8 Oct 2020 07:00
8 October 2020
JKX Oil & Gas plc
("JKX", the "Company" or the "Group")
Quarterly Operations Update
Highlights
· | Group average production of 10,245 boepd for Q3 2020, 4% higher than during Q2 2020. |
· | Drilling to resume in Ukraine with IG146 in October. |
· | Net $18.8m of cash and cash equivalents (up 30% on Q2 2020), and oil and gas inventory of approximately $2.6m in value (up 53% on Q2 2020), held at 30 September 2020. |
Production
| Q3 | Q2 | Q on Q% Change | 9 months | 9 months | Y on Y % Change |
2020 | 2020 | 2020 | 2019 | |||
Total production, boepd | 10,245 | 9,894 | 4% | 10,378 | 10,668 | (3)% |
Ukraine, boepd | 4,727 | 4,963 | (5)% | 5,016 | 5,535 | (9)% |
- Average gas production, Mcmd | 639 | 666 | (4)% | 673 | 765 | (12)% |
- Average oil and condensate production, boepd | 965 | 1,045 | (8)% | 1,054 | 1,033 | 2% |
Russia, boepd | 5,519 | 4,931 | 12% | 5,362 | 5,125 | 5% |
- Average gas production, Mcmd | 926 | 829 | 12% | 901 | 861 | 5% |
- Average condensate production, boepd | 67 | 54 | 24% | 62 | 58 | 7% |
Hungary, boepd | 0 | 0 | 0% | 0 | 8 | (100)% |
Prices realised |
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Ukraine |
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- Average gas price, $/Mcm | 105 | 107 | (2)% | 123 | 226 | (46)% |
- Average oil and condensate price ($/bbl) | 49 | 31 | (58)% | 42 | 61 | (31)% |
Russia |
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- Average gas price, $/Mcm | 52 | 52 | 0% | 53 | 57 | (7)% |
In Ukraine:
· | Drilling to resume in October with IG146, a new well targeting the Devonian in the Ignativske field. |
· | One remedial workover and one abandonment were completed with the workover rig in Q3 2020. A second remedial workover on a Rudenkivske well carried out in Q3 2020 has been completed at the start of October. |
· | The decline in Ukraine gas production quarter-on-quarter has been reduced with successful additional perforations made in IG142 at the start of Q3 2020. |
In Russia:
· | Wells 5, 18 and 27 were acidised in August and September using a new lower cost contractor. All acid jobs were completed successfully. |
Liquidity
In $m | 30 Sep 2020 | 30 Jun 2020 | 31 Dec 2019 | 30 Jun 2019 | 31 Dec 2018 |
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Total cash and cash equivalents | 18.8 | 14.5 | 20.6 | 10.7 | 19.2 |
Bond liability (principal and interest accrued) | - | - | (5.7) | (5.7) | (11.3) |
Net cash | 18.8 | 14.5 | 14.9 | 4.9 | 7.9 |
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Approximate sales value of gas and oil inventory | 2.6 | 1.7 | 4.1 | 8.0 | 9.9 |
Our Ukrainian subsidiary held 2.8 million cubic metres of gas and 44.4 thousand barrels of oil inventory available for immediate sale at 30 September 2020. Approximate sales value of gas and oil inventory is calculated using average sales prices for September 2020.
Rental fee claims
Claims issued by the Ukrainian tax authorities for additional rental fees for 2010 and 2015 are still being contested through the Ukrainian court process as explained in the 2019 Annual Report. As previously reported, four of the eight 2015 cases were closed in favour of JKX's subsidiary in Ukraine, Poltava Petroleum Company (PPC). Final resolution of the remaining 2015 rental fee claims cases is expected during 2021.
International arbitration award
The international arbitration award, directing the State of Ukraine to pay $11.8m plus interest and $0.3m costs to JKX as described in the 2019 Annual Report, has now been successfully legally recognised in Ukraine and JKX has filed for collection. No possible future benefit that may result from this award will be reflected in the accounts until there is further clarity on the process for, and likely success of, enforcing collection.
Covid-19
We continue to monitor the impact of Covid-19 developments on our industry, operations, staff and contractors and are confident about the safety measures we put in place.
boepd - Barrels of oil equivalent per day
bopd - Barrels of oil per day
Mboe - Thousand barrels of oil equivalent
Mcm - Thousand cubic metres
MMcm- Million cubic metres
Mcmd - Thousand cubic metres per day
psi - pounds per square inch
This announcement contains inside information as defined in EU Regulation No. 596/2014 and is in accordance with the Company's obligations under Article 17 of that Regulation.
ENDS
JKX Oil & Gas plc +44 (0) 20 7323 4464
Dmytro Piddubnyy, CFO
EM Communications +44 (0) 20 7002 7860
Stuart Leasor, Jeroen van de Crommenacker