Enwell Energy (AIM:ENW), the AIM-quoted oil and gas exploration and production group, said its Mekhediviska-Golotvshinska (MEX-GOL), Svyrydivske (SV) and Vasyschevskoye (VAS) production licences in Ukraine remained suspended throughout the third quarter, with no production recorded since and none to date.
The three licences have been suspended since November 2024, after Ukraine's State Geologic and Subsoil Survey acted under legislation allowing it to suspend or revoke hydrocarbon licences where the ultimate beneficial owner is subject to government sanctions.
Enwell's cash position stood at approximately US$86.9 million at 30 September, down from approximately US$89.7 million at its previous quarter end, with US$73.9 million equivalent held in Ukrainian hryvnia and the remainder in US dollars, British pounds and euros.
At the Svystunivsko-Chervonolutskyi (SC) exploration licence area, the company has installed temporary gathering, separation and compression equipment at the SC-4 well site, enabling gas and condensate to be separated and compressed on site before being trucked to its existing MEX-GOL and SV processing facilities for treatment and sale.
Development planning continues for the SC-5 exploration well and for new gas-processing infrastructure at SC, alongside an assessment of connecting to existing facilities as an alternative.
"The lack of progress towards a resolution of the regulatory situation is disappointing, and has meant that it has been necessary to continue to take other steps to protect our business and assets, including through our arbitration proceedings under the bilateral investment treaty between the United Kingdom and Ukraine," said chief executive Oleksiy Zayets.
The suspensions trace back to a presidential decree of October 2024 that applied sanctions to the Cypriot trustees holding a major indirect shareholding in Enwell, which the company has challenged through arbitration under the UK-Ukraine bilateral investment treaty.
Zayets said the SC compression initiative "should enable the re-commencement of some production," even as the licence suspensions and the war in Ukraine continue to weigh on the business.