Enwell Energy swings to loss after suspension of licences

13th May 2026 13:10

(Sharecast News) - Enwell Energy swung to a loss in 2025 after production and revenue fell sharply following the suspension of several production licences by Ukrainian authorities.

The AIM-traded oil and gas exploration and production group reported revenue of $3.3m for the year ended 31 December, down 92% from $44.9m in 2024.

Gross profit fell 96% to $1.2m, while the company posted an operating loss of $1.5m, compared with an operating profit of $29.1m a year earlier.

Enwell recorded a net loss of $4.5m for the year, against a net profit of $23.7m in 2024.

Aggregate average daily production was 1,865 barrels of oil equivalent per day, calculated on days when the group's fields were actually in production, compared with 2,288 boepd in 2024.

Total production volumes for the year fell to 48,962 barrels of oil equivalent from 722,753 barrels in the prior year.

The company said the decline was primarily due to significantly lower production after Ukrainian government authorities issued orders in November 2024 suspending its MEX-GOL, SV and VAS production licences for 10 years.

It said all work at those licences remained suspended, following earlier regulatory action in 2023 when the VAS production licence and SC exploration licence were suspended from May 2023 until June 2024.

Average realised prices in Ukraine were $377 per thousand cubic metres for gas, $63 per barrel for condensate and $64 per barrel for oil, while no LPG was produced during the year.

Cash and cash equivalents stood at $97.1m at year-end, compared with $99.4m at the end of 2024, and were $92.0m as at 8 May 2026.

Enwell said the Russian invasion of Ukraine continued to have a significant impact on all aspects of life in the country, including its business and operations, while the scale and duration of disruption remained difficult to predict.

Further work on the suspended MEX-GOL, SV and VAS licences will remain halted until the regulatory issues are resolved and the suspension orders are lifted.

At the SC exploration licence area, Enwell said development planning was continuing, including for the SC-5 exploration well and new gas processing facilities and surface infrastructure.

The company is also assessing an alternative option to connect to existing gas processing facilities, and is installing temporary gathering, separation and compression equipment to enable gas and condensate from the SC-4 well to be separated on site.

It said the gas would then be compressed and trucked to the group's gas processing facilities at its MEX-GOL and SV fields for treatment and sale, enabling some limited production from the SC licence later in the year.

Enwell said it was continuing legal proceedings to challenge the suspension orders and protect its business and assets, including arbitration proceedings under the bilateral investment treaty between the UK and Ukraine.

The group said it retained a material proportion of its cash outside Ukraine, providing flexibility and a buffer against further disruption, with its limited development programme for the rest of 2026 and 2027 expected to be funded from existing cash resources and operational cash flow.

"The regulatory actions of the Ukrainian authorities resulting in the suspensions of our MEX-GOL, SV and VAS production licences, coupled with the challenges of the ongoing war in Ukraine, meant that 2025 was a difficult year for us," said chief executive officer Oleksiy Zayets.

"Nevertheless, we were able to progress some development work at our SC exploration licence area, and we hope to establish some limited production from that licence later in the year.

"The lack of progress towards a resolution of the regulatory situation is frustrating, and has meant that we have been obliged to take necessary steps to protect our business and assets, including through arbitration proceedings under the bilateral investment treaty between the United Kingdom and Ukraine."

At 1440 BST, shares in Enwell Energy were down 5.45% at 13p.

Reporting by Josh White for Sharecast.com.

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