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RNS Number : 7702R
Enwell Energy PLC
08 July 2022
8 July 2022
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, 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 .
The Russian military action in Ukraine, which began on 24
February 2022, is ongoing, and has made the situation in Ukraine
extremely challenging. Nevertheless, Enwell had been able to
continue production and some field operations at the MEX-GOL and SV
fields, and completion of the drilling of the SC-4 well at the SC
licence is planned shortly. However, all operations at the VAS
field (located near to Kharkiv) remain suspended due to the risks
associated with the military activity near this location.
The Company continues to be cautious and vigilant in continuing
these operations and is taking all 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.
Production - Q2 2022
The average daily production of gas, condensate and LPG from the
MEX-GOL, SV and VAS fields over the period from 1 April 2022 to 30
June 2022 was as follows:-
Field Gas Condensate LPG Aggregate
(MMcf/d) (bbl/d) (bbl/d) boepd
Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021
-------- -------- -------- -------- -------- -------- -------- --------
MEX-GOL
& SV 10.7 21.2 421 752 241 326 2,478 4,723
-------- -------- -------- -------- -------- -------- -------- --------
VAS - 3.0 - 29 - - - 531
-------- -------- -------- -------- -------- -------- -------- --------
Total 10.7 24.2 421 781 241 326 2,478 5,254
-------- -------- -------- -------- -------- -------- -------- --------
The disruption to production operations at the MEX-GOL and SV
fields, where certain remedial and maintenance work was delayed
and/or disrupted, and the shut-in of the VAS field since February
2022 meant that production volumes were materially lower compared
with Q2 2021. In addition, drilling of new wells and some remedial
work on existing wells has been deferred or suspended until there
is an improvement in the situation in Ukraine.
Notwithstanding the disruption to production operations, the
continuing high gas prices in Europe have fed through to Ukrainian
gas prices, although there has been significant volatility in gas
prices, both in Europe and Ukraine. Nevertheless, the sales prices
being achieved by the Company for its gas, as well as condensate
and LPG, have been high by comparison to Q2 2021, and the continued
high hydrocarbons sales prices have helped to offset the impact on
revenues during the quarter due to the lower production
volumes.
Demand for hydrocarbons, particularly gas, has been
understandably variable since the military conflict commenced in
February 2022. The Company has continued to supply gas to its
existing ultimate off-takers, although volumes ordered by such
off-takers have reduced over recent months, which has meant that
the Company has been selling a higher proportion of its gas through
the Ukrainian electronic gas trading market. It has been necessary
for the Company to allow some flexibility in the recovery of sales
receivables from certain ultimate off-takers, while sales through
the Ukrainian electronic market are made on a prepayment basis. The
Company is working with its customers and ultimate off-takers to
manage the situation as satisfactorily as possible in the
circumstances.
Operations
Production operations are continuing at the MEX-GOL and SV
fields, where a proportion of the wells have been put on
production, and, currently, the production rate is approximately
2,600 boepd. Some other field operations have resumed, including
workover operations on the SV-2 well, and perforation and testing
of various intervals in the SV-29 development well. In addition,
construction work on the upgrades to the gas processing facilities
at the MEX-GOL and SV fields was completed during the quarter. All
o ther works have been deferred or suspended.
Preparations to resume drilling of the SC-4 appraisal well at
the SC licence are also underway, and once drilling operations are
completed, it is planned to log, and subject thereto, test this
well.
All production and field operations at the VAS field remain
suspended.
Cash Holdings
At 30 June 2022, the Company's cash resources were approximately
$77.6 million, comprised of $18.6 million equivalent in Ukrainian
Hryvnia and the balance of $59.0 million equivalent in a
combination of US Dollars, Pounds Sterling and Euros, and at 6 July
2022, were approximately $83.8 million, comprised of $24.9 million
equivalent in Ukrainian Hryvnia and the balance of $58.9 million
equivalent in a combination of US Dollars, Pounds Sterling and
Euros .
The Company has contributed funds and is intending to allocate
further funds to certain humanitarian aid organisations to assist
with the valuable work that such organisations are undertaking in
Ukraine.
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.
Sergii Glazunov, Chief Executive Officer, said : "The situation
in Ukraine continues to be extremely challenging, but we are taking
all available measures to protect our business and ensure the
safety and wellbeing of our personnel, while continuing to operate
where we believe it is safe to do so ."
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.
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
LPG liquefied petroleum gas
MMcf/d million cubic feet per day
$ US Dollars
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END
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