JKX commences production and sales of LPG via new Poltava plant

JKX Oil & Gas (LSE: JKX LN) started production on July 4 at its liquefied petroleum gas processing plant of the off-take from its fields in Poltava region in Ukraine and dispatched its first commercial LPG cargo, the company announced yesterday via the LSE’s Regulatory News Service. JKX said daily production, planned to reach approximately 80 mt per day, was contracted to pre-qualified wholesale distribution companies. In the statement, CEO Paul Davies said JKX expects to achieve pay-back on its investment in approximately six months. JKX’s launch of LPG processing was in line with its previously announced schedule and on budget, according to Davies. Antonina Davydenko: The news is positive for the stock though well–expected and already priced-in. LPG is a value-added product ensuring better margins than direct gas sales. We expect it to contribute an additional USD 11 mln to the company’s top line in 2011, approximately 10% of JKX’s 2H11 revenues.