5 Dec 2013 07:00
JKX OIL & GAS PLC
Letter to Shareholders
The Board of JKX Oil & Gas ("JKX" or the "Company") has sent the following letter to shareholders:
Dear Shareholder
I want to update you on the status of the Court proceedings initiated by Eclairs Limited ("Eclairs") and Glengary Overseas Limited ("Glengary") and their nominees against your Company and also to give you a JKX progress report as we approach the end of the year.
Permission to Appeal Granted
The Court of Appeal has given JKX permission to appeal on an expedited basis against the ruling of the High Court in favour of Eclairs and Glengary. The High Court had ruled that the Board's power to restrict Eclairs and Glengary from exercising their voting rights as shareholders could be used only for the limited purpose of extracting information from them. On its own behalf, Eclairs is also appealing against certain aspects of the High Court judgment. It is expected that the appeal will be heard in the first quarter of 2014.
The Board carefully considered its grounds for an appeal and decided that it is in the interests of the Company and its shareholders as a whole to take this course of action. Neither Eclairs nor Glengary has provided further information beyond that which the High Court found the Board had reasonable cause to believe was false or materially inaccurate when the Board exercised its discretion to issue restriction notices.
The High Court has ordered that the setting aside of certain voting restrictions imposed on Eclairs and Glengary by the Board be delayed until the outcome of the appeal. In the event that any resolution is put to shareholders in the interim, where Eclairs' and Glengary's votes could be decisive, they will be counted on two bases (one including the votes cast by Eclairs and Glengary and the other excluding these votes) but the resolutions will not be declared or minuted pending the Court of Appeal's decision.
Operational Progress
I am pleased to report that your Company has made significant progress during the year. In particular I would like to praise our people on the ground for their unstinting commitment to the business in spite of the distractions from Eclairs and Glengary.
The Board is satisfied that all the hard work over the last few years is coming to fruition. We were substantially strengthened by the $40 million raised at the beginning of this year through the convertible bond issue.
Our strategy remains focused on Eastern and Central Europe and in particular on optimising our strong capability and long experience in Ukraine and on taking advantage of our substantial and more recent investment in southern Russia.
Our state-of-the-art facility at Koshekhablskoye in Russia, which only started production last year, has already achieved stable production at nominal full capacity. As a result, the Company is now modifying its plant to grow capacity, as well as enhancing production capability to fill that increased capacity.
The new funding also allowed our wholly-owned Ukrainian subsidiary, Poltava Petroleum Company, to restart drilling and workover programmes to stabilise production from its existing fields. In the Ukraine, your Company is also achieving good progress with its new development of the Elizavetovskoye field with first gas expected before the end of the year. In addition, our ambitious programme of carrying out a 10-stage multi-frac at Rudenkovskoye has been successfully completed. Our target is now to ensure that the next fracced well there will provide increased plateau production at a lower capital cost.
Your Board is fully committed to developing the business of your Company for the benefit of all its shareholders and will, of course, keep you appraised of further developments.
Yours sincerely
Nigel Moore
Chairman
For further information please contact:
Anthony Cardew/Nadja Vetter: | Cardew Group | T: 020 7930 0777 |