JKX Oil & Gas PLC December 2016 Monthly Production Report (3346U)

TIDMJKX

RNS Number : 3346U

JKX Oil & Gas PLC

17 January 2017

17 January 2017

JKX Oil & Gas plc

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

December 2016 Monthly Production Report

 
                             December   November   % Change    12 months     12 months   % Change 
                                          2016                 to December       to 
                                                                 2016(3)      December 
                                                                                2015 
--------------------------  ---------  ---------  ---------  -------------  ----------  --------- 
 Total production 
  (boepd(1) )                 9,954      9,746       2.1%        10,083        8,996      12.1% 
--------------------------  ---------  ---------  ---------  -------------  ----------  --------- 
 Ukraine (boepd)              3,840      4,095      (6.2)%       4,001         4,325      (7.5)% 
 - Average gas production 
  (MMcfd(2) )                  18.5       19.7      (6.1)%        18.6         21.0      (11.4)% 
 - Average oil and 
  condensate production 
  (boepd)                      761        814       (6.5)%        902           823        9.6% 
--------------------------  ---------  ---------  ---------  -------------  ----------  --------- 
 Russia (boepd)               6,114      5,651       8.2%        6,082         4,670      30.2% 
 - Average gas production 
  (MMcfd)                      36.3       33.5       8.4%         36.1         27.7       30.3% 
 - Average condensate 
  production (boepd)            65         63        3.2%          65           48        35.4% 
--------------------------  ---------  ---------  ---------  -------------  ----------  --------- 
 

Summary

-- Average Group production for December 2016 was 9,954 boepd, 2.1% higher than in the previous month. Average annual production was 12.1% higher in 2016 than it was in 2015.

-- In Hungary, well Hn-2ST (sidetrack) was successfully completed on the Hajdunanas IV mining plot. This is the first drilling operation completed since JKX assumed operatorship in November 2014. The Hn-2ST well tested 1.5 MMcfd from the Pannonian Pegasus sands (1051-1055m MD(4) ) and 2.8 MMcfd from a lower Pannonian sand interval (1082 - 1088m MD). The latter is a newly discovered productive horizon in the field. Gas sales are expected from early February at an initial rate of 1.8 MMcfd, after a production and sales break of more than three years. Assessment of reserves following the well test is underway and the production forecast and development plan will be adjusted accordingly.

-- In Ukraine, gas production was adversely affected by hydrates in flow lines caused by cold weather. The Group continued the implementation of its field development plan (FDP) for the Rudenkivske field. After a successful workover, another Rudenkivske well (NN47) located in the north of the field tested gas and condensate from the V-25 interval in the Visean sands - the main focus of the FDP. The well tested an initial maximum rate of 16.9 MMcfd and 668 boepd of condensate on a 137/64(th) " choke prior to declining to 11.5 MMcfd of gas and 255 boepd of condensate within 36 hours. Preliminary estimates of gas initially in place are 0.44 Bcf(5) . More information will be provided once production rate has stabilized. In addition, gas lift is currently being implemented at well NN16 to restore production and increase overall recovery.

   --     In Russia, Well 25 and Well 27 were acidized resulting in increased gas production. 

On December 21, 2016 Ukraine's Parliament passed legislation reducing the royalty on oil production from a maximum of 45% to 29%. Disappointingly, the proposal to reduce the gas royalty from a maximum of 29% to 12% for new wells, which was passed at the first reading, was excluded from the second reading and therefore failed to pass into law. The Company continues to believe that reducing gas production taxes is a critical step to making Ukraine's gas sector attractive for investors, which, in turn, will support the Government's stated goal of energy independence. JKX will continue to work with the Government and other stakeholders in 2017 to reduce gas production taxes in order to increase investment in the sector.

(1) boepd - Barrels of oil equivalent per day

(2) MMcfd - Million cubic feet per day

(3) unaudited

(4) MD - Measured depth

(5) Bcf - Billion cubic feet

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                              [phone] 

Russell Hoare, Chief Financial Officer

   Stockdale Securities                         [phone] 

Robert Finlay, Daniel Harris

   EM Communications                          [phone] 

Stuart Leasor, Jeroen van de Crommenacker

This information is provided by RNS

The company news service from the London Stock Exchange

END

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January 17, 2017 03:06 ET (08:06 GMT)