TIDMJKX
RNS Number : 0549D
JKX Oil & Gas PLC
05 October 2018
5 October 2018
JKX Oil & Gas plc
("JKX", the "Company" or the "Group")
Quarterly Operations Update
Q3 Q2 Q on 9 months 9 months Y on
Q % Change Y % Change
2018 2018 2018 2017
Total production, boepd(1) 9,411 8,707 8.1% 8,958 8,645 3.6%
Ukraine, boepd 4,014 3,585 12.0% 3,667 3,595 2.0%
- Average gas production, 19.4 16.7
MMcfd(2) (549) (473) 16.2% 17.4 17.3 0.6%
(Mm(3) d)(3) (493) (490)
- Average oil and condensate
production, boepd 785 805 (2.5)% 776 711 9.1%
Russia, boepd 5,302 5,030 5.4% 5,199 4,905 6.0%
- Average gas production,
MMcfd 31.5 29.8 5.7% 30.8 29.1 5.8%
(Mm(3) d) (892) (844) (872) (824)
- Average condensate production,
boepd 60 57 5.3% 58 54 7.4%
Hungary, boepd 95 91 4.4% 92 145 (36.6)%
- Average gas production,
MMcfd 0.5 0.5 - 0.5 0.8 (37.5)%
(Mm(3) d) (14) (14) (14) (23)
- Average condensate production,
boepd 8 7 14.3% 8 10 (20.0)%
Average Group production for the third quarter of 2018 was 9,411
boepd, which represents an 8.1% increase compared to the second
quarter of 2018. Year-on-year Group production was up by 3.6%.
Group production on 30 September was 9,610 boepd comprising of
5,025 boepd in Russia and 4,585 boepd in Ukraine.
In Ukraine, production quarter-on-quarter increased due to
continuing production from R3, completed late in Q2, and the
performance of the work programme:
-- WM215, a leased well, was successfully worked over in
September and came online on 26 September at an initial rate of 9.1
MMcfd (258 Mm(3) d) with a WHP of 2400 psig(4) on a 30/64(th) "
choke. The well is currently producing at 4.4 MMcfd (125 Mm(3) d)
with a WHP of 2300 psig on a 20/64(th) " choke and has yet to
stabilise. This is the first well to be tested by PPC on the
undeveloped West Mashivske field where further development is
planned.
-- E308, the first new well to be drilled since 2014, was
successfully completed on 4 September. Production commenced from
this well on 17 September and has since stabilised at 0.9 MMcfd (25
Mm(3) d).
-- IG101 sidetrack was worked over which resulted in an increase
in the gas rate from 0.3 MMcfd (8 Mm(3) d) to 4.1 MMcfd (116 Mm(3)
d) at the start of September. The gas rate has since declined to
0.8 MMcfd (23 Mm(3) d).
-- Due to complications during the workover of the leased well
R11, caused by poor condition of the well, it was not possible to
reach the primary target, V26. Plans to evaluate the deeper
reservoir in this location at a later date are being
investigated.
A tender process has been initiated in order to find a suitable
drilling rig to carry out the drilling planned in the near future,
starting with a new well on the West Mashivske field.
In Russia, production has increased quarter-on-quarter. This is
the result of successful acid jobs on Well 25 and 27 in the first
week of July. The contracted rig for the well workover programme is
currently en route to the Koshekhablskoye field with the start of
the Well 5 workover expected towards the end of the fourth
quarter.
The process of divesting the Company's Hungary assets is
currently ongoing.
Liquidity
Balance sheet extracts at quarter ends were as follows:
In $m 30 Sep 30 June 31 Mar 31 Dec
2018 2018 2018 2017
Total cash 4.9 7.6 6.5 6.9
Bond liability (principal
and interest accrued) (10.9) (11.3) (10.9) (16.8)
Net debt (6.0) (3.7) (4.4) (9.9)
Trade and other receivables 3.2 3.3 2.9 3.3
Trade and other payables (0.6) (1.9) (5.6) (5.4)
Approximate sales value
of gas and oil inventory 9.9 3.1 3.3 3.0
The Company's bond liability relates to a convertible bond with
$10.7m principal outstanding. The bond pays an annual coupon of 14%
semi-annually in arrears and matures in 2020. The bond terms are
described in detail in the 2017 Annual Report.
Approximate sales value of gas and oil inventory are calculated
using the latest price information available in Ukraine. A flexible
trading approach has been adopted on the sale or holding of gas
based upon price fluctuations in the market. At 30 September 2018
inventory consisted of 791 MMcf (22,403 Mm3) of gas and 24,120 bbl
of oil held and available for immediate sale at our Ukrainian
subsidiary. Since 30 September 353 MMcf (10,000 Mm3) of gas was
sold for $3.7m.
(1) boepd - Barrels of oil equivalent per day
(2) MMcfd - Million cubic feet per day
(3) Mm(3) d - Thousand cubic metres per day (1 m3 = 35.315
cf)
(4) psig - pounds per square inch gauge
This announcement contains inside information as defined in EU
Regulation No. 596/2014 and is in accordance with the Company's
obligations under Article 17 of that Regulation.
ENDS
JKX Oil & Gas plc +44 (0) 20 7323 4464
Ben Fraser, CFO
EM Communications +44 (0) 20 7002 7860
Stuart Leasor, Jeroen van de Crommenacker
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END
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