Page 17 - FSUOGM Week 28 2020

FSUOGM PROJECTS & COMPANIES FSUOGM
JKX gas and oil output falls 4% in Q1
UKRAINE
A further decline is expected in the third quarter.
JKX Oil & Gas produced 9,894 barrels of oil equivalent per day (boepd) of hydrocarbons in 2Q20, which is 4.4% less year on year and 10.0% less quarter on quarter, according to the compa- ny’s July 9 trading update. Production decreased both in Ukraine (-7.5% y/y, -7.4% q/q to 4,963 boepd) and in Russia (-1.2% y/y, -12.5% q/q to 4,931 boepd). e decline in Ukraine was from a lack of new wells being commissioned, while Russia’s decline was mostly the result of a sev- en-day shutdown of a gas processing plant for maintenance work in June.
In 1H20, the company’s output expanded by 3.2% y/y to an average of 10,445 boepd, as output decline in Ukraine by 0.5% was o set by higher output in Russia (up 7.1% y/y). Average prices for natural gas plunged in Ukraine by 47% y/y to $131 per trillion cubic metres and by 4% y/y in Russia to $54/tcm in 1H20.
e company is planning to commence drill- ing of the IG-146 well in Ukraine in late 3Q, and is also going to perform acidising of some wells
in Russia.
JKX reported it ended 2Q20 with a cash bal-
ance of $14.5mn (up from $14.2mn in 1Q20) and no debt. e company reported no pro- gress in the recovery of $12mn of an interna- tional arbitration award from the Ukrainian government, only indicating that it has led for collection.
" e company’s Ukrainian performance in 3Q20 will likely follow the trend of recent quar- ters, with a decline by about 7% q/q from the natural decrease of well yields," Alexander Par- aschiy, an analyst at the Kyiv-based Concorde Capital brokerage, said in a research note. "In Russia, the company’s output is likely to slightly recover in 3Q20."
"Lower gas prices and weaker output will lead to worsened JKX P&L in 2020, but the company’s strong liquidity will safeguard its nancial stabil- ity during times of low hydrocarbon prices," he added. "All in all, we remain positive about JKX stock’s mid-term performance."™
Petrofac wins $135mn construction deal at Kashagan oilfield
KAZAKHSTAN
Petrofac scored its rst contract in Kazakhstan in 2004, also at Kashagan.
THE North Caspian Operating Co. (NCOC) developing Kashagan, one of Kazakhstan’s big- gest oil elds, has awarded a $135mn construc- tion contract to a joint venture between the UK’s Petrofac and local group Isker.
e engineering, procurement, construction and commissioning (EPCC) contract is for new water treatment facilities for NCOC in Atyrau, western Kazakhstan. The 30-month project involves the building of inlet stream screening to remove debris, feed water tanks with oil skim- mer and pumps, a clari er system including oc- culation, coagulation and oil skimmer, treated wastewater storage and pumps, sludge treatment and relative utilities.
Petrofac said the award was in line with its strategy of growing its business through rela- tively small awards. e company won several other contracts across the world last month, including a multi-million dollar EPCC deal with Tatweer Petroleum for an upstream gas project in Bahrain.
Petrofac scored its first contract win in Kazakhstan in 2004, securing a deal to develop processing facilities at Kashagan. Its last award in the country was a project management ser- vices contract issued in 2018 by Karachaganak
Petroleum Operating (KPO), the opera- tor of Kazakhstan’s biggest condensate field, Karachaganak.
NCOC has rights to the Kashagan, Kairan, Aktoty and Kashagan South West elds in the Caspian Sea. By far the largest eld is Kashagan, which came on stream in 2016 and now pumps around 380,000 barrels per day (bpd) of oil.
e consortium’s shareholders include Chi- na’s CNPC, US major ExxonMobil, Italy’s Eni, Anglo-Dutch Shell, France’s Total, Japan’s Inpex and Kazakhstan’s KazMunayGas.™
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