JKX receives UAH 150 mln loan from Ukrainian bank

Natural gas E&P firm JKX Oil & Gas (JKX LN)
reported on Dec. 18 its Ukrainian subsidiary secured a 12-month credit line for
UAH 150 mln (USD 5.4 mln) from Tascombank. The company reported no other
details on the loan. Recall, JKX’s cash balance fell to a historical low of USD
4.2 mln as of end-June 2017 after it invested over USD 10 mln in CapEx in the
first half of the year.

Alexander Paraschiy: We viewed
the lack of available liquidity as the key risk for JKX in the short term, so
securing some new financing is encouraging news in and of itself. At the same
time, we see the company will need more financing merely to cover its nearest
financial outflow. Namely, the company is due to pay amortization and coupons
on its bonds in the amount of about USD 7 mln in February 2018.

Also, the company owes at least USD 14 mln to
Ukrainian authorities (tax payables less compensation due from the government),
which is still a risk for the company. All in all, we are looking forward to
see JKX resolve its issues with the Ukrainian government, while still remaining
skeptical about its future.