Quarterly Operations Update

JKX Oil & Gas plc

("JKX", the "Company" or the "Group")

Quarterly Operations Update

·;

Q3 group average production of 11,719 boepd, 13% higher than the previous quarter.

·;

Ukraine average production of 5,535 boepd for first 9 months of 2019, more than 50% higher than during first 9 months of 2018.

·;

Highest quarterly and year-to-date oil production in Ukraine since 2013.

·;

Capital investment in the fields continues as planned, entirely financed by operating cash flow despite lower gas price in Ukraine.

·;

$9.5m of cash and cash equivalents, and oil and gas inventory of approximately $11.5m in value, held at 30 September 2019.

Q3

Q2

Q on Q % Change

9 months

9 months

Y on Y % Change

2019

2019

2019

2018

Total production, boepd

11,719

10,354

13%

10,668

8,958

19%

Ukraine, boepd

6,217

5,364

16%

5,535

3,667

51%

- Average gas production, Mcmd

842

742

14%

765

493

55%

- Average oil and condensate production, boepd

1,260

999

26%

1,033

776

33%

Russia, boepd

5,502

4,990

10%

5,125

5,199

(1%)

- Average gas production, Mcmd

924

838

10%

861

872

(1%)

- Average condensate production, boepd

62

57

9%

58

58

0%

Hungary, boepd

0

0

0%

8

92

(91)%

Prices realised

Ukraine

- Average gas price, $/Mcm

175

215

(19)%

226

287

(21)%

- Average oil and condensate price ($/bbl)

63

60

5%

61

72

(15)%

Russia

- Average gas price, $/Mcm

58

57

2%

57

58

(2)%

·;

Well IG142 completed in Q3, is currently producing at 857 boepd with a wellhead pressure of 1,867 psi.

·;

Two rigs currently in operation in Ukraine. One is drilling WM4 in West Mashivska and a second larger rig has also been procured and is currently drilling R101 sidetrack - the first sidetrack drilled by PPC to target the Visean sands in the North of Rudenkivske.

·;

IG103 sidetrack production continues to exceed expectations with current production at 1,116 boepd with a wellhead pressure of 1,150 psi. To date the well has produced 374 Mboe.

·;

Oil production increase of 26% in Q3 2019 compared to Q2 2019 is the result of two recently drilled new wells: NN81 and IG142.

·;

2 day planned shutdown of the Novo-Nikolaevske production facility reduced the Q3 Ukraine production.

·;

Production is up quarter on quarter due to a well being brought into production at the end of Q2 2019.

·;

Well 5 production has been adversely affected by solids blockages which resulted in the well being acidized three times in the reporting period. The last acid job was conducted at the end of August and a recent flaring and choke reduction has led to the well cleaning up. The current production rate is 370 boepd.

·;

Workover of Well 18 is progressing with all 300m of a fish left in the well by a previous operator milled. The production casing will be repaired before drilling the sidetrack.

 In $m

30 Sep 2019

30 Jun

 2019

31 Dec 2018

30 June 2018

Total cash and cash equivalents

9.5

10.7

19.2

7.6

Bond liability (principal and interest accrued)

(5.4)

(5.7)

(11.3)

(11.3)

Net cash/ (debt)

4.1

4.9

7.9

(3.7)

Approximate sales value of gas and oil inventory

11.5

8.0

9.9

3.1

Our Ukrainian subsidiary held 54 MMcm of gas and 25 thousand barrels of oil inventory available for immediate sale at 30 September 2019. Approximate sales value of gas and oil inventory is calculated using average sales prices for September 2019.

$0.4m of bond interest was paid in August 2019. The final bond payment of $5.8m is due in February 2020.

Rental fee claims

Claims issued by the Ukrainian tax authorities for additional rental fees for 2010 and 2015 are being contested through the Ukrainian court process as explained in the 2018 Annual Report. Final resolution of the 2010 rental fee claim case is expected in the next few months. The 2015 rental fee claims cases were contested in eight separate cases. As previously reported, in early July one of these cases was closed in favour of JKX's subsidiary in Ukraine, Poltava Petroleum Company (PPC). Successful closure of a second case is expected shortly. Final resolution of the remaining six 2015 rental fee claims cases, four of which are currently suspended, is expected during 2019 and 2020.

International arbitration award

In February 2019 JKX filed an application for the recognition and enforcement of an international arbitration award as described in the 2018 Annual Report. On 5 July 2019 the written judgment of the Kyiv Appellate Court was issued, satisfying the application and ordering the State of Ukraine to pay $11.8m plus interest and $0.3m costs. This judgment is currently subject to appeal in the Supreme Court of Ukraine. No recognition will be made in the financial statements 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.

boepd - Barrels of oil equivalent per day

bopd - Barrels of oil per day

Mboe - Thousand barrels of oil equivalent

Mcm - Thousand cubic metres

MMcm- Million cubic metres

Mcmd - Thousand cubic metres per day

psi - pounds per square inch

This announcement contains inside information as defined in EU Regulation No. 596/2014 and is in accordance with the Company's obligations under Article 17 of that Regulation.