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(Sharecast News) - Enwell Energy reported no production in a second quarter update on Friday, as operations at its key Ukrainian gas fields remained suspended.
The AIM-traded oil and gas group said its MEX-GOL, Svyrydivske (SV), and Vasyschevskoye (VAS) production licences remained inactive due to regulatory sanctions.
It said the suspensions, originally imposed in November 2024 by the State Geologic and Subsoil Survey of Ukraine (SGSS), stemmed from Ukrainian sanctions applied to individuals and entities deemed ultimate beneficial owners of Enwell's licence-holding subsidiaries.
The sanctions were issued by presidential decree following a resolution by the National Security and Defence Council of Ukraine.
Legal efforts by Enwell to challenge the licence suspensions had so far been unsuccessful.
Interim court rulings to lift the suspensions were overturned earlier in the year, prompting the company to halt all field operations.
The firm said it was continuing legal proceedings and exploring further interim relief to restore access to the licences.
Chief executive Oleksiy Zayets said the group was prioritising the resolution of the suspensions.
"The ongoing difficult regulatory environment in Ukraine continues to be a significant challenge for the group.
"We are yet to be successful in resolving the continuing suspensions of our MEX-GOL, SV and VAS licences, although our efforts to do so continue as a priority for the group," he said.
"In addition, the general operating environment in Ukraine remains extremely challenging as a result of the war."
Enwell reported cash resources of $100.7m at the end of June, including $84.1m held in Ukrainian Hryvnia and $16.6m in foreign currencies.
Meanwhile, development planning was continuing at the group's Svystunivsko-Chervonolutskyi (SC) exploration licence, where the company said it was assessing infrastructure options to support future operations.
At 1104 BST, shares in Enwell Energy were down 2.5% at 17.55p.
Reporting by Josh White for Sharecast.com.