JKX reports testing well IG149 exceeds expectations

JKX Oil & Gas (JKX LN) reported on June 3 on the
results of testing its new well IG149 in Ukraine, commenting that the result
“significantly exceeds expectations.” The well averaged 1,248 boepd in the
first ten days of testing since May 21 (with 777 boepd being oil) and then was
shut-in for a pressure build-up. Now the well stabilized its output at 1,340
boepd (with 890 boepd being oil), while the company stated that further testing
will determine its optimal parameters to maximize oil recovery.

Alexander Paraschiy: The well looks like a significant addition to JKX’s Ukrainian
operations, where the company produced just 3,843 boepd of hydrocarbons in
1Q21. At least, operation of this well will allow JKX to stabilize its
Ukrainian output in 2Q21 vs the previous quarter (after it reported five
consecutive quarters of output decline). If the well continues performing, it
will allow the company to smoothen the total production decline rate in Ukraine
this year from 25% yoy (as we earlier estimated) to about 12% yoy. All in all, the news could be welcomed by the stock
market.