JKX.L Regulatory News (JKX)

18 May 2006 11:10

JKX Oil & Gas PLC18 May 2006 JKX Oil and Gas plc AGM STATEMENT Speaking at the Annual General Meeting today, JKX Oil & Gas plc's Chairman, theRt. Hon. Lord Fraser of Carmyllie Q.C., said: "I am pleased to be able to report that your Company continued to growsignificantly in 2005, with rising production generating substantial increasesin both revenues and profits. We have embarked on this current year with theobjective of again lifting production, and utilising our strong balance sheetand cash flow to broaden our asset portfolio and increase our reserve base. "Ukraine remains the Company's main area of production and investment. Thedrilling programme is moving at an accelerated pace on our Poltava licences withthe addition of a second drilling rig from the turn of the year. We haverecently reported the positive results of the drilling and completion of twofurther development wells on the Ignatovskoye and Molchanovskoye Fieldsrespectively; these have lifted current production rates above 12,000 boepd. Thelarger of our two rigs has completed the deep, high pressure gas Well R101 onthe Rudenkovskoye Field, and is now returning to Molchanovskoye to drill thenext oil targeted development well. I anticipate that we will be in a positionto release initial indicative results in the early part of next month from theextended test programme planned for Well R101. Our smaller rig has justsuccessfully completed a re-entry and sidetrack on Well I101 on the IgnatovskoyeField, and testing is scheduled for next month. This rig is now moving to drillour first exploration well in the Zaplavskoye license which lies to the south ofour production licences at Poltava. We are also out for tender for a large rigto drill the Devonian section at 5,000m plus in the northern part ofRudenkovskoye Field. "The Company continues to seek to increase its licence portfolio in Ukraine andwelcomes the recent introduction of open licence auctions. I am hopeful thatfuture licence offerings will include both exploration and development acreage. "Throughout 2005, the Company actively pursued new opportunities in and aroundits core area of activity, the results of which include the addition of two newexploration licences in Ukraine and recent farm-ins to projects in Bulgaria andTurkey; work programmes are underway on all projects. The Company is continuingto evaluate other potential opportunities in the region, including onshoreprojects in the Russian Federation. I remain confident that the management teamwill add meaningful assets to our portfolio in the current reporting period. "Increase in reserves remains the strategic objective for this year, withUkraine continuing as our prime area of investment, expansion and development.Despite the current delay in formation of a new government, your Board is of theview that market economy forces are well entrenched in Ukraine and furtherprivatisation of the oil and gas sector can reasonably be expected in the mediumterm. Your Board continues to remain committed to delivering shareholder value. Wehave recommended a doubling of the dividend for 2005, and I can confirm that theBoard will be reviewing the absolute dividend level to be paid in theforthcoming period. "Finally, I extend my appreciation and thanks to all shareholders of the Companyfor their continued interest and support." ENDS Press Enquiries Sofia Rehman Cardew Group 020 7930 0777 This information is provided by RNS The company news service from the London Stock Exchange