ENEGI Oil (LON:ENEG) is seeing many more opportunities for its marginal field initiative in the North Sea as a result of lower oil prices.
The AIM-quoted oil company’s strategy is to use low cost, mainly un-manned and redeployable engineering solutions to develop marginal fields. Through this strategy it is working with joint venture company ABT Oil & Gas.
This morning, in the group’s interim results statement, it said that lower oil prices not only meant there are more projects that can be addressed by its low opex / capex solutions, but also the project’s themselves are larger.
Lower oil prices also make these solutions more attractive and will see returns increasing significantly as the oil price strengthens in the future.
ENEGI as a result now expects to add more projects to the portfolio.
"The significant opportunities afforded by marginal fields, particularly in the current climate, remains the company's focus,” said chief executive Alan Minty.
“Dialogue with the market and, in particular, asset owners continually reinforces the need for delivery capability to be demonstrable.
“Our offering requires expertise across a broad spectrum of disciplines and, as such, we are looking to build a consortium of established industry partners, with discussions well advanced in a number of cases, to deliver this.”
Minty added that completing these arrangements will provide a very strong endorsement to our marginal field initiative.
ENEG told investors that the implementation of its business plan will require an injection of new capital, though it believes it will generate sufficient value to significantly exceed the effect of any potential shareholder dilution.
The company reported a loss of £1.08mln for the six months to December.