JKX.L Regulatory News (JKX)

16 Aug 2007 16:51

JKX Oil & Gas PLC16 August 2007 For Immediate Release 16 August 2007 JKX Oil & Gas plc Publication of circular and trading update JKX Oil & Gas plc ("JKX") announces that it has today published its circular toshareholders in relation to the proposed acquisition of the southern RussianKoshekhablskoye gas field which was announced on 24 July 2007. The circularcontains a notice of extraordinary general meeting to be held at 11 a.m. on 3September 2007 at the premises of Cardew Group, 12 Suffolk Street, London, SW1Y4HG at which the approval of shareholders will be sought. The circular contains the following update on the current trading of JKX: "The results for the year ended 31 December 2006 were reported by the Group on20 March 2007. The trading performance reported for that period was driven byaverage production of 11,146 boepd and average realisations of US$54.31 perbarrel of oil and US$2.83 per Mcf of gas. Production levels have increased in the first half of 2007 with averageproduction of approximately 13,000 boepd. The production increase results fromthe ongoing drilling success in the Group's Poltava Ukraine licences, mostnotably in the northern part of the Molchanovskoye field where successful gascondensate wells have continued to be added to the production inventory. TheGroup's production for the remainder of 2007 and 2008 will depend on the successof future wells, rates of production from existing wells and the increasedcapacity for gas deliveries from the Group's Poltava production facilities to beachieved with commissioning of the tie-in to the 56" Soyuz pipeline. This tie-inis currently anticipated for completion in Q1 2008 and is intended to double thenominal capacity for production from the Group's Ukrainian production licences.Given that a significant proportion of liquids production results fromcondensate extracted from gas wells, future liquids production is also dependenton the factors noted above. Oil realisations have fallen slightly from the 2006 average with an average inthe first half of 2007 of approximately US$51 per bbl. The Group continues tosell all of its Ukrainian production within the Ukrainian domestic market whereeffective discounts to international prices vary. The average discount year todate 2007 is materially in line with that of the 2006 average of approximately16.5 per cent. Gas realisations in 2007 are up almost 40 per cent on the 2006 average, with anaverage in the first half of 2007 of US$3.91 per Mcf. This significant increaseresults from the upward revision of the agreed price between Russia and Ukrainefor Russian and central Asian gas imported into Ukraine in 2007. Accordingly,the Group believes its current level of realisations will remain essentiallyconstant for the remainder of the year and will increase again in 2008. From2006, approximately half of the Group's Ukrainian gas production has been soldto Shell Ukraine with the remainder sold to a variety of local consumers andtraders. The overall costs of production in 2007 remain in line with the 2006 costs ofUS$8.03 per boe including production costs, depreciation, depletion andamortisation and production based taxes." A copy of the circular to shareholders has been submitted to the UKLA, and will shortly be available at the UKLA's Document Viewing Facility, which is situated at: Financial Services Authority25 The North ColonnadeCanary WharfLondonE14 5HS ENDS For further information please contact: Dr Paul Davies / Bruce Burrows JKX Oil & Gas plc 020 7323 4464Michael Ansell Investec 020 7597 5970Anthony Cardew / Sofia Rehman Cardew Group 020 7930 0777 This information is provided by RNS The company news service from the London Stock Exchange