REG - Enwell Energy PLC - Quarterly Operations Update

Enwell EnergyAnnouncement

19/04/2024 07:00

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RNS Number : 2430L  Enwell Energy PLC  19 April 2024

19 April 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 - Q1 2024

 

The average daily production of gas, condensate and LPG from the MEX-GOL, SV
and VAS fields over the period from 1 January 2024 to 31 March 2024 was as
follows:

 

 Field             Gas               Condensate        LPG               Aggregate

                   (MMcf/d)          (bbl/d)           (bbl/d)           boepd
                   Q1 2024  Q1 2023  Q1 2024  Q1 2023  Q1 2024  Q1 2023  Q1 2024  Q1 2023

 MEX-GOL & SV      8.7      9.9      309      394      378      434      2,128    2,449
 VAS               -        1.7      -        19       -        -        -        338
 Total             8.7      11.6     309      413      378      434      2,128    2,787

 

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, most
notably by the loss of production from the VAS field. Production volumes at
the MEX-GOL and SV fields were lower when compared with Q1 2023 predominantly
due to natural field decline.

 

 

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 electricity supply, which has caused delays to some activities. In
general, the operating environment in Ukraine remains very challenging.

 

At the VAS field and SC exploration licence area, all operations currently
remain suspended following the suspension orders made by the State Geologic
and Subsoil Survey of Ukraine (the "SGSS") on 4 May 2023, as detailed in the
Company's announcement of the same date.

 

The Company continues to be cautious and vigilant with its ongoing 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 March 2024, the Company's cash resources were approximately $86.2
million, comprised of $67.3 million equivalent in Ukrainian Hryvnia and the
balance of $18.9 million equivalent in a combination of US Dollars, Pounds
Sterling and Euros.

 

Board and Management Changes

 

As announced on 8 March 2024, there have been a number of changes to the
senior management and Board of Directors of the Company. Mr Chris Hopkinson
stepped down as Non-Executive Chairman and Mr Sergii Glazunov stepped down as
Chief Executive Officer and Director of the Company. At the same time, Mr
Charles "Chuck" Valceschini was appointed as Non-Executive Chairman and Mr
Igor Basai was appointed as a Non-Executive Director of the Company.

 

It is intended that a new Chief Executive Officer will be recruited in due
course, and, pending such an appointment, Mr Oleksiy Zayets, the Chief
Financial Officer of the Group's companies in Ukraine, will act as interim
Chief Executive Officer.

 

Suspension of VAS and SC Licences

 

On 4 May 2023, the SGSS issued orders suspending each of the Company's VAS
production licence and SC exploration licence for a period of five years
effective from that date, and these orders remain in place. Further
information is set out in the Company's announcement dated 4 May 2023.

 

 

Oleksiy Zayets, Interim CEO, said: "The operating environment in Ukraine
remains extremely challenging as a result of the war, and additionally the
regulatory actions and ongoing suspension orders made by the Ukrainian
authorities are very frustrating and disappointing. Nevertheless, we are
pleased to be able to continue our production operations at the MEX-GOL and SV
fields. We continue to consult with our legal advisers to pursue all available
measures to protect our assets and business and to, hopefully, ultimately
successfully challenge the regulatory actions taken by the Ukrainian
authorities in due course."

 

For further information, please contact:

 

 Enwell Energy plc                              Tel: 020 3427 3550
 Chuck Valceschini, Chairman
 Oleksiy Zayets, Interim CEO
 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

 

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.

 

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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