JKX reports 2011 results, provides cautious 2012 outlook

JKX Oil & Gas (JKX LN) reported yesterday its revenues increased 23% yoy to USD 237 mln in 2011 on a hike in gas prices, while profit from operations declined 14% yoy due to an upsurge in production taxes in Ukraine. Production was down 12% yoy to 9,045 boepd. JKX’s cash balance was down 53% yoy to USD 29 mln mainly due to heavy capital investments in Russia (USD 105 mln). The company said it expects a further easing in gas realization in Ukraine, but said its overall gas production volumes should still increase as production is expected to start in Russia in 2Q12. The company decided to forego dividends for 2011 due to the need to repay short-term borrowings and secure greater liquidity. JKX also said its financial resources will be stretched in the next six months and it might be necessary to delay some drilling projects in Ukraine. JKX shares declined 14.2% yesterday following the announcement.