REG - Enwell Energy PLC - Ukraine Update

Enwell EnergyAnnouncement

12/10/2021 07:00

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RNS Number : 7210O  Enwell Energy PLC  12 October 2021

12 October 2021

 

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 2021

 

The average daily production of gas, condensate and LPG from the MEX-GOL, SV
and VAS fields for the period from 1 July 2021 to 30 September 2021 was as
follows:-

 

 

 Field              Gas               Condensate        LPG               Aggregate

                    (MMcf/d)          (bbl/d)           (bbl/d)           boepd
                    Q3 2021  Q3 2020  Q3 2021  Q3 2020  Q3 2021  Q3 2020  Q3 2021  Q3 2020

                    21.0     18.2     749      641      278      287      4,645    4,049

 MEX-GOL & SV

                    2.5      3.0      24       31       -        -        481      580

 VAS

                    23.5     21.2     773      672      278      287      5,126    4,629

 Total

 

Overall production volumes continued to be strong in Q3 2021, showing an
increase of approximately 11% compared with Q3 2020, primarily as a result of
new production volumes from the SV-25 well in the SV field, which commenced
production in February 2021 (see announcement dated 25 February 2021), offset
by natural field decline.

 

 

The significant, and to date sustained, increase in European gas prices in the
period has fed through to Ukrainian gas prices, which has benefited the sales
prices being achieved by the Company.

 

Operations

 

At the MEX-GOL and SV fields, drilling of the SV-29 well was completed at a
final depth of 5,450 metres, and testing operations are currently underway.
The well is primarily a development well, targeting production from the V-22
horizon, as well as appraising the V-21 and V-23 horizons, in the Visean
formation.

 

The SV-31 well was spudded in September 2021 and has a target depth of 5,250
metres. Drilling operations are scheduled to be completed by the end of the
first quarter of 2022, and, subject to successful testing, production hook-up
is scheduled during the second quarter of 2022. The well is a development
well, targeting production from the V-21 and V-22 horizons in the Visean
formation, which have demonstrated good productivity in an existing nearby
well.

 

In addition, work has commenced on upgrades to the gas processing plant at the
MEX-GOL and SV fields, which involve an upgrade of the LPG extraction circuit,
an increase to the flow capacity of the plant, and a significant increase to
the liquids tank storage capacity. The works are designed to improve overall
plant efficiencies, improve the quality of liquids produced and boost
recoveries of LPG, while reducing environmental emissions. In total, the works
are expected to take approximately three and a half months to complete.

 

At the SC exploration licence, drilling of the SC-4 well commenced in August
2021. This well, which has a target depth of 5,565 metres, is primarily an
appraisal well, targeting production from the V-22 horizon, as well as
exploring the V-16 and V-21 horizons, in the Visean formation. Drilling
operations are scheduled to be completed in mid-2022. In addition, the
acquisition of 150 km(2) of 3D seismic at the licence is planned to commence
later in the year.

 

At the VAS field, planning is continuing for a new well to explore the
Vvdenska (VED) prospect within the VAS licence area.

 

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 Company remains
confident that it will ultimately be successful in such legal proceedings.

 

Cash Holdings

 

At 30 September 2021, the Company's cash resources were approximately $62.7
million, comprised of $25.7 million equivalent in Ukrainian Hryvnia and the
balance of $37.0 million equivalent in a combination of US Dollars, Pounds
Sterling and Euros.

 

 

COVID-19 Pandemic

 

The Group continues to monitor the 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 to report
another very good operational quarter, with strong production volumes and
significantly higher gas prices in Ukraine. We are looking forward to the test
results of the SV-29 well, to continued good progress with the drilling of the
SC-4 and SV-31 wells, and to further progressing the Company's overall
development plans, enabled by the strong current gas revenues and cash
resources resulting from the recent surge in gas prices."

 

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.

 

 

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

 Arden Partners plc                                Tel: 020 7614 5900
 Ruari McGirr / Elliot Mustoe (Corporate Finance)
 Simon Johnson (Corporate Broking)

 Citigate Dewe Rogerson                            Tel: 020 7638 9571
 Ellen Wilton

 

 

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
 km(2)   square kilometre
 LPG     liquefied petroleum gas
 MMcf/d  million cubic feet per day
 %       per cent
 $       US Dollars

 

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