TIDMRPT
RNS Number : 8466B
Enwell Energy PLC
13 October 2020
13 October 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 - Q3 2020
The average daily production of gas, condensate and LPG from the
MEX-GOL, SV and VAS fields for the period from 1 July 2020 to 30
September 2020 was as follows:-
Field Gas Condensate LPG Aggregate
(MMcf/d) (bbl/d) (bbl/d) boepd
Q3 2020 Q3 2019 Q3 2020 Q3 2019 Q3 2020 Q3 2019 Q3 2020 Q3 2019
-------- -------- -------- -------- -------- -------- -------- --------
MEX-GOL
& SV 18.2 13.4 641.0 526.1 287.4 243.8 4,049 3,058
-------- -------- -------- -------- -------- -------- -------- --------
VAS 3.0 4.2 31.2 49.0 - - 580 831
-------- -------- -------- -------- -------- -------- -------- --------
Total 21.2 17.6 672.2 575.1 287.4 243.8 4,629 3,889
-------- -------- -------- -------- -------- -------- -------- --------
Overall production volumes in Q3 2020 increased by approximately
19% compared with Q3 2019, a continued consequence of the
significant boost in May 2020 from the SV-54 well in the SV field
commencing 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 drilling of the SV-25 well
continues, with the well having reached a depth of approximately
4,875 metres. The well has a target depth of 5,320 metres, with
drilling operations scheduled to be completed by the end of the
first quarter of 2021, and, subject to successful testing,
production hook-up during the second quarter of 2021. The well is
an appraisal well, with its primary targets being the B-20, B-22
and B-23 horizons in the Visean formation. In addition, planning is
progressing for a further well and the possible sidetracking of an
existing well in the SV field in 2021.
At the VAS field, planning is continuing for a new well to
explore the Vvdenska (VED) prospect within the VAS licence
area.
Arkona Legal Dispute
As announced on 24 March 2020, the Company has acquired the
entire issued share capital of LLC Arkona Gas-Energy ("Arkona"),
which holds the SC exploration licence (the "Licence"). As further
announced on 3 July, 31 July and 30 September 2020, there are legal
proceedings between NJSC Ukrnafta as claimant and Arkona as
defendant, in which NJSC Ukrnafta has made claims asserting that
irregular procedures were followed in the grant of the Licence to
Arkona in May 2017. NJSC Ukrnafta was the holder of a previous
licence over this area which expired prior to the grant of the
Licence. Arkona disputes these claims.
In early July 2020, the First Instance Court in Ukraine made a
ruling in favour of NJSC Ukrnafta, determining that the grant of
the Licence was irregular, and accordingly, the Licence would be
invalid. However, in early August 2020, Arkona filed an appeal of
this decision in the Appellate Administrative Court in Kyiv, and
pending the hearing of this appeal, the Licence remained valid.
At a hearing of this appeal on 29 September 2020, the Appellate
Administrative Court ruled in favour of Arkona, overturning the
earlier decision of the First Instance Court.
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 September 2020, the Company's cash resources were
approximately $55.7 million, comprised of $15.8 million equivalent
in Ukrainian Hryvnia and the balance of $39.9 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 continuing to be the
priority.
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 than 2019. We are also pleased with progress in the
drilling of the SV-25 well, which we hope will continue our success
in the development of our fields. We are closely monitoring the
unprecedented developments of the ongoing COVID-19 pandemic, and
although we have not experienced any material impact on our
operations so far, we have taken and will continue to take action
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
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END
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