TIDMJKX
RNS Number : 1573Y
JKX Oil & Gas PLC
28 August 2009
?
+-----------------------------------------+---------------------------------------------+
| | 6 Cavendish Square, London W1G 0PD, |
| | England, UK |
| | Tel: +44 (0)20 7323 4464 Fax: +44 (0)20 |
| | 7323 5258 |
| | Web site:http://www.jkx.co.uk |
| | |
+-----------------------------------------+---------------------------------------------+
JKX Oil & Gas plc
HALF-YEARLY RESULTS
FOR
THE SIX MONTHS ENDED 30 JUNE 2009
Financial Highlights
* Gas revenues $53.6m (2008: $40.8m)
* Oil revenues $24.2m (2008: $75.1m)
* Operating cash flow $59.9m (2008: $86.9m)
* Operating profit $44.5m (2008: $82.2m)
* Earnings per share 20.2 cents (2008: 39.4 cents)
* Capital expenditure $51.6m (2008: $57.7m)
* 5% increase in the interim dividend declared to 2.3p per share (2008: 2.2p per
share)
Operational Highlights
* Progress made on the Company's exploration programmes
* Recovery of Ukrainian oil and gas production levels in latter part of the period
continued into third quarter of the year
* Current production exceeds 13,000 boepd, an increase of approx. 30% above the
average for the period (10,191 boepd)
* First gas production in Hungary commenced in August, with production currently
approx. 750 boepd
* Overall performance in the second half of the year expected to be in line with
expectations
JKX Chief Executive, Dr Paul Davies, commented: "In spite of the difficult
market conditions, we are pleased to have been able to maintain the planned
investment programmes on our Ukrainian, Russian and Hungarian producing and
development projects through the first half of the year. We are making solid
progress in expanding our production base whilst continuing with our active
exploration portfolio. As anticipated we achieved first gas production from our
Hungarian project in August.
We expect our performance in the second half of the year to be in line with
market expectations, and believe that we will keep delivering long term value
for shareholders."
ENDS
For further information please contact:
+----------------------------------------------+------------------+----------------------+
| Catherine Maitland / Matthew Law | Cardew Group | 020 7930 0777 |
+----------------------------------------------+------------------+----------------------+
CHAIRMAN'S STATEMENT
I am pleased to report that the Company's healthy cash flow and cash resources
have allowed it to maintain its planned investment programmes on its Ukrainian,
Russian and Hungarian producing and development projects through the first half
of the year. The lower production and fall in revenues from substantially lower
international oil prices in the period was partially offset by the increase in
Ukrainian gas realisations. As disclosed previously, delays in completion and
testing of new development wells at Poltava, Ukraine impacted overall production
for the period. However, recovery of Ukrainian oil and gas production levels in
the latter part of the period has continued into the third quarter of the year.
Good progress has also been made on the Company's exploration programmes.
Major financial highlights for the period include:
* Gas revenues of $53.6m (2008: $40.8m)
* Oil revenues of $24.2m (2008: $75.1m)
* Operating profit of $44.5m (2008: $82.2m)
* Operating cash flow of $59.9m (2008: $86.9m)
* Earnings per share of 20.2 cents (2008: 39.4 cents)
* Capital expenditure of $51.6m (2008: $57.7m)
* Interim dividend of 2.3p per share declared (2008: 2.2p per share)
Production and Realisations
Average production from our wholly owned Ukrainian subsidiary, Poltava Petroleum
Company ("PPC"), reduced in the first half of the year by approximately 12% to
10,191 boepd (11,607 boepd) due to: natural decline in oil and gas production in
the period; variable liquids production from new and recompleted wells; a
backlog of new wells awaiting testing.
However, some of our most recent wells and re-completions have produced at rates
above expectation. Additional compression capacity has also been brought
on-stream, further system efficiencies have been implemented and the backlog of
wells awaiting testing significantly reduced. Current production is in excess of
13,000 boepd, an increase of approximately 30% above the average for the period.
In August, PPC signed a new sales contract with the Ukrainian subsidiary of
Royal Dutch Shell to supply 21 million cubic metres of gas per month
(approximately 50% of current PPC production). The contract runs until March
2012 and provides for potential increases in delivery volumes.
We anticipate the average gas realisation achieved in the first half to be
maintained through the second half of the year with oil realisations continuing
to track international oil prices.
Dividend
The Board is pleased to declare a five per cent increase in the interim dividend
to 2.3p per share (2008: 2.2p per share) which reflects the Company's continued
liquidity and your Board's confidence in the outlook for the Company. The
dividend will be paid on 16th October to shareholders who are on the Company's
Register of Members at the close of business on 11th September.
Change of Adviser
I am pleased to announce that Hawkpoint Partners have been appointed as
Financial Adviser to the Company, effective immediately.
Outlook
The Company is making solid progress towards its primary goal of expanding its
production base whilst nurturing an active exploration portfolio. Cash flow and
liquidity remain key parameters in management of this broadening of the
Company's sphere of activity. Improved production in Ukraine and initiation of
gas delivery in Hungary are expected to raise the average production in the
second half of the year above 11,500 boepd.
We are active in evaluation of new development and exploration opportunities in
our central and east European core area, whilst being mindful of the acquisition
opportunities afforded by the relative strength of our balance sheet and cash
resources.
I anticipate the Company's overall performance in the second half of the year to
be in line with expectations.
CHIEF EXECUTIVE'S STATEMENT
Operational Highlights
Ukraine
In the first half of the year, PPC drilled and/or completed three development
wells and two appraisal wells in the Poltava licences:
· Well N71 was drilled in the western Novo-Nikolaevskoye field area to test
a sequence of Visean sandstones and logged hydrocarbons in two sandstone layers.
Initial production from the secondary target, the deeper reservoir, flowed at an
initial rate of 1.9 MMcfd of gas with 118 bpd of condensate. The flow declined
rapidly and the well was subsequently recompleted in the upper primary reservoir
and tested at a stabilised rate of 6.4 MMcfd of gas and 87 bpd of condensate.
· Well M206 was the first well to target specifically the Tournasian T2
carbonate and sandstone in the centre of the Molchanovskoye Main field. It found
39 metres of net pay and, after a very high initial clean-up rate, tested at a
stabilised rate of 4.2 MMcfd of gas and 393 bpd of condensate.
· Well M207 was drilled to test an isolated Devonian sandstone fault block
in the west of the Molchanovskoye Main field. Logs indicated in excess of 18
metres of net pay and test production confirmed that the block had not been
depleted. The well tested at a stabilised rate of 4.9 MMcfd of gas and 409 bpd
of condensate.
· Well M166 was drilled as a horizontal infill well to the Devonian
sandstone in the Molchanovskoye North field. The modified well design resulted
in the well exceeding expectations with a stabilised flow rate of 2,140 bpd of
oil and 1.7 MMcfd of gas.
· Well N72 was drilled in the Novo-Nikolaevskoye field to develop the Visean
sandstones between the N71 and I133 wells. It logged hydrocarbons in two
sandstone layers. There was no flow from the deeper, thinner reservoir and the
well is being prepared for recompletion in the upper reservoir.
The Skytop rig is currently drilling development Well M167 as a high angle
Tournasian carbonate infill well across the main natural fracture system in the
Molchanovskoye North field. The rig will then undergo a short period of
maintenance and rehabilitation before drilling a Devonian sandstone offset to
the successful M166 horizontal well. The rig has a full drilling schedule
through the remainder of 2009 and 2010.
PPC's work-over rig carried out re-completions in Molchanovskoye Main wells M204
and M205, and Ignatovskoye Well I79 during the period. It also performed
preparatory work on Rudenkovskoye wells R101 and R102 ahead of the planned
proppant fracture stimulation test programme. The rig has now returned to
exploration Well Z3 on the Zaplavskoye licence to replace damaged tubing prior
to acidizing and testing the well. Meanwhile, PPC has applied for both easterly
and westerly extensions to the Zaplavskoye exploration licence.
The proppant fracture stimulation test programme for two of the producing wells
on the Rudenkovskoye field was completed after the reporting period. The aim of
the programme was to identify a preferred stimulation technique to be employed
for the full development of the field. Initial results from Well R102 indicate
that the frac was successful and flow rates increased significantly over
previous production from the same interval. Work is now in progress to evaluate
the impact of these results on the other intervals in the well and the rest of
the South Rudenkovskoye area. Unfortunately a pressure leak curtailed the Well
R101 frac operation and the results were inconclusive.
In addition to the proppant fracture stimulation test programme in the
Rudenkovskoye field, the 3D seismic data over the field has been re-interpreted
and alternative locations for a horizontal well targeting the Devonian sandstone
in the shallower southern part of the field have been identified for drilling in
the coming year. Most of the northern part of the Rudenkovskoye field lies
beyond the existing 3D seismic coverage and a 30 sq.km extension was acquired in
April. This survey will permit more accurate identification of the multiple sand
bodies and potential drilling locations in the main Tournasian sandstone. It
should also aid interpretation of the underlying Devonian sandstone penetrated
by Well R101 but which had to be plugged off due to the high pressures
encountered when drilled in 2006.
An acid fracture stimulation programme was carried out in the period to enhance
production from the Tournasian carbonate in areas where the natural fracture
system is less developed i.e. where the carbonate is tight. The frac on Well
M162 in the Molchanovskoye North field area resulted in a significant increase
in flow in comparison to the pre-frac rate and PPC continues to monitor rates as
the well re-stabilises. The frac on Well I131 in the Ignatovskoye field (which
had stopped flowing prior to stimulation) did result in some flow to the
production facility and a measurable improvement in reservoir performance, but
was not sustainable. Further evaluation will be needed to assess the potential
for other frac techniques in low productivity areas of the PPC fields.
Exploration Well Z2 on the Zaplavskoye licence, located to the south of the
Molchanovskoye field, was drilled in 2008 and encountered thicker than expected
T2 carbonate with the primary sandstone objective being deeper than prognosed.
The reservoir was tested in the period and proved to be tight and unproductive.
Initial plans to abandon the well are on hold pending evaluation of the results
of the acid fracture stimulation programme.
The pace of facility development has eased with the connection to the Soyuz gas
export line being completed in late 2008. Final implementation of the updated
gas metering system is in progress and the oil export metering system has been
upgraded. An additional compressor has been installed and commissioned, and a
second test separator added to improve reservoir monitoring and management.
Russia
During the period, JKX's wholly owned subsidiary, Yuzhgazenergie ("YGE"),
started the initial three-well workover programme in the Koshekhablskoye field
in the southern Russian Republic of Adygea and progressed the programme for
development of a new Gas Processing Facility (GPF).
Well 27 has been worked over, re-logged and re-completed in the Oxfordian
limestone. The well will be tested shortly with results anticipated early next
month. A full re-evaluation of the development schedule and the project
economics will be undertaken after the well has been tested. Following
completion of the work on Well 27, the Kremco-900 rig will return to working
over Well 20 which will also be re-completed in the Oxfordian limestone. This is
now scheduled for testing in the fourth quarter. The rig will then workover the
Callovian sandstone interval in Well 9. Workover of the remaining eight wells is
currently planned to commence in late 2010.
The second half of 2009 will see the procurement and laying of replacement
infield flowlines and the new export connection to the nearby gas trunkline. The
70 man camp and site office has been completed and the site for the GPF has been
cleared. The land is levelled and being prepared for construction operations to
commence at the beginning of 2010. Design work on the GPF and related
infrastructure is ongoing. First gas is anticipated in the fourth quarter 2010,
subject to the development schedule review mentioned above.
Hungary
Hernad licences: The licences (JKX: 50%) are in the northern Pannonian Basin and
include the Hajdunanas field.
The Hajdunanas field development is complete with commercial gas delivery
commencing earlier this month. Production from the two discovery wells is routed
through a simple separator and then via a 14.5 km export line to an existing
facility for input to the Hungarian gas pipeline system. Production of
approximately 8.5MMcfd is now being sold under contract to Fogaz Zrt, the
Hungarian subsidiary of the German utility, RWE. JKX has a 50% interest in the
field.
Interpretation of the 348 sq.km of 3D seismic data acquired over the south
eastern portion of Hernad I licence identified a number of prospects additional
to Hajdunanas. The Tiszatarjan-1 exploration well was spudded in late 2008 to
investigate the first of these additional prospects and targeted a Miocene
volcanoclastic reservoir 20km south west of the Hajdunanas discovery. The well
reached TD in January 2009 with oil being recovered from the Miocene objective
but at sub-commercial rates. The well has been suspended pending a forward
programme of formation stimulation.
Nyirseg Licence: JKX and its co-venturer in the Hernad licences, Hungarian
Horizon Energy (HHE), farmed into the adjacent Nyirseg licence operated by
PetroHungaria in late 2008. JKX and HHE each acquired a one-third equity share
in 120 sq.km of the Nyirseg licence by funding the acquisition of 3D seismic
over the area. Acquisition was completed in early 2009 and the first well,
Gorbehaza-1, was spudded on the 17th August. The well has now reached TD of
1,300m with gas shows in two Pannonian sandstones levels and is being prepared
for testing.
Veszto Licence: During the period, JKX farmed-in for a 25% interest in a 15.6
sq.km area of the Veszto exploration licence held by HHE in the eastern
Pannonian Basin. A 3D seismic survey covering the entire 219 sq.km licence has
been completed and interpreted with two prospects identified. The first well has
been drilled and logged gas in both the deeper primary target and a shallower
secondary target. High pressures were encountered in the primary target, causing
the well to be suspended. Testing of the secondary target will await the
drilling of a follow-up well planned for the third quarter which will utilise a
higher rated drilling spread to investigate fully the primary, high pressure
formation.
Bulgaria
The Company operates the B Golitza and B1 Golitza exploration permits which
cover a total of 3,499 sq.km, onshore Bulgaria. The 250 sq.km 3D seismic survey
across the east-central parts the B and B1 Golitza licenses was completed in
February 2009. Processing is complete and interpretation is now in progress with
the goal of identifying a drilling prospect before the end of the year. Sorgenia
E&P SpA ("Sorgenia") has farmed-in for a 30% working interest in the Golitza
licences. Following the earning of Sorgenia's interest and subject to the
approval of the Bulgarian authorities, participation in the licences will be:
JKX (40% and operator), Aurelian (30%) and Sorgenia (30%).
Slovakia
The Company farmed-in to the Svidnik, Medzilaborce and Snina exploration
licences in the Carpathian Fold Belt in north east Slovakia in 2008 (JKX: 25%).
The licences cover a total area of 2,278 sq.km. A 238 km 2D seismic programme
was started in 2008 but suspended due to poor weather conditions. The remaining
108 km is being acquired in 2009, and will provide basic regional information in
the two eastern licences as well as infill to the 2008 data in the western
Svidnik licence.
Current and Future Activity
The drilling programme on the Poltava licences, Ukraine, for the second half of
the year will include more development drilling on the Ignatovskoye and
Molchanovskoye fields targeting the productive carbonate and sandstone horizons.
The results of the proppant fracture stimulation test programme on two of the
producing wells in the Rudenkovskoye field, together with the acid fracture
stimulation programme in the carbonate reservoir will provide the base criteria
for the 2010 drilling and development programme. In addition, we will continue
to actively pursue development and exploration opportunities elsewhere in
Ukraine through a programme of high-grading technical and commercial potential.
In Russia, the focus is firmly on the Koshekhablskoye field where work-over and
testing activity is in progress along with preparations for installation of
flowlines and design and construction at the GPF. First gas is anticipated by
the end of 2010. The gas market in Russia is evolving and we continue to seek
additional licences for our Russian portfolio for development following the
start up of the Koshekhablskoye Field.
The strategy of focusing the Company's exploration efforts in eastern and
central Europe will continue. The Company's first gas production in
Hungary commenced in August and there is the potential for further developments
in 2010. We anticipate participating in further exploration plays in the area in
the coming periods.
FINANCIAL REVIEW
Revenue
Total revenues decreased by 33% to $78.6m (2008: $116.8m) as a result of a 30%
fall in oil production in the period and the significant fall in world oil
prices, bringing the average oil realisation down 53% to $42.29/bbl (2008:
$90.45/bbl). The decline in oil production is due to the fewer than anticipated
new wells completed towards the end of 2008 not compensating for natural field
decline. This was compounded by delays in clearing the backlog of wells for
completion (as previously reported) and some lower than anticipated individual
well performances. The combined effect of the decrease in oil prices and the
reduced production meant that oil revenues dropped by 68% to $24.2m (2008:
$75.1m). This fall in oil revenues was partly offset by a 31% increase in gas
revenues to $53.6m (2008: $40.8m) The increase is a function of production in
the period being consistent with H1 2008 but a rise in the Ukrainian domestic
gas price to $7.18/mcf (2008: $5.40/mcf). Combined oil and gas production was
12% lower at an average daily rate of 10,191 boepd (2008: 11,607 boepd).
Operating profit
Total cost of sales fell 16% to $23.6m (2008: $28.2m) with falls in each of the
cost components:
* Production costs fell 20% to $9.4m (2008: $11.7m) as a result of general cost
savings initiatives combined with reductions in a number of specific Ukrainian
costs following inflation and foreign exchange driven changes in the local cost
environment. On a boe basis production costs fell 8% to $5.13/boe (2008:
$5.60/boe).
* DD&A fell 10% to $12.7m (2008: $14.1m) largely driven by the 12% fall in
production in the period. The average DD&A rate itself rose 4% in the period to
$6.90/boe (2008: $6.66/boe) as a result of revisions to future capital
expenditure forecasts and a slight change in mix of the field specific rates
dictated by the production mix in the period.
* Total production related taxes fell 39% to $1.4m (2008: $2.3m). As with DD&A
this was largely a function of the 12% fall in production but was also impacted
by a number of changes in rates in specific taxes. The cost on a boe basis is
34% lower at $0.73/boe (2008: $1.10/boe).
General and administrative expenses were largely unchanged in the period at
$7.7m (2008: $7.8m), although the combined figure contains a number of savings
arising from changes in the cost environment in Ukraine in the latter part of
2008 and into 2009.
There was a $2.8m net loss on foreign exchange (2008: net gain of $1.3m) due
mainly to realised exchange losses in relation to the Group's Ukrainian
operations. This was partially offset by gains from Group companies transacting
in Euros.
Taxation
The tax charge in the period was $12.9m (2008: $21.8m), which equates to an
effective rate of 30% (2008: 26%). The main reason for this increase in
effective rate is the net increase in losses, primarily in Russia and the
Netherlands which are not recognized at present.
These losses may reduce the effective tax rate in future periods if they are
used or if they were to be recognized as deferred tax assets. If the impact of
these losses is excluded, the effective tax rate for the period is 26% (2008:
26%).
Profit for the year
The profit after tax was $31.8m (2008: $61.8m) down 49%. The basic earnings per
share is also down 49% to 20.23 cents per share (2008: 39.43 cents per share).
Cash flow/Net cash
Net cash from operating activities (after tax payments of $10.7m and net
interest received of $0.3m) was $49.5m, down 32% (2008: $72.6m), consistent with
the reduction in revenues and costs. Total net cash used in investing activities
remained constant at $49.0m (2008: $48.9m). Most of this cash was invested in
the continued development of the Ukrainian and Russian assets, together with the
new development in Hungary. During the period $1.6m was received as proceeds for
the farm down in B Golitza and B1 Golitza licences in Bulgaria.
The effect of exchange rates on cash and cash equivalents had a materially
adverse effect on non $US balances at period end. The total effect of $5.2m
compares to a modest positive effect in 2008 of $0.2m.
After accounting for proceeds from the issue of shares of $0.4m (2008: $0.8m)
and dividends paid of $6.4m (2008: $7.4m) there was a 37% net decrease in cash
and cash equivalents to $54.1m (2008: $85.4m). The current cash balance is
approximately $74.8m.
Financial instruments
The Group's financial instruments comprise of cash and liquid resources, and
various items such as trade and other receivables, and trade and other payables
that arise directly from its operations. The main purpose of these financial
instruments is to finance the Group's operations.
Financial risk factors
The Group's activities expose it to a variety of financial risks: market risk
(including currency risk, interest rate risk and commodity price risk), credit
risk and liquidity risk. The Group's overall risk management programme focuses
on the unpredictability of financial markets in which it operates and seeks to
minimise potential adverse effects on the Group's financial performance. Risk
management is carried out by the Finance Director under policies and procedures
approved by the board of directors.
(a) Market risk
(i) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk
arising from various currency exposures, primarily with respect to Ukrainian
Hryvna and the Russian Rouble. Foreign exchange risk arises from future
commercialtransactions, recognised assets and liabilities and net investments in
foreign operations. The Group manages its exposure by matching, as far as is
practical, receipts and payments in the same currency and by following a range
of commercial policies to minimise exposure to the Hryvna denominated sales,
which continued to account for virtually all Group revenues in 1H 2009.
The Group was affected by continuing exchange rate fluctuations in its main
operational currencies. The fluctuations had impact on foreign exchange losses
emanating from revaluation of period end cash balances.
(ii) Price risk
The Group is exposed to international oil and gas price movements. The Group is
a price taker and does not enter hedge agreements unless required for borrowing
purposes from time to time.
(iii) Cash flow and fair value interest rate risk
As the Group has no significant interest-bearing assets other than cash, the
Group's income and operating cash flows are substantially independent of changes
in market interest rates. The Group manages its cash flow interest rate risk by
actively managing cash in short term or overnight fixed interest rate deposits.
(b) Credit risk
Credit risk arises from cash and cash equivalents and deposits with banks and
financial institutions, as well as credit exposures to customers, including
outstanding receivables and committed transactions. Credit risk on cash and cash
equivalents is managed at a Group level with two Treasury Committees (one
comprised of Management which meets weekly, and another being a sub committee of
the Audit Committee) evaluating the relative risks of banks and determining the
appropriate allocation of Group funds across a range of banks in varying
jurisdictions aimed at minimizing credit risk associated with cash deposits.
Customers are managed at the operating company level and are evaluated if there
is no independent rating, taking account of their financial position, past
experience and other factors. Credit terms are only agreed with significant
entities who can offer guarantees from appropriately rated banks or corporate
guarantees from credit worthy international companies. Management does not
expect any losses from non-performance by any period-end counterparties. The
Company does not have any concentration of credit risk and management does not
consider there to be any exposure to loss.
(c) Liquidity risk
Management monitors rolling forecasts of the Group's liquidity on the basis of
expected cash flow.
Capital risk management
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital. In order to maintain or adjust
the capital structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets.
The Group has no borrowings (2008: nil).
Fair value estimation
The carrying value less impairment provision of trade receivables and payables
are assumed to approximate their fair values. The fair value of financial
liabilities for disclosure purposes is estimated by discounting the future
contractual cash flows at the current market interest rate that is available to
the Group for similar financial instruments.
Financial review
+------------+--------+--------+--------+
| Production | 1H | 2H | 1H |
| summary | 2009 | 2008 | 2008 |
+------------+--------+--------+--------+
| Production | | | |
+------------+--------+--------+--------+
| Oil | 578 | 615 | 830 |
| (Mbbl) | | | |
+------------+--------+--------+--------+
| Gas | 7.6 | 7.8 | 7.7 |
| (Bcf) | | | |
+------------+--------+--------+--------+
| Oil | 1,845 | 1,917 | 2,113 |
| equivalent | | | |
| (Mboe) | | | |
+------------+--------+--------+--------+
| Daily | | | |
| production | | | |
+------------+--------+--------+--------+
| Oil | 3,191 | 3,339 | 4,563 |
| (bopd) | | | |
+------------+--------+--------+--------+
| Gas | 42 | 42 | 42 |
| (MMcfd) | | | |
+------------+--------+--------+--------+
| Oil | 10,191 | 10,423 | 11,607 |
| equivalent | | | |
| (boepd) | | | |
+------------+--------+--------+--------+
+------------------+--------+--------+--------+
| Operating | 1H | 2H | 1H |
| results | 2009 | 2008 | 2008 |
| | $m | $m | $m |
+------------------+--------+--------+--------+
| Revenue | | | |
+------------------+--------+--------+--------+
| Oil | 24.2 | 46.7 | 75.1 |
+------------------+--------+--------+--------+
| Gas | 53.6 | 42.3 | 40.8 |
+------------------+--------+--------+--------+
| Other | 0.8 | 1.2 | 0.9 |
+------------------+--------+--------+--------+
| | 78.6 | 90.2 | 116.8 |
+------------------+--------+--------+--------+
| Cost | | | |
| of | | | |
| sales | | | |
+------------------+--------+--------+--------+
| Operating | (9.4) | (12.2) | (11.7) |
| costs | | | |
+------------------+--------+--------+--------+
| Depreciation, | (12.7) | (13.1) | (14.1) |
| depletion and | | | |
| amortisation | | | |
+------------------+--------+--------+--------+
| Production | (1.4) | (1.7) | (2.3) |
| based | | | |
| taxes | | | |
+------------------+--------+--------+--------+
| | (23.5) | (27.0) | (28.1) |
+------------------+--------+--------+--------+
| Provision | (0.1) | (6.9) | - |
| for | | | |
| impairment/write | | | |
| off of | | | |
| exploration | | | |
| costs | | | |
+------------------+--------+--------+--------+
| Total | (23.6) | (33.9) | (28.1) |
| cost | | | |
| of | | | |
| sales | | | |
+------------------+--------+--------+--------+
| Gross | 55.0 | 56.3 | 88.7 |
| Profit | | | |
+------------------+--------+--------+--------+
| Operating | | | |
| expenses | | | |
+------------------+--------+--------+--------+
| General | (7.7) | (7.5) | (7.8) |
| and | | | |
| administrative | | | |
| expenses | | | |
+------------------+--------+--------+--------+
| (Loss)/profit | (2.8) | (5.6) | 1.3 |
| on foreign | | | |
| exchange | | | |
+------------------+--------+--------+--------+
| | | | |
+------------------+--------+--------+--------+
| Operating | 44.5 | 43.2 | 82.2 |
| profit | | | |
+------------------+--------+--------+--------+
+--------------+--------+--------+--------+
| Earnings | 1H | 2H | 1H |
| | 2009 | 2008 | 2008 |
+--------------+--------+--------+--------+
| Net | 31.8 | 16.4 | 61.8 |
| profit | | | |
| ($m) | | | |
+--------------+--------+--------+--------+
| Basic | 157 | 157 | 157 |
| weighted | | | |
| average | | | |
| number | | | |
| of | | | |
| shares | | | |
| in issue | | | |
| (m) | | | |
+--------------+--------+--------+--------+
| Earnings | 20.23 | 10.42 | 39.43 |
| per | | | |
| share | | | |
| (basic, | | | |
| cents) | | | |
+--------------+--------+--------+--------+
| Earnings | 58.5 | 57.6 | 97.3 |
| before | | | |
| interest, | | | |
| tax, | | | |
| depreciation | | | |
| and | | | |
| amortisation | | | |
| ($m) | | | |
+--------------+--------+--------+--------+
+--------------+--------+--------+--------+
| Realisations | 1H | 2H | 1H |
| | 2009 | 2008 | 2008 |
+--------------+--------+--------+--------+
| Oil | $42.29 | $76.08 | $90.45 |
| (per | | | |
| bbl)* | | | |
+--------------+--------+--------+--------+
| Gas | $7.18 | $5.53 | $5.40 |
| (per | | | |
| Mcf) | | | |
+--------------+--------+--------+--------+
*Oil prices are net of all transportation, shrinkage and brokerage charges.
+---------------+--------+--------+--------+
| Cost | 1H | 2H | 1H |
| of | 2009 | 2008 | 2008 |
| production | | | |
| ($/boe) | | | |
+---------------+--------+--------+--------+
| Production | $5.13 | $6.37 | $5.60 |
| costs | | | |
+---------------+--------+--------+--------+
| Depreciation, | $6.90 | $6.86 | $6.66 |
| depletion and | | | |
| amortisation | | | |
+---------------+--------+--------+--------+
| Production | $0.73 | $0.87 | $1.10 |
| based | | | |
| taxes | | | |
+---------------+--------+--------+--------+
+------------+--------+--------+--------+
| Cash | 1H | 2H | 1H |
| flow | 2009 | 2008 | 2008 |
+------------+--------+--------+--------+
| Cash | 59.9 | 74.9 | 86.9 |
| generated | | | |
| from | | | |
| operations | | | |
| ($m) | | | |
+------------+--------+--------+--------+
| Operating | 38.1 | 47.7 | 55.5 |
| cash flow | | | |
| per share | | | |
| (cents) | | | |
+------------+--------+--------+--------+
+----------------------+--------+--------+--------+
| Balance | 1H | 2H | 1H |
| sheet | 2009 | 2008 | 2008 |
+----------------------+--------+--------+--------+
| Net | 54.1 | 64.8 | 85.4 |
| cash | | | |
| ($m) | | | |
+----------------------+--------+--------+--------+
| Net | 15.1 | 19.3 | 24.8 |
| cash | | | |
| to | | | |
| equity | | | |
| (%) | | | |
+----------------------+--------+--------+--------+
| Return | 18.4 | 10.6 | 39.2 |
| on | | | |
| average | | | |
| capital | | | |
| employed | | | |
| (%) | | | |
+----------------------+--------+--------+--------+
| | | | |
+----------------------+--------+--------+--------+
| Increase | | | |
| in | | | |
| property, | | | |
| plant and | | | |
| equipment/intangible | | | |
| assets ($m) | | | |
+----------------------+--------+--------+--------+
| Ukraine | 25.5 | 27.2 | 29.0 |
+----------------------+--------+--------+--------+
| Russia | 17.6 | 11.2 | 21.3 |
+----------------------+--------+--------+--------+
| Other | 8.5 | 14.1 | 7.4 |
+----------------------+--------+--------+--------+
| Capital | 51.6 | 52.5 | 57.7 |
| expenditure | | | |
| ($m) | | | |
+----------------------+--------+--------+--------+
Interim financial information - Group income statement
+--------+--------------------------------+----------+--------+--------------+--------------+-----------+
| | Notes | Six | Six | Year |
| | | months | months | to |
| | | to | to | 31 |
| | | 30 | 30 | December |
| | | June | June | 2008 |
| | | 2009 | 2008 | (audited) |
| | | (un-audited) | (un-audited) | $000 |
| | | $000 | $000 | |
+----------------------------------------------------+--------+--------------+--------------+-----------+
| Revenue | 4 | 78,584 | 116,847 | 207,047 |
+----------------------------------------------------+--------+--------------+--------------+-----------+
| Cost | | | | | |
| of | | | | | |
| sales | | | | | |
+--------+-------------------------------------------+--------+--------------+--------------+-----------+
| Operating costs - excluding impairment/write off | 7 | (23,497) | (28,183) | (55,077) |
| of exploration costs | | | | |
+----------------------------------------------------+--------+--------------+--------------+-----------+
| Provision for impairment/write off of | 7 | (95) | - | (6,883) |
| exploration costs | | | | |
+----------------------------------------------------+--------+--------------+--------------+-----------+
| Total cost of sales | | (23,592) | (28,183) | (61,960) |
+----------------------------------------------------+--------+--------------+--------------+-----------+
| Gross profit | | 54,992 | 88,664 | 145,087 |
+----------------------------------------------------+--------+--------------+--------------+-----------+
| General and administrative expenses | | (7,730) | (7,834) | (12,700) |
+----------------------------------------------------+--------+--------------+--------------+-----------+
| (Loss)/profit on foreign exchange | | (2,783) | 1,334 | (6,994) |
+----------------------------------------------------+--------+--------------+--------------+-----------+
| Operating profit | 8 | 44,479 | 82,164 | 125,393 |
+----------------------------------------------------+--------+--------------+--------------+-----------+
| Finance income | | 715 | 1,542 | 3,172 |
+----------------------------------------------------+--------+--------------+--------------+-----------+
| Finance cost | | (514) | (112) | (1,004) |
+----------------------------------------------------+--------+--------------+--------------+-----------+
| Profit before tax | | 44,680 | 83,594 | 127,561 |
+----------------------------------------------------+--------+--------------+--------------+-----------+
| Taxation - current | 10 | (12,888) | (21,842) | (49,407) |
+----------------------------------------------------+--------+--------------+--------------+-----------+
| Profit for the period | | 31,792 | 61,752 | 78,154 |
+----------------------------------------------------+--------+--------------+--------------+-----------+
| | | | | |
+----------------------------------------------------+--------+--------------+--------------+-----------+
| Earnings per share | - | 12 | 20.23 | 39.43 | 49.85 |
| | basic | | | | |
| | earnings | | | | |
| | per 10p | | | | |
| | ordinary | | | | |
| | share | | | | |
| | (in | | | | |
| | cents) | | | | |
+-----------------------------------------+----------+--------+--------------+--------------+-----------+
| | - | 12 | 20.15 | 39.04 | 49.44 |
| | diluted | | | | |
| | earnings | | | | |
| | per 10p | | | | |
| | ordinary | | | | |
| | share | | | | |
| | (in | | | | |
| | cents) | | | | |
+--------+--------------------------------+----------+--------+--------------+--------------+-----------+
+-----------+--------+---------+---------+-----------+
| Dividends | 11 | (6,377) | (7,436) | (13,610) |
| paid | | | | |
+-----------+--------+---------+---------+-----------+
| Dividend | | 2.6 | 2.4 | 4.6 pence |
| (per | | pence | pence | |
| share) | | | | |
+-----------+--------+---------+---------+-----------+
Interim financial information - Group statement of comprehensive
income
+--------------------------------------------------+-----+--------------+--------------+------------+
| | | Six | Six | Year |
| | | months to | months to | to |
| | | 30 June | 30 June | 31 Dec |
| | | 2009 | 2008 | 2008 |
| | | (un-audited) | (un-audited) | (audited) |
| | | $000 | $000 | $000 |
+--------------------------------------------------+-----+--------------+--------------+------------+
| Profit for the period | | 31,792 | 61,752 | 78,154 |
+--------------------------------------------------+-----+--------------+--------------+------------+
| Currency translation differences | | (3,009) | 2,980 | (16,985) |
+--------------------------------------------------+-----+--------------+--------------+------------+
| | | | | |
+--------------------------------------------------+-----+--------------+--------------+------------+
| Total comprehensive income attributed to: | | | | |
+--------------------------------------------------+-----+--------------+--------------+------------+
| JKX shareholders | | 28,783 | 64,732 | 61,169 |
+--------------------------------------------------+-----+--------------+--------------+------------+
The notes below form an integral part of this financial
information.
Interim financial information - Group balance sheet
+---------------+--------+--------------+--------------+-----------+
| | Notes | As at | As at | As at |
| | | 30 | 30 | 31 Dec |
| | | June | June | 2008 |
| | | 2009 | 2008 | (audited) |
| | | (un-audited) | (un-audited) | $000 |
| | | $000 | $000 | |
+---------------+--------+--------------+--------------+-----------+
| Assets | | | | |
+---------------+--------+--------------+--------------+-----------+
| Non-current | | | | |
| assets | | | | |
+---------------+--------+--------------+--------------+-----------+
| Property, | 5 | 307,753 | 266,739 | 278,902 |
| plant and | | | | |
| equipment | | | | |
+---------------+--------+--------------+--------------+-----------+
| Other | 5 | 26,545 | 26,514 | 22,359 |
| intangible | | | | |
| assets | | | | |
+---------------+--------+--------------+--------------+-----------+
| Goodwill | | 2,028 | 3,256 | 2,165 |
+---------------+--------+--------------+--------------+-----------+
| | | 336,326 | 296,509 | 303,426 |
+---------------+--------+--------------+--------------+-----------+
| Current | | | | |
| assets | | | | |
+---------------+--------+--------------+--------------+-----------+
| Inventories | | 1,603 | 2,017 | 1,758 |
| - finished | | | | |
| goods | | | | |
+---------------+--------+--------------+--------------+-----------+
| Trade | | 23,530 | 20,510 | 15,002 |
| and | | | | |
| other | | | | |
| receivables | | | | |
+---------------+--------+--------------+--------------+-----------+
| Cash | 14 | 54,079 | 85,391 | 64,805 |
| and | | | | |
| cash | | | | |
| equivalents | | | | |
+---------------+--------+--------------+--------------+-----------+
| | | 79,212 | 107,918 | 81,565 |
+---------------+--------+--------------+--------------+-----------+
| Assets | 15 | 7,397 | - | 7,347 |
| of | | | | |
| disposal | | | | |
| group | | | | |
| classified | | | | |
| as held | | | | |
| for sale | | | | |
+---------------+--------+--------------+--------------+-----------+
| | | 86,609 | 107,918 | 88,912 |
+---------------+--------+--------------+--------------+-----------+
| Total | | 422,935 | 404,427 | 392,338 |
| assets | | | | |
+---------------+--------+--------------+--------------+-----------+
| | | | | |
+---------------+--------+--------------+--------------+-----------+
| Liabilities | | | | |
+---------------+--------+--------------+--------------+-----------+
| Current | | | | |
| liabilities | | | | |
+---------------+--------+--------------+--------------+-----------+
| Current | | (3,269) | (8,906) | (10) |
| tax | | | | |
| liabilities | | | | |
+---------------+--------+--------------+--------------+-----------+
| Trade | | (33,155) | (29,187) | (26,670) |
| and | | | | |
| other | | | | |
| payables | | | | |
+---------------+--------+--------------+--------------+-----------+
| | | (36,424) | (38,093) | (26,680) |
+---------------+--------+--------------+--------------+-----------+
| Liabilities | 15 | (8) | - | (8) |
| directly | | | | |
| associated | | | | |
| with the | | | | |
| assets | | | | |
| classified | | | | |
| as held for | | | | |
| sale | | | | |
+---------------+--------+--------------+--------------+-----------+
| | | (36,432) | (38,093) | (26,688) |
+---------------+--------+--------------+--------------+-----------+
| Non-current | | | | |
| liabilities | | | | |
+---------------+--------+--------------+--------------+-----------+
| Provisions | 9 | (2,261) | (3,812) | (2,396) |
+---------------+--------+--------------+--------------+-----------+
| Deferred | | (27,150) | (18,830) | (29,097) |
| tax | | | | |
+---------------+--------+--------------+--------------+-----------+
| | | (29,411) | (22,642) | (31,493) |
+---------------+--------+--------------+--------------+-----------+
| Total | | (65,843) | (60,735) | (58,181) |
| liabilities | | | | |
+---------------+--------+--------------+--------------+-----------+
| Net | | 357,092 | 343,692 | 334,157 |
| assets | | | | |
+---------------+--------+--------------+--------------+-----------+
| | | | | |
+---------------+--------+--------------+--------------+-----------+
| Equity | | | | |
+---------------+--------+--------------+--------------+-----------+
| Share | 6 | 24,334 | 24,245 | 24,256 |
| capital | | | | |
+---------------+--------+--------------+--------------+-----------+
| Share | | 41,296 | 40,964 | 41,015 |
| premium | | | | |
+---------------+--------+--------------+--------------+-----------+
| Merger | | 30,680 | 30,680 | 30,680 |
| reserve | | | | |
+---------------+--------+--------------+--------------+-----------+
| Other | | | | |
| reserves | | | | |
+---------------+--------+--------------+--------------+-----------+
| | | 587 | 587 | 587 |
| Capital | | | | |
| redemption | | | | |
| reserve | | | | |
+---------------+--------+--------------+--------------+-----------+
| | | 2,889 | 2,579 | 2,719 |
| Equity | | | | |
| - | | | | |
| share | | | | |
| options | | | | |
+---------------+--------+--------------+--------------+-----------+
| | | (24,644) | (1,670) | (21,635) |
| Equity | | | | |
| - | | | | |
| foreign | | | | |
| currency | | | | |
| translation | | | | |
+---------------+--------+--------------+--------------+-----------+
| Retained | | 281,950 | 246,307 | 256,535 |
| earnings | | | | |
+---------------+--------+--------------+--------------+-----------+
| Total | | 357,092 | 343,692 | 334,157 |
| shareholders' | | | | |
| equity | | | | |
+---------------+--------+--------------+--------------+-----------+
The notes below form an integral part of this financial
information.
Interim financial information - Group statement of changes in
equity (un-audited)
+--------------+---------+---------+------------+---------+-------------+--------+---------+----------+---------+
| | Share | Merger | Capital | Equity | Foreign | Assets | Share | Retained | Total |
| | capital | reserve | redemption | share | currency | held | premium | earnings | $000 |
| | $000 | $000 | reserve | options | translation | for | $000 | $000 | |
| | | | $000 | reserve | reserve | sale | | | |
| | | | | $000 | $000 | $000 | | | |
+--------------+---------+---------+------------+---------+-------------+--------+---------+----------+---------+
| Group: | | | | | | | | | |
+--------------+---------+---------+------------+---------+-------------+--------+---------+----------+---------+
| At 1 | 24,148 | 30,680 | 587 | 2,448 | (4,650) | 803 | 40,217 | 191,991 | 286,224 |
| January | | | | | | | | | |
| 2008 | | | | | | | | | |
+--------------+---------+---------+------------+---------+-------------+--------+---------+----------+---------+
| Net | - | - | - | - | 2,980 | - | - | - | 2,980 |
| gains | | | | | | | | | |
| not | | | | | | | | | |
| recognised | | | | | | | | | |
| in the | | | | | | | | | |
| income | | | | | | | | | |
| statement | | | | | | | | | |
+--------------+---------+---------+------------+---------+-------------+--------+---------+----------+---------+
| Issue | 97 | - | - | - | - | - | 747 | - | 844 |
| of | | | | | | | | | |
| employee | | | | | | | | | |
| share | | | | | | | | | |
| options | | | | | | | | | |
+--------------+---------+---------+------------+---------+-------------+--------+---------+----------+---------+
| IFRS 2 | - | - | - | 131 | - | - | - | - | 131 |
| share | | | | | | | | | |
| option | | | | | | | | | |
| charge | | | | | | | | | |
+--------------+---------+---------+------------+---------+-------------+--------+---------+----------+---------+
| Profit | - | - | - | - | - | (803) | - | 61,752 | 60,949 |
| attributable | | | | | | | | | |
| to equity | | | | | | | | | |
| shareholders | | | | | | | | | |
+--------------+---------+---------+------------+---------+-------------+--------+---------+----------+---------+
| Dividend | - | - | - | - | - | - | - | (7,436) | (7,436) |
+--------------+---------+---------+------------+---------+-------------+--------+---------+----------+---------+
| At 30 | 24,245 | 30,680 | 587 | 2,579 | (1,670) | - | 40,964 | 246,307 | 343,692 |
| June | | | | | | | | | |
| 2008 | | | | | | | | | |
+--------------+---------+---------+------------+---------+-------------+--------+---------+----------+---------+
| | | | | | | | | | |
+--------------+---------+---------+------------+---------+-------------+--------+---------+----------+---------+
| Group: | | | | | | | | | |
+--------------+---------+---------+------------+---------+-------------+--------+---------+----------+---------+
| At 1 | 24,256 | 30,680 | 587 | 2,719 | (21,635) | - | 41,015 | 256,535 | 334,157 |
| January | | | | | | | | | |
| 2009 | | | | | | | | | |
+--------------+---------+---------+------------+---------+-------------+--------+---------+----------+---------+
| Net | - | - | - | - | (3,009) | - | - | - | (3,009) |
| gains | | | | | | | | | |
| not | | | | | | | | | |
| recognised | | | | | | | | | |
| in the | | | | | | | | | |
| income | | | | | | | | | |
| statement | | | | | | | | | |
+--------------+---------+---------+------------+---------+-------------+--------+---------+----------+---------+
| Issue | 78 | - | - | - | - | - | 281 | - | 359 |
| of | | | | | | | | | |
| employee | | | | | | | | | |
| share | | | | | | | | | |
| options | | | | | | | | | |
+--------------+---------+---------+------------+---------+-------------+--------+---------+----------+---------+
| IFRS 2 | - | - | - | 170 | - | - | - | - | 170 |
| share | | | | | | | | | |
| option | | | | | | | | | |
| charge | | | | | | | | | |
+--------------+---------+---------+------------+---------+-------------+--------+---------+----------+---------+
| Profit | - | - | - | - | - | - | - | 31,792 | 31,792 |
| attributable | | | | | | | | | |
| to equity | | | | | | | | | |
| shareholders | | | | | | | | | |
+--------------+---------+---------+------------+---------+-------------+--------+---------+----------+---------+
| Dividend | - | - | - | - | - | - | - | (6,377) | (6,377) |
+--------------+---------+---------+------------+---------+-------------+--------+---------+----------+---------+
| At 30 | 24,334 | 30,680 | 587 | 2,889 | (24,644) | - | 41,296 | 281,950 | 357,092 |
| June | | | | | | | | | |
| 2009 | | | | | | | | | |
+--------------+---------+---------+------------+---------+-------------+--------+---------+----------+---------+
The notes below form an integral part of this financial
information.
Interim financial information - Group cash flow statement
+----------------------+--------+--------------+--------------+-----------+
| | Notes | Six | Six | Year |
| | | months | months | to |
| | | to | to | 31 Dec |
| | | 30 | 30 | 2008 |
| | | June | June | (audited) |
| | | 2009 | 2008 | $000 |
| | | (un-audited) | (un-audited) | |
| | | $000 | $000 | |
+----------------------+--------+--------------+--------------+-----------+
| Cash | 13 | | | |
| flows | | | | |
| from | | | | |
| operating | | | | |
| activities | | | | |
+----------------------+--------+--------------+--------------+-----------+
| Cash | | 59,919 | 86,865 | 161,762 |
| generated | | | | |
| from | | | | |
| operations | | | | |
+----------------------+--------+--------------+--------------+-----------+
| Interest | | 429 | 1,884 | 3,045 |
| received | | | | |
+----------------------+--------+--------------+--------------+-----------+
| Interest | | (163) | (3) | (2) |
| paid | | | | |
+----------------------+--------+--------------+--------------+-----------+
| Income | | (10,694) | (16,186) | (38,300) |
| tax | | | | |
| paid | | | | |
+----------------------+--------+--------------+--------------+-----------+
| Net | | 49,491 | 72,560 | 126,505 |
| cash | | | | |
| from | | | | |
| operating | | | | |
| activities | | | | |
| | | | | |
+----------------------+--------+--------------+--------------+-----------+
| Cash | | | | |
| flows | | | | |
| from | | | | |
| investing | | | | |
| activities | | | | |
+----------------------+--------+--------------+--------------+-----------+
| Acquisition | | - | (119) | (5,119) |
| of | | | | |
| subsidiary, | | | | |
| net cash of | | | | |
| acquired | | | | |
+----------------------+--------+--------------+--------------+-----------+
| Proceeds | | - | 14 | - |
| from | | | | |
| sale of | | | | |
| property, | | | | |
| plant and | | | | |
| equipment | | | | |
+----------------------+--------+--------------+--------------+-----------+
| Net | 16 | 1,595 | 2,911 | 2,911 |
| proceeds | | | | |
| on part | | | | |
| disposal/disposal | | | | |
| of business | | | | |
+----------------------+--------+--------------+--------------+-----------+
| Short | | - | (90) | (130) |
| term | | | | |
| loan | | | | |
| advanced | | | | |
+----------------------+--------+--------------+--------------+-----------+
| Purchase | | (50,617) | (51,572) | (102,594) |
| of | | | | |
| property, | | | | |
| plant and | | | | |
| equipment | | | | |
| and | | | | |
| intangible | | | | |
| assets | | | | |
+----------------------+--------+--------------+--------------+-----------+
| Net | | (49,022) | (48,856) | (104,932) |
| cash | | | | |
| used | | | | |
| in | | | | |
| investing | | | | |
| activities | | | | |
| | | | | |
+----------------------+--------+--------------+--------------+-----------+
| Cash | | | | |
| flows | | | | |
| from | | | | |
| financing | | | | |
| activities | | | | |
+----------------------+--------+--------------+--------------+-----------+
| Proceeds | | 359 | 844 | 906 |
| from | | | | |
| issue of | | | | |
| ordinary | | | | |
| share | | | | |
| capital | | | | |
+----------------------+--------+--------------+--------------+-----------+
| Proceeds | | - | (7) | (6) |
| from | | | | |
| borrowing/(repayment | | | | |
| of borrowing) | | | | |
+----------------------+--------+--------------+--------------+-----------+
| Dividends | 11 | (6,377) | (7,436) | (13,610) |
| paid to | | | | |
| shareholders | | | | |
+----------------------+--------+--------------+--------------+-----------+
| Net | | (6,018) | (6,599) | (12,710) |
| cash | | | | |
| used | | | | |
| in | | | | |
| financing | | | | |
| activities | | | | |
| | | | | |
+----------------------+--------+--------------+--------------+-----------+
| Increase/(decrease) | | (5,549) | 17,105 | 8,863 |
| in cash and cash | | | | |
| equivalents in the | | | | |
| period | | | | |
+----------------------+--------+--------------+--------------+-----------+
| Effect | | (5,177) | 160 | (12,184) |
| of | | | | |
| exchange | | | | |
| rates on | | | | |
| cash and | | | | |
| cash | | | | |
| equivalents | | | | |
+----------------------+--------+--------------+--------------+-----------+
| Cash | | 64,805 | 68,126 | 68,126 |
| and | | | | |
| cash | | | | |
| equivalents | | | | |
| at 1 | | | | |
| January | | | | |
+----------------------+--------+--------------+--------------+-----------+
| Included | 14 | 54,079 | 85,391 | 64,805 |
| in cash | | | | |
| and cash | | | | |
| equivalents | | | | |
| as per | | | | |
| balance | | | | |
| sheet | | | | |
+----------------------+--------+--------------+--------------+-----------+
The notes below form an integral part of this financial
information.
Notes to the interim financial information
1. General information and
accounting policies
JKX Oil & Gas plc (the ultimate parent of the Group) is a public limited company
listed on the London Stock Exchange and incorporated in England. The registered
office is 6 Cavendish Square, London, W1G 0PD and the principal activities of
the Group are exploration, appraisal, development and production of oil and gas
reserves. The registered number of the Company is 03050645.
This condensed consolidated interim financial information was approved by the
directors for issue on 28 August 2009.
This condensed consolidated interim financial information does not comprise
statutory accounts within the meaning of section 434 of the Companies Act 2006.
Statutory accounts for the year ended 31 December 2008 were approved by the
Board of directors on 6 April 2009 and delivered to the Registrar of Companies.
The report of the auditors on those accounts was unqualified, did not contain an
emphasis of matter paragraph and did not contain any statement under section 498
of the Companies Act 2006.
This condensed consolidated interim financial information has been reviewed and
not audited.
2. Basis of preparation
This condensed consolidated interim financial information for the six months
ended 30 June 2009 has been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Services Authority and with IAS 34, 'Interim
financial reporting' as adopted by the European Union. The condensed
consolidated interim financial information should be read in conjunction with
the annual financial statements for the year ended 31 December 2008 which were
prepared in accordance with IFRSs as adopted by the European Union.
3.
Accounting policies
Except as described below, the accounting policies adopted are consistent with
those used in the annual financial statements for the year ended 31 December
2008. A copy of the annual financial statements is available on the company's
corporate website (www.jkx.co.uk) or from the company's registered office.
Taxes on income in the interim period are accrued using the tax rate that would
be applicable on expected total annual earnings.
The following new standards and amendments to standards are mandatory for the
first time for the financial year beginning 1 January 2009:
* IAS 1 (revised), 'Presentation of financial statements'. The revised standard
prohibits the presentation of
items of income and expenses (that is 'non-owner changes in equity') in the
statement of changes in equity,
requiring 'non-owner changes in equity' to be presented separately from owner
changes in equity. All 'non-owner
changes in equity' are required to be shown in a performance statement, however
this is not currently relevant for the group.
Entities can choose whether to present one performance statement (the statement
of comprehensive income)
or two statements (the income statement and statement of comprehensive income).
The group has elected to present one statement: an income statement. The
condensed consolidated interim financial information have been prepared under
the revised disclosure requirements.
* IFRS 8, 'Operating segments'. IFRS 8 replaces IAS 14, 'Segment reporting'. It
requires a 'management
approach' under which segment information is presented on the same basis as that
used for internal reporting
purposes.
Operating segments are reported in a manner consistent with the internal
reporting provided to the Executive Directors.
Goodwill is allocated by management to groups of cash-generating units on a
segment level.
The following new standards, amendments to standards and interpretations are
mandatory for the first time for the financial year beginning 1 January 2009 but
are not currently relevant for the group:
* IFRIC 13, 'Customer loyalty programmes'.
* IFRIC 15, 'Agreements for the construction of real estate'.
* IFRIC 16, 'Hedges of a net investment in a foreign operation'.
* IAS 39 (amendment), 'Financial instruments: Recognition and measurement'.
* IFRS 2 (amendment), 'Share based payments'.
* IAS 23 (revised), 'Borrowing costs'.
* IAS 32 (amendment), 'Financial instruments: Presentation'.
The following new standards, amendments to standards and interpretations have
been issued, but are not effective for the financial year beginning 1 January
2009 and have not been early adopted:
* IFRS 3 (revised), 'Business combinations' and consequential amendments to IAS
27, 'Consolidated and
separate financial statements', IAS 28, 'Investments in associates' and IAS 31,
'Interests in joint ventures',
effective prospectively to business combinations for which the acquisition date
is on or after the beginning of
the first annual reporting period beginning on or after 1 July 2009. Management
is assessing the impact of the
new requirements regarding acquisition accounting, consolidation and associates
on the group. The group
does not currently have any joint ventures.
The revised standard continues to apply the acquisition method to business
combinations, with some
significant changes. For example, all payments to purchase a business are to be
recorded at fair value at the
acquisition date, with contingent payments classified as debt subsequently
re-measured through the statement
of comprehensive income. There is a choice on an acquisition-by-acquisition
basis to measure the minority
interest in the acquiree either at fair value or at the minority interest's
proportionate share of the acquiree's
net assets. All acquisition-related costs should be expensed. The group will
apply IFRS 3 (revised) to all
business combinations from 1 January 2010, subject to endorsement by the EU.
* IFRIC 17, 'Distributions of non-cash assets to owners', effective for annual
periods beginning on or after 1
July 2009. This is not currently applicable to the group, as it has not made any
non-cash distributions.
* IFRIC 18, 'Transfers of assets from customers', effective for transfers of
assets received on or after 1 July
2009. This is not relevant to the group, as it has not received any assets from
customers.
4. Segmental analysis
The Executive Directors review the group's internal reporting in order to assess
performance and allocate resources. The business is reviewed from a geographical
perspective and income is analysed by product.
Transfer prices between geographical segments are on an arm's-length basis in a
manner similar to transactions with third parties.
Inter-segment revenues are eliminated on consolidation.
4. Segmental analysis (continued)
+---------------+------------+---------+---------+---------+---------+--------+---------+--------------+---------+
| 1H 2009 | | UK |Ukraine | Russia |Hungary | Rest | Sub |Eliminations | Total |
| | | $000 | $000 | $000 | $000 | of | total | $000 | $000 |
| | | | | | | world | $000 | | |
| | | | | | | $000 | | | |
+---------------+------------+---------+---------+---------+---------+--------+---------+--------------+---------+
| External | | | | | | | | | |
| revenue | | | | | | | | | |
+---------------+------------+---------+---------+---------+---------+--------+---------+--------------+---------+
| Revenue by | Oil | - | 24,136 | - | - | - | 24,136 | - | 24,136 |
| location of | | | | | | | | | |
| asset | | | | | | | | | |
+---------------+------------+---------+---------+---------+---------+--------+---------+--------------+---------+
| | Gas | - | 53,611 | | - | 6 | 53,617 | - | 53,617 |
+---------------+------------+---------+---------+---------+---------+--------+---------+--------------+---------+
| | Management | - | 831 | - | - | - | 831 | - | 831 |
| | services | | | | | | | | |
+---------------+------------+---------+---------+---------+---------+--------+---------+--------------+---------+
| | | - | 78,578 | - | - | 6 | 78,584 | - | 78,584 |
+---------------+------------+---------+---------+---------+---------+--------+---------+--------------+---------+
| | | | | | | | | | |
+---------------+------------+---------+---------+---------+---------+--------+---------+--------------+---------+
| Inter segment | Oil | - | - | - | - | - | - | - | - |
| revenue | | | | | | | | | |
+---------------+------------+---------+---------+---------+---------+--------+---------+--------------+---------+
| | Gas | - | - | - | - | - | - | - | - |
+---------------+------------+---------+---------+---------+---------+--------+---------+--------------+---------+
| | Management | 6,097 | - | - | - | - | 6,097 | (6,097) | - |
| | services | | | | | | | | |
+---------------+------------+---------+---------+---------+---------+--------+---------+--------------+---------+
| | Equipment | 10,944 | - | - | - | 71 | 11,015 | (11,015) | - |
+---------------+------------+---------+---------+---------+---------+--------+---------+--------------+---------+
| | | 17,041 | - | - | - | 71 | 17,112 | (17,112) | - |
+---------------+------------+---------+---------+---------+---------+--------+---------+--------------+---------+
| | | | | | | | | | |
+---------------+------------+---------+---------+---------+---------+--------+---------+--------------+---------+
| Total revenue | Oil | - | 24,136 | - | - | - | 24,136 | - | 24,136 |
+---------------+------------+---------+---------+---------+---------+--------+---------+--------------+---------+
| | Gas | - | 53,611 | - | - | 6 | 53,617 | - | 53,617 |
+---------------+------------+---------+---------+---------+---------+--------+---------+--------------+---------+
| | Management | 6,097 | 831 | - | - | - | 6,928 | (6,097) | 831 |
| | services | | | | | | | | |
+---------------+------------+---------+---------+---------+---------+--------+---------+--------------+---------+
| | Equipment | 10,944 | - | - | - | 71 | 11,015 | (11,015) | - |
+---------------+------------+---------+---------+---------+---------+--------+---------+--------------+---------+
| | | 17,041 | 78,578 | - | - | 77 | 95,696 | (17,112) | 78,584 |
+---------------+------------+---------+---------+---------+---------+--------+---------+--------------+---------+
| Operating | | (2,820) | 50,108 | (1,721) | (157) | 194 | 45,604 | (1,125) | 44,479 |
| profit/(loss) | | | | | | | | | |
+---------------+------------+---------+---------+---------+---------+--------+---------+--------------+---------+
| Total assets | | 33,085 | 229,662 | 117,139 | 20,450 | 22,599 | 422,935 | - | 422,935 |
+---------------+------------+---------+---------+---------+---------+--------+---------+--------------+---------+
+---------------+------------+--------+---------+---------+---------+--------+---------+--------------+---------+
| 1H 2008 | | UK |Ukraine | Russia |Hungary | Rest | Sub |Eliminations | Total |
| | | $000 | $000 | $000 | $000 | of | total | $000 | $000 |
| | | | | | | world | $000 | | |
| | | | | | | $000 | | | |
+---------------+------------+--------+---------+---------+---------+--------+---------+--------------+---------+
| External | | | | | | | | | |
| revenue | | | | | | | | | |
+---------------+------------+--------+---------+---------+---------+--------+---------+--------------+---------+
| Revenue by | Oil | - | 75,132 | - | - | - | 75,132 | - | 75,132 |
| location of | | | | | | | | | |
| asset | | | | | | | | | |
+---------------+------------+--------+---------+---------+---------+--------+---------+--------------+---------+
| | Gas | - | 40,771 | - | - | - | 40,771 | - | 40,771 |
+---------------+------------+--------+---------+---------+---------+--------+---------+--------------+---------+
| | Management | - | 944 | - | - | - | 944 | - | 944 |
| | services | | | | | | | | |
+---------------+------------+--------+---------+---------+---------+--------+---------+--------------+---------+
| | | - | 116,847 | - | - | - | 116,847 | - | 116,847 |
+---------------+------------+--------+---------+---------+---------+--------+---------+--------------+---------+
| | | | | | | | | | |
+---------------+------------+--------+---------+---------+---------+--------+---------+--------------+---------+
| Inter segment | Oil | - | - | - | - | - | - | - | - |
| revenue | | | | | | | | | |
+---------------+------------+--------+---------+---------+---------+--------+---------+--------------+---------+
| | Gas | - | - | - | - | - | - | - | - |
+---------------+------------+--------+---------+---------+---------+--------+---------+--------------+---------+
| | Management | 12,418 | - | - | - | - | 12,418 | (12,418) | - |
| | services | | | | | | | | |
+---------------+------------+--------+---------+---------+---------+--------+---------+--------------+---------+
| | Equipment | 15,329 | - | - | - | - | 15,329 | (15,329) | - |
+---------------+------------+--------+---------+---------+---------+--------+---------+--------------+---------+
| | | 27,747 | - | - | - | - | 27,747 | (27,747) | - |
+---------------+------------+--------+---------+---------+---------+--------+---------+--------------+---------+
| | | | | | | | | | |
+---------------+------------+--------+---------+---------+---------+--------+---------+--------------+---------+
| Total revenue | Oil | - | 75,132 | - | - | - | 75,132 | - | 75,132 |
+---------------+------------+--------+---------+---------+---------+--------+---------+--------------+---------+
| | Gas | - | 40,771 | - | - | - | 40,771 | - | 40,771 |
+---------------+------------+--------+---------+---------+---------+--------+---------+--------------+---------+
| | Management | 12,418 | 944 | - | - | - | 13,362 | (12,418) | 944 |
| | services | | | | | | | | |
+---------------+------------+--------+---------+---------+---------+--------+---------+--------------+---------+
| | Equipment | 15,329 | - | - | - | - | 15,329 | (15,329) | - |
+---------------+------------+--------+---------+---------+---------+--------+---------+--------------+---------+
| | | 27,747 | 116,847 | - | - | - | 144,594 | (27,747) | 116,847 |
+---------------+------------+--------+---------+---------+---------+--------+---------+--------------+---------+
| Operating | | (894) | 87,345 | (2,130) | (32) | 221 | 84,510 | (2,346) | 82,164 |
| profit/(loss) | | | | | | | | | |
+---------------+------------+--------+---------+---------+---------+--------+---------+--------------+---------+
| Total assets | | 67,611 | 210,002 | 99,147 | 8,101 | 19,566 | 404,427 | - | 404,427 |
+---------------+------------+--------+---------+---------+---------+--------+---------+--------------+---------+
5. Property, plant and equipment and intangible assets
During the period the group acquired $51.6m additional assets (2008: $57.7m),
with 92% (2008: 86%) being in Ukraine, Russia and Hungary on the Group's oil and
gas producing and development assets and 8% (2008: 14%) being spent on
intangible assets.
6. Share capital
Equity share capital, denominated in Sterling, was as follows:
+------------+-------------+--------+--------+-------------+--------+--------+
| | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 |
| | Number | GBP000 | $000 | Number | GBP000 | $000 |
+------------+-------------+--------+--------+-------------+--------+--------+
| Authorised | | | | | | |
+------------+-------------+--------+--------+-------------+--------+--------+
| Ordinary | 250,000,000 | 25,000 | 35,940 | 250,000,000 | 25,000 | 49,771 |
| shares | | | | | | |
| of 10p | | | | | | |
| each | | | | | | |
+------------+-------------+--------+--------+-------------+--------+--------+
| Allotted, | | | | | | |
| called up | | | | | | |
| and fully | | | | | | |
| paid | | | | | | |
+------------+-------------+--------+--------+-------------+--------+--------+
| Opening | 156,974,380 | 15,697 | 24,256 | 156,415,131 | 15,642 | 24,148 |
| balance | | | | | | |
| at 1 | | | | | | |
| January | | | | | | |
+------------+-------------+--------+--------+-------------+--------+--------+
| Exercise | 530,500 | 54 | 78 | 488,224 | 48 | 97 |
| of share | | | | | | |
| options | | | | | | |
+------------+-------------+--------+--------+-------------+--------+--------+
| Closing | 157,504,880 | 15,751 | 24,334 | 156,903,355 | 15,690 | 24,245 |
| balance | | | | | | |
| at 30 | | | | | | |
| June | | | | | | |
+------------+-------------+--------+--------+-------------+--------+--------+
| Of | | | | | | |
| which | | | | | | |
| the | | | | | | |
| following | | | | | | |
| are | | | | | | |
| shares | | | | | | |
| held in | | | | | | |
| treasury: | | | | | | |
+------------+-------------+--------+--------+-------------+--------+--------+
| Treasury | 402,711 | 40 | 77 | 402,771 | 40 | 77 |
| shares | | | | | | |
| held at | | | | | | |
| 1 | | | | | | |
| January | | | | | | |
+------------+-------------+--------+--------+-------------+--------+--------+
| Treasury | 402,711 | 40 | 77 | 402,771 | 40 | 77 |
| shares | | | | | | |
| held at | | | | | | |
| 30 June | | | | | | |
+------------+-------------+--------+--------+-------------+--------+--------+
The Company did not purchase any treasury shares during 2009 (2008: nil). There
were no treasury shares used in 2009 (2008: nil) to settle share options. There
are no shares reserved for issue under options or contracts.
7. Cost of
sales
+------------------+--------+--------+--------+
| | Six | Six | Year |
| | months | months | to |
| | to | to | 31 Dec |
| | 30 | 30 | 2008 |
| | June | June | $000 |
| | 2009 | 2008 | |
| | $000 | $000 | |
+------------------+--------+--------+--------+
| | 9,421 | 11,781 | 23,874 |
| Operating | | | |
| costs | | | |
+------------------+--------+--------+--------+
| | 12,720 | 14,080 | 27,222 |
| Depreciation, | | | |
| depletion and | | | |
| amortisation | | | |
+------------------+--------+--------+--------+
| | 1,356 | 2,322 | 3,981 |
| Production | | | |
| based | | | |
| taxes | | | |
+------------------+--------+--------+--------+
| | 23,497 | 28,183 | 55,077 |
+------------------+--------+--------+--------+
| | 95 | - | 6,883 |
| Provision | | | |
| for | | | |
| impairment/write | | | |
| off of | | | |
| exploration | | | |
| costs | | | |
+------------------+--------+--------+--------+
| Total | 23,592 | 28,183 | 61,960 |
| cost | | | |
| of | | | |
| sales | | | |
+------------------+--------+--------+--------+
8. Operating profit
In calculating the operating profit there have been no costs recorded in
addition to operating costs and general and administrative costs (2008: $nil).
All assets that are subject to amortisation are reviewed for impairment whenever
events or circumstances indicate that the carrying value may not be recoverable.
Goodwill is reviewed at the end of each financial year or as circumstances
dictate.
9. Provisions
+----------------+--------+--------+--------+
| | 30 | 30 | 31 Dec |
| | June | June | 2008 |
| | 2009 | 2008 | $000 |
| | $000 | $000 | |
+----------------+--------+--------+--------+
| Provision | 2,253 | 2,053 | 2,380 |
| for site | | | |
| restoration | | | |
+----------------+--------+--------+--------+
| Deferred | - | 1,734 | - |
| consideration, | | | |
| due after more | | | |
| than one year, | | | |
| relating to | | | |
| the | | | |
| acquisition of | | | |
| Yuzhgazenergie | | | |
| LLC | | | |
+----------------+--------+--------+--------+
| Other | 8 | 25 | 16 |
| provisions | | | |
+----------------+--------+--------+--------+
| | 2,261 | 3,812 | 2,396 |
+----------------+--------+--------+--------+
10. Taxation
No liability to UK taxation has arisen during the six months ended 30 June 2009
(2008: $nil) due to the availability of tax losses, relief for overseas taxes
paid on dividends received and tax relief on employee share options exercised.
The tax charged in the period relates to Ukrainian corporation tax which has
arisen in the Group subsidiary, Poltava Petroleum Company. Taxes charged on
production of hydrocarbons in Ukraine and the USA are included in cost of sales.
11. Dividends
In respect of the full year 2008 a final dividend of 2.6 pence per share (2007:
2.4 pence per share) was paid on 5 June 2009. An interim dividend for 2009 has
been declared of 2.3 pence per share (2008: 2.2 pence per share) which will be
paid in October 2009.
Total dividends paid during the six months period to 30 June 2009 amounted to
$6.4m (2008: $7.4m) and for the full year ended 31 December 2008 $13.6m.
12. Earnings per share
The calculation of earnings per ordinary share for the six months ended 30 June
2009 is based on the weighted average number of shares in issue during the
period of 157,173,684 (30 June 2008:156,606,199; 31 December 2008: 156,769,466)
and the profit for the relevant period.
The diluted earnings per share for the six months ended 30 June 2009 is based on
157,806,129 (30 June 2008: 158,160,088; 31 December 2008: 158,063,386) ordinary
shares calculated as follows:
+-----------+-------------+-------------+-------------+
| | 30 | 30 | 31 Dec |
| Number | June | June | 2008 |
| of | 2009 | 2008 | |
| shares | | | |
+-----------+-------------+-------------+-------------+
| | 157,173,684 | 156,606,199 | 156,769,466 |
| Basic | | | |
| weighted | | | |
| average | | | |
| number | | | |
| of | | | |
| shares | | | |
+-----------+-------------+-------------+-------------+
| | | | |
| Dilutive | | | |
| potential | | | |
| ordinary | | | |
| shares: | | | |
+-----------+-------------+-------------+-------------+
| | 632,445 | 1,553,889 | 1,293,920 |
| Share | | | |
| options | | | |
+-----------+-------------+-------------+-------------+
| | 157,806,129 | 158,160,088 | 158,063,386 |
+-----------+-------------+-------------+-------------+
13. Reconciliation of operating profit to net cash inflow from operating
activities
+----------------------+--------+---------+---------+
| | Six | Six | Year |
| | months | months | to |
| | to | to | 31 Dec |
| | 30 | 30 | 2008 |
| | June | June | $000 |
| | 2009 | 2008 | |
| | $000 | $000 | |
+----------------------+--------+---------+---------+
| | 44,479 | 82,164 | 125,393 |
| Operating | | | |
| profit | | | |
+----------------------+--------+---------+---------+
| | 14,054 | 15,170 | 29,503 |
| Depreciation, | | | |
| depletion and | | | |
| amortisation | | | |
+----------------------+--------+---------+---------+
| | 139 | 90 | 6,883 |
| Impairment | | | |
| of | | | |
| property, | | | |
| plant and | | | |
| equipment/intangible | | | |
| assets | | | |
+----------------------+--------+---------+---------+
| | - | (843) | (915) |
| Gain | | | |
| on | | | |
| disposal | | | |
| of | | | |
| subsidiary/asset | | | |
| disposal | | | |
+----------------------+--------+---------+---------+
| | 170 | 131 | 271 |
| Share-based | | | |
| payment | | | |
| costs | | | |
+----------------------+--------+---------+---------+
| | (683) | (1,334) | 6,435 |
| Exchange | | | |
| differences | | | |
+----------------------+--------+---------+---------+
| | 58,159 | 95,378 | 167,570 |
| Cash | | | |
| generated | | | |
| from | | | |
| operations | | | |
| before | | | |
| changes in | | | |
| working | | | |
| capital | | | |
+----------------------+--------+---------+---------+
| | 1,760 | (8,513) | (5,808) |
| Changes | | | |
| in | | | |
| working | | | |
| capital | | | |
+----------------------+--------+---------+---------+
| | 59,919 | 86,865 | 161,762 |
| Cash | | | |
| generated | | | |
| from | | | |
| operations | | | |
+----------------------+--------+---------+---------+
14.Cash and cash equivalents
+-------------+---------+----------+--------+
| | At | Net | At |
| | 1 | movement | 30 |
| | January | $000 | June |
| | 2009 | | 2009 |
| | $000 | | $000 |
+-------------+---------+----------+--------+
| Cash | 962 | 970 | 1,932 |
+-------------+---------+----------+--------+
| Short | 63,843 | (11,696) | 52,147 |
| term | | | |
| deposits | | | |
+-------------+---------+----------+--------+
| Cash | 64,805 | (10,726) | 54,079 |
| and | | | |
| cash | | | |
| equivalents | | | |
+-------------+---------+----------+--------+
15. Assets held for sale
The assets that the group holds in the USA were presented in the 2008 annual
report and accounts and also in these interim accounts as being held for sale.
Subsequent to the half year these assets have been sold to Petrohawk Energy
Corporation, a US independent oil and gas company, which resulted in cash
proceeds of $10.1m being received against a holding value of $7.4m.
16. Part disposal/disposal of business
During the period the Company agreed to reduce its holding in B Golitza and B1
Golitza exploration permits from 50% to 40% through a farm out to Songenia E&P
SpA in exchange for $1.6m (2008: $2.9m Italy). Songenia's interest is subject to
approval by the Bulgarian authorities.
17. Capital commitments
Under the programs for exploration, development and production of oil and gas
assets in Hungary, Slovakia, Bulgaria, Ukraine and Russia, the Group had
committed $5.6m (2008: $4.5m) to future capital expenditure on drilling rigs and
facilities as at 30 June 2009.
18. Related-party transactions
Key management compensation amounted to $1.7m for the six months ended 30 June
2009 (30 June 2008: $2.0m).
19. Ukrainian and Russian business environment
Ukraine and Russia display emerging market characteristics, and the legislation
and business practices regarding banking operations, foreign currency
transactions and taxation are constantly evolving as the governments attempt to
manage the economies. Risks inherent in conducting business in an emerging
market economy include, but are not limited to, volatility in the financial
markets and the general economy. Uncertainties over the development of the tax
and legal environment, as well as difficulties associated with the consistent
interpretation and application of current laws and regulations, have continued.
As at 30 June 2009, oil and gas assets based in Ukraine and Russia represent
approximately 61% (2008: 62%) and 30% (2008: 29%) respectively of the Group's
oil and gas assets.
The Group's operations and financial position may be affected by these
uncertainties. The Group's condensed consolidated interim financial information
do not include any adjustments to reflect the possible future effects on the
recoverability, and classification of assets or the amounts or classifications
of liabilities that may result from these uncertainties.
20. Copies of this half-year report are being sent to registered shareholders
and further copies are available from the Company's registered office.
Registered office
6 Cavendish Square
London W1G 0PD
Statement of directors' responsibilities
The directors confirm that this condensed consolidated interim financial
information has been prepared in accordance with IAS 34 as adopted by the
European Union, and that the interim management report herein includes a fair
review of the information required by the Disclosure and Transparency Rules
4.2.7 and 4.2.8, namely:
* an indication of important events that have occurred in the first six months and
their impact on the condensed set of financial information, and a description of
the principal risks and uncertainties for the remaining six months of the
financial year; and
* material related party transactions in the first six months and any material
changes in related party transactions described in the last annual report
The directors of JKX Oil & Gas plc are listed in the JKX Oil & Gas plc Annual
Report for 31 December 2008 and a list of current directors is maintained on the
JKX Oil & Gas plc website www.jkx.co.uk.
By order of the Board
Dr Paul Davies
Chief Executive Officer
B J Burrows
Finance Director
Independent review report to JKX Oil & Gas plc
Introduction
We have been engaged by the company to review the condensed consolidated interim
financial information in the half-yearly financial report for the six months
ended 30 June 2009, which comprises the Group income statement, Group balance
sheet, Group statement of comprehensive income, Group cash flow statement,
comparative figures and associated related notes. We have read the other
information contained in the half-yearly financial report and considered whether
it contains any apparent misstatements or material inconsistencies with the
information in the condensed consolidated interim financial information.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
As disclosed in note 3, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed consolidated interim financial information included in this
half-yearly financial report has been prepared in accordance with International
Accounting Standard 34, "Interim Financial Reporting", as adopted by the
European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the
condensed consolidated interim financial information in the half-yearly
financial report based on our review. This report, including the conclusion, has
been prepared for and only for the company for the purpose of the Disclosure and
Transparency Rules of the Financial Services Authority and for no other purpose.
We do not, in producing this report, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent in writing.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed consolidated interim financial information in the half-yearly
financial report for the six months ended 30 June 2009 is not prepared, in all
material respects, in accordance with International Accounting Standard 34 as
adopted by the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
PricewaterhouseCoopers LLP
Chartered Accountants
London
28 August 2009
Notes:
(a) The maintenance and integrity of the JKX Oil & Gas plc web site is the
responsibility of the directors; the work carried
out by the auditors does not involve consideration of these matters and,
accordingly, the auditors accept no responsibility for any changes that may have
occurred to the interim report since it was initially presented on the web site.
(b) Legislation in the United Kingdom governing the preparation and
dissemination of financial information may differ from
legislation in other jurisdictions.
+---------+------------+
| Mcf | Thousand |
| | cubic |
| | feet |
+---------+------------+
| Bcf | Billion |
| | cubic |
| | feet |
+---------+------------+
| cfpd | Cubic |
| | feet |
| | per |
| | day |
+---------+------------+
| MMcfd | Million |
| | cubic |
| | feet |
| | per day |
+---------+------------+
| Mbbl | Thousand |
| | barrels |
+---------+------------+
| MMbbl | Million |
| | barrels |
+---------+------------+
| bcpd | Barrel |
| | of |
| | condensate |
| | per day |
+---------+------------+
| bpd | Barrel |
| | per |
| | day |
+---------+------------+
| bopd | Barrel |
| | of oil |
| | per |
| | day |
+---------+------------+
| boe | Barrel |
| | of oil |
| | equivalent |
+---------+------------+
| Mboe | Thousand |
| | barrels |
| | of oil |
| | equivalent |
+---------+------------+
| MMboe | Millions |
| | barrels |
| | of oil |
| | equivalent |
+---------+------------+
| boepd | Barrel |
| | of oil |
| | equivalent |
| | per day |
+---------+------------+
| sq.km | Square |
| | Kilometre |
+---------+------------+
| $ | United |
| | States |
| | Dollars |
+---------+------------+
| LIBOR | London |
| | InterBank |
| | Offered |
| | Rate |
+---------+------------+
| US | United |
| | States |
+---------+------------+
| Roubles | The |
| | lawful |
| | currency |
| | of |
| | Russia |
+---------+------------+
| Hryvna | The |
| | lawful |
| | currency |
| | of |
| | Ukraine |
+---------+------------+
Conversion factors
6,000 standard cubic feet of gas = 1 boe
We welcome visits to our website
www.jkx.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
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IR KDLFLKVBBBBE
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