TIDMJKX

RNS Number : 5824F

JKX Oil & Gas PLC

19 July 2021

   19   July 2021 

JKX Oil & Gas plc

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

Quarterly Operations Update

Highlights

 
      --   Ukraine average production of 4,101 boepd for Q2 2021, 
            7% higher than during Q1 2021. 
      --   Net $36.5m of cash and cash equivalents, and oil and 
            gas inventory of approximately $4.4m in value, held at 
            30 June 2021. 
      --   The gas and oil prices in Ukraine have significantly 
            improved by 77% and 58% respectively in comparison with 
            H1 2020. 
      --   IG149, a new well in the Ignativske field, was drilled 
            and brought into production in Q2 2021. The well has 
            produced an average of 962 boepd since starting production 
            on the 21(st) May 2021. 
 

Production

 
                                  Q2      Q1     Q on Q     H1       H1      Y on Y 
                                                    %                        % Change 
                                                  Change 
                                 2021    2021              2021     2020 
 Total production, boepd         9,332   9,177     2%      9,255   10,445     (11)% 
 Ukraine, boepd                  4,101   3,843     7%      3,973   5,162      (23)% 
 - Average gas production, 
  Mcmd                            521     517      1%       519     690       (25)% 
 - Average oil and condensate 
  production, boepd              1,032    799      29%      916    1,100      (17)% 
 Russia, boepd                   5,231   5,334    (2)%     5,282   5,283       0% 
 - Average gas production, 
  Mcmd                            879     896     (2)%      888     887        0% 
 - Average condensate 
  production, boepd               58      58       0%       58       59       (2)% 
 Hungary, boepd                    0       0       0%        0       0         0% 
 Prices realised 
 Ukraine 
 - Average gas price, 
  $/Mcm                           250     214      17%      232     131       77 % 
 - Average oil and condensate 
  price ($/bbl)                   65      60       8 %      63       40        58% 
 Russia 
 - Average gas price, 
  $/Mcm                           52      52        -       52       54      ( 4 )% 
 

In Ukraine:

 
      --   IG149, a new well in the Ignativske field was drilled 
            and completed in the Devonian reservoir. Following testing 
            the choke was reduced to 25/64ths". Average production 
            from this well in June was 915 boepd with a current wellhead 
            pressure of 930 psig. 
      --   IG21, a leased well in the Ignativske field, was worked 
            over to test the Visean carbonate reservoir and came 
            online at an initial rate of 256 boepd and produced an 
            average of 50 boepd since coming online in the second 
            half of April. 
      --   The drilling rig was demobilised following the drilling 
            of IG149 and is expected to return to PPC ("Poltava Petroleum 
            Company") in September to spud the next well. Meanwhile 
            the PPC owned workover rig continues operating in the 
            Novo-Nik complex. 
 

In Russia:

 
      --   Acid treatments were carried out on 3 wells in Q2 2021 
            with no significant incremental production increase achieved. 
            The coiled tubing unit has now been demobilised from 
            the field as there are now not many future acid treatments 
            expected to be required due to stable production from 
            all wells. 
      --   Russian average production was 5,282 boepd in H1 2021 
            and is unchanged from H1 2020 with no new wells added 
            in the last year. 
 

Liquidity

 
 In $m                              30 June   31 Dec   30 Jun   31 Dec 
                                       2021     2020     2020     2019 
 
 Total cash and cash equivalents       36.5     24.3     14.5     20.6 
 Bond liability (principal 
  and interest accrued)                   -        -        -    (5.7) 
 Net cash                              36.5     24.3     14.5     14.9 
 
 Approximate sales value 
  of gas and oil inventory              4.4      2.2      1.7      4.1 
 

Our Ukrainian subsidiary held 3.0 million cubic metres of gas and 50.8 thousand barrels of oil inventory available for immediate sale at 30 June 2021. Approximate sales value of gas and oil inventory is calculated using average sales prices for June 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 2020 Annual 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 minimize 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

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 

Jeroen van de Crommenacker

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July 19, 2021 02:00 ET (06:00 GMT)

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