Enegi Prepares Next Stage of Onshore Newfoundland Workover

- Enegi Prepares Next Stage of Onshore Newfoundland Workover

Monday, September 12, 2011
Enegi Oil Plc

Enegi Oil Plc on Monday announced that preparations for the next stage of the workover of its PAP#1 ST#3 well ('the 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 program 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 program.

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 program have been addressed as they arise. The Company do not, therefore, anticipate any delays in gaining regulatory approvals, once the details of the program (equipment specifications, suppliers etc.) have been finalized and applications can be formally submitted. As stated previously, all the equipment and personnel required for the workover program will be mobilized to site once approval to commence the program 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 finalize 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 program, which will be the culmination of recent diligent and prudent planning."

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Enegi to Begin Second Phase of Workover at Newfoundland Well

- Enegi to Begin Second Phase of Workover at Newfoundland Well

Wednesday, July 27, 2011
Enegi Oil plc

Enegi announced that a program for the next stage of the workover of its PAP#1 ST#3 well ('the Well'), onshore Newfoundland, has been submitted to the Department of Natural Resources ('DNR'). The well was drilled in 2008 and, following flow tests in 2009 and an extended well test in 2010, reworked in late 2010 and early 2011. The first phase of this workover program has increased the pressure recovery rate and improved reservoir connectivity, and the encouraging results have moved the company to undertake a second phase in the hope of achieving further improvements. The proposed program should commence in the next 2 weeks and take a maximum of 4 weeks to complete. The latest initial program results and proposed second phase of the workover are as follows:

Initial Program Results

• The time taken for the bottom hole pressure to recover from approximately 18,000kPa to 31,000kPa was 8 days in June 2011, compared to 229 days following the initial flow test in 2009 and 68 days immediately after the initial stages of the workover in November 2010.
• The initial results of the first chemical soak indicate improved connectivity between the wellbore and the reservoir.
• Between May 31 and June 3, 2011, the well was flowed, as part of testing, for 9.5 hours each day, through a 94% choke, and produced between 75 and 94 barrels each day.

Proposed Workover: Second Phase 

• Flow the Well for a 3 day period to gather data to confirm the full effects of the first chemical soak.
• Squeeze paraffin solvents and dispersants, followed by dead crude, down the Well.
• Shut in the Well to monitor pressure recovery over 60 hours and flow the Well for a further 2 day period to gather data before squeezing further chemicals, dead crude and acid down the Well.

Depending on the results observed during this initial period, the Company may choose to shut the Well in for a further period, flow it back or prepare to re-acidize. Once complete, and again dependent upon results, the workover program will be followed by an extended well test, during which the parameters for production from the Well will be determined and preparations for production, including applications for all necessary approvals, will be completed.

The results of the program will also be accounted for in a revised resource estimate for the Company's assets in the region, which is currently being undertaken by AJM Deloitte of Calgary.

Equipment and personnel required for the workover program will be mobilized to site once approval to commence the program is obtained from the DNR. The Company will provide further details over the coming weeks.

Alan Minty, CEO of Enegi Oil commented, "As previously announced indications are that the completed elements of the workover allow a sustainable production rate of 200 bopd which would mean the well is economic. The results of the Initial Program are encouraging and we eagerly await the outcome of the Second Phase."

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