Kulczyk rises gas production, Regal and JKX cut in 2Q12

Ukrainian companies increased natural gas output 1% yoy to 10.1 bcm in 1H12, according to preliminary data from the Energy Ministry sourced by Interfax last Friday. Private producers increased their output 5.2% yoy in 1H12, but 2Q12 output fell 11% qoq. Kulczyk Oil (KOV PW), via its asset KUB-Gas, showed the best performance among listed companies: +3.3x yoy in gas output in 1H12. The worst performer was the Ukrainian subsidiary of JKX Oil & Gas (JKX LN):  down 20% yoy in 1H12. Regal Petroleum (RPT LN), which did not operate a year ago, was able to restore gas production at 39.6 mcm in 1H12. Kulzcyk was also the best performer for 2Q12: the company increased gas output 13% qoq to 14.8 Mcf/day (net to the company), by our estimates. Regal and JKX decreased their daily gas output 14% and 6% qoq, respectively, in 2Q12. All the companies have yet to release their own production updates.

Gas production, mcm

                             1H12   yoy  2Q12   qoq
Kulczyk Oil, net      71.7    3.3x  38.3  +15%
JKX Oil & Gas        160.3  -20%  78.0   -5%
Regal Petroleum    39.6    n/m  18.2  -13%

Source: Energy Ministry, Concorde Capital calculations

Roman Dmytrenko: The news seems slightly encouraging for Kulzcyk Oil, which proved the sustainability of its increased gas output from February-March, and achieved higher average daily production in 2Q than it reported in late March (14.2 Mcf/day, net to the company). The released data is neutral for Regal and JKX, which previously reported a production decline in 2Q12 vs. 1Q12.