JKX delays Russian well workover, November output falls in Ukraine



28 декабря 2017 года
Конкорд Капитал

JKX Oil & Gas (JKX)


JKX Oil & Gas (JKX LN) reported on Nov. 27 that workover of its well #5 in its Russian Koshekhablskoye field will require more time and efforts than initially planned. It reported that an obstruction has been encountered in the tailpipe of the well, and the company is still considering options to clear it. The well was planned to be commissioned in December.



JKX’s Ukrainian operations also did not bring encouraging results. Based on preliminary information from the Energobiznes data base, we estimate the company produced 3,060 boepd of hydrocarbons in Ukraine in November, which is 6% less m/m and 25% less yoy. The company did not provide its November monthly operating update for the first time this year.



Alexander Paraschiy: The company's Ukraine results are below our expectations. This could be sweetened by the recently adopted (but not yet signed) gas production tax cuts for new wells in Ukraine since 2018. So far, however, the key risk for JKX is its poor liquidity that requires it to seek new external financing. And the delay with commissioning the Russian well only complicates the liquidity issue for the company. All in all, we remain cautious about JKX’s ability to improve its value.

Источник: Конкорд Капитал



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