TIDMENW
RNS Number : 9063Z
Enwell Energy PLC
17 January 2024
17 January 2024
Enwell Energy plc
("Enwell" or the "Company")
Quarterly Operations Update
Enwell Energy plc (AIM: ENW), the AIM-quoted oil and gas
exploration and production group, provides an update on its
operational activities in Ukraine in respect of its
Mekhediviska-Golotvshinska ("MEX-GOL"), Svyrydivske ("SV") and
Vasyschevskoye ("VAS") gas and condensate fields and
Svystunivsko-Chervonolutskyi ("SC") exploration licence .
Production - Q4 2023
The average daily production of gas, condensate and LPG from the
MEX-GOL, SV and VAS fields over the period from 1 October 2023 to
31 December 2023 was as follows:
Field Gas Condensate LPG Aggregate
(MMcf/d) (bbl/d) (bbl/d) boepd
Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022
-------- -------- -------- -------- -------- -------- -------- --------
MEX-GOL
& SV 9.1 10.8 346 426 368 441 2,212 2,641
-------- -------- -------- -------- -------- -------- -------- --------
VAS - 1.6 - 14 - - - 303
-------- -------- -------- -------- -------- -------- -------- --------
Total 9.1 12.4 346 440 368 441 2,212 2,944
-------- -------- -------- -------- -------- -------- -------- --------
The ongoing war in Ukraine continues to cause disruption to
operations at the Company's fields, whilst the adverse regulatory
actions taken by the Ukrainian authorities, culminating in
suspension of the VAS and SC licences on 4 May 2023, have similarly
negatively impacted the Company's operations, with a loss of
production from the VAS field. Production volumes at the MEX-GOL
and SV fields were lower when compared with Q4 2022 due to natural
field decline.
Production - Full Year 2023
The average daily production of gas, condensate and LPG for the
2023 year from the MEX-GOL and SV fields (351 days in 2022), and
for the 124 days in 2023 (147 days in 2022) that the VAS field was
producing, was as follows:
Field Gas Condensate LPG Aggregate
(MMcf/d) (bbl/d) (bbl/d) boepd
2023 2022 2023 2022 2023 2022 2023 2022
----- ----- ------ ----- ----- ----- ------ ------
MEX-GOL
& SV 9.5 11.0 368 445 379 318 2,314 2,604
----- ----- ------ ----- ----- ----- ------ ------
VAS 1.7 1.8 18 18 - - 330 352
----- ----- ------ ----- ----- ----- ------ ------
Total 11.2 12.8 386 463 379 318 2,644 2,956
----- ----- ------ ----- ----- ----- ------ ------
Operations
Production operations are continuing at the MEX-GOL and SV
fields, and, currently, the aggregate production rate is
approximately 2,120 boepd. Field operations are currently
continuing relatively normally, but there have been disruptions to
the supply of equipment and fuel, as well as interruptions to the
supply of electricity, which has caused delays to some activities.
In general, the operating environment in Ukraine remains very
challenging.
The GOL-107 development well, targeting production from the V-20
and V-23 horizons in the Visean formation, was completed in late
October 2023. The well was spudded in December 2022 and drilled to
a final depth of 5,190 metres. One interval, at a drilled depth of
5,140 - 5,143 metres, within the V-23 horizon, was perforated and
demonstrated gas flows, but at lower than anticipated rates. The
well has now been hooked up to the gas processing facilities to
undergo longer-term testing to establish its optimal operating
parameters and assess whether stimulation of the well may improve
flow rates.
At the VAS field and SC exploration licence area, all operations
are currently suspended following suspension orders made by the
State Geologic and Subsoil Survey of Ukraine (the "SGSS") on 4 May
2023.
The Company continues to be cautious and vigilant in continuing
with its operations and is taking the appropriate measures
available to protect and safeguard its personnel and business. The
safety and wellbeing of its personnel and contractors is paramount
and the Company will continue to take all possible steps to ensure
their safety.
Cash Holdings
At 31 December 2023, the Company's cash resources were
approximately $77.0 million, comprised of $56.3 million equivalent
in Ukrainian Hryvnia and the balance of $20.7 million equivalent in
a combination of US Dollars, Pounds Sterling and Euros.
Suspension of VAS and SC Licences
As announced on 4 May 2023, the SGSS has issued orders
suspending the Company's VAS production licence and SC exploration
licence.
This followed action by the Ministry of Justice of Ukraine (the
"MoJ") on 2 May 2023, which made Orders (the "MoJ Orders")
cancelling the registration entry made on behalf of three Ukrainian
subsidiaries of the Company named LLC Prom-Enerho Produkt ("PEP"),
LLC Arkona Gas-Energy ("Arkona") and LLC Well Investum ("Well
Investum") respectively in the Unified State Register of Legal
Entities, Individuals-entrepreneurs and Civil Institutions of
Ukraine (the "State Register") relating to the ultimate beneficial
owners of such companies. The registration entry for each of these
companies stated the ultimate beneficial owners to be the
beneficial owners of the indirect majority shareholder of the
Company as notified to the Company and published to the market on
26 January 2023, but the MoJ Orders removed each such registration
entry and restored the previous entry in the State Register, Vadym
Novynskyi ("Mr Novynskyi"). As announced on 26 January 2023, the
Company was notified that Mr Novynskyi ceased holding a beneficial
interest in the indirect majority shareholder of the Company on 1
December 2022. PEP holds the VAS production licence, Arkona holds
the SC exploration licence and Well Investum is a dormant
company.
Under Ukrainian Law No. 2805-IX, which came into force on 28
March 2023 , the SGSS has legislative powers to suspend and/or
revoke hydrocarbon licences of which the ultimate beneficial owner
is the subject of Ukrainian Government sanctions. A s announced on
9 December 2022, the Ukrainian Government imposed sanctions on Mr
Novynskyi, who previously held a major indirect shareholding
interest in the Company, but ceased to do so on 1 December 2022 as
referred to above. However, following the issuance of the MoJ
Orders, Mr Novynskyi is now registered in the State Register as the
ultimate beneficial owner of each of PEP and Arkona, and is
consequently recognised by the SGSS as the ultimate beneficial
owner of each of the VAS production licence and SC exploration
licence. As a result, the SGSS issued the suspension orders in
respect of each of the VAS production licence and SC exploration
licence for a period of 5 years effective from 4 May 2023 .
Accordingly, the Company ceased all field and production operations
on the VAS and SC licence areas.
Sergii Glazunov, Chief Executive Officer, said : "The operating
environment in Ukraine continues to be extremely challenging as a
result of the war, and additionally the regulatory actions and
continuing suspension orders made by the Ukrainian authorities are
very disappointing. Nevertheless, w e are pleased to be able to
continue our production operations at the MEX-GOL and SV fields,
and to undertake the long-term testing of the GOL-107 well. We
continue to consult with our lawyers to pursue all available
measures to protect our assets and business and to, hopefully,
successfully challenge the regulatory actions taken by the
Ukrainian authorities in due course."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014, which forms part of United
Kingdom domestic law by virtue of the European Union (Withdrawal)
Act 2018, as amended by virtue of the Market Abuse (Amendment) (EU
Exit) Regulations 2019.
For further information, please contact:
Enwell Energy plc Tel: 020 3427
3550
Chris Hopkinson, Chairman
Sergii Glazunov, Chief Executive Officer
Bruce Burrows, Finance Director
Strand Hanson Limited Tel: 020 7409
3494
Rory Murphy / Matthew Chandler
Zeus Capital Limited Tel: 020 7614
5900
Alexandra Campbell-Harris (Corporate
Finance)
Simon Johnson (Corporate Broking)
Citigate Dewe Rogerson Tel: 020 7638
9571
Ellen Wilton
Dr Gehrig Schultz, BSc Geophysical Engineering, PhD Geophysics,
Member of the European Association of Geophysical Engineers, Member
of the Executive Coordinating Committee of the Continental European
Energy Council, and a Non-Executive Director of the Company, has
reviewed and approved the technical information contained within
this announcement in his capacity as a qualified person, as
required under the AIM Rules for Companies.
Definitions
bbl/d barrels per day
boepd barrels of oil equivalent per day
cf cubic feet measured at 20 degrees Celsius and
one atmosphere
LPG liquefied petroleum gas
MMcf/d million cubic feet per day
$ US Dollars
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END
UPDFLFEDLVIRLIS
(END) Dow Jones Newswires
January 17, 2024 02:00 ET (07:00 GMT)
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