TIDMJKX

RNS Number : 9087L

JKX Oil & Gas PLC

18 January 2021

   18   January 2021 

JKX Oil & Gas plc

("JKX", the "Company" or the "Group")

Quarterly Operations Update

Highlights

 
      --   Group average production of 10,238 boepd for 2020, similar 
            to 2019 despite significantly reduced drilling and workover 
            activity in 2020 compared to 2019. 
      --   Two wells drilled in Ukraine in Q4 2020, IG146 and a 
            sidetrack of NN75. 
      --   Net $24.5m of cash and cash equivalents, and oil and 
            gas inventory of approximately $2.2m in value, held 
            at 31 December 2020. 
 

Production

 
                                      Q4       Q3     Q on Q    12 months     12      Y on Y 
                                                         %                   months      % 
                                                       Change                          Change 
                                     2020     2020                2020       2019 
 Total production, boepd             9,825   10,245    (4)%      10,238     10,748     (5)% 
 Ukraine, boepd                      4,351   4,727     (8)%       4,849      5,584     (13)% 
 - Average gas production, 
  Mcmd                                592     639      (7)%        653        769      (15)% 
 - Average oil and condensate 
  production, boepd                   868     965      (10)%      1,007      1,058     (5)% 
 Russia, boepd                       5,474   5,519     (1)%       5,389      5,158      4% 
 - Average gas production, 
  Mcmd                                919     926      (1)%        905        867       4% 
 - Average condensate production, 
  boepd                               64       67      (4)%        61         59        4% 
 Hungary, boepd                        0       0        0%          0          6      (100)% 
 Prices realised 
 Ukraine 
 - Average gas price, $/Mcm           168     105       60%        132        206      (36)% 
 - Average oil and condensate 
  price ($/bbl)                       49       49       0%         44         61       (28)% 
 Russia 
 - Average gas price, $/Mcm           50       52      (4)%        52         57       (9)% 
 

In Ukraine:

 
      --   The drilling of NN75 sidetrack, in the Novo-Nikolaevske 
            field, commenced on the 15th December and reached a 
            TD of 1,943m on the 28th December. Logs have been run 
            and indicate 3 separate sands in the V16 with a total 
            net hydrocarbon bearing thickness of 7.8m with an additional 
            1m of net hydrocarbon bearing thickness in the shallower 
            V15 reservoir. The deepest V16 sand containing 4m of 
            net hydrocarbon bearing thickness was perforated on 
            the 14th November with a current rate of 80 boepd. Additional 
            perforations will be added in due course. 
      --   IG146 was completed to the Devonian in Ignativske and 
            encountered 2.6m of logged net hydrocarbon bearing thickness. 
            After initially testing at an oil rate of 497 bopd and 
            a gas rate of 35 Mcmd in November the rate declined 
            and the well is currently producing 6 Mcmd of gas (35 
            boepd). 
 

In Russia:

 
      --   Following the successful acid jobs on Well's 5, 18 and 
            27 in Q3 2020 production from these wells has not declined 
            significantly resulting in the production from the Koshekhablskoye 
            field in Russia only reducing by 1% quarter-on-quarter. 
 

Liquidity

 
 In $m                              31 Dec   30 Jun   31 Dec   30 Jun   31 Dec 
                                      2020     2020     2019     2019     2018 
 
 Total cash and cash equivalents      24.5     14.5     20.6     10.7     19.2 
 Bond liability (principal 
  and interest accrued)                  -        -    (5.7)    (5.7)   (11.3) 
 Net cash                             24.5     14.5     14.9      4.9      7.9 
 
 Approximate sales value 
  of gas and oil inventory             2.2      1.7      4.1      8.0      9.9 
 

Our Ukrainian subsidiary held 2.7 million cubic metres of gas and 32.6 thousand barrels of oil inventory available for immediate sale at 31 December 2020. Approximate sales value of gas and oil inventory is calculated using average sales prices for December 2020.

Rental fee claims

Claims issued by the Ukrainian tax authorities for additional rental fees for 2010 and 2015 are still being contested through the Ukrainian court process as explained in the 2019 Annual Report. Final resolution of the 2010 and remaining 2015 rental fee claims cases is expected during 2021.

International arbitration award

The international arbitration award, directing the State of Ukraine to pay $11.8m plus interest and $0.3m costs to JKX as described in the 2019 Annual Report, has now been successfully legally recognised in Ukraine and JKX has filed for collection. No possible future benefit that may result from this award will be reflected in the accounts until there is further clarity on the process for, and likely success of, enforcing collection.

Covid-19

The Group has all necessary arrangements in place to ensure the safe conduct of its business. We have implemented a number of policies recommended by Governments in the countries of our assets for the protection of our employees, as well as to help minimization of the spread of coronavirus (Covid-19). Our first priority is the safety and wellbeing of our staff. Our next priority is supporting the local communities, especially where there is a lack of medical assistance, and we have directed our corporate and social responsibility projects helping to fight further spread of Covid-19.

We continue to monitor the impact of Covid-19 developments on our industry, operations, staff and contractors and are confident about the safety measures we put in place.

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 

Dmytro Piddubnyy , CFO

   EM Communications                         +44 (0) 20 7002 7860, +44 (0) 7887 946719 

Jeroen van de Crommenacker

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