achieve continuous production.

We look forward to receiving and providing further updates over the coming weeks."

31 March 2010

Enquiries:

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 in the petroleum industry.

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 Newfoundland, which, although lightly explored, is in an active petroleum system with light oil having previously been discovered there. The Group's assets include Garden Hill South, Shoal Point, Garden Hill Central, Garden Hill North and Lourdes.