Page 8 - FSUOGM Week 25

FSUOGM PERFORMANCE FSUOGM
JKX output soars in May
UKRAINE
LONDON-LISTED JKX Oil & Gas has man- aged a 51% growth in output this year at its elds in eastern Ukraine on the back of recent drilling successes.
According to data published by Ukraine’s energy ministry, JKX’s wholly-owned subsidiary Poltava Petroleum produced 5,480 barrels of oil equivalent per day (boepd) of hydrocarbons in May – a new company record and up from only 3,630 boepd a year earlier. Extraction of natu- ral gas soared by 74% y/y to 22.1 million cubic metres (mcm) for the month, while crude oil and condensate output climbed 8% to arrive at 3,500 tonnes.
Results for the rst ve months of the year were also rm, with overall output surging by 48% y/y to 5,130 boepd. Gas production was up 66% at 99.6 mcm, while liquids output increased by 14% to 16,400 tonnes.
JKX has been operating in Ukraine since the early 1990s and currently controls production licences for ve elds in the Poltava region. It embarked on a new ve-year development plan last year aimed at expanding production by drilling new wells and carrying out workovers at existing ones.
Earlier this month the company announced
the completion of a third new well as part of its development drive. The NN81 well was drilled to a depth of 1,975 metres at the Novo- mykolayivske eld, and was reported on June 11 as daily flowing 168 barrels of oil and 4 mcm of gas. JKX has already broken ground on its next borehole, IG142, which will serve as a follow-up to the recently nished IG103 sidetrack.
“May’s statistics con rm JKX’s recent suc- cessful drilling is paying o and suggest the com- pany will show exceptionally strong production results in H1-2019,” Alexander Paraschiy, head of research at Kyiv-based Concorde Capital, said in a research note. “We see JKX shares having value growth potential. [But] note that its alleged outstanding tax debt in Ukraine – which the company is challenging in the courts – remains akeyrisk.”
JKX is embroiled in a years-old dispute with the Ukrainian tax authorities over rental fees that that were charged in 2015. e company achieved a pre-tax profit of $14mn in 2018, reversing a $12.9m loss during the previous year, largely to a 24.5% growth in revenues. In addi- tion to Ukraine, it also operates acreage in Russia and Hungary.™
Nostrum launches business reviews, considers equity sale
KAZAKHSTAN
KAZAKHSTAN-FOCUSED independent Nos- trum Oil & Gas is mulling the sale of an equity stake in a bid to drive growth following several years of agging production.
e London-listed operator said in a state- ment it had launched a review of its business that could involve a sale, noting that Goldman Sachs would be collecting bids from potential investors. It is also considering other options for li ing shareholder value, such as agreements with third-party gas suppliers, bolt-on acquisi- tions, farming out stakes in some assets and a corporate transaction.
“No decision has been taken yet, and there can be no certainty that this review of options will result in any agreement or transaction being concluded,” Nostrum said, adding it had not received any takeover o ers.
Nostrum operates four oil and gas fields in Kazakhstan’s western pre-Caspian basin, although only one of them, Chinarevskoye, has entered production. e company set out
ambitious plans several years ago to ramp up its output to 100,000 barrels of oil equivalent per day by 2020, but it has since been beset by a series of operational setbacks, including delays at a new gas treatment unit (GTU).
Production slumped to just 31,254 boepd in 2018, down from 39,199 boepd a year ear- lier. This loss was largely offset by higher product prices and stricter cost control, with Nostrum recording US$390mn in revenues and US$231mn in EBITDA, both only marginally down y/y.
Nostrum also announced this week a plan to buy 50% of Positive Invest, a company with rights to the two Stepnoy Leopard licence areas, which lie 60-120 km west of Chinarevskoye. e blocks contain eight known gas condensate elds with up to 200mn boe in contingent reserves, it said. Nostrum will pay US$500,000 for the 50% stake, with the right to acquire the rest of the company at a price of US$0.27 per boe of proven and probable reserves, subject to conditions.™
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w w w . N E W S B A S E . c o m Week 25 26•June•2019