February 16, 2009 / 9:01 AM / 9 years ago

UPDATE 1-Enegi says PDI unit hit by well closure; shares sink

* Says PDI Production’s liabilities exceed assets

* Co in talks with creditors to reschedule debt

* Explores options for improving flow rate

* Shares fall 32 percent (Adds details)

Feb 16 (Reuters) - Enegi Oil Plc ENEG.L on Monday said the financial position at its Canadian unit PDI Production Inc had been “materially adversely” affected due to the temporary closure of a well in Newfoundland, where a flow test showed sub-economic results last month.

“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 Oil shares plunged more than 32 percent to 11.5 pence, at 0845 GMT.

The western Newfoundland-focused oil and gas company said it was examining various options for improving the flow rate and recovery from the well, named PAP#1-ST#3.

The well was expected to generate revenue for the group.

The company said it was 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.

Enegi is also continuing to investigate the geological implications of the Garden Hill South well in relation to the trend of undrilled prospects in its 100 percent-owned acreage to the north east, it said. (Reporting by Usman Merchant in Bangalore; Editing by Gopakumar Warrier)

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