JKX hydrocarbon output slides 4.7% in 2020

JKX Oil & Gas (JKX LN) reported on Jan. 18 that
its total hydrocarbon output reached 9,825 boepd in 4Q20, which is 4.1% less
qoq and 10.6% less yoy. Its output in Ukraine fell 8.0% qoq and 24.1% yoy to
4,351 boepd.

In 2020, the company’s output slid 4.7% yoy to 10,238
boepd, of which output in Ukraine was 4,849 boepd (down 13.2% yoy) and in
Russia it was 5,389 boepd (up 4.5% yoy).

JKX’s cash position improved significantly in 2020 on
declining investment activity. As a result, it posted end-2020 cash of USD 24.5
mln, up from net cash of USD 14.9 mln at the year’s start. 

The company also reported on low yield from its two
new wells it drilled in Ukraine in 2020, an IG-146 sidetrack of NN75.

Alexander Paraschiy: The company’s 2020 production result fell in the middle of the range
we forecasted (down 4.5-5.0% yoy). With no encouraging
results from new wells in Ukraine, the company will continue to show output
decline in 1H21 by about 4-6% yoy. Meanwhile, higher gas prices in Ukraine will
enable the company to boost its P&L in the first half of the year and
possibly improve its cash position. At the moment, it’s not clear whether the
company will use its accumulated cash to pursue new drilling operations in
Ukraine, or decide to distribute some dividends.