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JKX Oil & Gas considers restart in Ukraine after tax drop

The Ukraine government has passed legislation to reduce the gas tax to 29% from 55% with effect of January 1 2016.

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JKX said it has been “at the forefront” of campaigns for the tax reduction

JKX Oil & Gas (LON:JKX) has acknowledged a 47% drop in gas production taxes in Ukraine, and highlighted it has plans in place to restart drilling programmes.

The Ukraine government has passed legislation to reduce the gas tax to 29% from 55% with effect of January 1 2016, JKX told investors.

The company said it has been “at the forefront” of campaigns for the tax reduction, and it believes the action should restore the viability of new capital investment by independent gas producers.

JKX, which has plans to reinstate previously suspended operations in Ukraine, clarified that the latest tax changes don’t have any effect upon its US$270mln international arbitration claim for the recovery of overpayment of production taxes paid to the government. A full hearing of the claim is scheduled for July.

Though, it added that proposals by 20% shareholder Proxima Capital to remove all the company’s executive directors could ‘severely prejudice the ability of JKX to pursue this claim.’

A general meeting, requisitioned by Proxima, is set to held on January 28 2016.

Quick facts: JKX Oil & Gas PLC

Price: 24.5 GBX

LSE:JKX
Market: LSE
Market Cap: £42.07 m
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