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JKX oil production declines while Ukrainian arbitration rumbles on

JKX said production edged lower in September from the previous month.

JKX Oil&Gas on October 13, 2017 said production edged lower in September from the previous month, contributing to a 15% drop in output in the 1st 9 months of 2017 than a year earlier.


The company produces gas as well as condensate from operations spread across Ukraine, Russia and the newest addition to the producing portfolio, Hungary.


9-month production fell 11% in Ukraine to 3,595 barrels daily, Russian output fell 20% to 4,905 barrels daily and Hungary did not contribute any production the year before, adding just 145 barrels daily over the 1st 3 quarters of 2017.


The company said an extensive review of the phase 1 fracturing campaign at the Rudenkivske field in Ukraine determined that a significant amount of geological work was still required to understand this complicated reservoir before further significant expenditure can be justified.


The company said it was re-evaluating field development plans in Ukraine, with the aim of restarting drilling as soon as possible.

For the moment, the focus was on well workovers and other operations in producing fields.


It said a delay of the workover of Well 5 in Russia was pushing back planned production to late November or early December.


The international arbitration against Ukraine is related to the attempted recovery of production related taxes paid by JKX's subsidiary Poltava Petroleum since 2011 and damages to the business.


The company said that in February the tribunal ruled that Ukraine was found not to have violated its treaty obligations related to excessive levying of taxes, but awarded JKX damages of about $11.8 million plus interest and costs of $300,000 in relation to subsidiary claims - which Ukraine has now appealed.


Previously, JKX said the appeal would be considered in the 2nd half of 2017.


Source : Neftegaz.RU