JKX Oil & Gas (LON:JKX) today reached an important milestone for the Elizavetovskoye field in Ukraine with proved and probable (2P) reserves increasing to 22bn cubic feet – which equates to 3.7mln barrels of oil equivalent.
It also says the project also has another 20mln barrels of oil equivalent in prospective resources on the licence.
This comes after JKX put the East Machevksa 53 well (M-53) back into production in April and conducted a long term production test. The company receives 33% of the revenues from the well, which currently flows gas at a rate of 2.7mln cubic feet per day.
"We are very pleased that the data collected from our joint activity with the Ukrainian state production company has demonstrated both the materiality of the 2P reserves and the significant prospective resources on our Elizavetovskoye licence,” said chief executive Paul Davies.
Meanwhile, Simon Hawkins, analyst at stockbroker N+1 Brewin, says it is good news for JKX as the long term test at Elizavetovskoye allows it to booking significant reserves against the field.
The operations will be expanded now with a five well development programme planned, and an 11 kilometre export pipeline will be built.
JKX says the first of the new wells will be spudded by mid-2013 and first gas is then expected in the fourth quarter.