Enegi, the independent oil and gas company, is pleased to announce the execution of a non-binding Memorandum of Understanding ("MoU") between ABT Oil and Gas Ltd. ("ABTOG", the marginal field development venture in which it holds a 50% interest) and Wood Group PSN ("WGPSN") that defines the terms under which it is proposed that WGPSN will subscribe for a 50% shareholding in ABTOG's previously announced engineering solutions subsidiary, Marginal Field Development Co.
Marginal Field Development Co, will be renamed and further defined as an upstream energy, oil and gas technology, project management and engineering company whose services are dedicated to the provision of solutions that will allow the technical development of stranded and marginal hydrocarbon fields. Marginal Field Development Co. will be the exclusive provider of engineering services to ABTOG projects and, as previously communicated, will not hold field equity with such equity being held by ABTOG's Field Equity Co.
It is proposed that WGPSN will initially invest (at its own expense) specific engineering services aimed at completion of the engineering of both of ABTOG's proprietary solutions, the Unmanned Production Buoy and Self-Installing Floating Tower ("SIFT"), to the point where the solutions on a generic level are capable of satisfying the engineering requirements for the completion of a Field Development Plan ("FDP"). In addition, it is proposed that as a shareholder, WGPSN will proportionally contribute to working capital and will, for projects that satisfy pre-agreed parameters, provide engineering services up to Ł5,000,000 on a deferred payment basis allowing the Marginal Field Development Co. to complete FDPs for projects in which ABTOG participates. Together, these arrangements provide ABTOG with a strong base from which to implement its business plan, ensuring that the solutions are ready and resources are in place to develop projects quickly.
WGPSN, which is the largest provider of brownfield services to the energy, oil and gas industry, is the ideal investor. This enables the Marginal Field Development Co. to provide services throughout the entire asset lifecycle, from project management, concept, appraisal and FEED studies to detailed design, construction, installation and commissioning, dutyholder, operations & maintenance and, eventually, redeployment and decommissioning. WGPSN will provide those services to ABTOG projects exclusively through the Marginal Field Development Co.
ABTOG and WGPSN will seek to complete definitive agreements whilst work continues to advance the solutions and projects.
Alan Minty, CEO of Enegi, commented:
"The establishment of the Marginal Field Development Company is a logical progression from the strategic partnership which existed for 3 years. During that period, the business model has been refined and proven, projects and licenses have been acquired and it has become imperative to demonstrate that ABTOG has a 'delivery partner' for its projects. This is the purpose of establishing the Marginal Field Development Company and we are pleased to have achieved that with the investment from WGPSN."
Dave Stewart, WGPSN UK's managing director said:
"This is an exciting new development for Wood Group PSN, aimed at maximising recovery of marginal field reserves in the UKCS, reducing running costs for operators and making previously sub-economic fields financially viable."