Enegi Oil rockets on Newfoundland approval

Enegi Oil has leapt 18% in early trading on news it has received permission to complete a work-over programme on its PAP#1 well in western Newfoundland.

The news comes after a long-running dispute with its previous partner on the project. The firm says any financing needed for the work-over will be less than the 40% stake held by the previous partner.

The announcement comes in Enegi's full year report for the period ending 30 June in which it admits; "As in prior years, subject to any further fundraising, the company is reliant upon achieving commercial production in the foreseeable future."

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Enegi also has two projects through which it hopes to reduce its risk exposure to Western Greeland.

The first is the onshore petroleum license granted by the Irish government in February for a project in County Clare.

The second is its relationship with Avanced Buoy Technology (ABT), a firm which is developing a way to reduce the costs of offshore drilling. Enegi's option to buy ABT passed in September but the two firms have agreed to continue their strategic partnerhsip.

Commenting on the results Enegi's Chairman Alan Minty said: "I am excited about the prospects for the coming year; the workover results from (Newfoundland) are eagerly anticipated; we will commence work on a new exciting lead in Ireland and we continue to work with ABT with the aim of expanding further Enegi Oil's portfolio."

At 10:00 in London the stock had dropped off its early highs to sit at 9.9p, still 13% up on the open. Since January Enegi shares have fallen 63%

BS