TIDMJPRL
RNS Number : 5720V
Jupiter Energy Ltd
31 January 2017
31 January 2017
Jupiter Energy Limited ("Jupiter" or the "Company")
QUARTERLY UPDATE ON ACTIVITIES FOR THE PERIOD TO 31 DECEMBER
2016
KEY POINTS:
-- Approval of the 3 year Work Program (2017-2019) is now being
progressed with all the relevant Kazakh Regulatory Authorities and
final approval is expected during 1(st) quarter 2017.
-- Two senior appointments made: In country manager to oversee
operations in Kazakhstan and senior advisor to the Jupiter Energy
Board.
-- The Company is now working with various oil marketing groups
to secure oil sales agreements and position itself for a return to
oil production once all the relevant Trial Production Licences for
the 2017-2019 period have been approved.
-- The Company continues to work on various options to provide
long term funding for the ongoing development of Block 31.
-- Discussions continue with relevant parties regarding the
resolution of the Akkar North division of Reserves.
Jupiter Energy Limited (ASX: "JPR", AIM: "JPRL" and KASE:
"AU_JPRL") presents the following update on activities for the 3
month period ending 31 December 2016 (the "Quarter"). Also included
in this report are details of subsequent events that have occurred
up to the date of this release.
The Quarter in brief:
There were no oil sales made during the Quarter. All producing
wells were shut in during February 2015, and remain shut in, due to
low domestic oil prices.
Exploration Licence Extension:
The Company announced on 19 September 2016 that it had formally
signed Addendum 7 to Contract 2275 which confirms that the Ministry
of Energy has agreed to a three (3) year extension to the
Exploration Period, through to 29 December 2019. The 3 year
extension is based on the Company maintaining its current acreage
and the Ministry of Energy has indicated that if the Company does
proceed with the North East and South East land extensions then a
further one (1) year extension (to 29 December 2020) would be
considered.
The three year licence extension is a positive step forward and
will allow the Company to undertake further work on the Akkar East
and West Zhetybai oilfields, further de-risking the current State
Accepted preliminary oil reserves on both oilfields.
Approval of the 2017 - 2019 Work Program:
The Company spent much of the Quarter preparing and submitting
for approval its proposed three year Work Program (2017-2019) that
will support the 3 year Exploration Licence Extension that has been
granted by the Ministry of Energy.
The Work Program must be approved by the Kazakh Regulatory
Authorities and as part of the Work Program submission, Trial
Production Licences extensions for the Akkar East and West Zhetybai
oilfields for the period to 29 December 2019 have also been applied
for. The Company expects that all the required approvals will be in
place during the 1(st) Quarter of 2017, thereby enabling the
Company to be in a position to recommence oil production during the
1(st) half of 2017.
The Company will keep shareholders updated on progress with the
approval of the 2017-2019 Work Program and the extension of the
Trial Production Licences for the Akkar East and West Zhetybai
oilfields.
Forward Plan - Operations:
The Company has opened dialogue with various local oil marketing
groups with a view to securing an oil sales contract. Assuming that
the Trial Production Licences are approved for the Akkar East and
West Zhetybai oilfields during the 1(st) quarter of 2017, that
requisite funding to recommence operations is in place and most
importantly domestic oil prices reach a level that ensures cashflow
from oil production will be positive, the Company will consider
recommencing production during the 1(st) half of 2017.
Extension of J-50 Trial Production Licence:
The Company advised shareholders on 28 November 2014 that the
application to extend the Trial Production Licence for well J-50
was being held by the Kazakh Committee of Geology pending
resolution of the allocation of reserves associated with the
well.
The J-50 well has been shut in since 29 December 2014 (the date
at which the last Trial Production licence expired).
The underlying issue delaying the Trial Production Licence
renewal is the request by the Committee of Geology that Jupiter
Energy reach agreement with its neighbour MangistauMunaiGas (MMG)
over the division of reserves associated with both companies' share
of the Akkar North accumulation. Jupiter Energy has been in
dialogue with MMG on this issue for some time but has been unable
to reach formal agreement with MMG with respect to the division of
Akkar North reserves.
The Company believes progress has been made during the Quarter
on this issue and will update shareholders as soon as the relevant
authorities have made any definitive decisions on this matter.
Senior Appointments:
On 2 December 2016 the Company announced the appointment of
Sergey Kostin as the new Head of Operations in Kazakhstan.
Sergey is based in Aktau and is responsible for leading the
operations team based both in the Aktau office and in the field as
the Company looks to prepare to recommence production during the 1H
2017. His direct reports include all operations, marketing, geology
and geophysics personnel and he works closely with the heads of
Finance & Administration and Legal.
Sergey (52) has 30 years experience in the oil sector with over
14 years spent in a variety of operational roles with the
international oil services organisation Schlumberger. He has also
worked with a number of Russian oil companies, most recently with
SGC Drilling as their Director of Drilling.
He has vast experience in the drilling of wells and the Company
believes that he will bring Jupiter Energy an important combination
of international drilling expertise and cultural awareness at what
will be a critical period in the development of Block 31.
In another important appointment, the Company has also named
Alexander Kuzev as an Advisor to the Jupiter Energy Limited
Board.
Alexander Kuzev (51) is an oil industry professional with over
26 years of experience.
Most of Alexander's career has been spent working in the Former
Soviet Union (FSU) with much of that time responsible for the
overall management of field operations with a focus on production
sustainability, technology and field maintenance. He has worked
with a range of oil and gas companies including Schlumberger and
Gazprom Drilling.
Alexander brings an important technical skill set to Jupiter
Energy as well as in country experience, having been involved with
various Kazakhstan based oil and gas operations since the late
1990's.
Alexander is currently Managing Director of an oil production
company with operations in Astrakhan, Southern Russia and he holds
a Bachelor of Engineering.
Annual General Meeting:
The 2016 Annual General Meeting was held on Friday 4 November
2016 in Perth, Western Australia. All resolutions were passed.
Licence Information:
As is required under ASX disclosure rules, the Company confirms
that it currently holds the following licence:
Country Block / Interest Interest Interest
Licence held as acquired held as
at 30 September / disposed at 31 December
2016 of during 2016
the Quarter
------------ ---------- ----------------- ------------- ----------------
Kazakhstan Block 31 100% Nil 100%
------------ ---------- ----------------- ------------- ----------------
Capital Structure and Finances:
As at 31 December 2016, the Company has 153,377,693 listed
shares trading under the ASX ticker "JPR", the AIM ticker "JPRL"
and the KASE ticker "AU_JPRL".
The Company has no options or Performance Shares, listed or
unlisted, in issue.
As at 31 December 2016, total Company debt outstanding was
$US33,971,682 through a total of five (5) Promissory Notes, with
the following holders:
-- Waterford Petroleum Limited: $US11,292,645
-- Waterford Petroleum Limited: $US9,559,670
-- Mobile Energy Limited: $US10,199,502
-- Midocean Holdings Limited: $US2,199,914
-- Other Private Investors: $US719,951
As at 31 December 2016, the Company has drawn down $US2,291,154
(including accrued interest) under the new Funding Agreement with
Waterford Petroleum Limited, as announced on 29 July 2016, and
therefore has a further $US2,708,846 (including accrued interest)
available to it under this Agreement.
Unaudited net cash reserves as at 31 December 2016 stood at
approximately $A474,000.
The Directors of the Company continue to defer their Directors'
Fees until such time that the Company has an improved cashflow.
Summary:
Progress during the Quarter was positive with the three year
extension to the Exploration Period on Block 31 through to 29
December 2019 having been signed.
In order for the Company to return to oil production sufficient
working capital needs to be in place and the domestic oil sales
price that can be achieved needs to be at a level to ensure a
cashflow positive operation.
Under the current Care & Maintenance approach, sufficient
working capital is in place until the end of September 2017 to
enable the Company to work towards resolving its longer term
funding requirements.
The immediate focus is on getting the necessary approvals from
the relevant Kazakh Regulatory Authorities for the 2017-2019 Work
Program and to secure funding so that work under this program can
be commenced during the 2(nd) quarter of 2017.
If shareholders have any questions regarding this Quarterly
report they are welcome to contact the Company on +61 89 322
8222.
Geoff Gander
Chairman/CEO
S
Enquiries:
Jupiter Energy (+61 89 322 8222)
Geoff Gander (geoff@jupiterenergy.com)
finnCap Ltd +44 (0)20 7220 0500
Matt Goode/Emily Watts/Christopher Raggett (Corporate
Finance)
Simon Johnson (Corporate Broking)
Competent Persons Statement:
Keith Martens, BSc Geology and Geophysics, with over 35 years'
oil & gas industry
experience, is the qualified person who has reviewed and
approved the technical information contained in this report.
About the Company:
Jupiter Energy Limited is an oil exploration and production
company, quoted on the AIM, ASX and KASE markets. The Company is
focused on developing its onshore assets in western Kazakhstan. In
2008 the Company acquired 100 per cent of the Block 31 permit,
located in the oil-rich Mangistau Basin, close to the port city of
Aktau.
Jupiter has a proven in-country management team, led by an
experienced, international Board, together possessing the skills,
knowledge, network and attention to detail needed to operate
successfully in Kazakhstan. The forward plan will see Jupiter
develop a group production facility on Block 31 to process, store
and export oil. This topside infrastructure is a key element in
moving to long-term production and the achievement of self-funding
for further development of Block 31.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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