TIDMJPRL
RNS Number : 3654D
Jupiter Energy Ltd
28 April 2017
28 April 2017
Jupiter Energy Limited ("Jupiter" or the "Company")
QUARTERLY UPDATE ON ACTIVITIES FOR THE PERIOD TO 31 MARCH
2017
KEY POINTS:
-- Solid progress made during the Quarter with the Kazakh
Regulatory Authorities in relation to the approval of the 3 year
Work Program (2017-2019) and Trial Production Licences for the
Akkar East and West Zhetybai oilfields.
-- Additional funding package under discussion with major
shareholder Waterford Petroleum Limited to enable the
recommencement of oil production from wells J-51, J-52 and Well 19
once Trial Production Licences approved.
-- Signing of an Oil Sales Framework Agreement with local Aktau
trader for the sale of oil into the Kazakh domestic market as soon
as production recommences.
-- Resolution of the Akkar North division of Reserves.
-- The Company continues to work on various options to provide
long term funding for the ongoing development of Block 31.
Jupiter Energy Limited (ASX: "JPR", AIM: "JPRL" and KASE:
"AU_JPRL") presents the following update on activities for the 3
month period ending 31 March 2017 (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.
The current expectation is that oil production will recommence
as soon as the Kazakh Regulatory Authorities have approved Trial
Production licences for the Akkar East and West Zhetybai oilfields
and funding is in place to support the cost structure required to
recommence production.
Approval of the 2017 - 2019 Work Program:
The Company made good progress during the Quarter with regards
finalising all the necessary paperwork to enable the Kazakh
Ministry of Energy to sign Addendum 8 to Contract 2275. The signing
of Addendum 8 will approve Jupiter's three year Work Program
(2017-2019) that supports the three year Exploration Licence
Extension that was granted by the Ministry of Energy during the
4(th) quarter of 2016.
As part of the signing of Addendum 8, the Ministry of Energy
will also approve Trial Production Licences extensions for the
Akkar East and West Zhetybai oilfields for the period to 29
December 2019. The approval of the Trial Production Licences will
enable the Company to recommence oil production as soon as is
practical. It is planned that initial production will be from wells
J-51, J-52 and Well 19, all of which are located on the Akkar East
oilfield.
The Company will keep shareholders updated on progress with the
signing of Addendum 8 and its plans to recommence domestic oil
production.
Forward Plan - Operations:
The Company has signed a non exclusive Oil Sales Framework
Agreement with a local Aktau oil trader which provides a pricing
formula that is driven by two key variables - the world price of
oil (Brent) and the level of water cut of oil collected from the
field. Depending on these two variables at a given point in time,
an oil price based on $US/tonne, will be determined. For example,
at $US55/barrel (Brent), the oil price received by the Company at
the well head could range from $US145/tonne (0-3% Water Cut) to
$US120/tonne (7% Water Cut).
The Company continues discussions with its major shareholder
Waterford Petroleum Limited ("Waterford") with respect to the
additional funding that will be required to enable the
infrastructure and staffing to be put in place to recommence
domestic oil production from wells J-51, J-52 and Well 19. It is
expected that the additional funding will be provided by an
increase in the current Funding Framework Agreement in place with
Waterford.
The Company will keep shareholders updated on progress with the
additional funding package.
Resolution of Akkar North Reserves Dispute:
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 was 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.
The Company is pleased to advise shareholders that the division
of the Akkar North reserves has now been formally resolved. Jupiter
was successful with its ownership claim over the Akkar North (East
Block) reserves and will now work to complete the required
paperwork and gain the requisite approvals to return the J-50 well
to production, subject to the requisite funding being in place.
This will require submission of Addendum 9 to its Contract and
approval by the relevant authorities of a Trial Production Licence
for the Akkar North (East Block) permit area.
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 31 December / disposed at 31 March
2016 of during 2017
the Quarter
------------ ---------- ---------------- ------------- -------------
Kazakhstan Block 31 100% Nil 100%
------------ ---------- ---------------- ------------- -------------
Capital Structure and Finances:
As at 31 March 2017, 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 March 2017, total Company debt outstanding was
$US37,736,416 through a total of five (5) Promissory Notes, with
the following holders:
-- Waterford Petroleum Limited: $US14,286,372
-- Waterford Petroleum Limited: $US9,884,665
-- Mobile Energy Limited: $US10,546,249
-- Midocean Holdings Limited: $US2,274,704
-- Other Private Investors: $US744,427
As at 31 March 2017, the Company has drawn down $US3,125,587
(including accrued interest) under the current $US5m Funding
Agreement with Waterford , as announced on 29 July 2016, and
therefore has a further $US1,874,413 (including accrued interest)
available to it under this Agreement.
Under the current Care & Maintenance approach to operations,
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.
As detailed earlier in this announcement, the current intention
is to increase the funding available under the 2016 Waterford
Funding Agreement, thereby enabling a return to production from the
Akkar East oilfield and, in so doing, revert to operating under an
"Operations Budget". The amount of additional funding required will
be based on a revised budget that takes into account the cost
structure required to support a return to production offset by the
revenues derived from budgeted oil sales.
Unaudited net cash reserves as at 31 March 2017 stood at
approximately $A495,000.
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 and the Company is now
close to getting final approval of the 2017-2019 Work Program and
Trial Production Licences for the Akkar East and West Zhetybai
oilfields from the Kazakh Regulatory Authorities.
The Company signed an Oil Sales Framework Agreement in April
2017 with a local Aktau oil trader, thus positioning Jupiter for a
return to domestic oil production as soon as the necessary Kazakh
Regulatory Approvals have been granted and the requisite funding to
support a return to production is in place.
Another positive outcome during the Quarter was the resolution
of the long running dispute over the allocation of the Akkar North
reserves. Jupiter was successful with its ownership claim over the
Akkar North (East Block) reserves and will now work to complete the
required paperwork and gain the requisite approvals to return the
J-50 well to production, subject to the requisite funding being in
place.
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
finnCap Ltd +44 (0)20 7220 0500
Matt Goode/Chris Raggett/Emily Watts/Anthony Adams (Corporate
Finance)
Simon Johnson (Corporate Broking)
Competent Persons Statement:
Alexey Glebov, PhD, with over 33 years' oil & gas industry
experience, is the qualified person who has reviewed and approved
the technical information contained in this report. Alexey PhD's in
technical science (1992) and geology science (2006), an Honors
Degree in Geology and Geophysics (1984) from Novosibirsk State
University and a Gold Medal (1985) from USSR Academy of Sciences.
He is a member since 2001 of the European Association of
Geoscientists & Engineers (EAGE #M2001-097) and was made an
Honorary Oilman in 2011 by the Ministry of Energy of the Russian
Federation. Alexey Glebov is qualified in accordance with ASX
Listing Rule 5.41.
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
MSCIFMRTMBBTMMR
(END) Dow Jones Newswires
April 28, 2017 02:00 ET (06:00 GMT)
Jupiter Energy (LSE:JPRL)
Historical Stock Chart
From Apr 2024 to May 2024
Jupiter Energy (LSE:JPRL)
Historical Stock Chart
From May 2023 to May 2024