ENEGI Oil has said the fall in oil prices should boost demand for its unmanned production systems in areas like the North Sea but noted challenges facing the business.

Announcing reduced first half losses, Enegi said the oil price fall will encourage more companies to consider using the buoys and towers the firm offers as they look to reduce costs.

"This environment ... provides significant opportunities for us as oil and gas companies look for ways to preserve their cash whilst still needing to move their projects forward," said Enegi.

The company reckons the technology it markets can help slash the cost of developing fields in areas like the North Sea, in the process transforming the economics of marginal fields.

The company said its solutions are suitable for the development of fields containing 16 to 22 million barrels (mmbbls) even at current oil prices.

"With the cancellation of projects on fields with as much as 30 mmbbls, which were marginally economic with higher oil prices, an even more significant opportunity is now available to us," said Enegi.

The Aim-listed company said it manages its cashflow carefully and has been reducing expenditure.

It added: "Even allowing for these measures the implementation of our business plan will require an injection of new capital."

Enegi is confident the value generated from the additional capital will exceed the effect of any dilution of existing shareholders' interests.

The company said it is in talks with major industry players in order to build a consortium of like minded partners who will provide services and expertise on its Marginal Field Initiative.

It said the timeframe for setting up and completing this phase has been frustrating but it is essential to bring in the right partners on terms that would protect upside for Enegi and its shareholders.

Enegi lost £1.1m in the six months to December, down from £1.3m last time.