JKX eyes sale of Russian business
The board of London-listed JKX has decided to sell 100% of the company's Russian subsidiary Yuzhgazenergie in order to focus on core operations in Ukraine, the company said on October 4.
Yuzhgazenergie operates the five-well Koshekhablskoye gas field in the southern Russian region of Adygea. While the field delivers more than half of JKX's hydrocarbon production, it contributes only 25% of the company's revenues and operating profit. Gas from Koshekhablskoye sold for $52/'000 m3 in the first half of this year, or 78% less than what JKX got for its gas in Ukraine.
"This is a long-awaited decision that looks strategically correct for the company," Concorde Capital said in a research note on October 5. "However, the way the company reported on it (just an intention, allegedly without concrete buyer options) suggests there may not be much interest in the Russian asset."
In Ukraine, JKX has 100% interests in five production licences in the Poltava region. It has been operating in the country for more than 25 years.