Jkx Oil & Gas Share Discussion Threads

[mpclag] 16/7/2012 07:47

oo mow the chairman resigns without giving a reason.

[jaka] 26/6/2012 23:02

Mpclag. Info you need in the last Annual Report. Download and quick search pdf.Latest analysis of the new tax changes. Dragon Capital view: The new law will have mostly neutral impact on listed oil and gas producers such as Ukrnafta and JKX at current oil and gas prices as the new taxes are close to what these companies currently pay (royalties plus mineral extraction tax). Yet the new minimum taxes on gas production are close to the rates implied by current gas prices, thus should gas prices for industrial consumers decline from their current level of $438/tcm (e.g. in case of revision of the gas contract with Russia), gas producers would still pay the same minimum rate, implying an increased amount of taxes in relation to revenues.

[mpclag] 26/6/2012 07:31

do you know what 1000 m2 is fetching for export (gas)?

[jaka] 26/6/2012 00:21

There was an expected hike in production taxes in 2011 from 30% to 50%Production taxes rose from around 5 mill in 2010 to 67 mill in 2011.Last year the total for all taxes paid in the Ukraine went up from 30% in 2010 to 60% in 2011!Thankfully taxes have been reduced in 2012 by 30% and further mitigated by a yearly ongoing reduction in corporation tax. JKX should issue an RNS if any of these conditions have changed.

[mpclag] 25/6/2012 18:41

The current take is 50%?

[jaka] 25/6/2012 15:53

50% of revenue I think.

[mpclag] 25/6/2012 12:34

seems like the original stated tax take has been drastically reduced/watered down. Any idea how these new rates compare to the current tax take?

[jaka] 23/6/2012 22:48

Ukrainian president signs law to raise taxes on mineral resources15:09Ukrainian President Viktor Yanukovych has signed into law amendments to the Tax Code that eliminate royalties and change the system for collecting payments for use of subsoil resources in fossil fuel production.The payments previously amounted to UAH147.63 per tonne of produced oil and condensate; UAH42.05 per 1,000 cubic meters of gas (regardless of depth); UAH5.33 per tonne of anthracite; UAH3.51 per tonne of thermal coal; UAH0.57 per tonne of brown coal; and UAH0.59 per tonne of peat.Under the new law, oil and condensate will be subject to a tax of 39% of its value if produced at a depth of up to 5 km, and 17% if produced at a depth of more than 5 km.Gas (including nontraditional) will be subject to a tax of 17% of its value (but not less than UAH594.64 per 1,000 cubic meters) if produced at a depth of up to 5 km, and 9% (but not less than UAH318.34 per 1,000 cubic meters) if extracted from a greater depth. The rate for offshore gas production will be 15%, but not less than UAH53.90 per 1,000 cubic meters.For production of gas that is subsequently sold for household consumption, the subsoil resource use payment will be 28% of its value (but not less than UAH101.30 per 1,000 cubic meters) if produced at up to 5 km, and 25% (but not less than UAH89.45 per 1,000 cubic meters) if extracted from a greater depth.Fields being developed under production sharing agreements will be subject to a resource use tax of 2% of the value of oil and 1.25% of the value of gas produced.The tax will be 0.5% of the value for anthracite (but not less than UAH5.33 per tonne); 0.4% (but not less than UAH3.51 per tonne) for steam and coking coal; 1% (but not less than UAH0.57 per tonne) for brown coal; and 1% (but not less than UAH0.59 per tonne) for peat.Yanukovych instructed Prime Minister Mykola Azarov to draft and submit to parliament by July 2 a bill that would resolve problems arising from the introduction on January 1, 2013 of the new system of payments for resource use in fossil fuel production.Ukraine's Verkhovna Rada passed the bill to amend the Tax Code on May 24. Energy and Coal Industry Minister Yuriy Boiko and the American Chamber of Commerce in Ukraine opposed the bill.

[mpclag] 22/6/2012 08:04

Ive seen an article somewhere, but can't recall where I saw it-sorry

[whothecares] 21/6/2012 10:05

What makes you think so mpclag? I agree that this is my feeling too but do you have anything more concrete?

[mpclag] 21/6/2012 07:37

looking like the Ukranian tax increase may not happen

[mpclag] 20/6/2012 08:09

nice bounce

[the ballcock] 13/6/2012 16:03

looks much stronger today, hope it comes good for all invested

[whothecares] 13/6/2012 14:10

This businessman is at total war on all fronts with the current president and his team.
Much the same as Zhevago and Ferrexpo.

[xorex] 13/6/2012 13:49

We must not forget the fact that A certain Ukranian businessman holds a very high stake in JKX.

[whothecares] 13/6/2012 11:55

The law appears to be stuck between president and parliament - as it has caused massive panic in the industry. The royalties weren't really meant to be in the law they were inserted at last second against all procedures.

Very bizarre situation even for Ukraine. Its a stealth law that in its current form may completely destroy JKX business in Ukraine. 30-40% royalty rate + VAT + import duties + CPT would at very least make it pointless to do new drilling.

It has already decimated the share price of KOV, JKX and Ukrnafta.

If I was president, I would build up a large stake in JKX, Ukrnafta, KOV etc and then veto the law. Then sell my stakes, parliament passes it again, veto, repeat. Easy money.

[scorbin] 13/6/2012 10:52

Google translation: All the talk of President, Prime Minister and Cabinet of Ministers to reduce Ukraine's dependence on imported gas supplies may well remain talk. And it's not the futility of negotiations with "Gazprom". Another problem is that not all members of the parliamentary majority, members of the ruling Party of Regions, oriented in the nuances of the oil and gas market, but because some MPs sometimes make such legislative initiatives on which to roll upside down entire sectors of the economy. May 24 carried out a coup deputies Regionals Vitaly and Oleg Tsarev Khomutynnyk: its bill number 9661-g, they are two to three times increased the tax burden on the miners of oil and gas in Ukraine. Industry shocked: if the president will sign adopted on second reading the law Khomutynnyk-Tsarev, an increase in domestic production of hydrocarbons will be forgotten.

February 17 this year, deputies and V.Homutynnik O.Tsarev made to the Verkhovna Rada a draft law "On Amendments to the Tax Code of Ukraine regarding the improvement of certain tax rules» (№ 9661-d). It dealt with the changes to taxation of certain activities. The document was adopted on first reading in March. Even then, had been mention of some of the changes in taxation of subsoil. But no one expected that, in early May, the bill suddenly filled up with a number of articles which may significantly affect the level of mineral production (although in the version adopted on first reading, this was not a word).

The text of the law Khomutynnyk-Tsarev, proposed by the authors for the second reading, remained a great mystery. Despite the fact that it was discussed at a meeting of the parliamentary committee on finance, banking, tax and customs policy (which just leads Khomutynnyk), the vast majority of the deputies were apparently unaware of what actually talking about.

Information on the bill number 9661-g dramatically alter the principles of taxation in the extraction of minerals, could not get to those whose interests are directly affected by it, ie, to mining companies, including foreign ones. And they sounded the alarm. What they worried? The more foreigners that the state leaders have already promised to the stability of taxation rules provided for in production sharing agreements (PSAs).

The American Chamber of Commerce (AmCham) in Ukraine was among the first addressed to the president, prime minister and parliament speaker. And on the eve of the bill on second reading. In a letter dated May 22, President Jorge Zukoski ATP says that the board is concerned about the lack of a draft law prepared by the second reading, the site of the Verkhovna Rada. Nevertheless, Mr. Zukoski acquainted with the ideas and Khomutynnyk Tsarev, and claims that their bill has been agreed and discussed with any market participants, some of whom are American mining companies, or with other committees of Parliament, nor even with the line ministries.

With access to the interim version of the bill, the head ITP notes that according to him since July 1, 2013 payment of royalties for the gas producers grow 7,5-14 times. Not two or three or even five, and 14 (!).

Currently, fees for use of mineral resources is 42.05 USD. per 1,000 cubic meters of gas, and Khomutynnyk offers up "when mining at depths up to 5,000 meters - more than 14 times, to UAH 596.53., when mining at depths exceeding 5,000 m - 7.5 times to UAH 315.81 ., with production on the shelf - more than 12 times, to UAH 540.38. ».

Mr. Zukoski worries that these innovations "jeopardize future projects under the PSA." The document contains an exception for shale gas, but two recent winners of the competitions - Shell and Chevron - primarily to the same conditions to produce the PSA and other hydrocarbons in the licensed premises. Now, it turns out, the conditions of competition have changed? And companies will have to pay "for the new higher rates?"

According to the American companies expressed the head of the ATP, "it may concern not only of the PSA, contests the conclusion that planned to conduct (Scythian, Foros, Slobozhansky areas), but those contests which have been held, and winners are determined (and Olessky Yuzovsky areas). "

Summary of general disappointing, "Adoption of the draft (№ 9661) may cast doubt on the reality of government initiatives aimed at increasing gas production in Ukraine, and the veracity of government statements about the stability of investment conditions in the oil and gas industry ..."

American companies, however, still hoped that the second reading of this bill will not pass in the described form. Now it remains to hope that President Yanukovych veto the bill. How else to be with his recent statements Chicago? After all, Viktor Yanukovych at a meeting with the management of Chevron proudly announced that Ukraine has the most favorable tax climate for such investment, and expects to receive a gas within the PSA.

And then on to you - with the idea Khomutynnyk dramatically raise taxes on gas production in Ukraine ...

Doubts about U.S. companies were presented the head of the ATP on 22 May. But it later emerged that Khomutynnyk went much further. In particular, he wrote rule that a January 1, 2013 of the Tax Code, section X will disappear, "Rental price for oil, natural gas and gas condensate extracted in Ukraine." What does this mean?

The first is that this type of tax, as rents in the oil industry will disappear and the "merge" with the royalties. But for some reason this only applies to oil and gas.

Second, section X is notable for the fact that for inaccessible areas it is set zero rents to encourage miners to develop these areas. Such areas are characterized by deep and deposits, and geological features of the subsoil on which the extracted hydrocarbons, and many other parameters. But Khomutynnyk left only one parameter (depth), while ignoring all others. Exclusion of this section "equalize" all areas of their properties, which is certainly wrong.

Thus, the union of two totally different in essence taxes - rent and royalties, as well as the abolition of rent in conjunction with an increase in royalties and the elimination of the zero rate for difficult areas (which in Ukraine is almost 80%) will lead to an increase in total tax burden on miners in two or three times.

But that's not all. When Mr. Zukoski wrote his letter, he did not know that Khomutynnyk and Tsarev offer to tax at a rate of 2% of the value of minerals mined in the PSA. The same concept of Shell and Chevron about it had no part in competitions and Yuzovsky Olessky areas. And if now they will be offered new terms, the signing of the PSA and the beginning of these companies in Ukraine will be called into question.

Project Khomutynnyk hurt not only by foreign investors, it affects the interests of absolutely all oil and gas companies operating in Ukraine. Perhaps the first victims of state-owned company will fall "Ukrgazdobycha" ("daughter" of "Naftogaz of Ukraine") and parastatal "Ukrnafta". Do not forget about the private companies, which account for almost 15% of the total gas production in Ukraine.

As you know, "Naftogaz" regularly credited for maintaining financial balance. Moreover, his balance is the subject of negotiations with the IMF on the next tranche of the loan. Given the growth of double taxation, which offers Khomutynnyk, a public company "Ukrgazdobycha 'annual paid almost 2 billion USD. Taxes are automatically would have to pay almost 4 billion UAH. All would be nothing - the budget income, if it were a means for exploration and production increase.

In addition, especially for oil and gas companies Khomutynnyk invented another revolutionary innovation - the penalty for failure to transfer the advance payments in the form of royalties to the budget in the amount of 50% of tax liabilities. This is nothing like a time bomb, planted "deputies partisans" of a train of investors (primarily local, state!), Because it is obvious that these penalties will be flush with the working capital of the speed of light.

Here in this form, the bill Khomutynnyk May 24 was passed by Parliament (which took ten minutes). Two days later, on the parliamentary website became available the conclusion of the Main yurupravleniya. It turned out to be extremely brief and states that the amendments made to the second reading, no one had been agreed ...

Immediately sounded the alarm "Naftogaz" and Minenergougolprom who, it turns out, too, were not aware of what is happening. This is evidenced by a letter Minister Yuriy Boyko in the name of Viktor Yanukovich on May 29. It Boyko asked the president not to sign the Law № 9661-d, as it will cause irreparable damage. A comment Minenergougolproma Khomutynnyk the law, which the Minister attached to the letter, took more than 20 pages. 100% of the comments boil down to, to leave the norm of the Tax Code in its original form, and innovations Khomutynnyk excluded from the law. Especially since they are contrary to the norm of the Tax Code provides for a "transition to a system of payments for the extraction of minerals using the principle of rental income."

In fact, Boyko made it clear that oil and gas market is very sensitive, and that such guerrilla methods can not act: "The adopted law will lead to a substantial decrease in production of hydrocarbons in the territory of Ukraine, to reduce the budgets of all levels and increase the country's dependence on imported energy supplies."

[xorex] 13/6/2012 10:00

A zoo in Newcastle acquired a very rare species of gorilla. Within a few



weeks the gorilla, a female, became very difficult to handle.



Upon examination, the veterinarian determined the problem. The gorilla was



in season and to make matters worse, there was no male gorilla available.





Thinking about their problem, the Zoo Keeper thought of Geordie

Elliott, a local lad & part-time worker responsible for cleaning the animal cages.



Geordie, like many Newcastle men, felt he had ample ability to satisfy

any female. The Zoo Keeper thought they might have a solution so Geordie was



approached with a proposition.



Would he be willing to mate with the gorilla for £500?



Geordie showed some interest, but said he would have to think the matter



over carefully.



The following day, he announced that he would accept

Their offer, but only under four conditions:





1. "Forst", Geordie said, "Nee kissin' on the lips." The Keeper quickly



agreed to this condition.





2. "Secund", he said, "Ye cannit nivva tell neebody aboot this." The

Keeper again readily agreed to this condition.





3. "Thord", Geordie said, "Ah want aall the bairns raised as Nuwcastle



fans." Once again it was agreed.





4. "And last of all", Geordie stated, "You Gotta givvus another week to

Come up with the £500"

[the ballcock] 13/6/2012 09:29

me broka stewart, he reckons political events in ukraine is the reason to stay away

[the ballcock] 12/6/2012 14:31

same as me brucie, neva thought it wud go so low, had a buy on it a few months back but luckily me broka says way too risky

[brucie5] 12/6/2012 13:18

Pretty dire, isn't it. Once 90 is gone it's a case of waiting till there's total capitulation, imo. Glad this is one I never got into, but I continue to watch.

[the ballcock] 12/6/2012 13:00

me broka stewart has just downgraded this to 50p, and speculative buy at that