Impact of Ukrainian Emergency Legislation on JKX Investment Programme
The Board of JKX has assessed the consequences of the emergency legislation passed by the Ukrainian Government in early August and the actions required to mitigate its effect on the Company’s operations and investment programme in Ukraine. The legislation imposes a substantial increase in production taxes for the five-month period from August to December 2014.
The Board has concluded that it will need to reduce capital expenditure to offset additional production tax costs of approximately $10 million in the period. These additional taxation costs amount to approximately 25% of the Company’s budgeted capital expenditure programme in Ukraine for 2014.
The Company is continuing its drilling programme at Poltava with the completion of the important deep Elizavetovskoye well E-303, which will be followed by the oil-targeted IG-141 well in the Ignatovskoye field. In parallel, its on-going capital investment programme in Ukraine will be reduced, commensurate with the shortfall in operating cash flow attributable to the increase in production taxes.
JKX Oil & Gas plc is an exploration and production company listed on the London Stock Exchange. The Company has licence interests in Ukraine, Russia, Hungary and Slovakia.
Source: JKX OIL & GAS plc