TIDMJKX
RNS Number : 2110Z
JKX Oil & Gas PLC
09 January 2020
9 January 2020
JKX Oil & Gas plc
("JKX", the "Company" or the "Group")
Quarterly Operations Update
Highlights
-- Group annual production up 20% (2019: 10,748 boepd, 2018:
8,937 boepd).
-- Ukraine annual production up 52% (2019: 5,584 boepd, 2018:
3,677 boepd).
-- Russia annual production flat (2019: 5,158 boepd, 2018:
5,169 boepd).
-- More than $26m of capital expenditure invested in our
operations in 2019 (Ukraine: $18m, Russia: $8m), entirely
financed by operational cash flow despite lower gas prices
in Ukraine in 2019.
-- In Ukraine new wells completed in December 2019 and January
2020 and field development continuing as planned.
-- Well workover programme completed in Russia with no further
workovers planned in 2020.
-- $20.5m of cash and cash equivalents, and oil and gas inventory
of approximately $4.1m in value, held at 31 December 2019.
-- Group on schedule to be debt free from February 2020.
Production
Q4 Q3 Q on 12 12 months Y on
Q % months Y
Change %
Change
2019 2019 2019 2018
Total production, boepd 10,989 11,719 (6)% 10,748 8,937 20%
Ukraine, boepd 5,731 6,217 (8)% 5,584 3,677 52%
- Average gas production,
Mcmd 782 842 (7)% 769 497 55%
- Average oil and condensate
production, boepd 1,131 1,260 (10)% 1,058 751 41%
Russia, boepd 5,258 5,502 (4)% 5,158 5,169 0%
- Average gas production,
Mcmd 883 924 (4)% 867 868 0%
- Average condensate production,
boepd 59 62 (5)% 59 58 2%
Hungary, boepd 0 0 0% 6 91 (93)%
Prices realised
Ukraine
- Average gas price, $/Mcm 180 175 3% 206 308 (33)%
- Average oil and condensate
price ($/bbl) 62 63 (2)% 61 74 (18)%
Russia
- Average gas price, $/Mcm 58 58 0% 57 57 0%
In Ukraine:
-- WM4, a new well in the West Mashivska field, was completed
in December and is now producing gas from the deepest of
three hydrocarbon bearing intervals encountered, with a
current rate of around 100 boepd. Production from the other
two hydrocarbon bearing intervals is scheduled for later
dates.
-- NN82 was completed this month, January 2020, and production
is expected to start shortly.
-- The rig is relocating to IG143, a follow-up well to the
successful IG103 sidetrack and IG142 wells.
-- Drilling of the R101 sidetrack by a second rig continues
and is scheduled to complete in Q1 2020.
In Russia:
-- The workover and sidetrack of Well 18 has been completed
and the well is currently producing at 1,282 boepd with
a wellhead pressure of 1,161 psi.
-- Well 5 production has been stable through Q4 at 400 boepd
with no further acid jobs carried out.
-- The successful workovers of these two wells increased the
number of producing wells to six and more than offset the
production decline in Well 20. Average daily production
in 2020 is expected to exceed 5,250 boepd without the need
for further workovers. The rig has now been demobilised.
Liquidity
In $m 31 Dec 30 Jun 31 Dec
2019 2019 2018
Total cash and cash equivalents 20.5 10.7 19.2
Bond liability (principal
and interest accrued) (5.7) (5.7) (11.3)
Net cash 14.8 4.9 7.9
Approximate sales value
of gas and oil inventory 4.1 8.0 9.9
Our Ukrainian subsidiary held 14 million cubic metres of gas and
27 thousand barrels of oil inventory available for immediate sale
at 31 December 2019. Approximate sales value of gas and oil
inventory is calculated using average sales prices for December
2019.
It is anticipated that the Group will be debt free after the
final bond payment of $5.8m scheduled for February 2020. Access to
undrawn credit facilities is maintained, although management is
confident that execution of field development plans in Ukraine can
continue to be financed from operational cash flow.
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. As previously reported, in October 2019 the
second of the eight 2015 cases was closed in favour of JKX's
subsidiary in Ukraine, Poltava Petroleum Company (PPC). Final
resolution of the remaining six 2015 rental fee claims cases, four
of which are currently suspended, is expected during 2020 and
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 2018 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.
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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January 09, 2020 02:00 ET (07:00 GMT)
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