JKX boosts hydrocarbon output 11% qoq in 1Q20

JKX Oil & Gas (JKX LN) produced 10,996
boepd of hydrocarbons in 1Q20, which is flat yoy and 11.0% more qoq, the
company reported on Apr. 15. In Ukraine, the company produced 5,636 boepd,
which is 6.5% less yoy and 7.0% more qoq. JKX has commissioned in March a new
IG-143 well producing now 539 boepd of hydrocarbons, and has completed a side
track of two more wells, whose testing is ongoing. The company has no other
drilling plans for 2Q20. In Russia, JKX produced 5,635 boepd, which is 7.2%
more yoy and 15.6% more qoq, with no new wells planned here.

As of end-March, the company reported its cash balance
amounted to USD 14.2 mln, which is comparable to its net cash as of
end-December (USD 20.6 mln in cash and USD 5.8 mln in debt due in February).
JKX confirmed its debt-free status as of end-March.

Alexander Paraschiy: With no debt and no visible CapEx projects for the nearest future, JKX
seems to be well-prepared for the period of low oil and gas prices, which will
affect financials of the company’s Ukrainian business. It’s likely that JKX’s
output will decline by the end of 2020, but the company will remain with
liquidity and generate positive cash flow. Additional benefits could emerge if
JKX becomes able to enforce the collection of a USD 12 mln international
arbitration award from the Ukrainian government, but the timing of such
collections looks unclear now.