TIDMRPT
RNS Number : 9026U
Enwell Energy PLC
09 April 2021
9 April 2021
Enwell Energy plc
("Enwell" or the "Company")
Ukraine 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, where it operates the
Mekhediviska-Golotvshinska (MEX-GOL), Svyrydivske (SV) and
Vasyschevskoye (VAS) gas and condensate fields, as well as the
Svystunivsko-Chervonolutskyi (SC) exploration licence .
Production - Q1 2021
The average daily production of gas, condensate and LPG from the
MEX-GOL, SV and VAS fields for the period from 1 January 2021 to 31
March 2021 was as follows:-
Field Gas Condensate LPG Aggregate
(MMcf/d) (bbl/d) (bbl/d) boepd
Q1 2021 Q1 2020 Q1 2021 Q1 2020 Q1 2021 Q1 2020 Q1 2021 Q1 2020
-------- -------- -------- -------- -------- -------- -------- --------
MEX-GOL
& SV 18.2 17.3 635 659 336 280 4,079 3,904
-------- -------- -------- -------- -------- -------- -------- --------
VAS 2.5 3.1 27 34 - - 497 604
-------- -------- -------- -------- -------- -------- -------- --------
Total 20.7 20.4 662 693 336 280 4,576 4,508
-------- -------- -------- -------- -------- -------- -------- --------
Overall production volumes in Q1 2021 increased by approximately
1.5% compared with Q1 2020, as a result of new production volumes
from the SV-54 and SV-25 wells in the SV field, which commenced
production in May 2020 and February 2021 respectively (see
announcements dated 22 May 2020 and 25 February 2021), offset by
natural field decline.
Operations
At the MEX-GOL and SV fields, the SV-25 appraisal well was
completed, having been drilled to a final depth of 5,320 metres.
One interval, at a drilled depth of 5,184 - 5,190 metres, within
the B-22 Visean formation was perforated, and after successful
testing, the well was hooked-up to the gas processing facilities.
The well is currently producing at approximately 1.9 MMscf/d of gas
and 70 bbl/d of condensate (413 boepd in aggregate).
In February 2021, the SV-29 well was spudded, and has a target
depth of 5,450 metres. Drilling operations are scheduled to be
completed by the end of Q3 2021, and, subject to successful
testing, production hook-up is scheduled for Q4 2021. The well is
primarily a development well, targeting production from the B-22
horizon, as well as appraising the B-21 and B-23 horizons, in the
Visean formation.
In addition, preparations for upgrade works to the gas
processing plant at the MEX-GOL and SV fields are continuing, with
the design phase now completed and procurement of long-lead items
underway. These works involve an upgrade of the LPG extraction
circuit, an increase to the flow capacity of the plant, and a
significant increase to the liquids tank storage capacity. The
works are scheduled to commence in mid-2021 and are designed to
improve overall plant efficiencies and boost recoveries of
condensate and LPG.
At the VAS field, a workover of the VAS-10 well has been
undertaken to access an alternative production horizon, and
planning is continuing for a new well to explore the Vvdenska (VED)
prospect within the VAS licence area.
At the SC exploration licence (SC Licence), development planning
has commenced, which includes the acquisition of 150 km(2) of 3D
seismic and drilling of a new well, SVYST-4, both of which are
planned to start later in the year.
Arkona Legal Dispute
As announced on 24 March 2020, the Company acquired the entire
issued share capital of LLC Arkona Gas-Energy ("Arkona"), which
holds the SC Licence. However, NJSC Ukrnafta ("Ukrnafta"), as
claimant, brought legal proceedings against Arkona, as defendant,
in which Ukrnafta made claims of irregularities in the procedures
involved in the grant of the SC Licence to Arkona in May 2017.
Ukrnafta was the holder of a previous licence over this area which
expired prior to the grant of the SC Licence. Arkona disputed these
claims.
In July 2020, the First Instance Court in Ukraine made a ruling
in favour of Ukrnafta, which found that the grant of the SC Licence
was irregular, but this ruling was overturned by the Appellate
Administrative Court in September 2020, and a final appeal to the
Supreme Court was determined in favour of Arkona in February 2021.
Further information can be found in the Company's announcements
dated 3 July 2020, 31 July 2020, 30 September 2020, 23 November
2020 and 11 February 2021.
VAS Licence Order for Suspension
The Company does not have any further information to report in
relation to the Order for suspension relating to the production
licence for the VAS field since the announcements made on 12 March
2019 and 19 March 2019 respectively, other than to report that the
legal proceedings issued in the Ukrainian Courts to challenge the
validity of the Order are ongoing, and the Com pany remains
confident that it will ultimately be successful in such legal
proceedings.
Cash Holdings
At 31 March 2021, the Company's cash resources were
approximately $60.9 million, comprised of $23.2 million equivalent
in Ukrainian Hryvnia and the balance of $37.7 million equivalent in
a combination of US Dollars, Pounds Sterling and Euros.
COVID-19 Pandemic
The Group continues to monitor the situation relating to the
COVID-19 pandemic, and to take any steps necessary to protect its
staff and operations. However, as of the date hereof, there has
been no operational disruption linked to the COVID-19 pandemic, and
no material impact is currently envisaged on the Group's prospects.
Nevertheless, the Group remains acutely aware of the risks, and is
taking action to mitigate them where possible, with the safety of
individuals and communities continuing to be the priority.
Sergii Glazunov, Chief Executive Officer, said : " We are
pleased to report another strong operational quarter, with robust
production volumes, and the successful completion of the SV-25
well, which was drilled safely and ahead of schedule. We are also
looking forward to the safe and efficient drilling of the SV-29
well, which we hope will continue our success in the development of
our fields. Furthermore, the recent resolution of the legal issues
relating to the SC Licence has enabled us to commence planning for
the development of this licence."
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 (Withdrawal) Act
2018.
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
Arden Partners plc Tel: 020 7614 5900
Ruari McGirr / Dan Gee-Summons (Corporate
Finance)
Simon Johnson (Corporate Broking)
Citigate Dewe Rogerson Tel: 020 7638 9571
Elizabeth Kittle
Dmitry Sazonenko, MSc Geology, MSc Petroleum Engineering, Member
of AAPG, SPE and EAGE, Director of the Company, has reviewed and
approved the technical information contained within this press
release in his capacity as a qualified person, as required under
the AIM Rules.
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
% per cent
$ US Dollars
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END
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