JKX reports on its first successful well in Ukraine in 2013

JKX Oil & Gas (JKX LN) reported on May 30 it successfully completed a second sidetrack of its M-166X well. The initial 12-hour flow rate stabilized at 1,710 boepd from a 1 1/8’’ choke, according to the company. After further testing, the size of choke will be decreased “to optimize” the flow.

JKX announced on Feb. 5 that it would start horizontal recompletion of its M-166 well, which suffered water ingress back in 2011. Now the company’s CEO stressed the sidetracking results have exceeded the company’s expectations.

M-166X is the first well in the company’s renewed Ukrainian drilling campaign after a break of more than a half-year. JKX has reportedly spudded the IG-132 well at its Ignatovskoye field.

Roman Dmytrenko: The first positive news from JKX’s Ukrainian fields looks tentative and seems to have been prepared to impress shareholders ahead of the company’s AGM (scheduled for June 5) in order to win them over to management’s side in its conflict with “collaborating parties.”

A day before the release, JKX management sent a letter to shareholders asking for support at the AGM and describing potential risks related to proposed management changes in favor of people close to the “collaborating parties” (identified as the companies Eclairs and Glengary, which are close to Ukrainian tycoons Igor Kolomoisky and Gennady Bogolyubov).

Recall, earlier this month Eclairs, the owner of a 27.5% stake in JKX (also backed by 11.5%-stake owner Glengary) called on investors to vote against the re-election of the company’s CEO.