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The court allowed the appeal of LLC Arkona Gas-Energy

The Court of Appeal overturned decision of the first instance court to invalidate special permit for production of hydrocarbons of LLC Arkona Gas-Energy.
 
Thus, on September 29, the Sixth Administrative Court of Appeal held a hearing on the appeal of LLC Arkona Gas-Energy (hereinafter Arkona), which is part of Smart Energy Group of Companies and is a Ukrainian asset of British Public Company Enwell Energy. The company appealed to the Court of Appeal to overturn July decision of Kyiv District Administrative Court on a lawsuit filed by PJSC Ukrnafta to invalidate Arkona’s special permit for hydrocarbon production at Svystunkivsko-Chervonolutske field.
 
This decision of the Court of Appeal confirms legitimacy of Arkona and its new owner British Enwell Energy’s standpoint, and also provides an opportunity to revive Svystunkivsko -Chervonolutske field, which has not been producing hydrocarbons for over ten years.
 
“We are rooting for decision of the Sixth Court of Appeal. Not only it is an opportunity for us to continue preparing for drilling the first well in a quarter of a century but also a green light for foreign investors to invest in Ukrainian economy and a tendency to reduce investment risks here”, – said Sergey Glazunov, CEO of Smart Energy Group and Enwell Energy company.
 
“The Court of Appeal upheld Arkona’s appeal, overturned decision of the first instance court and denied Ukrnafta’s lawsuit. We consider such decision of the Court of Appeal to be quite legal and logical, because in the end of 2019 the Supreme Court in another case has already established that the permit was issued to Arkona in a legal way. That is, the court of the first instance in making the contested decision in this case actually reviewed decision of the Supreme Court, which violated the principle of legal certainty and binding nature of the court decision, regulated by both national and international laws. Also, the court of the first instance committed a number of procedural violations, which, given today’s decision, did not go unnoticed by the Court of Appeal, “- Gleb Byaliy, a partner at law firm Asters, which represented Arkona in this case.
 
To be reminded that British Public Company Enwell Energy received a permit to produce hydrocarbons at Svystunkivsko-Chervonolutske field via acquisition of LLC Arkona Gas-Energy in March this year. By the end of 2020, the company expects to start drilling the first well at the field.
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Arkona Gas-Energy prepared site for first well

Arkona Gas-Energy LLC, a part of Smart Energy Group and an operator of Svystunkivsko-Chervonolutske field (Poltava oblast), completed preparation of the site for drilling the first well. Spudding is scheduled for the end of 2020 A new well will be the first one, drilled at the field since 1994 Currently, there are intensive works at the field on preparation for drilling the first well (#4): the permits for land plots are ready (updated), the drilling agreement with a contractor has been concluded, surface soil has been stripped, drill site has been prepared for drilling equipment. At the same time the company is working on preparing all documents, necessary for drilling.
 
It has also started preparation for 3D seismic works and geochemical surveys.
“We should also complete front-end engineering and design, defining the most efficient well construction, and prepare all necessary documents. By the end of the year we will start drilling well #4 with target depth of 5,565 m. Soon after that we are planning to spud a next well. However, currently the main point for us is to start drilling as the field new for us and we need to “perceive” it”, comments Viktor Dudzych, CTO of Smart Energy Group.
 
Moreover, by the moment of its acquisition by British company Enwell Energy Arkona had already received the environmental impact assessment (EIA) report, made the calculations of hydrocarbons reserves and got their approval by the State Commission of Ukraine on Mineral Resources, completed reinterpretation of seismic data and updated the geological model of the field.
 
Earlier, in March 2020, British Enwell Energy acquired 100% of Arkona Gas-Energy LLC, expanding its activities to Svystunkivsko-Chervonolutske field that is located in Poltava oblast, in approximately 15 km east of Svyrydivske field where another Ukrainian asset of British investor produces hydrocarbons.