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JKX Oil & Gas PLC - Quarterly Operations Update

RNS Number : 4570S
JKX Oil & Gas PLC
09 July 2020
 

 

9 July 2020

JKX Oil & Gas plc

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

Quarterly Operations Update

Highlights

 

·   

Group production up 3% year-on-year (H1 2020: 10,445 boepd, H1 2019: 10,132 boepd).

·   

Group production down 10% quarter-on-quarter due to drilling and workover rigs on standby in Ukraine for the majority of the reporting period because of Covid-19 restrictions. In addition, two routine plant shutdowns in Russia and Ukraine contributed to the drop in average group production in Q2 2020.

·   

Group production at the time of issuing this update was up to nearly 11,000 boepd after successfully adding perforations in IG142. 

·   

One new well is scheduled to be drilled in Ukraine commencing late in Q3 2020.

·   

$14.5m of cash and cash equivalents, and oil and gas inventory of approximately $1.7m in value, held at 30 June 2020.

 

 

Production

 


Q2

Q1

Q on Q % Change

H1

H1

Y on Y % Change

2020

2020

2020

2019

Total production, boepd

9,894

10,996

(10)%

10,445

10,132

3%

Ukraine, boepd

4,963

5,361

(7)%

5,162

5,188

(1)%

- Average gas production, Mcmd

666

715

(7)%

690

725

(5)%

- Average oil and condensate production, boepd

1,045

1,155

(10)%

1,100

919

20%

Russia, boepd

4,931

5,635

(12)%

5,283

4,932

7%

- Average gas production, Mcmd

829

946

(12)%

887

828

7%

- Average condensate production, boepd

54

65

(17)%

59

57

4%

Hungary, boepd

0

0

0%

0

12

(100)%

Prices realised







Ukraine







- Average gas price, $/Mcm

107

150

(29)%

131

247

(47)%

- Average oil and condensate price ($/bbl)

31

49

(37)%

40

59

(32)%

Russia







- Average gas price, $/Mcm

52

56

(7)%

54

56

(4)%

 

 

In Ukraine:

 

·   

The SMS drilling rig has been on standby at the production site since April at no cost. It is currently planned to use the SMS rig to commence drilling IG146 at the end of Q3 2020. IG146 will be targeting the Devonian in Ignativske close to successful IG101 sidetrack and IG142.

·   

The workover rig underwent essential maintenance until the middle of June and has since carried out two remedial workovers.

·   

In an effort to increase production two wireline perforation operations were carried out on IG143 and IG142, both of which involved adding perforations in the Devonian.

·   

A plant shutdown was carried out at the Novomykolaivske complex for 3 days in June in order to install a condensate stabilisation column and increase the LPG yield.

 

 

In Russia:

 

·   

A 7 day plant shutdown took place in June for routine maintenance. This was the first shutdown of this plant since 2016. All wells have now returned to the pre shutdown production levels.

·   

Well 27 was successfully acidized during the reporting period and it is currently planned to acidize Wells 5, 18 and 27 in September.

 

 

 

Liquidity

 

 

 In $m

30 Jun 2020

31 Dec 2019

30 Jun

 2019

31 Dec 2018





Total cash and cash equivalents

14.5

20.6

10.7

19.2

Bond liability (principal and interest accrued)

-

(5.7)

(5.7)

(11.3)

Net cash

14.5

14.9

4.9

7.9






Approximate sales value of gas and oil inventory

1.7

4.1

8.0

9.9

 

Our Ukrainian subsidiary held 5.5 million cubic metres of gas and 31.6 thousand barrels of oil inventory available for immediate sale at 30 June 2020. Approximate sales value of gas and oil inventory is calculated using average sales prices for June 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 2019 Annual Report.  Final resolution of the 2010 rental fee claim case is expected in the next few months.  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                              +44 (0) 20 7323 4464

Dmytro Piddubnyy, CFO

 

 

EM Communications                         +44 (0) 20 7002 7860

Stuart Leasor, Jeroen van de Crommenacker

 

 

 

 

 

 

 

 

 

 


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