Enegi All Smiles over Recovery Rates at Newfoundland Well

Dragon Lance Management Corporation (DLMC), Enegi's partner in the development of its Newfoundland regional play, has provided the Company with an update of operations on the PaP#1 Garden Hill South (GHS) well.

The pressure results from the ongoing chemical soak are positive. The pressure recovery rate is twice that observed prior to commencement of the work-over. The bottom hole pressure of the well is also higher than it was when the work-over commenced and is continuing to increase. The results are an indication of improved connectivity between the well bore and the reservoir, which if maintained, would be expected to result in higher achievable production rates. However, if the well is flowed before additional work has been undertaken, DLMC has advised that there is a risk of ingress of mobile solids, wax and asphaltene that would adversely affect the improved connectivity. This risk can be reduced by improving connectivity between the well bore and reservoir further before the well is flowed, and by appropriate engineering as the work program continues.

Given the positive results observed from the chemical soak, the plan is to undertake a second high pressure chemical soak with the intent of improving connectivity even further. This second chemical soak would involve chemicals and acid being injected down the wellbore at a significantly higher pressure than that of the original soak. Planning for the second chemical soak is already underway. Further updates will be provided as work-over operations continue.

Over the past few weeks, significant effort has also been expended to optimize the chance of retaining Exploration License 1070 under a Significant Discovery License, the lower portion of which Enegi Oil, through their wholly owned subsidiary PDI Production Inc, hold a 100% interest.

Alan Minty, CEO of Enegi Oil, commented, "The good pressure recovery rates observed from phases of the work program completed to date are encouraging. To ensure the best outcome for the well, we now need to take into account all of the data available to us in diligently and prudently planning our future work program. We are also pleased to see work progressing on EL1070, as this activity helps in the de-risking of our Newfoundland regional development play as a whole."



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