Smart Energy Group announces that LLC Arkona Gas-Energy, which is Ukrainian asset of public British company Enwell Energy, has all legal rights to develop Svystunkivsko-Chervonolutske field, where a set of geological prospecting works has already been carried out, the first well has been drilled, and the total amount of investments is over 400 mln UAH. In particular, Smart Energy Group believes that the decision of the Sixth Court of Appeal regarding unlawfulness of issuing a special permit to LLC Arkona Gas-Energy for the field development that has been idle for 15 years without any production whatsoever, actually blocks its further development.
Thus, on November 2, 2022, the Sixth Court of Appeal once again (after cassation) considered the appeal of LLC Arkona Gas-Energy, rejected it and upheld decision of the court of first instance dated January 18, 2022 on the claim of LLC Boryslav Oil Company.
"Arkona Gas-Energy will continue to defend its rights as an investor and will appeal the said decision in the cassation procedure in the Supreme Court of Ukraine. We consider it unreasonable, besides, it does not take into account two previous decisions of the Supreme Court, - said Oleksiy Zayets, acting CEO of Smart Energy Group of Companies. - From the point of view of the State’s interests, one cannot ignore the fact that current owner of Arkona is taking real efforts to develop the field, which is extremely important in view of Russian aggression in Ukraine and the expected increase of gas consumption over the next 15-20 years. Our country should actively increase production, developing new projects and stimulating investors to develop subsoil. And this is possible only if there are no similar court cases".
Currently, Arkona Gas-Energy company has carried out a significant set of geological prospecting works at Svystunkivsko-Chervonolutske field, including 3D seismic acquisition of the entire licensed area. Also, the first well No.4 has already been drilled. It is primarily of an exploratory kind, aimed to study deposits of V-22 horizon of Visean stage at this field. The drilling began in August 2021 and, after some interruption due to full-scale russian aggression in Ukraine, it was completed at 5 585 m depth. Three prospective intervals were drilled and tested. As a result, stable inflow of hydrocarbons was obtained.
Arkona Gas-Energy planned to perform pipeline laying works, construction of a new gas preparation plant and other processing infrastructure, as well as drilling of new wells in the future.
Reference
Smart Energy is a part of investment group Smart Holding and is in charge of implementing exploration projects, commercial development of the hydrocarbon deposits. It is ranked in top 5 biggest private gas producers of Ukraine, producing over 1 mln m3 of gas per day in total at the bigining of Russia's invasion of Ukraine.
Oil & Gas business block of Smart Energy is represented by gas producing Ukrgazvydobutok (Kharkiv region) and Enwell Energy, a listed British company having assets in Poltava (the Representative Office of Regal Petroleum Corporation Limited and Arkona Gas-Energy LLC) and Kharkiv regions (Prom-Energo Produkt).
Svystunkivsko-Chervonolutske field has been developed since 1994. 5 wells were drilled within the license area between 1989 and 1999, but none of them are currently operational. Smart Energy Group has been successfully working at the nearby Svyrydivske field for a while and has sufficient experience and professional team to continue developing Svystunkivsko-Chervonolutske field.
