JKX Output Grows, Prices Dip

UK-registered independent JKX saw its hydrocarbon output rise in Ukraine and Russia by 16% in the first half of the year compared with H1 2018, with production in the two countries more or less equal. Output in Hungary, which it is seeking to exit, was close to zero. 

New wells have come online in Ukraine and a Russian well has been worked over. Overall output was 11,872 barrels of oil equivalent/day on June 30 and the average H1 output was 10,132 boe/d, it said July 12. Ukrainian gas output was up sharply at almost 60%.

Average oil, gas and condensate prices were lower in both countries in H1 2019 compared with H1 2018. However, both Ukraine and Russia produced sufficient operational cash flow to finance the company's continued investment in the fields as planned, it said.

JKX continues to contest claims issued by the Ukrainian tax authorities for additional rental fees for 2010 and 2015. In early July one of these cases was closed in favour of JKX's subsidiary in Ukraine, Poltava Petroleum Company. The final resolution of the remaining seven 2015 rental fee claims cases, four of which are currently suspended, is expected during 2019 and 2020.

In July, the Kiev appellate court approved JKX’s application to recognise the amounts the government owed following an international arbitration award ($11.8mn plus interest and $0.3mn costs). But JKX said this judgment may be subject to appeal in the supreme court before mid-August and its financial reports would make “no recognition of any possible future benefit that may result from this award until there is further clarity on the process for, and likely success of, enforcing collection.”