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9.2 Major corporate news 9.2.1 Oil & gas corporate news
Ukrainian oil company JKX Oil & Gas improves output, liquidity in 2018
JKX Oil & Gas increased its hydrocarbon output 3.2% y/y to 8,937 boepd in 2018, according to the company’s January 10 trading update. Its output in Ukraine and Russia increased 4.8% to 3,677 boepd and 3.0% to 5,169 boepd, respectively. In the fourth quarter of 2018 alone, the company reported weaker performance compared to 3Q, including a 7.6% drop in Ukraine (to 3,707 boepd) and 4.1% decline in Russia (to 5,083 boepd). The company attributed its declining Ukrainian operations to a natural decline in yields amid reduced workover and drilling activity, and also to an underperformance of leased wells that showed initially high yields in late the third quarter of 2018. In particular, its WM215 and R3 wells demonstrated 77% and 74% decline rates, respectively, compared to levels shown in September. At the same time, its IG103 well in Ukraine – whose side-tracking was completed in late December – showed a better-than-expected performance, with its production rate exceeding 2,000 boepd as of January 8. JKX attributed its Russia declines to short repair work at one of its wells. JKX also provided an update on its liquidity, reporting on total cash of $19.3mn as of end-2018 ($14.4mn higher q/q, $12.4mn higher y/y). The company’s end-2018 cash exceeds its $10.7mn principal bond outstanding, JKX stressed. The company attributed its improved cash balance to a decrease of its working capital by $9.2mn q/q (mainly due to reduced inventories by $6.2mn and increased payables by $3.7mn). The company also provided an update on its litigation with Ukraine’s tax administration (total tax claims provisioned by the company amount to $42.7mn), reporting on interim victories in first tier and appellate courts on litigation totaling $26.0mn. On top of that, the company is working to get the Ukrainian courts to enforce a $12.1mn award gained in 2017 in Stockholm against the Ukrainian government.
9.2.3 Transport corporate news
French container shipping giant CMA CGM will invest EUR 20mn to upgrade the container terminal at Odesa port , Infrastructure Minister Volodymyr Omelyan writes on Facebook. Omelyan writes “an investment document” was signed with the Marseilles-based company. During his visit to France, Thursday through Saturday, Omelyan met with Transport Minister Elisabeth Borne.
Ukraine International Airlines, the nation’s largest carrier, boosted its passenger traffic last year by 15%, to 8mn passengers. On its scheduled flights, 53% of seats were occupied by transfer passengers. By developing its Boryspil base as an international transfer hub, UIA gives Kyiv residents more destinations and more frequencies than the local market can support. With a largely Boeing fleet of 42 jets, UIA has 88 destinations, including four cities added last year: Cairo, Copenhagen, Delhi and Toronto.
By the end of this year, Antonov plans to resume production in Kyiv of the An-124 Ruslan, the world’s largest military transport aircraft. From 1982-2004, 55 Ruslans were built. Plans to resume production were suspended after Russia’s military attacks on Ukraine in 2014. Now, Antonov
72 UKRAINE Country Report February 2019 www.intellinews.com