JKX Oil & Gas PLC Quarterly Operations Update (4173B)

TIDMJKX

RNS Number : 4173B

JKX Oil & Gas PLC

08 October 2020

   8   October 2020 

JKX Oil & Gas plc

("JKX", the "Company" or the "Group")

Quarterly Operations Update

Highlights

 
      --   Group average production of 10,245 boepd for Q3 2020, 
            4% higher than during Q2 2020. 
      --   Drilling to resume in Ukraine with IG146 in October. 
      --   Net $18.8m of cash and cash equivalents (up 30% on Q2 
            2020), and oil and gas inventory of approximately $2.6m 
            in value (up 53% on Q2 2020), held at 30 September 2020. 
 

Production

 
                                       Q3      Q2       Q on      9 months      9      Y on Y 
                                                          Q                   months      % 
                                                       % Change                         Change 
                                      2020    2020                  2020      2019 
 Total production, boepd             10,245   9,894      4%        10,378    10,668     (3)% 
 Ukraine, boepd                      4,727    4,963     (5)%       5,016      5,535     (9)% 
 - Average gas production, 
  Mcmd                                639      666      (4)%        673        765      (12)% 
 - Average oil and condensate 
  production, boepd                   965     1,045     (8)%       1,054      1,033      2% 
 Russia, boepd                       5,519    4,931      12%       5,362      5,125      5% 
 - Average gas production, 
  Mcmd                                926      829       12%        901        861       5% 
 - Average condensate production, 
  boepd                                67      54        24%         62        58        7% 
 Hungary, boepd                        0        0        0%          0          8      (100)% 
 Prices realised 
 Ukraine 
 - Average gas price, $/Mcm           105      107      (2)%        123        226      (46)% 
 - Average oil and condensate 
  price ($/bbl)                        49      31       (58)%        42        61       (31)% 
 Russia 
 - Average gas price, $/Mcm            52      52        0%         5 3        57       (7)% 
 

In Ukraine:

 
      --   Drilling to resume in October with IG146, a new well targeting 
            the Devonian in the Ignativske field. 
      --   One remedial workover and one abandonment were completed 
            with the workover rig in Q3 2020. A second remedial workover 
            on a Rudenkivske well carried out in Q3 2020 has been 
            completed at the start of October. 
      --   The decline in Ukraine gas production quarter-on-quarter 
            has been reduced with successful additional perforations 
            made in IG142 at the start of Q3 2020. 
 

In Russia:

 
      --   Wells 5, 18 and 27 were acidised in August and September 
            using a new lower cost contractor. All acid jobs were 
            completed successfully. 
 

Liquidity

 
 In $m                              30 Sep   30 Jun   31 Dec   30 Jun   31 Dec 
                                      2020     2020     2019     2019     2018 
 
 Total cash and cash equivalents      18.8     14.5     20.6     10.7     19.2 
 Bond liability (principal 
  and interest accrued)                  -        -    (5.7)    (5.7)   (11.3) 
 Net cash                             18.8     14.5     14.9      4.9      7.9 
 
 Approximate sales value 
  of gas and oil inventory             2.6      1.7      4.1      8.0      9.9 
 

Our Ukrainian subsidiary held 2.8 million cubic metres of gas and 44.4 thousand barrels of oil inventory available for immediate sale at 30 September 2020. Approximate sales value of gas and oil inventory is calculated using average sales prices for September 2020.

Rental fee claims

Claims issued by the Ukrainian tax authorities for additional rental fees for 2010 and 2015 are still being contested through the Ukrainian court process as explained in the 2019 Annual Report. As previously reported, four of the eight 2015 cases were closed in favour of JKX's subsidiary in Ukraine, Poltava Petroleum Company (PPC). Final resolution of the remaining 2015 rental fee claims cases is expected during 2021.

International arbitration award

The international arbitration award, directing the State of Ukraine to pay $11.8m plus interest and $0.3m costs to JKX as described in the 2019 Annual Report, has now been successfully legally recognised in Ukraine and JKX has filed for collection. No possible future benefit that may result from this award will be reflected in the accounts until there is further clarity on the process for, and likely success of, enforcing collection.

Covid-19

We continue to monitor the impact of Covid-19 developments on our industry, operations, staff and contractors and are confident about the safety measures we put in place.

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] 

Dmytro Piddubnyy , CFO

   EM Communications                         [phone] 

Stuart Leasor, Jeroen van de Crommenacker

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October 08, 2020 02:00 ET (06:00 GMT)