ENEGI, the Aim-quoted oil and gas firm working to bring unmanned oil rigs to the North Sea, sank deeper into the red in its last financial year due to the cost of developing its technology.
Unveiling a loss before tax of £4.9 million in the year to the end of June, compared with £3.1m in the previous 12 months, chief executive Alan Minty said the period had been “undeniably challenging”.
However, he said the potential scale of the so-called “marginal field initiative” – bringing smaller stranded oil fields into production – remained “very significant”.
Minty added: “While it has taken time and considerable effort to establish the foundations of this venture we are very confident that we are nearing the end of that phase and that we will see a considerable upturn in activity once it is completed.”
He said Enegi considered its strategy was “highly appropriate at this time in light of market conditions and industry sentiment” and management believed the outlook for the company “remains very good”.
The oil price has plummeted in 2014 to slip below $60, against $110 at the start of the year, forcing many oil companies to cut back on investment plans.
Enegi also cited the downturn in activity in the UK Continental Shelf (UKCS) shown by a reduction in drilling commitments in the 28th licensing round, as well as a cut in current drilling.
The initiative launched by Enegi and ABT Oil and Gas Technology, and also involving Abeerdeen-based Wood Group, to use unmanned buoys to pump oil and gas could potentially slash the cost of production in the North Sea and make smaller and older fields viable again.
Minty said: “More fields are becoming marginal and marginal fields need to be developed to support the overall production rate in the UKCS and other jurisdictions.”
The Enegi boss said he believed that marginal field application could eventually prove to be “truly global in its application”, but that with all ventures of potential major scale “it takes time and considerable effort to establish the foundations”.