Jkx Oil & Gas Share Discussion Threads

[salpara111] 07/12/2012 12:09

I took my long spread bet at 79 but for March expiry as I am not anticipating any "new news" that would lead to any sort of rise until then, I do believe that as long as they don't Fu*k it up again with yet more bad news at the next interims there will be a decent rally.

[greenroom78] 06/12/2012 23:03

Can't you set it to roll over?

[rikky72] 06/12/2012 22:54

Shift down today wasn't great - need this bleeder to recover to my b/e of 80 before my spread long expires in just over a week's time.. ho hum

Can see this doing quite nicely after 31st if statement bears out, or improves upon, what mgmt said in October though.

[xxx] 01/12/2012 06:25

@simon thanks for that.
This is another recent article on Ukraine's gas position :


Any views out there as to what and when the next piece of news might be that will catalyse the share price?

[simon gordon] 30/11/2012 22:10

Stratfor Intelligence:

Ukraine's Quest for Energy Diversification

Ukrainian President Viktor Yanukovich said Nov. 28 that his country hopes to begin receiving liquefied natural gas shipments in early 2015. During an official visit to Qatar, Yanukovich said a consortium is being created to construct an LNG terminal in Ukraine and that he hopes Qatar will become one of Ukraine's main suppliers of liquefied natural gas. Yanukovich's statement is in line with an announcement made by Kiev on Nov. 26 about the formation of a consortium with Spanish energy firm Gas Natural Fenosa to build the $1.1 billion project. However, the company denied its involvement, issuing a statement that it is not "studying anything along these lines."

Building an LNG plant is just one part of Ukraine's plan to diversify its energy supplies away from Russia. But as this development indicates, Kiev faces many challenges in truly weaning itself from Russian energy. The extent to which Ukraine can cut its imports from Russia will be key in gauging Kiev's ability to prevent Moscow from expanding its economic and political influence in the coming months and years.

Analysis

The LNG announcement and subsequent denial is the latest development in an energy dispute between Ukraine and Russia that began more than a year ago. The crux of the disagreement between the two countries is the price that Russia charges Ukraine for natural gas (currently $432 per thousand cubic meters), which Kiev wants lowered. Russia has said it would only reduce the price if Ukraine merged its state energy firm, Naftogaz, with Russia's Gazprom or joined the Moscow-dominated Customs Union. However, this would undermine Ukraine's sovereignty, particularly because Russia's Nord Stream and the soon-to-be opened South Stream pipelines will cut into Ukraine's transit volumes.

Yanukovich's government has resisted giving into Moscow's demands. Instead, Kiev has pursued a two-pronged strategy to diversify away from Russia -- cutting overall consumption of natural gas and ramping up its procurement of alternative sources of energy.

Cutting Consumption

So far, the first part of Ukraine's strategy has proved relatively successful. The country has cut its imports from Russia from 40 billion cubic meters in 2010 and 2011 to a projected 26 billion cubic meters in 2012. Kiev has said it plans to import less than 20 billion cubic meters in 2013, and Ukrainian Energy Minister Yuri Boyko announced that the country will soon submit a formal request for 18 billion cubic meters for the year. However, Ukraine's ability to maintain these lower levels of imports is questionable. The country was able to make the cuts in 2012 largely because its natural gas storage was full, the winter was relatively warm and adjustments were made to increase the efficiency of domestic energy production (Ukraine has one of the most energy-intensive production systems in the world). It is unclear whether these conditions will exist in upcoming years, particularly since Ukraine's stored natural gas comes from Russian imports.

Importing lower volumes in the next year or so based on lower consumption could also prove problematic from a legal standpoint. Ukraine's contract with Russia has a "take or pay" provision for 80 percent of the contracted volumes. The contracted volume for 2012 and 2013 is 52 billion cubic meters, meaning that Ukraine must pay for at least 41.6 billion cubic meters regardless of its consumption rates. This could cause Russia to take Ukraine to court over the issue, though Boyko has said that Ukraine is prepared to defend its position in case of legal action. Gazprom has been on the losing end of several legal cases during the past year, though European companies initiated these cases and it is unclear if Naftogaz would have such a favorable result.

Seeking Other Energy Sources

The real question concerns the second part of Ukraine's strategy: procuring non-Russian energy. One hundred percent of the natural gas Ukraine imports now, and 75 percent of the country's total consumption, comes from Russia (the rest of the natural gas consumed is produced domestically). Ukraine has been exploring a number of alternatives to Russian natural gas, striking deals with other energy producers and working with partners to increase its indigenous energy production.

Ukraine intends to build an LNG import terminal on its Black Sea coast in the southern region of Odessa. This is the project for which Kiev said a consortium was being created with Gas Natural. However, the denial by the Spanish firm indicates this project is not as far along as the Ukrainian government suggests. Moreover, moving LNG tankers into the Black Sea through the Bosporus would require approval from Turkey, since the route runs through Turkish territorial waters. Although the LNG terminal would allow Ukraine to cut imports from Russia significantly, it is one of the least feasible projects Ukraine is considering at this point.

Ukraine has also been in talks to secure natural gas supplies from Azerbaijan once the country's Shah Deniz II field comes online. However, this natural gas will not become available until 2017 at the earliest, and Azerbaijan's ambassador in Kiev has said Ukraine would receive only 2 billion cubic meters per year. This would have little effect on Ukraine's overall energy imports from Russia, and supplies from Shah Deniz have been of interest to other potential buyers -- including Turkey, various European countries and Russia -- who could edge Kiev out as a natural gas customer for Azerbaijan.

Kiev also has plans to construct coal gasification plants. In August, Ukraine signed a $3.6 billion agreement with China for the construction of three plants, and two more were added to the agreement in September. The project is currently in the design phase, with hopes of beginning construction in 2013. This project would take advantage of Ukraine's sizeable coal resources and be financially beneficial, given that China is providing a line of credit. Moreover, the production costs of coal-to-substitute or synthetic natural gas are about $113 per million cubic meters -- significantly lower than the price Russia charges Ukraine for natural gas imports. However, the five coal gasification plants would produce only an estimated 3 billion cubic meters, and construction likely would be completed in 2015 at the earliest.

Overall Assessment

Taken together, these projects eventually could wean Ukraine from Russian natural gas supplies to a significant degree. However, each is in a very different stage of development, and each has its own obstacles and variables. Some, like the LNG terminal, could cut Russian imports substantially if realized but likely would not be operational until the end of the decade. Others, such as developing Ukraine's shale gas potential or building a nuclear plant, would take even longer. The projects that have the shortest turnaround would still take a minimum of two to three years and would have only a limited effect on cutting imports.

Technical details aside, the common factor in each of these projects is the goal of giving Ukraine leverage over Russia in the countries' ongoing pricing negotiations. Ukraine's ability to hold out on Russia will depend on whether it can see these projects through in the medium term and maintain low consumption rates in the short term, which requires increased efficiency of Ukraine's indigenous energy production and comes with political costs. This two-pronged strategy presents Kiev with significant obstacles, but not following through would risk strengthening Moscow's influence.

[brucie5] 30/11/2012 19:32

Well, some here may have longer time frame than you. If you don't like waiting for a situation to bear fruit, why don't you move to something else..? My point is, I don't think this share is very highly related to the general market atm, more to languishing exlo sectors and its own specific issues, which I hope will be addressed..soon enough..

[the ballcock] 30/11/2012 17:03

BANG, down it goes.

No one wants it brucie, no one.

[pilky3] 30/11/2012 10:04

Can we push through 80 p barrier?

[flyingbull] 30/11/2012 00:05

Hi, The thread for the December Oil Stock Competition is now open. Deadline for entry is midnight on Sunday 2 December 2012. Good luck!!!

fb

[cr4zyness] 29/11/2012 22:46

Yeah agree they do, found this not bad article. Thanks

[simon gordon] 29/11/2012 18:40

Crazy,

I don't know, I've not seen any recent broker notes.

Previous posts point to 3x 2013, Sharescope is 4x.

--

Edit - just re-read the Sharescope figures and they look wildly incorrect.

[cr4zyness] 29/11/2012 18:30

Simon nice charts, the forward figures on Sharescope are they correct? Tia

[simon gordon] 29/11/2012 17:51

Green - it looks favourably priced to spring and trend higher. The Daily cloud is becoming more positive for the first time since it broke down in April. JKX just have to continue the progress in Russia and it could put on 50%+, with a stop below 71p, gives nearly 40+ points for 9 points loss. Looks a decent bet.

[greenroom78] 29/11/2012 17:20

Simon - looks like the sun may start to shine soon then?

[brucie5] 29/11/2012 17:11

Interesting. Nothing a bit of volume can't break through, but perhaps accounts for its current malingering under the 80p level. We're very close to break through, imo, though the figures have to add up, of course.

PS. Though I just checked with Ichimokutrader.com, which has it has a weak bull.

[simon gordon] 29/11/2012 16:31

Daily cloud has acted as resistance since it went under the cloud in April:




In the past few trading days price has gone into the cloud and the cloud is starting to twist at the end of December:

[the ballcock] 29/11/2012 11:30

this is 1 appalling share, anyone who buys will be on a loser

[brucie5] 27/11/2012 17:06

Compare

JKX mcap 137m
Year Ending Revenue (£m) Pre-tax (£m) EPS P/E PEG EPS Grth. Div Yield
31-Dec-12 146.85 40.65 23.78p 3.4 0.3 +11% n/a 0.0%
31-Dec-13 144.65 39.01 28.69p 2.8 0.1 +21% n/a 0

EXI mcap 243m
31-Dec-12 188.93 15.34 7.05p 21.2 n/a n/a n/a 0.0%
31-Dec-13 256.94 27.42 14.08p 10.6 0.1 +100% n/a 0.0%

RPO mcap 282m
31-Dec-12 61.78 (30.36) (9.70)p n/a n/a n/a n/a 0.0%
31-Dec-13 159.19 16.30 3.63p 23.7 n/a n/a n/a 0.0%

[greenroom78] 27/11/2012 10:53

It looks like there is a reloader at 80.5p on L2. It was there on top of the offer yesterday and got taken a few times only to reappear. Clear that seller and I'd expect to see 80p broken.

NAI.

[brucie5] 27/11/2012 10:51

Well, I got some at 80.4, so maybe not that bad. I really think we might be clearing the decks for take off here, looking at market cap vs. revenue, pe, and not least, the chart.. But of course, risks remain.

[greenroom78] 27/11/2012 10:44

Spread is tiny. 80.25 vs 80.5 on my screen.

[brucie5] 27/11/2012 10:41

Topped up - just a tad over 80. Bit of a spread this morning.