24th May 2007 11:01
JKX Oil & Gas PLC24 May 2007 24 May 2007 JKX Oil and Gas plc AGM STATEMENT Speaking at the Annual General Meeting today, JKX Oil & Gas plc's Chairman, theRt. Hon. Lord Fraser of Carmyllie Q.C., said: "I am pleased to report that the Company increased its oil and gas production in2006 resulting in a substantial rise in both revenues and profitability. Averagedaily production rose by some 20% to 11,146 boepd in the period, and this rateof increase has continued into the current year with average production to dateexceeding 13,000 boepd. Your Board remains focused on driving forward thedevelopment of our production licences in Ukraine whilst seeking to broaden theasset and reserve base. The Company successfully completed 9 new production wells and 5 wellinterventions/workovers on the Poltava production licences during 2006, as wellas initiating exploration activities in Ukraine, with the drilling of the firstexploration well on the Zaplavskoye licence. The pace of development activity is continuing during this current period withdrilling planned on all of the Poltava licences. The second new Well R102 in thedeep Rudenkovskoye Field has been drilled and brought on-stream this month andthe results of the first fracture stimulation of Well R101 on the field areanticipated shortly. Our ability to enhance productivity of both existing andplanned Rudenkovskoye wells will undoubtedly influence the rate of developmentof this challenging field. I am particularly enthused by the success of the Well M160 which was alsoannounced this month and believe it to be a milestone in the development of ourPoltava licences. This step-out well was drilled and completed in 200m ofproductive Tournasian Carbonates in an area north of the Molchanovskoye Field.The first of the follow-up wells to firm-up the extent of this exciting newcarbonate play is in progress and I am cautiously optimistic that this willresult in an upward revision of our reserves. Irrespective of ongoing drilling success, we will continue to be constrained tothe delivery of between 40 and 42 MMcfd of gas from our Poltava licences formost of this year. However, the 2007 tie-in to the 56 inch Soyuz pipeline is onschedule with the hot tap into the trunkline and the 5km spur line to the PPCfacilities already completed. Commissioning of the Soyuz tie-in by the year endwill not only release our shut-in gas to production but also remove any capacityconstraint for gas delivery going forward. Significant effort is being expended on broadening our exploration portfolio ineastern and central Europe. Notably, the Company spudded its first explorationwell on the B Golitza licence in Bulgaria in April and is on schedule tocomplete the 4,900m well in 120 days. Further seismic reprocessing andacquisition work is also scheduled over our Bulgarian, Turkish and Ukrainianlicences during the year. Acquisition of development projects in Ukraine and Russia underpins our growthstrategy and, coupled with confirmation of additional reservoirs within ourexisting licences, is targeted to achieve a significant increase in our reservebase. I remain hopeful that I will be able to announce progress on these frontsin the coming months. Your Board is committed to delivering increasing returns to it's shareholders.We are again recommending a doubling of the dividend for the period and I canconfirm that the Board will continue to review the absolute dividend level goingforward." ENDS Press Enquiries Anthony Cardew / Emma Consett Cardew Group T: 020 7930 0777 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
JKX.L