JKX Oil & Gas PLC Quarterly Operations Update (2002P)

TIDMJKX

RNS Number : 2002P

JKX Oil & Gas PLC

09 October 2019

9 October 2019

 
           JKX Oil & Gas plc 
 ("JKX", the "Company" or the "Group") 
      Quarterly Operations Update 
 

Highlights

 
 --   Q3 group average production of 11,719 boepd, 13% higher 
       than the previous quarter. 
 --   Ukraine average production of 5,535 boepd for first 
       9 months of 2019, more than 50% higher than during first 
       9 months of 2018. 
 --   Highest quarterly and year-to-date oil production in 
       Ukraine since 2013. 
 --   Capital investment in the fields continues as planned, 
       entirely financed by operating cash flow despite lower 
       gas price in Ukraine. 
 --   $9.5m of cash and cash equivalents, and oil and gas 
       inventory of approximately $11.5m in value, held at 
       30 September 2019. 
 

Production

 
                                       Q3       Q2        Q on       9 months   9 months      Y on 
                                                        Q % Change                          Y % Change 
                                      2019     2019                    2019       2018 
 Total production, boepd             11,719   10,354       13%        10,668     8,958         19% 
 Ukraine, boepd                      6,217    5,364        16%        5,535      3,667         51% 
 - Average gas production, 
  Mcmd                                842      742         14%         765        493          55% 
 - Average oil and condensate 
  production, boepd                  1,260     999         26%        1,033       776          33% 
 Russia, boepd                       5,502    4,990        10%        5,125      5,199        (1%) 
 - Average gas production, 
  Mcmd                                924      838         10%         861        872         (1%) 
 - Average condensate production, 
  boepd                                62       57         9%           58         58          0% 
 Hungary, boepd                        0        0          0%           8          92         (91)% 
 Prices realised 
 Ukraine 
 - Average gas price, $/Mcm           175      215        (19)%        226        287         (21)% 
 - Average oil and condensate 
  price ($/bbl)                        63       60         5%           61         72         (15)% 
 Russia 
 - Average gas price, $/Mcm            58       57         2%           57         58         (2)% 
 

In Ukraine:

 
 --   Well IG142 completed in Q3, is currently producing at 
       857 boepd with a wellhead pressure of 1,867 psi. 
 --   Two rigs currently in operation in Ukraine. One is drilling 
       WM4 in West Mashivska and a second larger rig has also 
       been procured and is currently drilling R101 sidetrack 
       - the first sidetrack drilled by PPC to target the Visean 
       sands in the North of Rudenkivske. 
 --   IG103 sidetrack production continues to exceed expectations 
       with current production at 1,116 boepd with a wellhead 
       pressure of 1,150 psi. To date the well has produced 
       374 Mboe. 
 --   Oil production increase of 26% in Q3 2019 compared to 
       Q2 2019 is the result of two recently drilled new wells: 
       NN81 and IG142. 
 --   2 day planned shutdown of the Novo-Nikolaevske production 
       facility reduced the Q3 Ukraine production. 
 

In Russia:

 
 --   Production is up quarter on quarter due to a well being 
       brought into production at the end of Q2 2019. 
 --   Well 5 production has been adversely affected by solids 
       blockages which resulted in the well being acidized 
       three times in the reporting period. The last acid job 
       was conducted at the end of August and a recent flaring 
       and choke reduction has led to the well cleaning up. 
       The current production rate is 370 boepd. 
 --   Workover of Well 18 is progressing with all 300m of 
       a fish left in the well by a previous operator milled. 
       The production casing will be repaired before drilling 
       the sidetrack. 
 

Liquidity

 
 In $m                              30 Sep   30 Jun   31 Dec   30 June 
                                      2019     2019     2018      2018 
 
 Total cash and cash equivalents       9.5     10.7     19.2       7.6 
 Bond liability (principal 
  and interest accrued)              (5.4)    (5.7)   (11.3)    (11.3) 
 Net cash/ (debt)                      4.1      4.9      7.9     (3.7) 
 
 Approximate sales value 
  of gas and oil inventory            11.5      8.0      9.9       3.1 
 
 
 Our Ukrainian subsidiary held 54 MMcm of gas and 25 thousand 
  barrels of oil inventory available for immediate sale at 30 
  September 2019. Approximate sales value of gas and oil inventory 
  is calculated using average sales prices for September 2019. 
 
 $0.4m of bond interest was paid in August 2019. The final bond 
  payment of $5.8m is due in February 2020. 
 
 
 Rental fee claims 
 
 Claims issued by the Ukrainian tax authorities for additional 
  rental fees for 2010 and 2015 are being contested through the 
  Ukrainian court process as explained in the 2018 Annual Report. 
  Final resolution of the 2010 rental fee claim case is expected 
  in the next few months. The 2015 rental fee claims cases were 
  contested in eight separate cases. As previously reported, in 
  early July one of these cases was closed in favour of JKX's 
  subsidiary in Ukraine, Poltava Petroleum Company (PPC). Successful 
  closure of a second case is expected shortly. Final resolution 
  of the remaining six 2015 rental fee claims cases, four of which 
  are currently suspended, is expected during 2019 and 2020. 
 
 
 International arbitration award 
 
 In February 2019 JKX filed an application for the recognition 
  and enforcement of an international arbitration award as described 
  in the 2018 Annual Report. On 5 July 2019 the written judgment 
  of the Kyiv Appellate Court was issued, satisfying the application 
  and ordering the State of Ukraine to pay $11.8m plus interest 
  and $0.3m costs. This judgment is currently subject to appeal 
  in the Supreme Court of Ukraine. No recognition will be made 
  in the financial statements of any possible future benefit that 
  may result from this award until there is further clarity on 
  the process for, and likely success of, enforcing collection. 
 
 
 boepd - Barrels of oil equivalent per day 
 bopd - Barrels of oil per day 
 Mboe - Thousand barrels of oil equivalent 
 Mcm - Thousand cubic metres 
 MMcm- Million cubic metres 
 Mcmd - Thousand cubic metres per day 
 psi - pounds per square inch 
 
 
 
 
 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] 

Ben Fraser, CFO

   EM Communications                            [phone] 

Stuart Leasor, Jeroen van de Crommenacker

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

END

UPDQVLFBKBFFFBB

(END) Dow Jones Newswires

October 09, 2019 02:00 ET (06:00 GMT)