Independent exploration and production firm Enegi Oil has confirmed it is in talks with Wood Group PSN to develop its unmanned-buoy technology.
Analysts said the agreement could boost the firm’s prospects of winning further investment in its plans to mine marginal oil fields with its range of buoyant products.
WGPSN is a technical partner in the marginal-field initiative developed by ABTechnology, in which Enegi took a stake two years ago.
Manchester-based Enegi said it had entered a 90-day negotiation period, during which the parties will seek to agree the structure and terms of WGPSN’s expanded role in the company’s operations.
Alan Minty, chief executive of Enegi said: “The execution of the option with Wood Group PSN is further evidence of the attractiveness of the marginal-field business model and reflects the progress in developing the business.
“The option represents the first step in securing independent investment into this initiative. Successful conclusion of negotiations would see stronger links with a leading global engineering services company providing access to the engineering manpower and expertise that will be needed to deliver on the many projects that it expects to secure and fulfil the potential of the marginal-field initiative.
“From Enegi’s perspective, successful conclusion of the discussions with Wood Group PSN would mean that both of its major initiatives, including the development of western Newfoundland after agreeing a farmout with Black Spruce Exploration (BSE), have sufficient resources and the appropriate expertise.”
Craig Howie, an analyst at Shore Capital Stockbrokers, said WGPSN taking a greater level of involvement in the project was “a natural progression from the current position and, he added: “This is highly encouraging news”.
Shares in the AIM-listed Enegi rose 1.7% to 7.62p.