Jkx Oil & Gas Share Discussion Threads

[its the oxman] 01/4/2021 15:30

Becoming tempting to buy more at current price now it 23-24p.

[its the oxman] 01/4/2021 15:28

Or is it simply selling due to Ukraine Russia conflict. Not sure if any of their operations can be affected or just poor sentiment maybe.

[its the oxman] 01/4/2021 12:01

Totally misjudged this one it seems. Results don't seem too bad. Is disappointment that outlook isn't better, they talk about hit from oil prices last year but little on how they might benefit going forward. Anyway tempted to sell up and move on as not a big position for me. Am I missing something or do others see things differently?

[thordon] 31/3/2021 22:07

I Know - Seems not loved

[jaka] 31/3/2021 21:25

I know you all probably know this but I'll repeat anyway, cash rich with growing cash reserves, debt free, net assets etc. so high its trading at a discount of 65%, p/e of 3, expected to receive a court award of $12M and an excellent handling of the Covid 19 virus achieving significant cost cutting measures so what's the problem? Credibility? I just don't know.

[thordon] 30/3/2021 20:05

anytime soon , Thursday

[glavey] 10/3/2021 06:28

Would be nice, but...

[vullrich] 09/3/2021 18:51

jaka, agree with your view re valuation, should see a proper rerate this year

[its the oxman] 08/3/2021 12:24

Going nicely. Should of bought a lot more of these.

[thordon] 07/3/2021 12:30

Eclairs Group Ltd 47,287,027 27.54 - These are frozen assets at present.
The other 20% was transferred a few months back and its unknown who owns the assets.

on Rental fees - JKX has already paid the fees - the court case is because was a unfair tax and should of been revaluated.

[its the oxman] 07/3/2021 11:54

Sorry I see there is just over 41m in provisions over disputed fee income and over 10m owed to the co but not being recognised until received. Not sure how to view this, clearly muddies the water and I guess shareholders expect a resolution would lift the stock.

[its the oxman] 07/3/2021 11:42

Are US sanctions and oligarchs directly related to jkx in some way? Can anyone explain as not obvious to me. Thx.

[its the oxman] 06/3/2021 22:57

Only reason I haven't invested more is the fact 4 out of 8 rental fee cases have yet to be resolved. Can anyone shed any light on the implications and exposure of these cases. Should we be worried at all? Sill see this as way undervalued from everything I can gather, and some overdue catch up with other Oil cos could easily justify move back to 35-40p range for starters.

[thordon] 06/3/2021 19:12

The Assets have been frozen so makes no difference to JKX.

[glavey] 06/3/2021 13:45

"US sanctions Ukrainian oligarch Kolomoisky over corruption
Move to help president Volodymyr Zelensky take on powerful moguls in war-torn state

[PIC]
[Igor Kolomoisky owns the TV channel where Volodymyr Zelensky made his name playing a fictional president and was a key backer of his rise to power in 2019]

Byline: Mark Raczkiewycz in Kyiv and Max Seddon in Moscow

The US has imposed sanctions on Ukrainian oligarch Igor Kolomoisky over corruption allegations in an attempt to help Ukraine’s president Volodymyr Zelensky root out the influence of powerful business clans in the war-stricken country."

contin....




Scroll down for comments section.

[thordon] 06/3/2021 12:35

one case was won , and can not remember the exact rebate to JKX but was over $10 million

That's only from memory , will check later

[jonshevlin] 06/3/2021 12:00

Hi Everyone, above report is from Stockopedia on Feb 9th. Does anyone know much detail around the historical tax cases? I'm not a holder here but I've read a few reports over the years and it does look particularly interesting at the moment. Thanks.

[jonshevlin] 06/3/2021 11:57

JKX Oil and Gas (LON:JKX)
Market cap: £51.5m

Net cash: £13.2m

2P reserves: 84.4 mmboe

Annual production: 10,748boepd

StockRank: 84

Classification: Speculative Small Cap Style Neutral

Bull points: Cash generative; modest valuation; growing cash balance; Neglected Firms Screen; big domestic market with good growth potential

Bear points: Tiny freefloat; volatile share price; poor liquidity

Jkx Oil And Gas (LON:JKX) is a cash generative oil & gas producer with operations in Ukraine and Russia. According to management, the group is ‘well placed to take advantage of other opportunities’ in these jurisdictions.

In terms of total 2P reserves and annual output, there is no question that JKX offers considerably more bang for the buck than Serica. Why the valuation discrepancy? Serica is already quite cheap, after all. The answer may be to do with jurisdictions: while Serica operates assets in the UKCS, JKX operates in the Ukraine and has the majority of its reserves in Russia.

Breaking that down into a little more detail, JKX has 13 licenses in the Ukraine totalling 23.4mmboe and another large license in Russia (Koshekhablskoye), which contains some 61mmboe of 2P reserves.

It’s probably one of the cheapest stocks you’re likely to find at the moment in terms of earnings multiples as well and, if you believe that in the short run the market is a voting machine and in the long run it is a weighing machine, then you might expect JKX’s future earnings to pull its share price up over time.

So it looks like there is a lot of value on offer here and yet there are no broker forecasts, which suggests this cheap stock just might not be appreciated by the wider market. Appropriately, it qualifies for the value-related Neglected Firms Guru Screen.

And the group looks strong from a financial health perspective too, with a growing net cash pile (currently at £13.2m) and a comfortable Z-Score.

But there are risks: the free float is small, the market is often thin, and the share price is volatile. This combination of illiquidity and volatility should be considered before entering. Revenue has also been lumpy and choppy trading means the group has some negative compound annual growth rates.

The group also faces ‘historical tax cases,’ which should be looked into further, and it also flags technical difficulties at some of its fields.

JKX was loss-making up until 2018, although cash flow has been more resilient. 2019 was a standout year for the group, as it became debt free, generated more than $100m in revenue for the first time since 2014, and marked its second consecutive year of profit.

Net profit came in at $22.2m, backed up by some $41.4m in operating cash flow. All this despite a ‘significantly lower gas price’ in the Ukraine. There could be material upside based on JKX’s current valuation given the present cash generation and scale of reserves, but clearly JKX is a potentially risky and volatile investment.

Jurisdictions

Earlier I noted that different jurisdictions might explain some of the valuation difference between SQZ and JKX. But are JKX’s reserves being discounted too harshly?

Ukraine is JKX’s most important market, providing most of its cash flow. Gas consumption still exceeds Ukrainian domestic production, which leaves an incentive to ramp up production.

Ukraine holds 1.1 trillion cubic metres (37 trillion cubic feet) of proven gas reserves - the second largest proven reserves in Europe. JKX’s expertise here leaves it well placed to take advantage of the emerging investment opportunities and it is considering the acquisition of new licences.

The investment climate in Ukraine’s gas production sector is favourable and the government has announced an “Open Door Policy for Investors”. Access to geologic data has been improved, thanks to electronic auctioning of oil and gas field licences and PSA tenders.

Meanwhile, the unbundling of the national oil & gas company Naftogaz is an important step towards further transparency and liberalization of the gas market.

In Russia, JKX has long life reserves and an established processing facility. Whilst gas prices are regulated there, the company says they are stable and increase year on year.

Conclusion
I’ll circle back to Wentworth, Enwell, and DGOC later in the week but I’m curious to know: is anyone else looking at this part of the market, or is it just too risky?

SQZ and JKX look to be quite different propositions, and both are attractive in their own rights. While Serica operates in a more familiar jurisdiction and may prove to be the safer bet, JKX might offer more upside potential for those that can handle the risks and share price volatility given its large domestic market and low valuation.

That said, I wonder if Serica offers more value on a risk-adjusted basis with its scope for M&A and defined operational catalysts. This strategy could drive a material increase in free cash flow per share in the coming years - if (as ever) commodity prices are supportive

[thordon] 05/3/2021 20:38

At some point a dividend will need to be given , good points jaka

[jaka] 05/3/2021 13:54

I reckon a fair value ranges between 70p and £2.00. There's no debt to equity so interest payments aren't an issue. A lot of the SP's volatility is down to the small free float and the recent brokers stock loan fallout debacle. Sentiment is another factor when it comes to eastern companies owned by oligarchs. The attempted sale of their Hungarian assets to a holding company employing one person in Cypress comes to mind. In the last 30 days companies in the O&G sector have risen by 15% whilst JKX have fallen 12%. Oversold to say the least.

[its the oxman] 03/3/2021 15:48

Any known price target for jkx or expectation it will pay a dividend ?

[its the oxman] 03/3/2021 15:36

Also bought a few as looks oversold and ready for a bounce. No expert , but most oil / energy related plays seem to be trending up. Any explanations on price performance here ?

[fullbreakfast] 03/3/2021 15:09

Caved in and bought some extra shares in SIPP and ISA. There doesn't seem to be much stock about.

Famous last words, but I can't see it going an awful lot lower from here.