13 Oct 2021 12:52
13 October 2021
JKX Oil & Gas plc
("JKX", the "Company" or the "Group")
Quarterly Operations Update
Highlights
· | Ukraine average production of 4,499 boepd for Q3 2021, 10% higher than during Q2 2021. |
· | Net $51.5m of cash and cash equivalents, and oil and gas inventory of approximately $4.1m in value, held at 30 September 2021. |
· | Gas and oil prices in Ukraine have significantly improved by almost 150% and 60% respectively in comparison with the first 9 months of 2020. |
· | R110, a new well in the Rudenkivske license, was spudded on the 14th September and on the 6th October was drilling ahead at 2,642m MD RT. |
· | The Board made a decision to dispose of the Group's 100% interest in its Russian operating subsidiary |
Production
| Q3 | Q2 |
Q on Q % Change | 9 months | 9 months |
Y on Y % Change |
2021 | 2021 | 2021 | 2020 | |||
Total production, boepd | 8,575 | 9,332 | (8)% | 9,026 | 10,378 | (13)% |
Ukraine, boepd | 4,499 | 4,101 | 10% | 4,150 | 5,016 | (17)% |
- Average gas production, Mcmd | 586 | 521 | 12% | 542 | 673 | (19)% |
- Average oil and condensate production, boepd | 1,051 | 1,032 | 2% | 962 | 1,054 | (9)% |
Russia, boepd | 4,076 | 5,231 | (22)% | 4,876 | 5,362 | (9)% |
- Average gas production, Mcmd | 685 | 879 | (22)% | 819 | 901 | (9)% |
- Average condensate production, boepd | 46 | 58 | (21)% | 54 | 62 | (13)% |
Hungary, boepd | 0 | 0 | 0% | 0 | 0 | 0% |
Prices realised |
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Ukraine |
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- Average gas price, $/Mcm | 431 | 250 | 72% | 305 | 123 | 148% |
- Average oil and condensate price ($/bbl) | 72 | 65 | 11% | 67 | 42 | 60% |
Russia |
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- Average gas price, $/Mcm | 65 | 52 | 25% | 56 | 53 | 6% |
In Ukraine:
· | R110, a new well in the Rudenkivske license, was spudded on the 14th September and on the 6th October was drilling ahead at 2,642m MD RT with an expected TD of 3,319m MD RT. |
· | IG149, a new well in the Ignativske field, had 12m of perforations added in August which has increased the gas rate from 55 Mcmd to an average of 72 Mcmd since perforating. The wellhead pressure has increased from 722 psi to an average of 1,504 psi since the additional perforations and a choke reduction. |
· | IG103 sidetrack gas rate has increased from 46 Mcmd to 71 Mcmd following a recent choke increase and 3m of perforations added. |
In Russia:
· | YGE commenced a new gas sales contract in Q3 2021 with gas sales prices 25% higher than under the previous gas sales contract. |
· | Essential maintenance was carried out in a 3 week plant shutdown for the transition to the new gas sales contract. |
· | The negotiations for contracting the workover of Well 20 are in process and they should be completed in the coming weeks with the rig to be immediately mobilised to the wellsite. The drilling contractor is the same as was used to successfully workover Well 18. |
In Hungary:
· | JKX agreed the terms for the sale of the entire share capital of its wholly owned Dutch subsidiary JKX (Nederland) B.V. to Mr Gabor Lujas Dudinsky and Mr Laszlo Arpad Barbuty for a total cash consideration of $3m. |
· | JKX (Nederland) B.V. holds, via its wholly owned Hungarian subsidiary, Folyopart Energia KFT, a number of Hungarian mining plots and a production facility that are not currently producing hydrocarbons. Folyopart Energia KFT had gross assets of tHUF 1,074,232 ($3.6m) as at 31 December 2020 and reported loss of tHUF 2,718 ($9.1K) according to Hungarian GAAP. |
Liquidity
In $m | 30 Sep 2021 | 30 June 2021 | 31 Dec 2020 | 30 Jun 2020 | 31 Dec 2019 |
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Total cash and cash equivalents | 51.5 | 36.5 | 24.3 | 14.5 | 20.6 |
Bond liability (principal and interest accrued) | - | - | - | - | (5.7) |
Net cash | 51.5 | 36.5 | 24.3 | 14.5 | 14.9 |
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Approximate sales value of gas and oil inventory | 4.1 | 4.4 | 2.2 | 1.7 | 4.1 |
Our Ukrainian subsidiary held 3.2 million cubic metres of gas and 33.6 thousand barrels of oil inventory available for immediate sale at 30 September 2021. Approximate sales value of gas and oil inventory is calculated using average sales prices for September 2021.
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 2021 Half-yearly Report. In July 2021 the Supreme Court satisfied demands of Poltava Petroleum Company (PPC) in respect of the case No. 816/844/16 and left the decisions of first and appellate instance courts in force. Also PPC has received the final judgement of the Supreme Court of Ukraine in Case No.816/4476/14 relating to the Poltava Tax Authorities appeal against lower court judgments in this case. This case relates to a claim for 2010 royalty payments and a judgment has been made in favour of the Poltava Tax Authorities. PPC is under no immediate obligation to pay the judgement as the Ukrainian tax authorities have to obtain approval of the Supreme Court of Ukraine before the payment can be collected from PPC. This hearing is expected to be heard in late 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 2020 Annual Report, was successfully legally recognised in Ukraine and JKX 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
The Group has all necessary arrangements in place to ensure the safe conduct of its business. We have implemented a number of policies recommended by Governments in the countries of our assets for the protection of our employees, as well as to help minimization of the spread of coronavirus (Covid-19). Our first priority is the safety and wellbeing of our staff. Our next priority is supporting the local communities, especially where there is a lack of medical assistance, and we have directed our corporate and social responsibility projects helping to fight further spread of 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
tHUF - Thousand Hungarian Forint
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, +44 (0) 7887 946719
Jeroen van de Crommenacker