TIDMJKX
RNS Number : 9799O
JKX Oil & Gas PLC
13 October 2021
13 October 2021
JKX Oil & Gas plc
("JKX", the "Company" or the "Group")
Quarterly Operations Update
Highlights
-- Ukraine average production of 4,499 boepd for Q3 2021,
10% higher than during Q2 2021.
-- Net $51.5m of cash and cash equivalents, and oil and
gas inventory of approximately $4.1m in value, held at
30 September 2021.
-- Gas and oil prices in Ukraine have significantly improved
by almost 150% and 60% respectively in comparison with
the first 9 months of 2020.
-- R110, a new well in the Rudenkivske license, was spudded
on the 14(th) September and on the 6(th) October was
drilling ahead at 2,642m MD RT.
-- The Board made a decision to dispose of the Group's 100%
interest in its Russian operating subsidiary
Production
Q3 Q2 Q on 9 months 9 months Y on
Q Y
% %
Change Change
2021 2021 2021 2020
Total production, boepd 8,575 9,332 (8)% 9,026 10,378 (13)%
Ukraine, boepd 4,499 4,101 10% 4,150 5,016 (17)%
- Average gas production,
Mcmd 586 521 12% 542 673 (19)%
- Average oil and condensate
production, boepd 1,051 1,032 2% 962 1,054 (9)%
Russia, boepd 4,076 5,231 (22)% 4,876 5,362 (9)%
- Average gas production,
Mcmd 685 879 (22)% 819 901 (9)%
- Average condensate
production, boepd 46 58 (21)% 54 62 (13)%
Hungary, boepd 0 0 0% 0 0 0%
Prices realised
Ukraine
- Average gas price,
$/Mcm 431 250 72% 305 123 148%
- Average oil and condensate
price ($/bbl) 72 65 11% 67 42 60%
Russia
- Average gas price,
$/Mcm 65 52 25% 56 53 6%
In Ukraine:
-- R110, a new well in the Rudenkivske license, was spudded
on the 14(th) September and on the 6(th) October was
drilling ahead at 2,642m MD RT with an expected TD of
3,319m MD RT.
-- IG149, a new well in the Ignativske field, had 12m of
perforations added in August which has increased the
gas rate from 55 Mcmd to an average of 72 Mcmd since
perforating. The wellhead pressure has increased from
722 psi to an average of 1,504 psi since the additional
perforations and a choke reduction.
-- IG103 sidetrack gas rate has increased from 46 Mcmd to
71 Mcmd following a recent choke increase and 3m of perforations
added.
In Russia:
-- YGE commenced a new gas sales contract in Q3 2021 with
gas sales prices 25% higher than under the previous gas
sales contract.
-- Essential maintenance was carried out in a 3 week plant
shutdown for the transition to the new gas sales contract.
-- The negotiations for contracting the workover of Well
20 are in process and they should be completed in the
coming weeks with the rig to be immediately mobilised
to the wellsite. The drilling contractor is the same
as was used to successfully workover Well 18.
In Hungary:
-- JKX agreed the terms for the sale of the entire share
capital of its wholly owned Dutch subsidiary JKX (Nederland)
B.V. to Mr Gabor Lujas Dudinsky and Mr Laszlo Arpad Barbuty
for a total cash consideration of $3m.
-- JKX (Nederland) B.V. holds, via its wholly owned Hungarian
subsidiary, Folyopart Energia KFT, a number of Hungarian
mining plots and a production facility that are not currently
producing hydrocarbons. Folyopart Energia KFT had gross
assets of tHUF 1,074,232 ($3.6m) as at 31 December 2020
and reported loss of tHUF 2,718 ($9.1K) according to
Hungarian GAAP.
Liquidity
In $m 30 Sep 30 June 31 Dec 30 Jun 31 Dec
2021 2021 2020 2020 2019
Total cash and cash equivalents 51.5 36.5 24.3 14.5 20.6
Bond liability (principal
and interest accrued) - - - - (5.7)
Net cash 51.5 36.5 24.3 14.5 14.9
Approximate sales value
of gas and oil inventory 4.1 4.4 2.2 1.7 4.1
Our Ukrainian subsidiary held 3.2 million cubic metres of gas
and 33.6 thousand barrels of oil inventory available for immediate
sale at 30 September 2021. Approximate sales value of gas and oil
inventory is calculated using average sales prices for September
2021.
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 2021 Half-yearly
Report. In July 2021 the Supreme Court satisfied demands of Poltava
Petroleum Company (PPC) in respect of the case No. 816/844/16 and
left the decisions of first and appellate instance courts in force.
Also PPC has received the final judgement of the Supreme Court of
Ukraine in Case No.816/4476/14 relating to the Poltava Tax
Authorities appeal against lower court judgments in this case. This
case relates to a claim for 2010 royalty payments and a judgment
has been made in favour of the Poltava Tax Authorities. PPC is
under no immediate obligation to pay the judgement as the Ukrainian
tax authorities have to obtain approval of the Supreme Court of
Ukraine before the payment can be collected from PPC. This hearing
is expected to be heard in late 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 2020 Annual Report, was successfully legally
recognised in Ukraine and JKX 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
The Group has all necessary arrangements in place to ensure the
safe conduct of its business. We have implemented a number of
policies recommended by Governments in the countries of our assets
for the protection of our employees, as well as to help
minimization of the spread of coronavirus (Covid-19). Our first
priority is the safety and wellbeing of our staff. Our next
priority is supporting the local communities, especially where
there is a lack of medical assistance, and we have directed our
corporate and social responsibility projects helping to fight
further spread of 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
tHUF - Thousand Hungarian Forint
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 +44 (0) 20 7323 4464
Dmytro Piddubnyy, CFO
EM Communications +44 (0) 20 7002 7860, +44 (0) 7887 946719
Jeroen van de Crommenacker
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October 13, 2021 07:52 ET (11:52 GMT)
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