JKX 3Q19 hydrocarbon output rises 25% yoy

9 October 2019

JKX Oil & Gas (JKX LN) produced 11,719 boepd of hydrocarbons in 3Q19, the company reported on Oct. 9. This is 24.5% more yoy and 13.2% more qoq. The rise was driven by improved performance in both its Ukrainian assets (5,627 boepd, up 54.9% yoy and 15.9% qoq) and Russian assets (5,502 boepd, up 3.8% yoy and 10.3% qoq).


The increasing production at its Ukrainian assets was mostly a result of new well IG-142 (which produced over 900 boepd since its commissioning in July), as well as the performance of two less productive new wells commissioned in mid-2Q19.


In 9M19, JKX boosted its hydrocarbon output 19.1% yoy to 10,668 boepd, driven solely by a 50.9% yoy surge in Ukrainian asset output to 5,535 boepd.


The company also reported on its satisfactory liquidity position with a USD 9.5 mln cash balance and USD 11.5 mln of hydrocarbon inventory as of end-September.


Alexander Paraschiy: After implementing an active drilling program in Ukraine since early 2018 and a series of successful wells drilled, JKX is demostrating improving oil and gas production for the third quarter in a row.


We expect the company’s 4Q output will be slightly lower than in 3Q19 as output at its most successful recently commissioned wells, IG-142 and IG-103, is declining fast. Meanwhile, it's becoming less likely that two new wells the company is drilling will be equally successful. In any case, JKX’s annual ouptut is likely to grow 18-20% yoy in 2019, which allows us to remain bullish on JKX stock.

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