Enegi Sticks with Low-Risk, Marginal-Assets Strategy
Junior explorer and producer Enegi Oil confirmed Monday that it would continue to build a portfolio with emphasis on low-risk, highly-appraised marginal assets as it provided an update on its strategy.
Enegi, which is working with ABTechnology to use autonomous production buoys to make previously uneconomical oilfields commercial, said its new strategy is already delivering. The firm cited its North Sea Fyne Field farm-in, which was announced on July 2, as an example of this.
Meanwhile, ABT Oil & Gas – a joint venture set up between Enegi and ABTechnology – is in negotiations with a number of other operators with a view to deploying the buoy technology at marginal fields.
Enegi believes ABT's buoy system can be used on fields with between 10 and 30 million barrels of recoverable oil. The buoy system uses a group of proven technologies and consists of an unmanned buoy that sits just below the surface of the water. It houses production and processing equipment to produce oil from a reservoir before storing it in a seabed storage facility. A tanker periodically comes along to take the oil away.
The ABT system works in water depths of between 200 feet and 2,000 feet with an oil production rate of between 1,000 and 20,000 barrels per day.
Enegi added that the farm-out of its Newfoundland assets is expected to enable the full potential of those assets to be realized as investment and operational responsibility for them transfers to Black Spruce Exploration.
Enegi Chairman Alan Minty commented in a company statement:
"After what has been a transformational few months, Enegi's management team [has] refined the focus and strategy of the company and we are pleased to provide this update to shareholders.
"We will continue to build a diverse portfolio assets, but with a strong emphasis on acquiring interests in marginal fields. These assets are low risk and highly-appraised and, consequently, our entry cost will be low. We will look to develop these assets utilizing ABT's buoy technology, an appropriate solution which changes the development economics, enabling the early booking of reserves and further development projects.
"The implementation of this strategy is already well underway with the commencement of work on the Fyne oil field and negotiations are continuing as we look to add further assets to our portfolio. This is a very exciting time in the company's development."
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