Enwell Energy PLC on Friday saw shares plummet after its licence for the Svystunivsko-Chervonolutskyi oil field was declared invalid by the Appellate Administrative Court in Kyiv.
Enwell Energy is a London-based oil and gas exploration and production company, with several gas and condensate operations in Ukraine.
The exploration licence in question, which is held by LLC Arkona Gas-Energy, was acquired by Enwell in March 2020.
Since completing the acquisition, Enwell has faced a number of legal challenges for the licence. Most recently, JV Boryslav Oil Co, which is 25% owned by previous claimant PJSC Ukrnafta, claimed that ‘irregular procedures’ were followed in the grant of the licence.
After this claim was denied, Boryslav issued a further legal claim against the State Service of Geology & Subsoil of Ukraine, the State Commission of Ukraine for Mineral Resources and Arkona.
On November 2, the Appellate Administrative Court upheld a previous ruling by the First Instance Court, which favoured Boryslav and ruled Enwell’s licence invalid.
As a result, Enwell is no longer able to conduct any field activities on the licence area, and intends to appeal the decision to the Supreme Court of Ukraine.
‘While we are extremely disappointed by this adverse ruling made by the Appellate Administrative Court, which we believe is unjustified, particularly having regard to the previous decisions made by the Supreme Court in favour of Arkona, we intend to pursue all measures to challenge this ruling and protect our legal rights to this licence area,’ said Chief Executive Officer Sergii Glazunov.
The ruling followed the completion of drilling at the SC-4 well to its final depth of 5,585 metres.
The well was also meant to explore the shallower V-16 and V-21 Visean horizons, but as the primary target of the well in the V-22 formation produced a stabilised flow, Enwell decided testing shallower horizons was not necessary at the present stage of development.
Enwell shares were trading 13% lower at 22.60 pence each in London on Friday morning.
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