Enegi and ABTechnology Ltd. ('ABT'), the owners of ABT Oil and Gas ('ABTOG') are pleased to announce that they have entered into an option agreement (the 'Option') with Wood Group PSN, the international energy services company. The Option provides Wood Group PSN with an exclusive right for a period of 90 days to conclude an agreement to expand its participation in the development of the marginal field initiative, commenced by Enegi and ABT.
The parties to the Option will now enter into a period of negotiation during which Enegi, ABT and Wood Group PSN will seek to conclude discussions with regard to the structure and terms of this expanded role as well as conduct due diligence as required.
Via a framework agreement executed in 2011, Wood Group PSN is a strategic partner of ABT in the commercial exploitation of unmanned buoy technology which allows Wood Group PSN exclusivity in the provision of a number of engineering services. The recent acceleration in the development of the marginal field initiative, in terms of industry interest, project acquisition and expansion of the technology portfolio, has encouraged the parties via the Option to reassess the relationship with a view to Wood Group PSN participating more widely in the development of the business.
Alan Minty, CEO of Enegi commented:
"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 that has been made 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 to provide them with the best chance of success.
In addition, shareholders can expect the successful execution of the work contemplated by the farmout agreement with BSE and the successful funding of the marginal field initiative to have a positive impact on the Company's future working capital requirement."
