Enwell Energy plc (ENW), the AIM-quoted oil and gas exploration and production group, is pleased to announce an update on its operations at the Svystunivsko-Chervonolutskyi exploration licence (the "SC Licence").
The Company's first well at the SC Licence, SC-4, has now been spudded. This well, which has a target depth of 5,565 metres, is primarily an appraisal well, targeting production from the V-22 horizon, as well as exploring the V-16 and V-21 horizons, in the Visean formation. Drilling operations are scheduled to be completed in mid-2022.
In addition, the Company has agreed a variation to the payment terms for the acquisition of LLC Arkona Gas-Energy ("Arkona"), which holds the SC Licence, and which was acquired by the Company in March 2020 (see announcement dated 24 March 2020) . The Company acquired a 100% shareholding interest in Arkona for aggregate consideration of up to $8,630,000, comprising: (i) a first tranche of $4,315,000 (less certain adjustments for debt liabilities) paid on completion; (ii) a second tranche of $2,157,500 payable on satisfaction of certain conditions, which have now been satisfied; and (iii) a third tranche of $2,157,500 payable after 12 months from the date of payment of the second tranche. The agreement for the a cquisition (the "Acquisition Agreement") contains representations, warranties and indemnities, which are customary for this type of transaction and entitle the Company to defer consideration payments and/or seek recovery of previously paid tranches of consideration in the event of a breach of the Acquisition Agreement. T he second tranche of the consideration was paid in March 2021, and consequently, the third tranche is payable in March 2022. However, in recognition of the progress that has been made towards the commencement of exploration and appraisal of the SC Licence and the fact that the second tranche of the consideration became payable later than originally expected, the Company and the vendors of Arkona have agreed to an early payment of 25% of the third tranche of the consideration, totalling $539,375, at this time, rather than in March 2022. Accordingly a Deed of Variation to the Acquisition Agreement has been entered into by the Company and such vendors to reflect this variation.