Share Search
Visit the Share Search
JKX reports decent improvement in group annual production
9th Jan 2020 10:01
(Sharecast News) - JKX Oil & Gas updated the market on its operations for the latest quarter on Thursday, reporting a 20% improvement in group annual production to 10,748 barrels of oil equivalent per day.
The London-listed firm said annual production in Ukraine was up 52% to 5,584 barrels of oil equivalent per day, while annual production in Russia was flat at 5,158 barrels of oil equivalent per day.
More than $26m of capital expenditure was invested in the firm's operations in 2019, with $18m being spent in Ukraine and $8m in Russia, which was entirely financed by operational cash flow despite lower gas prices in Ukraine during the year.
In Ukraine, new wells were completed in December and January, and the board said field development was continuing as planned.
JKX said a well workover programme was completed in Russia, with no further workovers planned in 2020.
A total of $20.5m of cash and cash equivalents, and oil and gas inventory of about $4.1m in value, was held as at 31 December.
The group said it was on schedule to be debt free from February.
"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," the board said in its statement.
"Final resolution of the 2010 rental fee claim case is expected in the next few months.
"As previously reported, in October 2019 the second of the eight 2015 cases was closed in favour of JKX's subsidiary in Ukraine, Poltava Petroleum Company (PPC)."
Final resolution of the remaining six 2015 rental fee claims cases, four of which were currently suspended, was expected during 2020 and 2021.
The board added that the international arbitration award, directing the state of Ukraine to pay $11.8m plus interest and $0.3m costs to JKX as it described in the 2018 annual report, had now been successfully legally recognised in Ukraine, with JKX filing 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."
At 0955 GMT, shares in JKX Oil & Gas were up 12.66% at 27.15p.
The London-listed firm said annual production in Ukraine was up 52% to 5,584 barrels of oil equivalent per day, while annual production in Russia was flat at 5,158 barrels of oil equivalent per day.
More than $26m of capital expenditure was invested in the firm's operations in 2019, with $18m being spent in Ukraine and $8m in Russia, which was entirely financed by operational cash flow despite lower gas prices in Ukraine during the year.
In Ukraine, new wells were completed in December and January, and the board said field development was continuing as planned.
JKX said a well workover programme was completed in Russia, with no further workovers planned in 2020.
A total of $20.5m of cash and cash equivalents, and oil and gas inventory of about $4.1m in value, was held as at 31 December.
The group said it was on schedule to be debt free from February.
"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," the board said in its statement.
"Final resolution of the 2010 rental fee claim case is expected in the next few months.
"As previously reported, in October 2019 the second of the eight 2015 cases was closed in favour of JKX's subsidiary in Ukraine, Poltava Petroleum Company (PPC)."
Final resolution of the remaining six 2015 rental fee claims cases, four of which were currently suspended, was expected during 2020 and 2021.
The board added that the international arbitration award, directing the state of Ukraine to pay $11.8m plus interest and $0.3m costs to JKX as it described in the 2018 annual report, had now been successfully legally recognised in Ukraine, with JKX filing 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."
At 0955 GMT, shares in JKX Oil & Gas were up 12.66% at 27.15p.