Enegi Oil Plc Company reported that the preparations for the next stage of the workover of its PAP#1 ST#3 well, onshore Newfoundland, are now close to completion. Delays have been experienced due to:

Technical complexities associated with safely conducting the proposed operations; and

The requirement for repeated stability and compatibility testing to ensure that the programme achieves its desired results with no unforeseen long term implications for the well and no negative impact on personnel or the environment.

The results of this extended sequence of detailed tests and analyses are positive and the Company has entered into, and is close to concluding, commercial negotiations with service suppliers to undertake the programme.

The Company has also been in regular communication with the Newfoundland and Labrador Department of Natural Resources (DNR) throughout the planning process to ensure that any questions associated with the programme have been addressed as they arise. The Company does not, therefore, anticipate any delays in gaining regulatory approvals, once the details of the programme (equipment specifications, suppliers etc.) have been finalised and applications can be formally submitted. As stated previously, all the equipment and personnel required for the workover programme will be mobilised to site once approval to commence the programme is obtained from the DNR.

Whilst recommencing work at the Garden Hill South site has been the Company's primary focus during recent weeks, work is also ongoing to finalise plans for the proposed seismic survey over the PL2002-01 lease area, with a view to undertaking that survey during winter 2011/2012.

Alan Minty, CEO of Enegi Oil, commented: "Whilst the last few months have been frustrating, we remain optimistic about the long term potential of these assets. We look forward to the commencement and outcome of the next phase of the work programme, which will be the culmination of recent diligent and prudent planning."

Tags: Enegi Oil