REG - Enwell Energy PLC - Arkona - Successful Appeal in SC Licence Case 

Enwell EnergyAnnouncement

04/05/2023 07:00

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RNS Number : 3444Y  Enwell Energy PLC  04 May 2023

4 May 2023

 

Enwell Energy plc
("Enwell" or the "Company")

 

Arkona - Successful Appeal in SC Licence Case

and Update on Regulatory Actions by Ukrainian Authorities

 

Enwell Energy plc (AIM: ENW), the AIM-quoted oil and gas exploration and
production group, announces a successful appeal decision in the legal
proceedings relating to its Svystunivsko-Chervonolutskyi exploration licence
(the "SC Licence") in Ukraine, which is held by its subsidiary LLC Arkona
Gas-Energy ("Arkona"), and an update on regulatory actions by Ukrainian
Authorities.

 

Arkona - SC Licence

 

Since the Company completed the acquisition of Arkona in March 2020 (see
announcement dated 24 March 2020), there have been a number of legal
challenges relating to the SC Licence. As announced on 3 July 2020, PJSC
Ukrnafta ("Ukrnafta"), as claimant, brought legal proceedings against Arkona,
as defendant, in which Ukrnafta made claims asserting that irregular
procedures were followed in the grant of the SC Licence to Arkona in May 2017.
Ukrnafta also brought these proceedings against the State Geologic and Subsoil
Survey of Ukraine (the "SGSS"). Both Arkona and the SGSS disputed these
claims. In these proceedings, the First Instance Court in Ukraine made a
ruling in favour of Ukrnafta, determining that the grant of the SC Licence was
irregular, and accordingly, the SC Licence would be invalid. Arkona filed an
appeal of this decision in the Appellate Administrative Court in Kyiv, and on
29 September 2020, the Appellate Administrative Court ruled in favour of
Arkona, overturning the earlier decision of the First Instance Court. Ukrnafta
filed a further appeal in the Supreme Court in Kyiv, and in February 2021, the
Supreme Court ruled that the arguments raised by Ukrnafta in the appeal were
not substantiated, and that the proceedings against Arkona should be
dismissed. The decision of the Supreme Court represented the final appeal
procedure in respect of these legal proceedings, and accordingly, these
proceedings against Arkona were exhausted.

 

Prior to the Company's acquisition of Arkona, Ukrnafta had previously issued
legal proceedings in 2018, raising substantially the same claims, which
proceeded through the First Instance Court and Appellate Administrative Court,
before a final appeal was determined by the Supreme Court in October 2019, in
which Ukrnafta's claims were denied.

 

In April 2021, an entity named JV Boryslav Oil Company ("Boryslav"), which is
25.0999% owned by Ukrnafta, issued a further legal claim, also claiming that
irregular procedures were followed in the grant of the SC Licence, which claim
was denied by the First Instance Court in July 2021 and by the Appellate
Administrative Court in October 2021. There was no further appeal in this case
and so the decision of the Appellate Administrative Court in these legal
proceedings is final.

 

In September 2021, Boryslav issued a further legal claim, again claiming that
irregular procedures were followed in the grant of the SC Licence, against the
SGSS, the State Commission of Ukraine for Mineral Resources ("SCP") and
Arkona, as defendants, with Ukrnafta named as a third party. In this claim,
the

First Instance Court made a ruling in January 2022 in favour of Boryslav, and
on 2 November 2022, the Appellate Administrative Court also made a ruling in
favour of Boryslav to uphold the decision of the First Instance Court.

 

The Company appealed the decision of the Appellate Administrative Court to the
Supreme Court, and on 3 May 2023, the Supreme Court published its decision to
allow the Company's appeal and overturn the ruling made by the Appellate
Administrative Court. The Supreme Court represents the final appellate court
in these legal proceedings, and accordingly, the decision of the Supreme Court
is final. Therefore, the SC Licence is valid.

 

The Company's announcements dated 24 March 2020, 3 July 2020, 31 July 2020, 30
September 2020, 23 November 2020, 11 February 2021 and 4 November 2022 provide
additional information.

 

Regulatory Actions - UBO Registrations for Ukrainian Group Subsidiaries

 

On 2 May 2023, the Ministry of Justice of Ukraine made Orders (the "MoJ
Orders") cancelling the registration entry made on behalf of three Ukrainian
subsidiaries of the Company named LLC Prom-Enerho Produkt, LLC Arkona
Gas-Energy and LLC Well Investum respectively in the Unified State Register of
Legal Entities, Individuals-entrepreneurs and Civil Institutions of Ukraine
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 such Register, Vadym Novynskyi. As announced on 26 January
2023, the Company was notified that Vadym Novynskyi ceased holding a
beneficial interest in the indirect majority shareholder of the Company on 1
December 2022. LLC Prom-Enerho Produkt holds the Vasyschevskoye ("VAS")
production licence, LLC Arkona Gas-Energy holds the SC Licence and LLC Well
Investum is a dormant company. The Company is now consulting with its legal
advisers to understand the implications of these actions, and further
information will be announced 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

 

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