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UPDATE 1-JKX says Ukraine's proposed drilling tax cut bodes well for investment
December 12, 2016 / 9:28 AM / a year ago

UPDATE 1-JKX says Ukraine's proposed drilling tax cut bodes well for investment

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Dec 12 (Reuters) - JKX Oil and Gas Plc said on Monday that Ukraine’s proposed law to reduce the country’s gas production tax to 12 percent from a maximum of 29 percent for new wells will help the company’s investment plans.

“The new law will have a material impact on the Group’s plans for investment in Ukraine and, specifically, on the implementation of the field development plan for the Rudenkivske gas field,” Chief Executive Tom Reed said in a statement.

Ukraine, which stopped buying Russian gas in November 2015, passed a legislation in January this year to reduce the tax on gas production in the country to 29 percent from 55 percent.

The Ukraine government has relied on gas from storage and reverse flow purchases from European Union neighbours since relations broke down over Russia’s annexation of Crimea and support for pro-Russian separatism.

The company also reported a 1.6 percent fall in its average production for November to 9,746 barrels of oil equivalent per day (boepd), compared with the previous month.

JKX shares were largely unchanged on the London Stock Exchange, compared to a 2.8 percent in STOXX Oil and Gas index due to a spike in oil prices. (Reporting by Sanjeeban Sarkar in Bengaluru; Editing by Amrutha Gayathri)

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