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Enegi Oil Plc is an independent oil and gas company. Current operations are focused on opportunities around the Port au Port Peninsula in Newfoundland, Canada and the Clare Basin in County Clare, Ireland.
The Port au Port Peninsula is located in western Newfoundland, which, although lightly explored, is in an active petroleum...Read more
ENEGI Oil’s GHS project potentially ‘on verge’ of continuous production, says brokerSeptember 27 2012, 11:51am
ENEGI Oil (LON:ENEG) could potentially be on the verge of establishing continuous production at its Garden Hill South project, says City broker Northland Capital.
In a note to clients analyst Andrew McGeary pondered whether the GHS project was finally coming good after turbulent period in which ENEGI has had to address a number of challenges.
“After several years of false starts, the PAP 1 Side-Track 3 (PAP1- ST3) was in continuous production (May/June operational updates) for several months at over 300 bopd with no signs of pressure depletion,” McGeary said.
However the analyst also reckons investors have yet to be convinced and are waiting for confirmation of this important breakthrough.
“The current market valuation of around £11.3m suggests prevailing market scepticism that is understandable given the track record.
“However, continued performance of the well going into full production would provide significant scope for upside.”
He adds that the most recent update, in June, was ‘encouraging if not definitive’.
McGeary points to the fact that independent analysis has suggested that the pressure data shows that the sidetrack ‘must be’ in contact with a reservoir with greater than 65 million barrels of oil in place - as outlined in ENEGI’s CPR in 2008 – and he says this means there may be further development upside to the asset.