Enwell upbeat on reserves and resources at SC licence

The AIM-traded firm said it engaged independent petroleum consultants DeGolyer and MacNaughton to prepare an assessment of the remaining reserves and contingent resources attributable to the exploration licence as at 1 January.

It said the report was consistent with its current field development plans.

The report estimates proved and probable reserves of 65.16 billion standard cubic feet of gas and 548 million barrels of condensate, for a total of 12.1 million barrels of oil equivalent.

It also estimated 2C contingent resources of 14.18 billion standard cubic feet of gas and 119 million barrels of condensate, for a total of 2.6 million barrels of oil equivalent.

The company said the SC licence is located in the Poltava region in north-eastern Ukraine, about 15 kilometres east of its producing Svyrydivske (SV) field, with similar characteristics to that asset.

It was granted the licence in May 2017 with a duration of 20 years, with the area extending over 97 square kilometres.

The licence is prospective for gas and condensate, and had been the subject of exploration since the 1980s, with five wells drilled on the licence since then, although none of those were currently on production.

As with the productive reservoirs in the SV field, the prospective reservoirs in the licence comprised a series of gently dipping Carboniferous sandstones of Visean age, inter-bedded with shales at depth between 4,600 and 6,000 metres.

Geologically, the licence is located towards the middle of the Dnieper-Donets sedimentary basin which extends across the major part of north-eastern Ukraine.

The vast majority of Ukrainian gas and condensate production come from that basin.

Enwell said the report was consistent with its proposed field development plan for the licence, which included the acquisition of 150 square kilometres of 3D seismic, and the drilling of the SC-4 well, which were both scheduled to start later in the year, as well as the construction of a gas processing plant.

Development would then continue with the drilling of a further six wells to recover the reserves and resources in the licence.

Due to the targeted depths, the wells were each likely to take about 12 months to complete, and were intended to be drilled consecutively over the next eight years.

“Based on this independent assessment, a material volume of reserves and contingent resources has been estimated in our SC licence,” said chief executive officer Sergii Glazunov.

“With the confidence that this independent assessment provides, we have been progressing with our field development plan to recover the reserves and resources in the licence, and based on such work, we are optimistic about the future prospects for the development of the licence.”

At 1013 BST, shares in Enwell Energy were up 6.76% at 22.26p.