Jkx Oil & Gas Share Discussion Threads

[peter27] 10/6/2012 18:43

so glad i sold when the fd left

[whothecares] 10/6/2012 18:17

It looks much worse than the article suggests. 39% of value royalty payments on shallow condensate and 28% on shallow gas (below 5000 metres).



Warrants an RNS imo.

[xorex] 09/6/2012 16:43

Have you got a translation?

[llamarama] 09/6/2012 15:27

In case you are wondering about the share price fall, this is the reason:

Law passed in parliament last week for rent payments to increase 14 fold -


Still not approved by president but would be a disaster for KOV and JKX.

[the ballcock] 01/6/2012 12:31

must thank me broka for holding off, i'd have dived in at 140 pennies, he says wait til the 80's

[jaka] 31/5/2012 17:01

Could be a one of the bigger holdings selling up. Financials in the Euro zone creating force selling and runs.

[arja] 31/5/2012 14:16

but it is one of the worst looking charts i have seen but always risky to short an oil explorer as news can be announced any time . this is almost a SOR situation !

[mpclag] 31/5/2012 14:12

shorters want this down to £1 imho

[arja] 31/5/2012 14:06

as always , do the opposite to what analysts and brokers say if you want to make a fortune ! an aussie friend of mine did that and made heaps over the years - wish I had done the same !

[jaka] 29/5/2012 23:57

Regarding brokers views I can't find any at the moment with a
SELL view. Below is the latest.

[targatarga] 25/5/2012 17:47

landkom was a tyical ukranian money pit[lki]. Worth a read of the last few posts for anyone interested. The takeover was done at a price that suited the buyer. imho

[brucie5] 25/5/2012 17:40

Thanks, Bob. Very helpful.

[bobsidian] 25/5/2012 15:32

Brucie5

Unfortunately this is a sector and field in which I lack the technical knowledge to make sense of many of the reports released by such companies. There are bulletin boards where there are technically proficient posters from whom you can learn much. But even they can be at a loss as to why shares they cover can surge to a particular price and then suddenly collapse.

Take for example XEL. A week ago it was sitting at around 75p and then in a matter of 3 days surged to hit around £1.15 on an intraday basis on the back of no news releases. Since then it has taken back up to 30p of that 40p move. Doubtless there was some speculation that a drilling had confirmed with a greater of certainty the oil resources believed to be in place. Alternatively take a look at CHAR. There was so much promise built into its share price with a belief that it had found with varying degrees of probability many billions of barrels of oil and it completed its first drill with little apparent success and suddenly the stockmarket took fright and wrote out from the share price almost all of that remaining hope in a day.

As you are doubtless aware you are in a sector which can make or lose you a fortune in a short time. And the cost of drilling can be hugely expensive with companies continuously being required to raise finance before any production can be brought on line and often by way of highly dilutive share placings. Take a look at GKP. Rumours of a capital raising exercise caused the share price to tumble by some 50% before the management of GKP took the decisive step of releasing an RNS threatening legal action against those believed to be involved in spreading the rumours. Even the perception of the need to raise finance can see a share price of a company in this sector take a serious tumble.

JKX appears to be both producer and explorer and seems to be able to fund its activities without the need for highly dilutive share placings. However, the following detailed in the full year financial statements are worthy of note:

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Dividend

In my Interim Statement, I highlighted the impact on available cash flow of the combination of a significant increase in taxation in Ukraine in 2011, the delay in start-up of the Russian project and the attendant increased project costs. This led to our decision to forgo an interim dividend for 2011. These pressures continue. Your Board recognises that we will need the rest of this year to pay down our existing short-term borrowings, reshape the balance sheet and provide a greater element of liquidity to our operations going forward. Consequently, the Board is not recommending any final dividend is paid for 2011.

Outlook

The critical issue for your Company in the coming second quarter of 2012 is to complete all aspects of our Russian project to enable the Company to sell its gas at plant capacity. Further work is also required on well 25 to bring it into production.

Our financial resources over the next 6 months will be stretched and it may be necessary to delay some drilling projects and the frac in Ukraine until later in the year. Ukraine remains the engine of the Group and we will continue our endeavours to broaden our licence position there.

Revenue

The Group benefited from high international oil and gas prices. The Group enjoyed a 42.1% improvement in the oil price achieved moving from $69.15/bbl in 2010 to $98.27/bbl in 2011. From a total revenue perspective, the gas price strengthening dwarfed the oil price increase as volumes of gas sold represent 75% (2010: 69%) of our total production volume. The Group gas price achieved rose 28.4% from $268/Mcm in 2010 to $344/Mcm in 2011.

The Ukrainian gas price achieved had the biggest impact increasing from $284/Mcm at the beginning of the period to $418/Mcm at year-end, giving an absolute price increase of 47.2% during the year.

Future Ukrainian Gas prices

Recent press contains much speculation concerning Ukrainian gas prices and the Ukrainian push for a renegotiation of the gas supply agreement between Russia and Ukraine; this has a direct impact on the industrial tariff that applies to our Ukrainian gas sales. The two countries have yet to reach any agreement on whether this contract will or will not be adjusted and consequently, the terms of the Supply Agreement of January 2009 still prevail. This resulted in a border price of $416/Mcm during the first quarter of 2012, translating into the price of gas in the industrial market in excess of $430/Mcm. The Ukrainian Parliament recently passed the Budget Law on the assumption that the import price remains at $416/Mcm for the remainder of 2012.

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Equity markets being what they are may be concentrating on the phrase "reshape the balance sheet and provide a greater element of liquidity to our operations going forward". Uncertainty may be surrounding whether or not the elimination of the dividend will be enough and what exactly is meant by "reshape the balance sheet".

Additional uncertainty may also surround financing facilities made available through Credit Suisse and Credit Agricole and their terms of repayment. And given the major uncertainty surrounding the exposure of Credit Agricole to Greece there may be doubt as to whether or not the lesser facility will be available at all to JKX.

And finally given how important gas sales have become to JKX, if gas prices are renegotiated downwards by Ukraine with Russia, then the revenues of JKX may be adversely impacted.

So, all in all, it looks as though financial liquidity concerns and how management will address those concerns are stalking the share price of JKX.

[brucie5] 25/5/2012 13:27

Bob, thanks, and of course everything you say makes sense, but I'm after a value argument from whoever feels sufficiently knowledgeable to make it. I've tried to do this over and over with CAD, based on such things as reserves/resources/ cash in the bank/exisiting production, and I'm a rank amateur whom noone in their right mind should follow. So was hoping someone here might be able to do an even better job.. I'm sure you could..?

[acta_topup] 24/5/2012 18:47

How did he cone up with that?

[the ballcock] 24/5/2012 18:40

me broka says 60p salvage value

[brucie5] 24/5/2012 16:09

re. 'stupifying' would you care to outline your case? I'm currently in CAD so feel slightly familiar with what you're saying, and also with the risks of companies operating in the Ukraine. As you say, this share price has reached a historic (2008) bottom. Why should it not go lower?