JKX Oil & Gas PLC Quarterly Operations Update (2002P)
October 09 2019 - 1:00AM
UK Regulatory
TIDMJKX
RNS Number : 2002P
JKX Oil & Gas PLC
09 October 2019
9 October 2019
JKX Oil & Gas plc
("JKX", the "Company" or the "Group")
Quarterly Operations Update
Highlights
-- Q3 group average production of 11,719 boepd, 13% higher
than the previous quarter.
-- Ukraine average production of 5,535 boepd for first
9 months of 2019, more than 50% higher than during first
9 months of 2018.
-- Highest quarterly and year-to-date oil production in
Ukraine since 2013.
-- Capital investment in the fields continues as planned,
entirely financed by operating cash flow despite lower
gas price in Ukraine.
-- $9.5m of cash and cash equivalents, and oil and gas
inventory of approximately $11.5m in value, held at
30 September 2019.
Production
Q3 Q2 Q on 9 months 9 months Y on
Q % Change Y % Change
2019 2019 2019 2018
Total production, boepd 11,719 10,354 13% 10,668 8,958 19%
Ukraine, boepd 6,217 5,364 16% 5,535 3,667 51%
- Average gas production,
Mcmd 842 742 14% 765 493 55%
- Average oil and condensate
production, boepd 1,260 999 26% 1,033 776 33%
Russia, boepd 5,502 4,990 10% 5,125 5,199 (1%)
- Average gas production,
Mcmd 924 838 10% 861 872 (1%)
- Average condensate production,
boepd 62 57 9% 58 58 0%
Hungary, boepd 0 0 0% 8 92 (91)%
Prices realised
Ukraine
- Average gas price, $/Mcm 175 215 (19)% 226 287 (21)%
- Average oil and condensate
price ($/bbl) 63 60 5% 61 72 (15)%
Russia
- Average gas price, $/Mcm 58 57 2% 57 58 (2)%
In Ukraine:
-- Well IG142 completed in Q3, is currently producing at
857 boepd with a wellhead pressure of 1,867 psi.
-- Two rigs currently in operation in Ukraine. One is drilling
WM4 in West Mashivska and a second larger rig has also
been procured and is currently drilling R101 sidetrack
- the first sidetrack drilled by PPC to target the Visean
sands in the North of Rudenkivske.
-- IG103 sidetrack production continues to exceed expectations
with current production at 1,116 boepd with a wellhead
pressure of 1,150 psi. To date the well has produced
374 Mboe.
-- Oil production increase of 26% in Q3 2019 compared to
Q2 2019 is the result of two recently drilled new wells:
NN81 and IG142.
-- 2 day planned shutdown of the Novo-Nikolaevske production
facility reduced the Q3 Ukraine production.
In Russia:
-- Production is up quarter on quarter due to a well being
brought into production at the end of Q2 2019.
-- Well 5 production has been adversely affected by solids
blockages which resulted in the well being acidized
three times in the reporting period. The last acid job
was conducted at the end of August and a recent flaring
and choke reduction has led to the well cleaning up.
The current production rate is 370 boepd.
-- Workover of Well 18 is progressing with all 300m of
a fish left in the well by a previous operator milled.
The production casing will be repaired before drilling
the sidetrack.
Liquidity
In $m 30 Sep 30 Jun 31 Dec 30 June
2019 2019 2018 2018
Total cash and cash equivalents 9.5 10.7 19.2 7.6
Bond liability (principal
and interest accrued) (5.4) (5.7) (11.3) (11.3)
Net cash/ (debt) 4.1 4.9 7.9 (3.7)
Approximate sales value
of gas and oil inventory 11.5 8.0 9.9 3.1
Our Ukrainian subsidiary held 54 MMcm of gas and 25 thousand
barrels of oil inventory available for immediate sale at 30
September 2019. Approximate sales value of gas and oil inventory
is calculated using average sales prices for September 2019.
$0.4m of bond interest was paid in August 2019. The final bond
payment of $5.8m is due in February 2020.
Rental fee claims
Claims issued by the Ukrainian tax authorities for additional
rental fees for 2010 and 2015 are being contested through the
Ukrainian court process as explained in the 2018 Annual Report.
Final resolution of the 2010 rental fee claim case is expected
in the next few months. The 2015 rental fee claims cases were
contested in eight separate cases. As previously reported, in
early July one of these cases was closed in favour of JKX's
subsidiary in Ukraine, Poltava Petroleum Company (PPC). Successful
closure of a second case is expected shortly. Final resolution
of the remaining six 2015 rental fee claims cases, four of which
are currently suspended, is expected during 2019 and 2020.
International arbitration award
In February 2019 JKX filed an application for the recognition
and enforcement of an international arbitration award as described
in the 2018 Annual Report. On 5 July 2019 the written judgment
of the Kyiv Appellate Court was issued, satisfying the application
and ordering the State of Ukraine to pay $11.8m plus interest
and $0.3m costs. This judgment is currently subject to appeal
in the Supreme Court of Ukraine. No recognition will be made
in the financial statements of any possible future benefit that
may result from this award until there is further clarity on
the process for, and likely success of, enforcing collection.
boepd - Barrels of oil equivalent per day
bopd - Barrels of oil per day
Mboe - Thousand barrels of oil equivalent
Mcm - Thousand cubic metres
MMcm- Million cubic metres
Mcmd - Thousand cubic metres per day
psi - pounds per square inch
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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