REG - Enwell Energy PLC - Quarterly Operations Update

Enwell EnergyAnnouncement

10/04/2025 07:00

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RNS Number : 4072E  Enwell Energy PLC  10 April 2025

10 April 2025

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 2025

 

The MEX-GOL, SV and VAS production licences are currently suspended and
accordingly there is no production from those licences at present. Further
details on the suspensions are set out below.

 

The average daily production of gas, condensate and LPG for the 23 days that
the MEX-GOL and SV fields were producing, and for the 58 days that the VAS
field was producing, over the period from 1 January 2025 to 31 March 2025 was
as follows:

 

 Field             Gas               Condensate*       LPG               Aggregate

                   (MMcf/d)          (bbl/d)           (bbl/d)           boepd
                   Q1 2025  Q1 2024  Q1 2025  Q1 2024  Q1 2025  Q1 2024  Q1 2025  Q1 2024

 MEX-GOL & SV      7.1      8.7      449      309      -        378      1,692    2,128
 VAS               0.9      -        6        -        -        -        173      -
 Total             8.0      8.7      455      309      -        378      1,865    2,128

 

*Condensate includes light oil from well MEX-102

The ongoing war in Ukraine has caused and continues to cause disruption to
operations at the Company's fields, whilst the adverse regulatory actions
taken by the Ukrainian authorities, culminating in the suspensions of the
MEX-GOL, SV and VAS licences, has similarly negatively impacted the Company's
operations during the period, most notably by the loss of production from
those fields. Gas production volumes at the MEX-GOL and SV fields were lower
when compared with Q1 2024 primarily due to the period of suspension of
production and natural field decline. There was no LPG production from the
MEX-GOL and SV fields during the period due to administrative delays in the
issuance of a new licence for such production. In addition, there are no Q1
2024 comparative average production figures for the VAS field since the VAS
licence was suspended during that period.

 

Operations

 

There have been no production or field operations at the MEX-GOL, SV and VAS
fields respectively since the reinstatement of the suspensions of the MEX-GOL
and SV licences on 22 January 2025 and the VAS licence on 27 February 2025.

 

At the SC exploration licence area, which is not currently under any
regulatory restrictions, development planning is continuing, including
planning for the installation of new gas processing facilities and other
surface infrastructure as well as assessing the feasibility of an alternative
option of a connection to existing gas processing facilities.

 

In general, the operating environment in Ukraine remains very challenging. The
Company continues to be cautious and vigilant with its ongoing activities 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 2025, the Company's cash resources were approximately $101.8
million, comprised of $85.9 million equivalent in Ukrainian Hryvnia and the
balance of $15.9 million equivalent in a combination of US Dollars, Pounds
Sterling and Euros.

 

Board and Management Changes

 

On 31 January 2025, Igor Basai stepped down as a non-executive director of the
Company and Oleksandr Blyzniuk was appointed as a non-executive director of
the Company, both with immediate effect.

 

On 27 March 2025, Oleksiy Zayets, who had been acting as Interim Chief
Executive Officer, was appointed as Chief Executive Officer.

 

Suspension of MEX-GOL, SV and VAS Licences

 

As announced on 18 November 2024, the State Geologic and Subsoil Survey of
Ukraine (the "SGSS") issued orders dated 15 November 2024 to suspend the
MEX-GOL, SV and VAS production licences. These orders were made pursuant to
Ukrainian legislation, specifically Law No. 2805-IX, under which the SGSS has
legislative powers to suspend and/or revoke hydrocarbon licences where the
ultimate beneficial owner is the subject of Ukrainian Government sanctions.

 

As announced on 11 October 2024, a Decree of the President of Ukraine numbered
698/2024 and dated 8 October 2024 (the "Decree"), made pursuant to a
resolution of the National Security and Defence Council of Ukraine dated 8
October 2024, entitled "On application of personal special economic and other
restrictive measures (sanctions)", was implemented, pursuant to which personal
special economic and other restrictive measures (sanctions) were applied to,
inter alia, Proteas Trustee Services Limited and Proteas Trustees Limited (as
well as their respective shareholders Andreas Sophocleous and Konstantina
Alkiviadous), Elena Iona and Afrodite Loukiadou, who are trustees of Cypriot
Trusts (the "Trustees") that hold a major indirect shareholding interest in
the Company.

 

Under Ukrainian legislation, the Company's subsidiary companies which own its
hydrocarbon licences in Ukraine, namely Regal Petroleum Corporation Limited in
the case of the MEX-GOL and SV production licences and LLC Prom-Enerho Produkt
in the case of the VAS production licence, are required to register their
respective ultimate beneficial owners in the Unified State Register of Legal
Entities, Individuals-entrepreneurs and Civil Institutions of Ukraine (the
"State Register"). The registration entries for each of these companies state
that their ultimate beneficial owners are the Trustees, based on the
notifications made by the Trustees to the Company and published to the market
on 26 January 2023, 31 July 2023 and 20 March 2024.

 

As a consequence of such registrations in the State Register, the SGSS
recognises the Trustees as the ultimate beneficial owners of the MEX-GOL, SV
and VAS production licences. As a result, the SGSS issued the suspension
orders dated 15 November 2024 in respect of each of the MEX-GOL, SV and VAS
production licences for a period of 10 years effective from 8 October 2024
(being the date of the Decree).

 

As announced on 26 November 2024, the Company issued legal proceedings in the
Poltava District Administrative Court in Ukraine to challenge such orders, and
within such proceedings, the Company obtained interim rulings (the "Interim
Rulings") to lift such suspension orders pending determination of the
substantive issues in the legal proceedings.

 

The SGSS appealed against the Interim Rulings in the Second Appeal
Administrative Court in Ukraine. By a decision dated 22 January 2025, the
appeal against the Interim Ruling relating to the MEX-GOL and SV licences was
allowed, and by a decision dated 27 February 2025, the appeal against the
Interim Ruling relating to the VAS licence was also allowed. As a result, the
respective suspension orders in respect of the MEX-GOL, SV and VAS licences
were reinstated, and the Company ceased all field operations on those licences
immediately following the respective appeal decisions.

 

The Company is continuing its legal proceedings to challenge the suspension
orders, including investigating the possibility of pursuing further interim
measures to allow restoration of its operations, and continuing to consult
with its external legal and other advisers to seek to mitigate the risks
associated with the regulatory actions of the Ukrainian authorities.

 

Oleksiy Zayets, CEO, commented: "The operating environment in Ukraine remains
extremely difficult as a result of the war, as well as the challenging
regulatory environment. We are very disappointed with the suspension orders in
respect of our MEX-GOL, SV and VAS licences, and hope that a resolution of
these issues can be found."

 

For further information, please contact:

 

 Enwell Energy plc                              Tel: 020 3427 3550
 Chuck Valceschini, Chairman
 Oleksiy Zayets, 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
 Luna Habte / Noemie de Andia

 

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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