JKX Ukraine hydrocarbon output drops 4% in August

2017/9/12 14:52:39

Analyst: “We remain bearish on JKX stock, taking into account the company’s poor end-1H17 liquidity (which is unlikely to have improved), implying a lack of money for repairs and investments, as well as unresolved tax debt issues in Ukraine, which implies the company may still have to pay net USD 14-37 mln to Ukraine’s budget in the short term.”

 


KYIV, Sep 12, 2017 - JKX Oil & Gas (JKX LN) produced 9,146 boepd of hydrocarbons in August, Concorde Capital informed clients, based on the company’s operating update on Sept. 11. This is 8% higher than July (but 7% less than August 2016, according to our estimates). The key driver of month-over-month growth was the Russian division of JKX, which boosted output 16% m/m to 5,747 boepd (-1% yoy, we estimate) due to the contributions of well #25, which was put into operation in late July after workover. The company also reported it has started workover of its #5 well there.

 

In Ukraine, JKX produced 3,293 boepd of oil and gas in August, or 4% less m/m (and 19% less yoy, we estimate). The decline was the result of a production drop at its NN22 well, the company explained. JKX also reported it paid USD 1.1 mln on a coupon on its convertible notes in August.

 

Concorde analyst Alexander Paraschiy added: “The decline in Ukraine, and boosted Russian output, is what we anticipated a month ago. In September, we expect relatively stable output in Russia and continuing decline in Ukraine. We also remain bearish on JKX stock, taking into account the company’s poor end-1H17 liquidity (which is unlikely to have improved), implying a lack of money for repairs and investments, as well as unresolved tax debt issues in Ukraine, which implies the company may still have to pay net USD 14-37 mln to Ukraine’s budget in the short term.

 

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For more information, link here: www.concorde.ua

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