2026 Interim Results

Enwell Energy PLC

30 September 2026

 

30 September 2026

ENWELL ENERGY PLC

2026 INTERIM RESULTS

Enwell Energy plc (“Enwell Energy” or the “Company”, and together with its subsidiaries, the “Group”), the AIM-quoted (AIM: ENW) oil and gas exploration and production group, is pleased to announce its unaudited consolidated results for the six month period ended 30 June 2026.

Highlights

Operational

• No production during the period as a result of the Ukrainian authorities suspension of the MEX-GOL, SV and VAS production licences (1H 2025: 1,865 boepd, calculated on the days when the Group’s fields were actually in production)

Financial

• Revenue of $0.3 million (1H 2025: $3.4 million) primarily as a result of the suspension of production

• Operating loss of $2.4 million (1H 2025: $1.0 million profit) primarily as a result of the suspension of production

• Net loss of $3.7 million (1H 2025: $1.4 million loss)

• Cash and cash equivalents of $89.7 million as at 30 June 2026 (30 June 2025: $97.1 million), and of $86.6 million as at 25 September 2026 

Outlook

• The Russian invasion of Ukraine in February 2022 has had, and continues to have, a significant impact on all aspects of life in Ukraine, including the Group’s business and operations. The scale and duration of disruption to the Group’s business continues to be difficult to predict, and there remains significant uncertainty about the outcome of the war in Ukraine

• In November 2024, the Ukrainian authorities issued orders to suspend the MEX-GOL, SV and VAS production licences for a period of ten years, and consequently all work at these licences is currently suspended. This followed similar regulatory action against the Group in April and May 2023, when the VAS production licence and SC exploration licence were suspended from May 2023 until June 2024

• Further work on the MEX-GOL, SV and VAS licences will remain suspended until there is a resolution of the regulatory issues, including the lifting of the suspension orders

• At the SC exploration licence area, development planning is continuing, including planning for the drilling of the SC-5 exploration well, and for the installation of new gas processing facilities and other surface infrastructure, as well as assessing the feasibility of an alternative option of a connection to existing gas processing facilities. Additionally, temporary gathering, separation and compression equipment has been installed, to enable gas and condensate from the SC-4 well to be separated, and the gas compressed at site and then trucked to the Group’s gas processing facilities at its MEX-GOL and SV fields for treatment and sale

• The Group is continuing to pursue legal proceedings to challenge the abovementioned suspension orders and protect its business and assets, including arbitration proceedings under the bilateral investment treaty between the United Kingdom and Ukraine

• Currently, the Group retains a material proportion of its cash outside Ukraine, which enhances the Group’s ability to navigate the current risk environment for the foreseeable future, and provides a material buffer to any further disruptions to the Group’s operations

• The Group’s limited development programme for the remainder of 2026 and 2027 is expected to be funded from its existing cash resources and potential operational cash flow

Oleksiy Zayets, CEO, commented: “The regulatory action taken by the Ukrainian authorities resulting in the suspensions of our MEX-GOL, SV and VAS production licences, coupled with the ongoing war, has meant that the situation in Ukraine remains very challenging for us. 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 continuing with our arbitration proceedings under the bilateral investment treaty between the United Kingdom and Ukraine.”

This announcement contains inside information for the purposes of Article 7 of EU Regulation No. 596/2014, which forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended by virtue of the Market Abuse (Amendment) (EU Exit) Regulations 2019.

For further information, please contact:

Enwell Energy plc	Tel: [phone]
Bruce Burrows, Interim Chairman and Finance Director
Oleksiy Zayets, Chief Executive Officer
Strand Hanson Limited	Tel: [phone]
Rory Murphy / Matthew Chandler
Zeus Capital Limited	Tel: [phone]
Alex Slater (Corporate Finance)
Simon Johnson (Corporate Broking)
BlytheRay	Tel: [phone]
Tim Blythe / Matthew Bowld

Dr Gehrig Schultz, BSc Geophysical Engineering, PhD Geophysics, Member of the European Association of Geophysical Engineers, Member of the Executive Coordinating Committee of the Continental European Energy Council, and a Non-Executive Director of the Company, has reviewed and approved the technical information contained within this announcement in his capacity as a qualified person, as required under the AIM Rules for Companies.

Definitions/Glossary
bbl	barrel
bbl/d	barrels per day
boe	barrels of oil equivalent
boepd	barrels of oil equivalent per day
Company	Enwell Energy plc
€	Euro
GDP	gross domestic product
Group	Enwell Energy plc and its subsidiaries
km	kilometre
km2	square kilometre
LPG	liquefied petroleum gas
MEX-GOL	Mekhediviska-Golotvshinska
m3	cubic metres
Mm³	thousand cubic metres
MMboe	million barrels of oil equivalent
MMscf	million scf
MMscf/d	million scf per day
%	per cent.
QHSE	quality, health, safety and environment
SC	Svystunivsko-Chervonolutskyi
scf	standard cubic feet measured at 20 degrees Celsius and one atmosphere
SV	Svyrydivske
$	United States Dollar
UAH	Ukrainian Hryvnia
VAS	Vasyschevskoye
VED	Vvdenska

Chairman’s Statement

The Group’s results for the first half of 2026 reflect a very challenging period for the Group’s business in Ukraine, driven primarily by the regulatory actions of the Ukrainian Government authorities that led to the suspension of the Group’s production licences. Furthermore, the ongoing war in Ukraine presents a difficult operating environment and worrying outlook, and I am greatly saddened by these terrible events.

The war has had, and continues to have, a significant impact on all aspects of life in Ukraine. The overall scale and duration of future disruption to the Group’s business and operations continues to be difficult to predict, and there remains significant uncertainty about the outcome of the war.

In November 2024, the MEX-GOL, SV and VAS production licences were suspended by the Ukrainian authorities. The Group commenced legal proceedings in Ukraine to challenge these suspensions, which resulted in interim rulings to temporarily lift the suspensions, but unfortunately, the interim rulings in respect of the MEX-GOL and SV licences were overturned in January 2025, and in respect of the VAS licence in February 2025. Consequently, all operational activity is currently suspended at these licences.

As a result of a lack of progress in resolving the issues relating to the licence suspensions with the relevant Ukrainian authorities, in August 2025, the Group commenced arbitration proceedings against Ukraine under the Agreement Between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of Ukraine for the Promotion and Reciprocal Protection of Investments (the “Treaty”). The Treaty is an international treaty designed to protect the rights of investors from the United Kingdom or Ukraine who make investments in the other country. Within the arbitration proceedings, the Company is claiming monetary damages for the loss and damage it has suffered as a result of Ukraine’s actions, as well as the reinstatement of the MEX-GOL, SV and VAS production licences for the remainder of their respective terms, and its costs.

Notwithstanding the war and the Ukrainian authorities’ regulatory actions, during the first half of 2026, the Group continued with development of the SC exploration licence area. This included planning for the drilling of the SC-5 exploration well and for the installation of new gas processing facilities and other surface infrastructure, as well as assessing the feasibility of an alternative option of a connection to existing gas processing facilities. Additionally, temporary gathering, separation and compression equipment was installed at the SC-4 well site, to enable gas and condensate from this well to be separated, the gas compressed at site, and then trucked to the Group’s gas processing facilities at its MEX-GOL and SV fields for treatment and sale.

There was no production during the first half of 2026 due to the respective suspensions of operations at the MEX-GOL, SV and VAS fields (1H 2025: 1,865 boepd, calculated on the days of actual production during that period).  

The lack of production meant that revenues were much lower at $0.3 million (1H 2025: $3.4 million), with the majority of this revenue coming from the provision of services to third party operators. The Group made a net loss of $3.7 million (1H 2025: $1.4 million loss), and an operating loss of $2.4 million (1H 2025: $1.0 million profit). There was a net cash outflow from operating activities of $1.2 million (1H 2025: $1.2 million inflow), which was moderated by the $4.4 million interest received from the Group’s cash resources. 

Development activity was significantly impacted by the high level of risk and the regulatory issues faced by the Group in Ukraine.

There is significant disruption to the fiscal and economic environment in Ukraine due to the ongoing war, but during the period, the economy grew, the inflation rate decreased, while the Ukrainian Hryvnia weakened only slightly against other currencies. Nevertheless, it is likely that fiscal and economic uncertainties will continue until the hostilities cease.

In recent years, the Ukrainian Government implemented a number of reforms in the oil and gas sector, which included the deregulation of the gas supply market and simplification of the regulatory procedures applicable to oil and gas exploration and production activities in Ukraine. The deregulation of the gas supply market, supported by electronic gas trading platforms, has improved pricing transparency in Ukraine.

Restructuring of the Smart Holding Group

In January 2023, the Company was notified that there had been a restructuring of the ownership of the PJSC Smart-Holding Group, a member of which held a major shareholding in the Company, and which was ultimately controlled by Mr Vadym Novynskyi (“Mr Novynskyi”). Under this restructuring, which occurred with effect from 1 December 2022, Mr Novynskyi disposed of his major indirect shareholding interest in the Company to two trusts registered in Cyprus named the SMART Trust and the STEP Trust (the “Trusts”). Further information is contained in the Company’s announcement dated 17 January 2023, and the TR-1 Forms published on 26 January 2023, 31 July 2023, 20 March 2024 and 29 September 2025.

Regulatory Actions by the Ukrainian Authorities and Suspensions of Licences

In early December 2022, the Ukrainian Government imposed sanctions on Mr Novynskyi, as set out in the Company’s announcement dated 9 December 2022.

As announced on 4 January 2023, new legislation, Law No. 2805-IX, relating to the natural resources sector was enacted in Ukraine, which came into force on 28 March 2023. This legislation was a substantial package of new procedures and reforms designed to improve the regulatory process relating to the exploration and development of natural resources in Ukraine. However, the legislation included provisions that if the ultimate beneficial owner of a mineral or hydrocarbon licence becomes the subject of sanctions in Ukraine, then the State Geologic and Subsoil Survey of Ukraine (the “SGSS”) may suspend or revoke that licence.

Following Law No. 2805-IX coming into force on 28 March 2023, the Ukrainian authorities have taken a number of regulatory actions against a number of the Group’s subsidiary companies in Ukraine.

As announced on 12 April 2023, such regulatory actions included conducting a search at the Group’s Yakhnyky office, from where the MEX-GOL and SV fields are operated, and placing certain physical assets of the Ukrainian branch (representative) office of Regal Petroleum Corporation Limited (“RPC”) and LLC Arkona Gas-Energy (“Arkona”) (which respectively hold the MEX-GOL and SV fields and the SC exploration licence) under seizure, thereby restricting any actions that would change registration of the property rights relating to such assets, although the use of such assets was not restricted and therefore the Company was able to continue to operate the fields. In addition, the Ministry of Justice of Ukraine (the “MoJ”) made an order cancelling the registration entry made on behalf of a subsidiary of the Company named LLC Regal Petroleum Corporation (Ukraine) Limited in the Unified State Register of Legal Entities, Individuals–entrepreneurs and Civil Institutions of Ukraine (the “State Register”) relating to the ultimate beneficial owners of such company, which were stated as being the trustees (the “Trustees”) of the Trusts as previously notified to the Company, thereby restoring the previous entry in the State Register, Mr Novynskyi.

On 2 May 2023, the MoJ made further orders cancelling the registration entry made on behalf of three further Ukrainian subsidiaries of the Company named LLC Prom-Enerho Produkt (“PEP”), Arkona and LLC Well Investum (“Well Investum”) respectively in the State Register relating to the ultimate beneficial owners of such companies, which again were stated as being the Trustees of the Trusts, thereby restoring the previous entry, Mr Novynskyi. PEP holds the VAS production licence, Arkona holds the SC exploration licence and Well Investum is a dormant company.

Following the issuance of the abovementioned orders by the MoJ, Mr Novynskyi was registered in the State Register as the ultimate beneficial owner of each of PEP and Arkona, and was consequently recognised by the SGSS as the ultimate beneficial owner of each of the VAS production licence and SC exploration licence. As a result, on 4 May 2023, the SGSS issued orders suspending the VAS production licence and SC exploration licence for a period of five years effective from that date.

However, on 26 June 2024, the SGSS issued orders to renew the validity of each of the VAS production licence and SC exploration licence, thereby cancelling the suspensions of those licences, and enabling the resumption of operational activities at those licences. Further information is contained in the Company’s announcement dated 27 June 2024.

In September 2024, new legislation came into force which required that branches (or representative offices) of foreign companies operating in Ukraine register their ultimate beneficial owners in the State Register. RPC, which holds the MEX-GOL and SV licences, operates such a branch and therefore registered the Trustees of the Trusts as its ultimate beneficial owners in the State Register, based on the notifications made by the Trustees to the Company and published to the market on 26 January 2023, 31 July 2023, 20 March 2024.

On 8 October 2024, the Ukrainian Government imposed sanctions on the Trustees, as set out in the Company’s announcement dated 11 October 2024.

On 15 November 2024, the SGSS issued orders to suspend the MEX-GOL, SV and VAS production licences for a period of ten years effective from 8 October 2024 pursuant to Law No. 2805-IX, based on the sanctions imposed on the Trustees of the Trusts. Further information is contained in the Company’s announcement dated 18 November 2024.

Following receipt of the suspension orders, the Company issued legal proceedings in the Poltava District Administrative Court in Ukraine to challenge such orders, and within such proceedings, the Company obtained interim rulings (the “Interim Rulings”) to lift the suspensions of the MEX-GOL, SV and VAS production licences pending determination of the substantive issues in the legal proceedings, as set out in the Company’s announcement dated 26 November 2024. However, the SGSS appealed against the Interim Rulings in the Second Appeal Administrative Court in Ukraine, and by a decision dated 22 January 2025, the appeal against the Interim Ruling relating to the MEX-GOL and SV licences was allowed, and by a decision dated 27 February 2025, the appeal against the Interim Ruling relating to the VAS licence was also allowed. As a result, the respective suspension orders in respect of the MEX-GOL, SV and VAS licences were reinstated, and the Company ceased all field operations on those licences immediately following the respective appeal decisions.

In light of these circumstances, as announced on 27 August 2025, the Group commenced arbitration proceedings against Ukraine under the Treaty and in accordance with the Convention on Settlement of Investment Disputes between States and Nationals of Other States (the “ICSID Convention”). The arbitration proceedings were registered in the International Centre for Settlement of Investment Disputes (“ICSID”), and within such proceedings, the Company is claiming monetary damages for the loss and damage it has suffered as a result of Ukraine’s actions, as well as the reinstatement of the MEX-GOL, SV and VAS production licences for the remainder of their respective durations, and its costs. In the proceedings, the Group made an application for provisional measures, which led to the Arbitration Tribunal’s Order dated 26 June 2026, under which each of Ukraine and the Group are obliged to notify the Tribunal and the other party by way of four days written notice of any new proceedings or any material change in any existing proceedings which might affect the Group’s rights in relation to its Group companies or the integrity of the arbitration. Further details are set out in the Company’s announcement dated 23 July 2026.

Board Change

At the Company’s Annual General Meeting in June 2026, Chuck Valceschini was not re-elected as Chairman and a Director, and consequently left the Board. I am therefore currently acting as Interim Chairman as well as Finance Director.

Outlook

The ongoing war creates a devastating humanitarian situation in Ukraine, as well as extreme challenges to its social, fiscal, economic and business environment. This has been exacerbated in respect of the Group by the regulatory actions of the Ukrainian authorities, culminating in the suspension of the MEX-GOL, SV and VAS production licences.

Under these circumstances, it is extremely difficult to plan future investment and operational activities at the Group’s fields. However, subject to the current regulatory issues with the Ukrainian authorities, and it being safe to do so, the Group is planning to undertake further limited development activities during the remainder of 2026 and beyond in order to continue the development of its fields. In doing so, the Group is taking and will take all measures available to protect and safeguard its personnel and business, with the safety and wellbeing of its personnel and contractors being paramount. The Group retains a material proportion of its cash reserves outside Ukraine, and this provides a material buffer to any further disruptions to the Group’s operations. This has enabled the Board to reach the opinion that the Group has sufficient resources to navigate the current risk environment for the foreseeable future.

In conclusion, on behalf of the Board, I would like to thank all of our staff for their continued dedication and efforts during 2026 to date, especially their remarkable courage and fortitude during the ongoing hostilities in Ukraine. I would also like to thank our shareholders for their perseverance during this challenging period for the Group.

Bruce Burrows

Interim Chairman and Finance Director

Chief Executive’s Statement

Introduction

The ongoing war in Ukraine, as well as adverse regulatory actions by the Ukrainian authorities, have materially disrupted the Group’s development activity at its Ukrainian fields during the first half of 2026, with the continued suspensions of the MEX-GOL, SV and VAS licences preventing production operations at those fields. Accordingly, there are currently no production operations at those fields.

At the SC exploration licence, development planning continued, which included planning for the drilling of a new exploration well and installation of new gas processing facilities and other surface infrastructure, as well as assessing the feasibility of an alternative option to connect to existing gas processing facilities. In addition, temporary gathering, separation and compression equipment has been installed at the SC-4 well site, to enable gas and condensate from this well to be separated, the gas compressed at site, and then trucked to the Group’s gas processing facilities at its MEX-GOL and SV fields for treatment and sale.

Production

There was no production during the six month period ended 30 June 2026 as a result of the suspensions of the MEX-GOL, SV and VAS production licences by the Ukrainian authorities (1H 2025: 1,865 boepd, calculated on the days that the fields were actually in production, being 23 days for the MEX-GOL and SV fields and 58 days for the VAS field).

Operations

The war has significantly affected fiscal and economic stability in Ukraine, and the oil and gas sector in the country has been particularly affected by interruptions to power supplies, the unavailability of oil field equipment and services and disruptions to the markets, including weaker demand for the sale of gas, condensate, oil and LPG.

During the first half of 2026, the Group continued to refine its geological subsurface models of the MEX-GOL, SV and VAS fields, as well as the SC licence area, in order to enhance its strategy for the further development of such fields and licence area, including the timing and level of future capital investment required to exploit the hydrocarbon resources therein. 

At the MEX-GOL and SV fields, all production operations remained suspended during the first half of 2026. However, during the period the Group did utilise its gas processing facilities to toll treat some hydrocarbons from other fields in the area, which provided some modest revenue in the period. Prior to the suspensions of the production licences for these fields, the Group continued to operate each of the SV-2 and SV-12 wells under joint venture agreements with PJSC Ukrnafta, the majority State-owned oil and gas producer. Under the agreements, the gas and condensate produced from the respective wells was sold under an equal net profit sharing arrangement between the Group and PJSC Ukrnafta, with the Group accounting for the hydrocarbons produced and sold from the wells as revenue, and the net profit share due to PJSC Ukrnafta being treated as a lease expense in cost of sales. However, following the SV-2 well experiencing water ingress, a workover of this well was undertaken to replace the production string and remove obstructions in the well, but this work was unsuccessful and further remedial work is not being considered at the present time.

At the VAS field, all production operations remained suspended for the first half of 2026. In December 2025, the gas processing facilities at the field were hit by several Russian military drones, which resulted in damage to the facilities. As the facilities had not been operational since the reinstatement of the licence suspension in February 2025, there were only security staff on site, and most fortunately, there were no casualties. An assessment of the damage was undertaken, mains power was restored and repairs have been made to site equipment and premises. In light of the risks at site, critical and high-value equipment has been moved elsewhere for further inspection and repair work. Preparation of plans for the restoration of the facilities is underway.

Outlook 

The ongoing war in Ukraine has caused significant disruption to the country as a whole and to the Group’s business activities, and until there is a resolution to the war, the disruption and uncertainty are likely to continue. Subject to the current regulatory issues with the Ukrainian authorities and it being safe to do so, during the remainder of 2026 and 2027, the Group plans to continue the development of its fields to the extent possible.

However, such work at the MEX-GOL, SV and VAS fields will remain suspended until there is a resolution of the regulatory issues, including the lifting of the suspension orders made in respect of those licences.

At the SC licence area, the work on development plans for the licence area will continue, along with installation of the temporary production equipment.

Finally, I would like to add my thanks to all of our staff for the continued hard work and dedication they have shown over the course of 2026 to date, and to especially recognise their continuing efforts and professionalism in the face of the extremely challenging situation in Ukraine. I would also like to express my appreciation to our shareholders for their continued support throughout this challenging period.

Oleksiy Zayets

Chief Executive Officer

Finance Review

The suspensions of the Group’s MEX-GOL, SV and VAS production licences for the entire first half of 2026 meant that there was no production, and hence no revenue from production, during the period, which resulted in the Group making a net loss for the period of $3.7 million (1H 2025: $1.4 million loss).

The Group generated some modest revenue in the period through the sale of inventories of hydrocarbons, and utilising the MEX-GOL and SV gas processing facilities to toll treat some hydrocarbons from other fields in the area.

Gross profit for the period was much lower at $0.1 million (1H 2025: $1.4 million) due to there being no production as a result of the licence suspensions. Cash generated from operations was negative at $5.5 million (1H 2025: $2.0 million negative) for similar reasons. 

Cost of sales for the period was also proportionately lower at $0.2 million (1H 2025: $2.0 million), with the absence of production resulting in a decline in depreciation as well as the revenue-related costs of taxes and well rental.

Administrative expenses for the period were higher at $4.1 million (1H 2025: $2.9 million) due to increased legal costs.

The tax charge for the six months ended 30 June 2026 was lower at $1.2 million, and comprised wholly of a deferred tax charge (1H 2025: $2.0 million, comprised of a current tax charge of $0.4 million and a deferred tax charge of $1.6 million).      

A deferred tax asset relating to the Group’s provision for decommissioning as at 30 June 2026 of $0.7 million (31 December 2025: $0.7 million) was recognised on the tax effect of the temporary differences of the Group’s provision for decommissioning at the MEX-GOL and SV fields, and its tax base. A deferred tax liability relating to the Group’s development and production assets at the MEX-GOL and SV fields as at 30 June 2026 of $8.7 million (31 December 2025: $7.9 million) was recognised on the tax effect of the temporary differences between the carrying value of the Group’s development and production asset at the MEX-GOL and SV fields, and its tax base.

A deferred tax asset relating to the Group’s provision for decommissioning as at 30 June 2026 of $0.2 million (31 December 2025: $0.2 million) was recognised on the tax effect of the temporary differences on the Group’s provision on decommissioning at the VAS field, and its tax base. A deferred tax asset relating to the Group’s development and production assets at the VAS field as at 30 June 2026 of $0.2 million (31 December 2025:  $0.2 million) was recognised on the tax effect of the temporary differences between the carrying value of the Group’s development and production asset at the VAS field, and its tax base.

Capital investment of $1.7 million was higher during the period due to the increased investment in the development of the SC exploration licence area (1H 2025: $0.2 million).

A review of any indicators of impairment of the carrying value of the Group’s assets was undertaken at the period end and this review concluded that the suspensions of the MEX-GOL, SV and VAS production licences had resulted in such an indicator. Impairment reviews were therefore conducted on the carrying value of the Group’s assets but did not result in the recognition of any further impairment loss (1H 2025: $nil).

Cash and cash equivalents held as at 30 June 2026 were lower at $89.7 million (1H 2025: $97.1 million). The Group’s cash and cash equivalents balance as at 25 September 2026 was $86.6 million, held as to $73.6 million equivalent in Ukrainian Hryvnia and the balance of $13.0 million equivalent predominantly in US Dollars, British Pounds and Euros.

During the first six months of 2026, the Ukrainian Hryvnia weakened slightly against the US Dollar, down from UAH42.4/$1.00 on 31 December 2025 to UAH44.9/$1.00 on 30 June 2026. The impact of this was $7.9 million of foreign exchange loss (1H 2025: $1.6 million of foreign exchange gain). Increases and decreases in the value of the Ukrainian Hryvnia against the US Dollar affect the carrying value of the Group’s assets. The official exchange rate of the Ukrainian Hryvnia to the US Dollar on 25 September 2026 was UAH45.0/$1.00. 

Cash from operating activities has funded capital investment during the first six months of 2026, and along with the Group’s current cash position, are the sources from which the Group plans to fund the limited development programmes for its assets over the remainder of 2026 and beyond. This is coupled with the fact that the Group has no debt covenants that may otherwise impede its ability to implement contingency plans if domestic and/or global circumstances dictate. This flexibility and ability to monitor and manage development plans and liquidity is a cornerstone of our planning, and underpins our assessments of the future. The annual running costs are materially covered by interest income from the Group’s monetary resources at the end of the period of $89.7 million, meaning that the Group remains in a very strong position, notwithstanding the suspensions of the MEX-GOL, SV and VAS production licences, the impact of the ongoing war in Ukraine and any local or global shocks that may occur to the industry and/or the Group.

Bruce Burrows

Interim Chairman and Finance Director

Principal Risks and How We Manage Them

The Group has a risk evaluation methodology in place to assist in the review of the risks across all material aspects of its business. This methodology highlights external, operational and technical, financial and corporate risks and assesses the level of risk and potential consequences. It is periodically presented to the Audit Committee and the Board for review, to bring to their attention potential risks and, where possible, propose mitigating actions. Key risks recognised and mitigation factors are detailed below:-

Risk	Mitigation
External risks
War in Ukraine
On 24 February 2022, Russia invaded Ukraine and there is currently a serious and ongoing war within Ukraine. This war is having a huge impact on Ukraine and its population, with significant destruction of infrastructure and buildings in the areas of conflict, as well as damage in other areas of Ukraine. The war is resulting in significant casualties and has caused a huge humanitarian catastrophe and refugee influx into neighbouring countries. The war is also impacting the fiscal and economic environment in Ukraine, as well as the financial stability and banking system in Ukraine, including restrictions on the transfer of funds outside Ukraine. The war is an escalation of the previous regional conflict risk faced by the business, a dispute that has been going on since 2014 in parts of eastern Ukraine, and since that time Russia has continued to occupy Crimea. The current war is also having a significant adverse effect on the Ukrainian financial markets, hampering the ability of Ukrainian companies and banks to obtain funding from the international capital and debt markets. The war has disrupted the Group’s business and operations, with damage to certain facilities from military drones and periods of suspension of field operations, and has also impacted the supply of materials and equipment and the availability of contractors to undertake field operations. At present, the war is ongoing and the scope and duration of the war is uncertain.	The Group has assets in the areas of conflict in the east of Ukraine, and the war has disrupted its operations in those areas. The Group had been undertaking only limited field and production operations at the MEX-GOL, SV and VAS fields, as well as the SC licence area, until the suspension of the MEX-GOL, SV and VAS licences in November 2024. During production operations at the fields, inventories of hydrocarbons are being maintained at minimum levels. At the sites where operations are suspended, there are no staff permanently on site, except for necessary security staff. Where possible, all other staff work remotely and have been supplied with all necessary devices and software to facilitate remote working. Additionally, the Group aims to maintain a material proportion of its cash resources outside Ukraine. The Group continues to monitor the situation and endeavours to protect its assets and safeguard its staff and contractors.
Risk relating to Ukraine
Ukraine is an emerging market and as such the Group is exposed to greater regulatory, economic and political risks than it would be in other jurisdictions. Emerging economies are generally subject to a volatile political and economic environment, which makes them vulnerable to market downturns elsewhere in the world and could adversely impact the Group’s ability to operate in the market. Furthermore, the war in Ukraine is impacting the social, fiscal and economic environment, the financial and banking system, and the economic stability of Ukraine. As a result, Ukraine will require financial assistance and/or aid from international financial agencies to provide economic support and assist with the reconstruction of infrastructure and buildings damaged in the war.	The Group minimises this risk by continuously monitoring the market in Ukraine and by maintaining as strong a working relationship as possible with the Ukrainian regulatory authorities. The Group also maintains a material proportion of its cash holdings in international banks outside Ukraine.
Banking system in Ukraine
The banking system in Ukraine has been under great strain in recent years due to the weak level of capital, low asset quality caused by the economic situation, currency depreciation, changing regulations and other economic pressures generally, and so the risks associated with the banks in Ukraine have been significant, including in relation to the banks with which the Group has operated bank accounts. This situation was improving moderately following remedial action by the National Bank of Ukraine, but the current war has significantly affected such improvements, and the National Bank of Ukraine has imposed a number of restrictive measures designed to protect the banking system, including restrictions on the transfer of funds outside Ukraine (albeit that the Group aims to maintain a material proportion of its cash resources outside Ukraine). In addition, Ukraine continues to be supported by funding from the International Monetary Fund.	The creditworthiness and potential risks relating to the banks in Ukraine are regularly reviewed by the Group, but the geopolitical and economic events in Ukraine over recent years have significantly weakened the Ukrainian banking sector. This has been exacerbated by the current war in Ukraine. In light of this, the Group has taken and continues to take steps to diversify its banking arrangements between a number of banks in Ukraine. These measures are designed to spread the risks associated with each bank’s creditworthiness, and the Group endeavours to use banks that have the best available creditworthiness. Nevertheless, the Ukrainian banking sector remains weakly capitalised and so the risks associated with the banks in Ukraine remain significant, including in relation to the banks with which the Group operates bank accounts. As a consequence, the Group also maintains a material proportion of its cash holdings in international banks outside Ukraine.
Geopolitical environment in Ukraine
Although there were some improvements in recent years, there has not been a final resolution of the political, fiscal and economic situation in Ukraine, and the current war has had a severe detrimental effect on the economic situation in Ukraine. The ongoing effects of this are difficult to predict and likely to continue to affect the Ukrainian economy and potentially the Group’s business. This situation is currently affecting the Group’s production and field operations, and the ongoing instability is disrupting the Group’s development and operational planning for its assets.	The Group continually monitors the market and business environment in Ukraine and endeavours to recognise approaching risks and factors that may affect its business. However, the war in Ukraine creates material challenges in planning future investment and operations. The Group is limiting its operational activities to minimise risk to its staff and contractors, and to limit its financial exposure.
Climate change
Any near and medium-term continued warming of the planet can have potentially increasing negative social, economic and environmental consequences, generally, globally and regionally, and specifically in relation to the Group. The potential impacts include: loss of market; and increased costs of operations through increasing regulatory oversight and controls, including potential effective or actual loss of licences to operate. As a diligent operator aware of and responsive to its good stewardship responsibilities, the Group not only needs to monitor and modify its business plans and operations to react to changes, but also to ensure its environmental footprint is as minimal as it can practicably be in managing the hydrocarbon resources the Group produces.	The Group’s plans include: assessing, reducing and/or mitigating its emissions from its operations; and identifying climate change-related risks and assessing the degree to which they can affect its business, including financial implications. The HSE Committee is specifically tasked with overseeing, measuring, benchmarking and mitigating the Group’s environmental and climate impact, which will be reported on in future periods. At this stage, the Group does not consider climate change to have any material implications for the Group’s financial statements, including accounting estimates.
Operational and technical risks
Quality, Health, Safety and Environment (“QHSE”)
The oil and gas industry, by its nature, conducts activities which can cause health, safety, environmental and security incidents. Serious incidents can not only have a financial impact but can also damage the Group’s reputation and the opportunity to undertake further projects. The war in Ukraine poses significant risks to field operations, by way of potential threat to the lives of employees and contractors, and damage to equipment and infrastructure.	The Group maintains QHSE policies and requires that management, staff and contractors adhere to these policies. The policies ensure that the Group meets Ukrainian legislative standards in full and achieves international standards to the maximum extent possible. As a consequence of the current war in Ukraine and the periods of suspension of the Group’s production licences, only limited operations have been undertaken at the Group’s fields. Only essential staff are located at site, and all other staff are working remotely, either from areas away from the conflict areas or outside Ukraine. The Group has invested in technology that allows many staff to work just as effectively from remote locations.
Industry risks
The Group is exposed to risks which are generally associated with the oil and gas industry. For example, the Group’s ability to pursue and develop its projects and undertake development programmes depends on a number of uncertainties, including the availability of capital, seasonal conditions, regulatory approvals, gas, condensate, oil and LPG prices, development costs and drilling success. As a result of these uncertainties, it is unknown whether potential drilling locations identified on proposed projects will ever be drilled or whether these or any other potential drilling locations will be able to produce gas, condensate or oil. In addition, drilling activities are subject to many risks, including the risk that commercially productive reservoirs will not be discovered. Drilling for hydrocarbons can be unprofitable, not only due to dry holes, but also as a result of productive wells that do not produce sufficiently to be economic. In addition, drilling and production operations are highly technical and complex activities and may be curtailed, delayed or cancelled as a result of a variety of factors.	The Group has well qualified and experienced technical management staff to plan and supervise operational activities. In addition, the Group engages with suitably qualified local and international geological, geophysical and engineering experts and contractors to supplement and broaden the pool of expertise available to the Group. Detailed planning of development activities is undertaken with the aim of managing the inherent risks associated with oil and gas exploration and production, as well as ensuring that appropriate equipment and personnel are available for the operations, and that local contractors are appropriately supervised.
Production of hydrocarbons
Producing gas, condensate and oil reservoirs are generally characterised by declining production rates which vary depending upon reservoir characteristics and other factors. Future production of the Group’s gas, condensate and oil reserves, and therefore the Group’s cash flow and income, are highly dependent on the Group’s success in operating existing producing wells, drilling new production wells and efficiently developing and exploiting any reserves, and finding or acquiring additional reserves. The Group may not be able to develop, find or acquire reserves at acceptable costs. The experience gained from drilling undertaken to date highlights such risks as the Group targets the appraisal and production of these hydrocarbons.	In recent years, the Group has engaged external technical consultants to undertake a comprehensive review and re-evaluation study of the MEX-GOL and SV fields in order to gain an improved understanding of the geological aspects of the fields and reservoir engineering, drilling and completion techniques, and the results of this study and further planned technical work are being used by the Group in the future development of these fields. The Group has established an ongoing relationship with such external technical consultants to ensure that technical management and planning is of a high quality in respect of all development activities on the Group’s fields.
Risks relating to the further development and operation of the Group’s gas and condensate fields in Ukraine
The planned development and operation of the Group’s gas, condensate and oil fields in Ukraine is susceptible to appraisal, development and operational risk. This could include, but is not restricted to, delays in the delivery of equipment in Ukraine, failure of key equipment, lower than expected production from wells that are currently producing, or new wells that are brought on-stream, problematic wells and complex geology which is difficult to drill or interpret. The generation of significant operational cash is dependent on the successful delivery and completion of the development and operation of the fields. The war in Ukraine is impacting planning and implementation of development and operations at the Group’s fields.	The Group’s technical management staff, in consultation with its external technical consultants, carefully plan and supervise development and operational activities with the aim of managing the risks associated with the further development of the Group’s fields in Ukraine. This includes detailed review and consideration of available subsurface data, utilisation of modern geological software, and utilisation of engineering and completion techniques developed for the fields. With regards to operational activities, the Group ensures that appropriate equipment and personnel are available for the operations, and that operational contractors are appropriately supervised. In addition, the Group performs a review of indicators of impairment of its oil and gas assets on an annual basis, and considers whether an assessment of its oil and gas assets by a suitably qualified independent assessor is appropriate or required.
Drilling and workover operations
Due to the depth and nature of the reservoirs in the Group’s fields, the technical difficulty of drilling or re-entering wells in the Group’s fields is high, and this and the equipment limitations within Ukraine, can result in unsuccessful or lower than expected outcomes for wells.	The utilisation of detailed sub-surface analysis, careful well planning and engineering in designing work programmes, along with appropriate procurement procedures and competent on-site management, aims to minimise these risks.
Maintenance of facilities
There is a risk that production or transportation facilities can fail due to non-adequate maintenance, control or poor performance of the Group’s suppliers.	The Group’s facilities are operated and maintained at standards above the Ukrainian minimum requirements. Operations staff are experienced and receive supplemental training to ensure that facilities are properly operated and maintained. Service providers are rigorously reviewed at the tender stage and are monitored during the contract period.
Financial risks
Exposure to cash flow and liquidity risk
There is a risk that insufficient funds are available to meet the Group’s development obligations to commercialise the Group’s oil and gas assets. Since a significant proportion of the future capital requirements of the Group is expected to be derived from operational cash generated from production, including from wells yet to be drilled, there is a risk that in the longer term insufficient operational cash is generated, or that additional funding, should the need arise, cannot be secured. The war in Ukraine and regulatory actions have disrupted production operations at the Group’s fields, and consequently reduced anticipated cash flows from those fields, and this has increased the risk regarding sufficiency of capital for development in the future. In addition, the conflict may disrupt the sales market for hydrocarbons that are produced. In addition to the risk of operational cash shortfalls, there is a risk that even with strong cash flows and cash balances, the Group, from time to time, can suffer from operational banking appetite for businesses such as the Group’s business, which can ultimately manifest itself in having a restricted access to banking services.	The Group maintains adequate cash reserves and closely monitors forecasted and actual cash flow, as well as short and longer-term funding requirements. The Group aims to maintain a material proportion of its cash resources outside Ukraine. The Group does not currently have any external loans outstanding, internal financial projections are regularly made based on the latest estimates available, and various scenarios are run to assess the robustness of the Group’s liquidity. However, as the risk to future capital funding is inherent in the oil and gas exploration and development industry and reliant in part on future development success, it is difficult for the Group to take any other measures to further mitigate this risk, other than tailoring its development activities to its available capital funding from time to time. The Group aims to maintain as diverse a range of banking relationships as possible to reduce the risks associated with limited accessibility to banking services which may exist from time to time.
Ensuring appropriate business practices
The Group operates in Ukraine, an emerging market, where certain inappropriate business practices may, from time to time occur, such as corrupt business practices, bribery, appropriation of property and fraud, all of which can lead to financial loss.	The Group maintains anti-bribery and corruption policies in relation to all aspects of its business, and ensures that clear authority levels and robust approval processes are in place, with stringent controls over cash management and the tendering and procurement processes. In addition, office and site protection is maintained to protect the Group’s assets.
Hydrocarbon price risk
The Group derives its revenue principally from the sale of its Ukrainian hydrocarbon production. These revenues are subject to commodity price volatility and political influence. A prolonged period of low hydrocarbon prices may impact the Group’s ability to maintain its long-term investment programme with a consequent effect on its growth rate, which in turn may impact the Company’s share price or any shareholder returns. Lower hydrocarbon prices may not only decrease the Group’s revenues per unit, but may also reduce the amount of hydrocarbons which the Group can produce economically, as would increases in costs associated with hydrocarbon production, such as subsoil taxes and royalties. The overall economics of the Group’s key assets (being the net present value of the future cash flows from its Ukrainian projects) are far more sensitive to long-term hydrocarbon prices than short-term price volatility. However, short-term volatility does affect liquidity risk, as, in the early stage of the projects, income from production revenues is offset by capital investment. In addition, the war in Ukraine has disrupted the sales market for hydrocarbons.	The Group sells a proportion of Its hydrocarbon production through offtake arrangements, which include pricing formulae so as to ensure that it achieves market prices for its products, as well as utilising the electronic market platforms in Ukraine to achieve market prices for its remaining products. However, hydrocarbon prices in Ukraine are, in the longer-term, linked to world hydrocarbon prices and so the Group is subject to external price trends, as well as shorter-term volatility in the Ukrainian hydrocarbon market.
Currency risk
Since the beginning of 2014, the Ukrainian Hryvnia has significantly devalued against major world currencies, including the US Dollar, where it has fallen from UAH8.3/$1.00 on 1 January 2014 to UAH42.4/$1.00 on 31 December 2025, and UAH45.0/$1.00 on 25 September 2026. This devaluation has been a significant contributor to the imposition of banking restrictions by the National Bank of Ukraine over recent years. In addition, the geopolitical events in Ukraine over recent years and the current war in Ukraine are likely to continue to impact the valuation of the Ukrainian Hryvnia against major world currencies. Further devaluation of the Ukrainian Hryvnia against the US Dollar will affect the carrying value of the Group’s assets.	The Group’s sales proceeds are received in Ukrainian Hryvnia, and the majority of the capital expenditure costs for the current investment programme will be incurred in Ukrainian Hryvnia, thus the currency of revenue and costs are largely matched. In light of the previous devaluation and volatility of the Ukrainian Hryvnia against major world currencies, and since the Ukrainian Hryvnia does not benefit from the range of currency hedging instruments which are available in more developed economies, the Group has adopted a policy that, where possible, funds not required for use in Ukraine be retained on deposit in the United Kingdom and Europe, principally in US Dollars.
Counterparty and credit risk
The challenging political and economic environment in Ukraine and current war means that businesses can be subject to significant financial strain, which can mean that the Group is exposed to increased counterparty risk if counterparties fail or default in their contractual obligations to the Group, including in relation to the sale of its hydrocarbon production, resulting in financial loss to the Group.	The Group monitors the financial position and credit quality of its contractual counterparties and seeks to manage the risk associated with counterparties by contracting with creditworthy contractors and customers. Hydrocarbon production is sold on terms that limit supply credit and/or title transfer until payment is received.
Financial markets and economic outlook
The performance of the Group is influenced by global economic conditions and, in particular, the conditions prevailing in the United Kingdom and Ukraine. The economies in these regions have been subject to volatile pressures in recent periods, with the global economy having experienced a long period of difficulty, the COVID pandemic, and more particularly the current war in Ukraine. This has led to extreme foreign exchange movements in the Ukrainian Hryvnia, high inflation and interest rates, and increased credit risk relating to the Group’s key counterparties.	The Group’s sales proceeds are received in Ukrainian Hryvnia and a significant proportion of investment expenditure is made in Ukrainian Hryvnia, which minimises risks related to foreign exchange volatility. However, hydrocarbon prices in Ukraine are implicitly linked to world hydrocarbon prices and so the Group is subject to external price movements. The Group holds a material proportion of its cash reserves in the United Kingdom and Europe, mostly in US Dollars, with reputable financial institutions. The financial status of counterparties is carefully monitored to manage counterparty risks. Nevertheless, the overall exposure that the Group faces as a result of these risks cannot be predicted and many of these are outside of the Group’s control.
Corporate risks
Ukrainian production licences
The Group operates in a region where the right to production can be challenged by State and non-State parties. During 2010, this manifested itself in the form of a Ministry Order instructing the Group to suspend all operations and production from its MEX-GOL and SV production licences, which was not resolved until mid-2011. In 2013, new rules relating to the updating of production licences led to further challenges being raised by the Ukrainian authorities to the production licences held by independent oil and gas producers in Ukraine, including the Group. In March 2019, a Ministry Order was issued instructing the Group to suspend all operations and production from its VAS production licence, which was not resolved until March 2023. In 2020, LLC Arkona Gas-Energy (“Arkona”) faced a challenge from PJSC Ukrnafta concerning the validity of its SC exploration licence, which was not ultimately resolved in Arkona’s favour until February 2021. During 2023, the Ukrainian authorities took a number of regulatory actions against the Group, which culminated in Ministry Orders being made in May 2023 to suspend all operations and production at the VAS production licence and SC exploration licence area, which suspensions were not lifted until June 2024. In November 2024, a Ministry Order was issued to suspend all operations and production at the MEX-GOL, SV and VAS production licences, which suspensions, although temporarily lifted, currently remain in force. Excepting the current suspension orders made in respect of the MEX-GOL, SV and VAS production licences, all such challenges affecting the Group have been successfully defended through the Ukrainian legal system. The business environment is such that these types of challenges may arise at any time in relation to the Group’s operations, licence history, compliance with licence commitments and/or local regulations. In addition, production licences in Ukraine are issued with and/or carry ongoing compliance obligations, which if not met, may lead to the loss of a licence.	The Group ensures compliance with commitments and regulations relating to its production and exploration licences through Group procedures and controls or, where this is not immediately feasible for practical or logistical considerations, seeks to enter into dialogue with the relevant Government bodies with a view to agreeing a reasonable time frame for achieving compliance or an alternative, mutually agreeable course of action. Work programmes are designed to ensure that all licence obligations are met and continual interaction with Government bodies is maintained in relation to licence obligations and commitments.
Risks relating to key personnel
The Group’s success depends upon skilled management as well as technical expertise and administrative staff. The loss of service of critical members from the Group’s team could have an adverse effect on the business. The current war in Ukraine has meant that, as far as possible, the Group’s staff have needed to move away from areas of conflict and work remotely.	The Group periodically reviews the compensation and contractual terms of its staff. In addition, the Group has developed relationships with a number of technical and other professional experts and advisers, who are used to provide specialist services as required. As a result of the war, only essential staff are located at site, and all other staff are working remotely, either from areas away from the conflict areas or outside Ukraine. The Group has invested in technology that allows many staff to work just as effectively from remote locations.

Directors’ Responsibility Statement

The Directors confirm that, to the best of their knowledge:

a)               the unaudited condensed interim consolidated financial statements have been prepared in accordance with UK-adopted International Accounting Standard 34, ‘Interim Financial Reporting’ (“IAS 34”) and the AIM Rules for Companies; and

b)              these unaudited interim results include:

(i)       a fair review of the information required (i.e. an indication of important events and their impact and a description of the principal risks and uncertainties for the remaining six months of the financial year); and

(ii)      a fair review of the information required on related party transactions.

A list of current Directors is maintained on the Group’s website, www.enwell-energy.com.

Condensed Interim Consolidated Income Statement

		6 months ended	6 months ended
		30 Jun 26	30 Jun 25
		(unaudited)	(unaudited)
	Note	$000	$000
Revenue	3	272	3,395
Cost of sales	4	(213)	(2,031)
Gross profit		59	1,364
Administrative expenses		(4,086)	(2,871)
Other operating gains/(losses), (net)	5	1,663	2,495
Operating profit/(loss)		(2,364)	988
Net impairment (gains)/losses on financial assets		6	117
Other gains/(losses), (net)	6	23	(57)
Finance income/(costs), (net)		(178)	(393)
Profit/(loss) before taxation		(2,513)	655
Income tax expense	7	(1,195)	(2,030)
Profit/(loss) for the period		(3,708)	(1,375)
Earnings per share (cents)
Basic and diluted	8	(1.2)c	(0.4)c

The Notes set out below are an integral part of these unaudited condensed interim consolidated financial statements.

Condensed Interim Consolidated Statement of Comprehensive Income

	6 months ended	6 months ended
	30 Jun 26	30 Jun 25
	(unaudited)	(unaudited)
	$000	$000
Profit/(loss) for the period	(3,708)	(1,375)
Other comprehensive income/(loss):
Items that may be subsequently reclassified to profit or loss:
Equity - foreign currency translation	(7,876)	1,591
Items that will not be subsequently reclassified to profit or loss:
Re-measurements of post-employment benefit obligations	15	-
Total other comprehensive income/(loss)	(7,861)	1,591
Total comprehensive income/(loss) for the period	(11,569)	216

The Notes set out below are an integral part of these unaudited condensed interim consolidated financial statements.

Condensed Interim Consolidated Balance Sheet

		30 Jun 26	31 Dec 25
		(unaudited)	(audited)
	Note	$000	$000
Assets
Non-current assets
Property, plant and equipment	9	69,902	67,431
Intangible assets	10	1,289	7,086
Deferred tax asset	7	433	427
Right-of-use assets		272	374
Prepayments for fixed assets		316	312
Non-current receivables		29	29
		72,241	75,659
Current assets
Inventories		2,985	3,006
Trade and other receivables	11	5,843	5,480
Cash and cash equivalents	14	89,654	97,093
		98,482	105,579
Total assets		170,723	181,238
Liabilities
Current liabilities
Trade and other payables		(2,918)	(2,012)
Lease liabilities		(183)	(315)
Corporation tax payable		-	(205)
		(3,101)	(2,532)
Net current assets		95,381	103,047
Non-current liabilities
Provision for decommissioning	12	(4,581)	(4,735)
Deferred tax liability	7	(8,031)	(7,238)
Loans		(280)	(393)
Defined benefit liability		(317)	(340)
Lease liabilities		(234)	(224)
Other non-current liabilities	13	(60)	(73)
		(13,503)	(13,003)
Total liabilities		(16,604)	(15,535)
Net assets		154,119	165,703
Equity
Called up share capital		28,115	28,115
Foreign exchange reserve		(170,178)	(162,302)
Other reserves		4,273	4,273
Retained earnings		291,909	295,617
Total equity		154,119	165,703

The Notes set out below are an integral part of these unaudited condensed interim consolidated financial statements.

Condensed Interim Consolidated Statement of Changes in Equity

	Called up share capital	Merger reserve	Capital contributions reserve	Foreign exchange reserve*	Retained earnings	Total equity
	$000	$000	$000	$000	$000	$000
As at 1 January 2026 (audited)	28,115	(3,204)	7,477	(162,302)	295,617	165,703
Profit/(loss) for the period	-	-	-	-	(3,708)	(3,708)
Other comprehensive income/(loss)
- exchange differences	-	-	-	(7,876)	-	(7,876)
- re-measurements of post-employment benefit obligations	-	-	-	-	15	15
Total comprehensive income/(loss)	-	-	-	(7,876)	(3,693)	(11,569)
As at 30 June 2026 (unaudited)	28,115	(3,204)	7,477	(170,178)	291,924	154,119

	Called up share capital	Merger reserve	Capital contributions reserve	Foreign exchange reserve*	Retained earnings	Total equity
	$000	$000	$000	$000	$000	$000
As at 1 January 2025 (audited)	28,115	(3,204)	7,477	(161,028)	300,080	171,440
Profit/(loss) for the period	-	-	-	-	(1,375)	(1,375)
Other comprehensive income/(loss)
- exchange differences	-	-	-	1,591	-	1,591
Total comprehensive income/(loss)	-	-	-	1,591	(1,375)	216
As at 30 June 2025 (unaudited)	28,115	(3,204)	7,477	(159,437)	298,705	171,656

 * Predominantly as a result of exchange differences on retranslation, where the subsidiaries' functional currency is not US Dollars

The Notes set out below are an integral part of these unaudited condensed interim consolidated financial statements.

Condensed Interim Consolidated Statement of Cash Flows

		6 months ended	6 months ended
		30 Jun 26	30 Jun 25
		(unaudited)	(unaudited)
	Note	$000	$000
Operating activities
Cash generated from operations	15	(5,491)	(1,973)
Charitable donations		(16)	-
Income tax paid		(71)	(1,248)
Interest received		4,405	4,465
Net cash (outflow)/inflow from operating activities		(1,173)	1,244
Investing activities
Purchase of property, plant and equipment		(79)	(922)
Purchase of oil and gas exploration and evaluation assets		(1,736)	-
Purchase of intangible assets		(240)	(221)
Proceeds from sale of property, plant and equipment		-	14
Net cash outflow from investing activities		(2,055)	(1,129)
Financing activities
Payment of principal portion of lease liabilities		(15)	(15)
Loans issued		-	(1,778)
Loans received		-	1,834
Net cash (outflow)/inflow from financing activities		(15)	42
Net increase/(decrease) in cash and cash equivalents		(3,243)	156
Cash and cash equivalents at beginning of the period	14	97,093	99,398
ECL* of cash and cash equivalents		(3)	-
Effect of foreign exchange rate changes		(4,193)	1,143
Cash and cash equivalents at end of the period	14	89,654	100,697

*ECL - Expected credit losses

The Notes set out below are an integral part of these unaudited condensed interim consolidated financial statements.

Notes to the Unaudited Condensed Interim Consolidated Financial Statements

1. General Information and Operational Environment

Enwell Energy plc (the “Company”) and its subsidiaries (together the “Group”) is a gas, condensate and LPG production group.

The Company is a public limited company incorporated in England and Wales under the Companies Act 2006, whose shares are quoted on the AIM Market of London Stock Exchange plc. The Company’s registered office is at 84 Brook Street, London W1K 5EH, United Kingdom and its registered number is 4462555.

As at 30 June 2026, the Company’s immediate parent company was Smart Energy (CY) Limited, which was 100% owned by Smart Holding (Cyprus) Limited, which was 100% owned by Proteas Trustees Ltd as trustee of the STEP Trust, and Proteas Trustee Services Ltd, Afroditi Loukaidou, Elena Iona and Argyrou Vaso as trustees of the SMART Trust. Accordingly, the Company was ultimately controlled by Proteas Trustees Ltd as trustee of the STEP Trust, and Proteas Trustee Services Ltd, Afroditi Loukaidou, Elena Iona and Argyrou Vaso as trustees of the SMART Trust.

The Group’s gas, condensate, oil and LPG extraction and production facilities are located in Ukraine.

Impact of the ongoing war in Ukraine

On 24 February 2022, Russia commenced a military invasion of Ukraine, and since then there has been an ongoing war in Ukraine. Shortly after the invasion, the Ukrainian Government imposed martial law, and the corresponding introduction of related temporary restrictions that impact, amongst other areas, the economic environment and business operations in Ukraine. The war has caused significant economic and social challenges in Ukraine, which has led to a deterioration of Ukrainian State finances, volatility of financial markets, illiquidity on capital markets, higher inflation and a depreciation of the national currency against major foreign currencies.

During 2022, the National Bank of Ukraine (“NBU”) took a number of measures to protect the Ukrainian economy, including significantly increasing its key policy interest rate, introducing temporary restrictions on foreign currency trades and limiting cross-border payments for non-critical imports and repayment of debt to foreign creditors, apart from international institutions. In addition, the Ukrainian Hryvnia exchange rate with the US Dollar was effectively fixed on the foreign exchange market to ensure the stable operation of Ukraine’s financial system.

The NBU is now following an interest rate policy consistent with flexible inflation targets, and its key policy rate currently stands at 16%. The inflation rate in Ukraine for the first half of 2026 was 5.7% (2025 year: 8%) according to the statistics published by the State Statistics Service of Ukraine. During the war, the NBU first switched to an exchange-rate peg and then to flexible inflation targets, whereby the NBU ensured that inflation was brought to its 5% target rate within a policy horizon of three years at most, by applying a consistent combination of interest-rate and exchange-rate policy instruments, foreign exchange restrictions, and other tools as necessary. After security risks abate and appropriate macroeconomic prerequisites are put in place, the NBU is expected to return to conventional inflation targets.  

In October 2023, the NBU returned to a managed floating exchange rate for the Ukrainian Hryvnia, and as of 30 June 2026, the Ukrainian Hryvnia exchange rate with the US Dollar was UAH44.85/$1.00 (UAH42.39/$1.00 as at 31 December 2025).

During the first half of 2026, Ukrainian GDP increased by 0.4% compared with a 2.2% increase in the 2025 year.

The nature of the situation in Ukraine and the unpredictability of the outcome means it is impracticable to assess the full impact of the war on the economic environment.

Overall, the final resolution and the ongoing effects of the war and political and economic situation in Ukraine are difficult to predict, but they may have further severe effects on the Ukrainian economy and the Group’s business.

As at 25 September 2026, the official NBU exchange rate of the Ukrainian Hryvnia against the US Dollar was UAH44.97/$1.00, compared with UAH44.85/$1.00 as at 30 June 2026.

Further details of risks relating to Ukraine can be found within the Principal Risks and Uncertainties section earlier in this announcement.

2. Accounting Judgements and Estimates

Basis of preparation

These unaudited condensed interim consolidated financial statements for the six month period ended 30 June 2026 have been prepared in accordance with UK-adopted International Accounting Standard 34, ‘Interim Financial Reporting’ (“IAS 34”) and the AIM Rules for Companies. The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.

These unaudited condensed interim consolidated financial statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2025 were approved by the Board of Directors on 12 May 2026 and subsequently filed with the Registrar of Companies. The Auditors’ Report on those accounts was not qualified and did not contain any statement under section 498 of the Companies Act 2006.

The unaudited condensed interim consolidated financial statements should be read in conjunction with the annual consolidated financial statements for the year ended 31 December 2025, which were prepared in accordance with UK-adopted International Accounting Standards.

The accounting policies and methods of computation and presentation used are consistent with those used in the Group’s Annual Report and Financial Statements for the year ended 31 December 2025, with the exception of the new or revised standards and interpretations set out below.

Going Concern

The Group’s business activities, together with the factors likely to affect its future operations, performance and position are set out in the Chairman’s Statement, Chief Executive’s Statement and Finance Review. The financial position of the Group, its cash flows and liquidity position are set out in these unaudited condensed interim consolidated financial statements.

On 24 February 2022, Russia commenced a military invasion of Ukraine, and since then there has been an ongoing war between Russia and Ukraine. Immediately after the commencement of the war, the Ukrainian Government imposed martial law and introduced a number of related temporary restrictions that impacted the economic environment and business operations in Ukraine. While a number of restrictions remain in place, improvements in the economic environment have led the Ukrainian Government to relax a number of the restrictions and stabilise the economic situation in Ukraine.

The production assets of the Group are located in the central and eastern part of the country (Poltava and Kharkiv regions) which are controlled by the Ukrainian Government. However, the licences relating to the Group’s MEX-GOL and SV assets in the Poltava region and VAS asset in the Kharkiv region are suspended after the State Geologic and Subsoil Survey of Ukraine issued orders on 15 November 2024 for the suspension of the MEX-GOL, SV and VAS production licences for a period of ten years effective from 8 October 2024, and consequently all field and production operations on these licences has ceased. In December 2025, the gas processing facilities at the VAS field were hit and damaged by Russian military drones. However, since the VAS field was not in operation as a result of the licence suspension, there were only security staff on site, and most fortunately, there were no casualties. An assessment of the damage was undertaken, power was restored and repairs have been made to site premises. In light of the risks at site, critical and high-value equipment has been moved elsewhere for further inspection and repair work. Preparation of plans for the restoration of the facilities is underway. The Group’s SC exploration licence is not suspended and development work is ongoing on the licence area. The Gas Transmission System Operator of Ukraine has maintained complete operational and technological control over the operations of the Ukrainian Gas Transmission System. However, as of the date of approval of these financial statements, the war and the regulatory actions of the Ukrainian authorities have had, and continue to have, a material impact on the production and sales levels of the business and execution of the Group’s 2026 budget.

The Group funds its operations from its own cash resources. Cash and cash equivalents were $86.6 million as at 25 September 2026. The Directors maintain a significant level of flexibility to modify the Group’s development plans as may be required to preserve cash resources for liquidity management. Absent the potential impact of the war in Ukraine, the Directors are satisfied that the Group and the Company are a going concern and will continue their operations for the foreseeable future.

In assessing the impact of the war and the regulatory actions of the Ukrainian authorities on the ability of the Group and the Company to continue as a going concern, the Directors have analysed a number of possible scenarios of economic and military developments and the impact on the expected cash flows of the Group and Company for 2026 and 2027. This includes considering a possible worst case scenario in which the Group has zero production as a result of possible future military conflict and regulatory actions dictating field operations being completely shut-in, and all other non-production related costs being maintained at current levels with no reduction or mitigating actions as would otherwise be possible. Even in this worst-case scenario, the Directors are satisfied that the Group and the Company have sufficient liquid resources to be able to meet their liabilities as they fall due and to be able to continue as a going concern for the foreseeable future.

The corporate strategy for the near term is to:

• continue work for the development of the SC exploration licence area, and moderating such development plans to reduce cash spend exposure whilst the war and regulatory, operational and political uncertainty continues;

•                 vigorously pursue legal initiatives to protect the Group’s assets, restore all licences and production, and seek compensation for losses incurred to date and as may be incurred in the future; and

• tightly manage costs to ensure cash resources are maintained at levels capable of sustaining the business through the uncertainty that lies ahead.

In respect of the Group’s operations, staff and assets in Ukraine, the potential short and long-term impact of the future development of the war is inherently uncertain. Accordingly, this creates a material uncertainty related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern because of the potential impact on its ability to continue its operations for the foreseeable future and realise its assets in the normal course of business. The financial statements do not include the adjustments that would result if the Group were unable to continue as a going concern.

The Company is a UK-based investment holding company. The Company had cash and cash equivalents of $13.0 million as at 25 September 2026, all of which are held outside Ukraine, in US Dollars, British Pounds and Euros. The Directors are satisfied that the Company is a going concern and will be able to continue its operations for the foreseeable future, and there is no material uncertainty in respect of its ability to do so.

New and revised standards adopted by the Group

The Group has adopted the following new and revised standards for the first time, effective for reporting periods beginning on or after 1 January 2025:

Amendments to IAS 21 “The Effects of Changes in Foreign Exchange Rates” – ”Lack of Exchangeability”

These amendments clarify the requirements for assessing whether a currency is exchangeable into another currency and determining the exchange rate to be used when exchangeability is lacking.

Furthermore, the amendments require the disclosure of additional information when a currency is not exchangeable, in order to help users of financial statements understand the impact of this fact on the entity's financial performance and financial position.

Since the Group operates in conditions where there are no signs of a lack of exchangeability of the functional currency, the Group's accounting policy has not changed, no potential impacts on future periods are expected, the amendments have not affected any line item of the financial statements, and there were no adjustments for prior periods.

New and revised IFRSs have been issued but have not yet entered into force

In accordance with the requirements of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, the Group has considered all new and revised standards that have been issued but are not yet effective at the date of preparation of these financial statements. The list of such standards and amendments includes:

Standards and Interpretations	Effective date
Renewable Energy Contracts (Amendments to IFRS 9 and IFRS 7)	1 January 2026
Annual Improvements to IFRS - Volume 11	1 January 2026
Amendments to the classification and measurement of financial instruments (amendments to IFRS 9 and IFRS 7)	1 January 2026
IFRS 18 “Presentation and Disclosure in Financial Statements”	1 January 2027

These new standards and interpretations are not expected to significantly affect the Group’s consolidated financial statements.

Significant accounting judgements and estimates

The preparation of the unaudited condensed interim consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

In preparing these unaudited condensed interim consolidated financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were consistent with those that applied to the consolidated financial statements for the year ended 31 December 2025 with certain updates described below.

Estimates

Depreciation of Development and Production Assets

Development and production assets held in property, plant and equipment are depreciated on a unit of production basis at a rate calculated by reference to proven and probable reserves at the end of the period plus the production in the period, and incorporating the estimated future cost of developing and extracting those reserves. Future development costs are estimated using assumptions about the number of wells required to produce those reserves, the cost of the wells, future production facilities and operating costs, together with assumptions on oil and gas realisations, and are revised annually. The reserves estimates used are determined using estimates of gas in place, recovery factors, future hydrocarbon prices and also take into consideration the Group’s latest development plan for the associated development and production asset. The latest development plan and therefore the inputs used to determine the depreciation charge for the MEX-GOL, SV and VAS fields continue until the end of the economic life of the fields, which is assessed to be 2038, 2042 and 2032 respectively, based on the assessment contained in the respective DeGolyer & MacNaughton reserves reports for these fields. The licences for the MEX-GOL and SV fields have recently been extended until 2044. Were the estimated reserves at the beginning of the year to differ by 10% from previous assumptions, there would be no impact on depreciation for the period ended 30 June 2026 due to the license suspensions (31 December 2025: increase by $38,000 or decrease by $31,000).

3. Segmental Information

In line with the Group’s internal reporting framework and management structure, the key strategic and operating decisions are made by the Board of Directors, who review internal monthly management reports, budgets and forecast information as part of this process. Accordingly, the Board of Directors is deemed to be the Chief Operating Decision Maker within the Group.

The Group’s only class of business activity is oil and gas exploration, development and production. The Group’s operations are located in Ukraine, with its head office in the United Kingdom. These geographical regions are the basis on which the Group reports its segment information. The segment results as presented represent operating profit/(loss) before depreciation and amortisation.

6 months ended 30 June 2026 (unaudited)

	Ukraine	United Kingdom	Total
	$000	$000	$000
Revenue
Liquefied Petroleum Gas sales	9	-	9
Services	263	-	263
Total revenue	272	-	272
Segment result	(3,104)	1,886	(1,218)
Depreciation and amortisation of non-current assets	(1,146)	-	(1,146)
Operating profit/(loss)	(4,250)	1,886	(2,364)
Segment assets	153,945	16,778	170,723
Capital additions*	2,073	-	2,073

*Comprises additions to property, plant and equipment and intangible assets (Notes 9 and 10).

Year ended 31 December 2025 (audited)

	Ukraine	United Kingdom	Total
	2025	2025	2025
	$000	$000	$000
Revenue
Gas sales	2,287	-	2,287
Condensate sales	486	-	486
Oil sales	433	-	433
Other goods	140	-	140
Total revenue	3,346	-	3,346
Segment result	(1,606)	2,612	1,006
Depreciation and amortisation of non-current assets	(2,482)	(6)	(2,488)
Operating profit/(loss)	(4,088)	2,606	(1,482)
Segment assets	164,460	16,778	181,238
Capital additions*	1,353	-	1,353

*Comprises additions to property, plant and equipment and intangible assets (Notes 9 and 10).

6 months ended 30 June 2025 (unaudited)

	Ukraine	United Kingdom	Total
	$000	$000	$000
Revenue
Gas sales	2,287	-	2,287
Condensate sales	486	-	486
Oil sales	433	-	433
Other goods	189	-	189
Total revenue	3,395	-	3,395
Segment result	1,372	921	2,293
Depreciation and amortisation of non-current assets	(1,302)	(3)	(1,305)
Operating profit/(loss)	70	918	988
Segment assets	172,243	18,252	190,495
Capital additions*	1,143	-	1,143

*Comprises additions to property, plant and equipment and intangible assets (Notes 9 and 10).

There are no inter-segment sales within the Group and all products are sold in the geographical region in which they are produced. The Group is not significantly impacted by seasonality.

4. Cost of Sales

	6 months ended 30 Jun 26	6 months ended 30 Jun 25
	(unaudited)	(unaudited)
	$000	$000
Staff costs	73	309
Cost of inventories recognised as an expense	47	243
Depreciation of property, plant and equipment	41	365
Production taxes	-	600
Amortisation of mineral reserves	-	158
Transmission tariff for Ukrainian gas system	-	77
Rent expenses	-	8
Other expenses	52	271
	213	2,031

5. Other Operating Gains/(Losses), (net)

	6 months ended 30 Jun 26	6 months ended 30 Jun 25
	(unaudited)	(unaudited)
	$000	$000
Interest income on cash and cash equivalents	4,405	4,465
Staff costs	(1,138)	(1,033)
Depreciation and amortisation	(592)	(505)
Foreign exchange gain/(loss)	(87)	192
Amortisation of mineral reserves	(150)	-
Other operating losses, net	(775)	(624)
	1,663	2,495

6. Other Gains(Losses), (net)

	6 months ended 30 Jun 26	6 months ended 30 Jun 25
	(unaudited)	(unaudited)
	$000	$000
Net foreign exchange gains/(losses)	31	(66)
Charitable donations	-	-
Other (losses)/gains, (net)	(8)	9
	23	(57)

7. Taxation

The income tax charge of $1,195,000 for the six month period ended 30 June 2026 relates to a deferred tax charge of $1,195,000 (1H 2025: current tax charge of $387,000 and deferred tax charge of $1,643,000).

The movement in the period was as follows:

	6 months ended	6 months ended
	30 Jun 26	30 Jun 25
	(unaudited)	(unaudited)
	$000	$000
Deferred tax (liability)/asset recognised relating to development and production assets at MEX-GOL-SV fields and provision for decommissioning
At beginning of the period	(7,238)	(5,796)
Charged to Income Statement - current period	(1,224)	(1,680)
Effect of exchange difference	431	76
At end of the period	(8,031)	(7,400)

Deferred tax (liability)/asset recognised relating to development and production assets at VAS field and provision for decommissioning
At beginning of the period	427	363
Credited to Income Statement - current period	30	33
Effect of exchange difference	(24)	3
At end of the period	433	399

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to the expected total annual profit or loss. The effective tax rate for the six month period ended 30 June 2026 was 25% (1H 2025: 25%). 

The deferred tax asset relating to the Group’s provision for decommissioning at 30 June 2026 of $695,000 (31 December 2025: $715,000) was recognised on the tax effect of the temporary differences of the Group’s provision for decommissioning at the MEX-GOL and SV fields, and its tax base. The deferred tax liability relating to the Group’s development and production assets at the MEX-GOL and SV fields at 30 June 2026 of $8,726,000 (31 December 2025: $7,953,000) was recognised on the tax effect of the temporary differences between the carrying value of the Group’s development and production asset at the MEX-GOL and SV fields, and its tax base.

The deferred tax asset relating to the Group’s provision for decommissioning at 30 June 2026 of $210,000 (31 December 2025: $216,000) was recognised on the tax effect of the temporary differences on the Group’s provision on decommissioning at the VAS field, and its tax base. The deferred tax asset relating to the Group’s development and production assets at the VAS field at 30 June 2026 of $223,000 (31 December 2025: $211,000) was recognised on the tax effect of the temporary differences between the carrying value of the Group’s development and production asset at the VAS field, and its tax base.

8. Earnings per Share

The calculation of basic earnings per ordinary share has been based on the loss for the six-month period ended 30 June 2026 and 320,637,836 (30 June 2025: 320,637,836) ordinary shares, being the weighted average number of shares in issue for the period. There are no dilutive instruments.

9. Property, Plant and Equipment

		6 months ended 30 Jun 26 (unaudited)				6 months ended 30 Jun 25 (unaudited)
	Oil and gas development and production assets Ukraine		Oil and gas exploration and evaluation assets	Other fixed assets	Total	Oil and gas development and production assets Ukraine	Oil and gas exploration and evaluation assets		Other fixed assets	Total
	$000		$000	$000	$000	$000	$000		$000	$000
Cost
At the beginning of the period	128,131		13,417	1,988	143,536	132,674	12,939		1,992	147,605
Additions	74		1,736	22	1,832	629	260		34	923
Development reclassification	19,994		(12,463)	-	7,531	-	-		-	-
Transfer	(3)		(2)	5	-	(1)	1		-	-
Disposals	(268)		(3)	(25)	(296)	(20)	(3)		(37)	(60)
Exchange differences	(6,696)		(1,297)	(110)	(8,103)	1,259	125		21	1,405
At the end of the period	141,232		1,388	1,880	144,500	134,541	13,322		2,010	149,873
Accumulated depreciation and impairment
At the beginning of the period	73,078		1,465	1,562	76,105	72,544	1,478		1,500	75,522
Charge for the period	484		-	118	602	791	-		66	857
Disposals	(6)		-	(24)	(30)	(23)	-		(10)	(33)
Development reclassification	2,170		-	(9)	2,161	-	-		-	-
Exchange differences	(4,073)		(80)	(87)	(4,240)	695	15		15	725
At the end of the period	71,653		1,385	1,560	74,598	74,007	1,493		1,571	77,071
Net book value at the beginning of the period	55,054		11,951	425	67,431	60,130	11,461		492	72,083
Net book value at end of the period	69,579		3	320	69,902	60,534	11,829		439	72,802

At 30 June 2026, an impairment indicator was identified by the Group, and impairment tests were performed for the MEX-GOL, SV, SC and VAS fields. These reviews concluded that no impairment to carrying value had occurred on any Group asset.

10. Intangible Assets

	6 months ended 30 Jun 26 (unaudited)				6 months ended 30 Jun 25 (unaudited)
	Mineral reserve rights	Exploration and evaluation intangible assets	Other intangible assets	Total	Mineral reserve rights	Exploration and evaluation intangible assets	Other intangible assets	Total
	$000	$000	$000	$000	$000	$000	$000	$000
Cost
At the beginning of the period	4,383	5,538	1,416	11,337	4,419	5,585	1,025	11,029
Additions	-	-	240	240	-	-	221	221
Disposals	-	-	(70)	(70)	-	-	(77)	(77)
Development reclassification	-	(5,365)	(5)	(5,370)	-	-	-	-
Exchange differences	(240)	(173)	(79)	(492)	42	54	20	116
At the end of the period	4,143	-	1,502	5,645	4,461	5,640	1,188	11,289
Accumulated amortisation and impairment
At the beginning of the period	3,453	-	798	4,251	3,169	-	543	3,712
Amortisation charge for the period	146	-	264	410	158	-	142	300
Disposals	-	-	(71)	(71)	-	-	(77)	(77)
Exchange differences	(189)	-	(45)	(234)	30	-	7	37
At the end of the period	3,410	-	946	4,356	3,357	-	615	3,972
Net book value at the beginning of the period	930	5,539	618	7,086	1,250	5,585	482	7,317
Net book value at the end of the period	733	-	556	1,289	1,104	5,640	573	7,317

Intangible assets consist mainly of the hydrocarbon production licence relating to the VAS gas and condensate field, which is held by LLC Prom-Enerho Produkt. In June 2026, assets of LLC Arkona Gas-Energy were put into development, and, as of 30 June 2026 are being amortised as part of Oil and gas development and production assets.

The Group amortises the hydrocarbon production licence relating to the VAS field using the straight-line method over the term of the economic life of the VAS field until 2028.

As at 30 June 2026, an impairment indicator was identified by the Group, and impairment tests were performed for the MEX-GOL, SV, SC and VAS fields. These reviews concluded that no impairment to carrying value had occurred on any Group asset.

11. Trade and Other Receivables

	30 Jun 26 (unaudited)	31 Dec 25 (audited)
	$000	$000
Accounts receivable from accrued income	407	444
Other financial receivables	1,454	1,472
Total financial receivables	1,861	1,916
Corporation tax receivable	2	-
Prepayments and accrued income	427	649
Other receivables	4,309	3,680
Less credit loss allowance	(756)	(765)
Total trade and other receivables	5,843	5,480

Due to the short-term nature of the current trade and other financial receivables, their carrying amount is assumed to be the same as their fair value. All trade and other financial receivables, except those provided for, are considered to be of high credit quality.

12. Provision for Decommissioning

	6 months ended 30 Jun 26 (unaudited)	6 months ended 31 Dec 25 (audited)
	$000	$000
At the beginning of the period	4,735	8,276
Unwinding of discount	(108)	390
Change in estimate	-	(3,920)
Effect of exchange difference	(46)	(11)
At the end of the period	4,581	4,735

The provision for decommissioning is based on the net present value of the Group’s estimated liability for the removal of the Ukrainian production facilities and well site restoration at the end of production life.

The non-current provision of $4,581,000 (31 December 2025: $4,735,000) represents a provision for the decommissioning of the Group’s MEX-GOL, SV, VAS and SC production and exploration facilities, including site restoration. None of the provision was utilised during the reporting period.

13. Other Non-current Liabilities

Other non-current liabilities of $60,000 at 30 June 2026 (31 December 2025: $73,000) consist of the long-term obligations for the Ukrainian State special purpose fund measured at amortised cost using an interest rate of 20%.

14. Financial Instruments

The Group’s financial instruments comprise cash and cash equivalents and various items such as debtors and creditors that arise directly from its operations. The Group has bank accounts denominated in British Pounds, US Dollars, Euros and Ukrainian Hryvnia. The Group does not have any external borrowings. The main future risks arising from the Group’s financial instruments are currently currency risk, interest rate risk, liquidity risk and credit risk.

The Group’s financial assets and financial liabilities comprise the following:

	30 Jun 26 (unaudited)	31 Dec 25 (audited)
	$000	$000
Financial assets
Cash and cash equivalents	89,654	97,093
Trade and other receivables	1,861	1,916
Non-current receivables	29	29
	91,544	99,038
Financial liabilities
Loans	280	393
Lease liabilities	417	539
Trade and other payables	1,452	334
Other financial liabilities	151	392
	2,300	1,658

At 30 June 2026, the Group held cash and cash equivalents in the following currencies:

	30 Jun 26 (unaudited)	31 Dec 25 (audited)
	$000	$000
Ukrainian Hryvnia	75,978	81,666
US Dollars	11,420	13,136
Euros	279	281
British Pounds	1,977	2,010
	89,654	97,093

All of the cash and cash equivalents held in Ukrainian Hryvnia are held in banks within Ukraine, and all other cash and cash equivalents are held in banks within Europe, Ukraine, the US and the United Kingdom.

15. Reconciliation of Operating Profit/(Loss) to Operating Cash Flow

	6 months ended	6 months ended
	30 Jun 26	30 Jun 25
	(unaudited)	(unaudited)
	$000	$000
Operating profit/(loss)	(2,364)	988
Depreciation and amortisation	1,188	1,286
Less interest income recorded within operating profit	(4,405)	(4,465)
Fines and penalties paid/(received)	(3)	2
Net (gain)/loss on sale of non-current assets	-	(14)
(Increase)/decrease in provisions	3	-
(Decrease)/increase in inventory	(147)	193
Decrease/(increase) in receivables	(674)	1,954
Increase/(decrease) in payables	911	(1,917)
Cash (used)/generated from operations	(5,491)	(1,973)

16. Contingencies and Commitments

Amounts contracted in relation to the Group’s 2026 investment programme at the MEX-GOL, SV, VAS and SC fields in Ukraine, but not provided for in the unaudited condensed interim consolidated financial statements at 30 June 2026, were $1,328,006 related to Oil and Gas Development and Production assets (31 December 2025: $314,955 related to Oil and Gas Development and Production assets and $7,326 to Oil and Gas Exploration and Evaluation assets).

17. Related Party Disclosures

Key management personnel of the Group are considered to comprise only the Directors. Remuneration of the Directors for the six month period ended 30 June 2026 was $266,359 (1H 2025: $441,100, and year ended 31 December 2025: $1,039,000).

During the period, Group companies had the following balances for transactions with related parties which are not members of the Group:

	6 months ended	6 months ended
	30 Jun 26	30 Jun 25
	(unaudited)	(unaudited)
	$000	$000
Sale of goods/services	-	208
Purchase of goods/services	(477)	(390)
Loans received from related parties	(1,835)	(1,834)
Loans made to related parties	1,650	1,778
Interest	(96)	(12)

All related party transactions were with subsidiaries of the ultimate Parent Company, and primarily relate to inter-group loans, as well as the rental of office facilities and vehicles and the sale of equipment. The amounts outstanding have been or will be settled in cash.

In 2025, the Group made loans to and received loans from subsidiaries of the ultimate Parent Company. These loans are denominated in British Pounds. The full value of the loans are as stated above and remained outstanding in accordance with their terms at the period end.

At the date of this announcement, none of the Company’s controlling parties prepares consolidated financial statements available for public use.

18. Events occurring after the Reporting Period

The ongoing war in Ukraine means that the fiscal, economic and humanitarian situation in Ukraine is unstable and extremely challenging and the final resolution and consequences of the ongoing war are hard to predict, but they may have a further serious impact on the Ukrainian economy and business of the Group. Management continues to identify and mitigate, where possible, the impact on the Group, but the majority of these factors are beyond their control, including the duration and severity of the war, as well as the further actions of various governments and diplomacy.

 

END