Enwell shares after as Ukraine imposes gas price control

Shares in London-listed Enwell Energy fell on January 17 after Ukraine's government imposed temporary regulation of gas prices to protect certain food industries.

The government has decreed that independent gas producers in Ukraine must sell up to 20% of their output until April 30 at a price based on the cost of sale, plus a 24% margin and any existing production taxes. This gas will be sold to specified producers of "socially important food products" to reduce their costs. These products include flour, milk, bread, eggs, chicken and sunflower oil.

Enwell shares slumped 10% in early trading after announcing the price control. CEO Sergii Glazunov described the regulation as "a very concerning situation for independent gas producers in Ukraine, and indeed for the investment climate in Ukraine generally."

"However, we recognise the underlying social issues that this scheme is intended to address, and will monitor its impact on the market and our business," he said.

Enwell operates four gas and condensate fields in the Dnipro-Donets basin in northeast Ukraine. It produced 4,917 barrels of oil equivalent/day in the first half of 2021.