JKX are a growth oil and gas company, principally based in the Ukraine, but also present in several other countries, and have recently presented some excellent results.




JKX corporate website : http://www.jkx.co.uk/index.cfm

Poltava Petroleum : http://www.ppc.net.ua/inf_en.html

Annual report 2005 : Click HERE

Why is JKX not going up after announcing its spectacular results today?

hlyeo98,

It is a bit strange I admit, I don't think the market could have expected any better results than these to be honest.

The price was looking a little toppy for the existing production, so maybe they were already priced in?

Any new additional producion would be different of course!



Dr Square,

re the pipeline, I will try and find out, but I presumed they were trying to hook up to an export line.

It would be beneficial if they did as they would achieve international rates for that gas, as opposed to the Ukraine domestic rste that applies to all of the production at the moment.

if oil is not being exported, it doens't really matter, as they receive close to the international spot price, and they dont have to pay transportation costs, so little difference.

Record profits at JKX Oil & Gas
MoneyAM
JKX Oil & Gas announced record full year profits, boosted by the sustained rise in production, coupled with the strong international oil prices and the continued rise in domestic Ukrainian gas prices.

CEO, Dr Paul Davies, said in a statement: 'JKX will continue to build on its success in Ukraine and will continue to examine opportunities elsewhere.'

The company said it is currently evaluating a number of potential exploration and development projects.

'We are enthusiastic about our initial investments in Bulgaria and Turkey, but to date have not identified a suitable onshore prospect in Russia. We are increasing our efforts to identify suitable prospects around our core operational area and are well placed to move swiftly to secure them,' the statement added.

The company said the full development of the four production licences at Poltava remains its operational focus in the near term.

The completion and testing of its suspended deep Well R101 on the Rudenkovskoye Field is a priority for the second quarter of the year, as is the securing of a third rig with a 15,000psi BOP system.

The company said the first exploration well on the Zaplavskoye license in Ukraine is scheduled for the third quarter. Evaluation work will also progress on the Elizavetovskoye and Chernovayarske exploration licences.

Exploration drilling is scheduled on its Bulgarian and Turkish licences this year.

In the year 2005, sales shot up to $82.9m from $46.6m, with pretax profit coming in at $51.3m from $23.4m.

The company is also proposing to double the dividend payout for the year. It is recommending a final dividend of 0.6p, taking the total payout to 1.1p from 0.55p the year before.

Capex rose to $32.3m from $27.8m, with more than 85% invested in the development of its Ukrainian assets.

Andy,

I agree with your post 248 - JKX is now on a current P/E of 23.3, which seems just a little on the high side, so they'll need to progress with production and exploration to drive value.

morning

The Independent says at 329p, JKX Oil & Gas trades on a rating of just 12 times forecasts earnings for this year. This is too low a rating for a quality player like JKX. Buy.

Guten Morgen!

This was in the Financial Times:

JKX Oil & Gas said yesterday that it had benefited from the row between Russia's Gazprom and Ukraine over gas supplies as it can now sell the gas it produces in Ukraine at a higher price.

The company, which recently joined the FTSE 250 index, unveiled strong annual results, including a 120 per cent jump in pre-tax profit in 2005.

Paul Davies, chief executive, said the group had brought new wells on stream in Ukraine during the second half of last year, boosting cash flow. The group produces all its oil and gas from Ukraine, where it has been operating for more than a decade, and last year produced a total of 3.4m barrels of oil equivalent (boe), up from 2.9bn boe in 2004.

Oil and gas prices in Ukraine rose during 2005 and JKX said it had sold its oil at an average price of $46.43 a barrel, up from $31.99 a barrel in 2004.

Gas is sold in Ukraine at a discount to European markets.

The group sold its gas for $1.82 per thousand cubic feet (Mcf), up from $1.59 per Mcf in 2004.

But Mr Davies said prices had already risen by a further 50 per cent in 2006 following Ukraine's agreement with Gazprom to pay more for gas imports.

He said Gazprom had "set a new benchmark for the domestic gas market. There is undoubtedly continued upward pressure on prices".

Revenues at JKX rose from $46.6m (26.7m) in 2004 to $82.9m while pre-tax profit rose from $23.4m to $51.3m.

Mr Davies said the group's priority in 2006 would be securing more production licences in Ukraine, as well as projects in Georgia, Bulgaria, Turkey and Russia.

JKX shares fell 3p to 329p yesterday.

FT Comment

*JKX Oil & Gas shares have had a good run over the last eight months. From 150p in July, the stock has risen above 300p, peaking at 373p in January. Although the company is doing well, the recent price rise has been mainly linked to an external factor - the rise in Ukrainian gas prices. With a forward p/e ratio of about 11 times, JKX trades in line with the UK oil and gas sector but analysts warn that the upside from rising gas prices has been priced in and the shares look fully valued.

In shares magazine today, it projected JKX with a target of 477p in 2 years.

Kkeith, Soul trader, hlyeo98,

Thanks for those updates, I think JKX is about fair value at this price, as we may have drill news soon.

I saw a presentation by Cardinal Resources today, and have to say they look a good prospect too, quite undervalued in comparison to JKX, but they of course don't have the exploration prospects, and they have a costly financing to try and sort out!

but did you pick up a few Addy??
CDLs that is

Andy,

I have a large holding of EEL , do you hold any ?

anotherxiii,

No because I didn't have a chance to trade as I had to travel home form London, I was in an internet cafe earlier and I don't trade from those!

I plan to buy some CDL in the near future as soon as I have some funds are available, for a long term hold.



Aldwick,

No not a company I have looked at.

Andy,

I also hold CDL.

I also posted this over the road.


All,

Some interestng theories regarding yesterday's drop, and, upon reflection, I think perhaps each factor contributed in some small way, at least.

I personally don't think triple witching had much effect, although the price started to fall around that time, so maybe I am wrong about that.

I certainly do think people made assumptions about trackers buying in due to the FTSE 250 inclusion, and may well have been long on margin awaiting a quick run up in the price, that did not occur.

Then maybe the shorters came in, and the price started to fall back, and margin traders then began to close out, thus acccellerating the fall, and then we had the sudden drop at the end.

I could be totally wrong of course, but fundementally JKX has not changed since yesterday, so I certainly couldn't see a rational explantion for such a sudden fall.


Having reviewed the 2005 final figures, JKX look to be in a healthy position, with increased oil production carrying over from H2 2005, and the much increased gas price since eary January this year that will enhance this year's earnings.

JKX always produce better H2 results than H1, so I remain convinced we will have a good year again in 2006.

A succinct article from oilbarrel.



20.03.2006
JKX Joins FTSE 250 As Ukraine Projects Continue To Deliver
Last week delegates at oilbarrel.coms conference in the City of London heard the executives of Cardinal Resources and Cadogan Petroleum express their enthusiasm for Ukraine. Both companies gave a nod to London-listed JKX Oil & Gas, which has just entered the FTSE 250, as an example of where they would like to go in terms of reserves and production growth.

JKX has, of course, been operating in the former Soviet republic for a decade and is today the largest non-state producer in the country, pumping about 5 per cent of the countrys oil and gas output. This has not been an easy journey: between 1999 and 2002 JKX was embroiled in legal battles with its state-owned partners and too often the companys plans are frustrated by political or bureaucratic inertia.

Historically its not been an easy area to work in and its still not a walk in the park, said chief executive Dr Paul Davies. But its steadily changing for the positive.

The company has certainly emerged from the difficult days of six years ago with a robust business. Last year JKX generated a post-tax profit of US$37 million on revenues of US$82.9 million, up 78 per cent on the previous year. The improved results were driven by higher prices for gas, already up more than 50 per cent on the 2004 average, and higher oil and gas production. Last year daily production averaged 9,300 barrels of oil equivalent, up from 8,000 boepd in 2004, and production is today running at 10,500 boepd.

This output comes from the companys four fields in the Poltava region of Ukraine, where work continues to fully develop the reserve base. The bulk of last years production growth was down to its oil and condensate fields: gas production is hemmed in until the company can access an export pipeline.

On this front, the company has been stymied by state oil and gas company Naftogas, which must approve a tie-in to the 56-inch Soyuz pipeline, one of the main gas trunkline systems delivering gas from Russia to Western Europe. With this long-awaited approval still pending, JKX has devised Plan B: it has completed engineering of an alternative 42 km pipeline that will link into the 36-inch Efremovka-Dikanka-Kiev trunkline. This alternative route has been submitted to the authorities for approval and JKX has also made progress to acquire the rights of way so it can hit the ground running if and when that approval comes in.

In the meantime the company continues to drill up its Ukraine properties, where it now has two rigs running and plans to bring in a third, heavy duty rig capable of handling the high pressure gas reservoirs on the deep Rudenkovskoye field.

Rudenkovskoye promises to be an exciting but challenging project. In the fourth quarter of last year the company drilled Well R101 in the north of the field but had to suspend the hole at 4,579 metres after encountering higher-than-expected pressures. With the right equipment in place, the hole will be re-entered and a 200 metre gas-bearing interval tested in the Tournasian sandstones. Once JKX has sourced and mobilized a third, heavy duty rig, it plans to drill down to 5,000 metres and more to get to grips with the underlying Devonian formations.

The company continues to work up the Molchanovskoye field and is currently drilling ahead on horizontal Well M154. It is also drilling a vertical well on the Ignatovskoye field. Further wells are planned on both fields this year together with a test on a further horizon in the N70 well on the Novo-Nikolaevskoye field. On the exploration front, a well is planned on the Zaplavskoye licence and in the second half of the year the company intends to shoot 2D seismic over its newly-awarded Chervonoyarske East exploration licence.

But JKX isnt just a Ukraine play. It also holds interest in Georgia, Italy, Bulgaria and Turkey. (A divestment of its US property may be on the cards after a series of disappointing well results.) This geographic spread diversifies the political risk but has also been driven by the difficulties of growing its asset base in Ukraine, where 90 per cent of licences are still controlled by the state. Instead, with its new additions of acreage in Bulgaria and Turkey and an ongoing search for projects in Russia, JKX is seeking to create a footprint in the wider region where it can leverage its regional expertise, contacts and experience.

112,000 trade @ 314 buy/sell ?

aldwickk,

Looks like a buy,IMO, in fact there were several large trades that looked like buys today, and we finallly ticked up at the close!

RSI looked oversold, and maybe one or two trackers are finally buying in for the FTSE 250 inclusion?

Comment in today's Shares magazinre;


"strong track record justifies investor confidence"


Fair comment given the recent results and doubling of the dividend IMO.

Former Ukrainian premier vows to scrap Russian gas accord if elected
AFX


MOSCOW (AFX) - Former Ukrainian prime minister Yulia Timoshenko said she would void a gas deal struck by Russia and Ukraine last month if her party wins legislative elections Sunday.

The agreement ended a disruption of Russian gas shipments to Ukraine that also affected western European countries.

This is not just about gas, she told the Russian newspaper Izvestia. 'It's about managing Ukraine from another country. Ukraine is reined in by its debts and risks losing its gas deposits.'

'After the legislative elections the gas accord must absolutely be cancelled. Because of this agreement Ukraine's energy sector is shrouded in secrecy. And some, let's say influential people, in our country are making a lot of money because of this,' she added.

Timoshenko has herself been accused of benefiting from Russian gas import deals in the past.

'If we win the election we will propose our candidates take up certain posts in the security services and will investigate who in Ukraine made a profit from this agreement,' she said.

Timoshenko was dismissed as prime minister in September after disagreements with President Viktor Yushchenko and has since joined opposition ranks.

'If we come in first (in the election) inside the orange coalition, we will be able to take over responsibilities' in the government, she said, referring to the colour of the bloodless 'Orange Revolution' in late 2004 in which she battled for change along with Yushchenko.

newsdesk@afxnews.com

afp/tc

Congratulations on the informed postings on this thread. It's rare in my experience to hear posters agree that a share is fairly valued at the moment. The better the share the less exuberant the posters it seems.

saintserf,

Yes I agree, the 'noisy' threads quite often are for the worst shares.

I hope Timoshenko loses on Sunday, or we may see a slide on Monday if she is genuinely going to scrap the gas deal with Russia.

But of course Ukraine would risk an international backlash if Russia cuts the supply again.

let's hope the present incumbent prevails.