Enwell Energy Announces Ukraine Update

Source: www.gulfoilandgas.com 7/6/2021, Location: Asia

Enwell Energy plc (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 - Q2 2021

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

MEX-GOL & SV Field:
Gas (MMcf/d)
Q2 2021 : 21.2
Q2 2020: 17.6

Condensate (bbl/d)
Q2 2021 : 752
Q2 2020 : 649

LPG (bbl/d)
Q2 2021 : 326
Q2 2020 : 304

VAS Field:
Gas (MMcf/d)
Q2 2021 : 3.0
Q2 2020: 3.1

Condensate (bbl/d)
Q2 2021 : 29
Q2 2020 : 34
Overall production volumes reached record levels in Q2 2021, showing an increase of approximately 15% compared with Q2 2020 as a result of new production volumes from the SV-54 and SV-25 wells in the SV field, which commenced production in May 2020 and February 2021 respectively (see announcements dated 22 May 2020 and 25 February 2021), offset by natural field decline.

Operations

At the MEX-GOL and SV fields, drilling of the SV-29 well is continuing, with the well having reached a depth of approximately 5,250 metres. This well was spudded in February 2021, and has a target depth of 5,450 metres. Drilling operations are ahead of schedule, and are now expected to be completed in August 2021, and, subject to successful testing, production hook-up is now expected by the end of Q3 2021. 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 (such horizons formerly reported as "B" horizons).

In addition, preparations for upgrade works to the gas processing plant at the MEX-GOL and SV fields are continuing, with the design phase completed and procurement of long-lead items underway. These works 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 scheduled to commence in Q4 2021, and are designed to improve overall plant efficiencies and boost recoveries of condensate and LPG.

At the SC exploration licence, development planning is well advanced, and includes the drilling of the SC-4 well, which is scheduled to commence later this month or early next month, and acquisition of 150 km2 of 3D seismic, which is planned to commence in Q4 2021.

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

Cash Holdings

At 30 June 2021, the Company's cash resources were approximately $62.9 million, comprised of $26.5 million equivalent in Ukrainian Hryvnia and the balance of $36.4 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 strong operational quarter, with record production volumes, and excellent progress with the drilling of the SV-29 well. We are excited to soon be spudding SC-4, our first well on the SC exploration licence, which we are optimistic will be successful and pave the way for the future development of this licence."


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