TIDMRPT
RNS Number : 1816S
Enwell Energy PLC
07 July 2020
7 July 2020
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 - Q2 2020
The average daily production of gas, condensate and LPG from the
MEX-GOL, SV and VAS fields for the period from 1 April 2020 to 30
June 2020 was as follows:-
Field Gas Condensate LPG Aggregate
(MMcf/d) (bbl/d) (bbl/d) boepd
Q2 2020 Q2 2019 Q2 2020 Q2 2019 Q2 2020 Q2 2019 Q2 2020 Q2 2019
-------- -------- -------- -------- -------- -------- -------- --------
MEX-GOL
& SV 17.6 13.6 649.1 540.4 304.0 254.7 3,978 3,113
-------- -------- -------- -------- -------- -------- -------- --------
VAS 3.1 4.8 33.9 75.5 - - 604 960
-------- -------- -------- -------- -------- -------- -------- --------
Total 20.7 18.4 683.0 615.9 304.0 254.7 4,582 4,073
-------- -------- -------- -------- -------- -------- -------- --------
Overall production volumes in Q2 2020 increased by approximately
12.5% compared with Q2 2019, having received a significant boost in
May 2020, when the SV-54 well in the SV field commenced production
testing (see announcement dated 22 May 2020). However, a decline in
production rates from the VAS-10 well in the later part of 2019
impacted overall production at the VAS field in 2020. As a
consequence, during Q1 2020, compression equipment was installed to
stabilise production from the VAS-10 well, with a longer term plan
to undertake a workover of the well to access an alternative
reservoir horizon.
Operations
At the MEX-GOL and SV fields, the SV-54 development well was
completed, after having reached a final depth of 5,322 metres. One
interval, at a drilled depth of 5,303 - 5,308 metres, within the
B-23 reservoirs in the Visean formation was perforated, and,
following successful initial testing, the well was hooked-up to the
gas processing facilities for longer-term production testing.
Preparations continue for the spudding of the SV-25 well in Q3
2020, and planning is also underway for a further well or
sidetracking of an existing well in the SV field.
At the VAS field, planning is continuing for a new well to
explore the Vvdenska (VED) prospect within the VAS licence
area.
Termination of Memorandum of Understanding
As announced on 1 April 2020, the Memorandum of Understanding
(the "MOU") for the potential acquisition of PJSC Science and
Production Concern Ukrnaftinvest , announced on 26 November 2019,
expired and was consequently terminated as a result of the parties
to the MOU being unable to reach a final agreement for the
acquisition. Under the provisions relating to termination set out
in the MOU, the deposit of $0.5 million previously paid under the
MOU became repayable. However, such deposit has not yet been repaid
and the Company is pursuing legal action to recover it from the
counterparties, being Ms Lidiia Chernysh and Bolaso Investments
Limited .
Arkona Legal Dispute
As announced on 24 March 2020, the Company has acquired the
entire issued share capital of LLC Arkona Gas-Energy ("Arkona"). As
further announced on 3 July 2020, a ruling has been made by the
First Instance Court in Ukraine in legal proceedings between NJSC
Ukranafta as claimant and Arkona as defendant, which relate to
claims made by NJSC Ukrnafta about the procedure involved in the
grant of the SC Licence to Arkona in May 2017. The ruling announced
is in favour of NJSC Ukrnafta, and indicates that the grant of the
Licence has been found to be irregular, which would mean the
Licence is invalid. However, the ruling has not yet come into legal
effect as the full decision and written judgement have not yet been
delivered by the Court. Consequently, the Licence currently remains
valid. Arkona disputes these claims and is defending these
proceedings. The Company considers Arkona has strong grounds for a
successful appeal since the subject matter of these legal
proceedings, including the validity of the Licence, has already
been ruled upon by the Supreme Court of Ukraine in similar
proceedings in October 2019 involving, inter alia, NJSC Ukrnafta
and Arkona, and in which the Licence was held to be valid.
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 30 June 2020, the Company's cash resources were approximately
$54.2 million, held as to $14.7 million equivalent in Ukrainian
Hryvnia and the balance of $39.5 million equivalent in a
combination of US Dollars, Pounds Sterling and Euros.
COVID-19 Pandemic
The Group continues to monitor the evolving 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 being paramount.
Sergii Glazunov, Chief Executive Officer, said : "We are pleased
with the continued progress with the development of our fields,
where we are seeing strong production, albeit in a lower gas price
environment. We are delighted with the excellent results of the
SV-54 well, which was drilled safely and successfully and well
ahead of schedule, and which is demonstrating strong flow rates in
production testing. We will continue to closely monitor the
unprecedented developments of the current COVID-19 pandemic, and
although we have seen no material impact on our operations so far,
we have taken and will continue to take all possible actions to
ensure the safety of our employees and local communities."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
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 / Richard Tulloch
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
Louise Mason-Rutherford / 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
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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