Enegi Oil Update On Western Newfoundland Activities

Enegi Oil, having successfully completed its IPO in March 2008, provides a progress update on its activities at Garden Hill South and Shoal Point in western Newfoundland.

Garden Hill South In July 2008, the Company intends to commence drilling of a horizontal sidetrack well (PAP#1-ST#3) at the Garden Hill South oilfield, where site preparations have already commenced, and drilling plans are now being finalised.

Enegi intends to use Nabors Rig 45, which is currently being used by Shoal Point Energy (SPE), the operator of the 2K-39 well at Shoal Point, to drill the horizontal well.

Agreements are in place with SPE and Nabors Drilling to allow Enegi to take control of the rig in early July for mobilisation to Garden Hill South.
Shoal Point Enegi has a 32% working interest in the Shoal Point 2K-39 well currently being drilled by SPE.

The Company has been informed by SPE that the well has now been drilled to a measured depth of 2,865 metres. The site geologist believes that drilling is on the planned trajectory and that they are currently just above the top of the Aguathuna formation, the primary reservoir target. The primary casing has been set to 667 metres and the intermediate casing, which is currently being run, is expected to be set within the next seven days. After that, the well will be drilled into the Aguathuna formation and, potentially, into two deeper formations, the Catoche and Watts Bight, both of which may also contain hydrocarbons.

Enegi has been informed by SPE that, during the drilling of the well, between 1300 meters and 1950 metres depth in the Humber Arm Allochthon, and specifically in the Green Point Shale formation, the presence of hydrocarbons was detected. Whilst this is encouraging, the economic significance of these hydrocarbons is unclear at this time.

Alan Minty, Chief Executive Officer of Enegi, said, “We are encouraged by news received from Shoal Point Energy and look forward to further progress on the drilling programme for well 2K-39 over the next few weeks. Our primary focus, however, remains the horizontal sidetrack at Garden Hill South, which we believe offers the greatest opportunity for near term production.”