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.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article