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7:33 am, February 16, 2009
Canadian arm insolvent, says Enegi

Enegi Oil Plc (AIM: ENEG) today admitted that its Canadian subsidiary is insolvent and is in talks to reschedule repayment of its debts.

The news follows last week’s admission that its most advanced oil well in western Newfoundland was not economic to exploit.

Manchester-based Enegi said the test results on the well had “materially adversely affected” the finances of PDI Production Inc (PDIP), the wholly-owned Canadian subsidiary.

“PDIP now has liabilities in excess of its assets and has entered into discussions with its creditors to reschedule payment of its liabilities,” Enegi said in a statement.

“Enegi is working closely with PDIP to ensure that the group's assets continue to be developed and the value of those assets is maximized for the benefit of shareholders. To this end, the company is continuing the review of its operational and financial options that it announced previously. Further announcements will be made when the Company has greater clarity on the outcome of this review and any update on the financial position of PDIP.”

Enegi shares fell 32.3 per cent to 11.5p.

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