Enwell Energy Assesses Ukraine Legislation Impac On Licences

Enwell Energy (LON: ENW) shares tumbled in early Wednesday trading after it said it is assessing new legislation in Ukraine which may adversely affect its hydrocarbon extraction licences in the country.

The company explained that new legislation in Ukraine includes conditions that if the owner of a mineral or hydrocarbon licence becomes the subject of sanctions, authorities may suspend or revoke the licence. In Enwell’s case, Vadym Novynskyi, who holds a major shareholding interest in the company, has been sanctioned.

Enwell said it is investigating whether the new law may affect its hydrocarbon extraction licenses, which will come into force on March 28, 2023.

At the time of writing, its shares are down more than 32%, trading around the 11p per share mark after they hit a low of 8p earlier in the morning. In the last 12 months, the stock has declined by over 68%.

Before the Christmas period, MarketScreener reported that PricewaterhouseCoopers had resigned as Enwell Energy’s auditor after the sanctions on its major shareholder.

On December 9, Enwell said in a release that its legal analysis is that the “restrictive measures imposed are directed at the named individuals (and not any other legal entities) and are applicable solely within Ukraine.”

“The restrictive measures are therefore not directed at the company, which continues its normal operations,” the company said at the time.