Oil and Gas
April 01, 2011
JKX Oil&Gas Plc: Better Luck Next Year - JKX Oil & Gas saw its operating profit decline by 21% YoY to USD 95mn in FY10, mainly due to an unexpected drop in output of 11% YoY, to an average of 10,320 boepd, during the period. Despite what we view as poor 2010 financial results, we leave our target price for JKX unchanged at USD 6.0 per share. The main driver for the stock should be the expected kickoff of natural gas extraction in Russia later this year, which we believe will lift the company’s average daily output by 70% to 20,000 boepd by the end of 2012.
