JKX Oil & Gas Exports First Gas from Ukraine

JKX Oil & Gas' subsidiary, Poltava Petroleum Company, has successfully achieved its first export of gas from Ukraine.

PPC has signed a three-year gas sales contract with Eural Trans Gas Kft for the supply of a minimum of 720 million cubic meters (25.6 billion cubic feet) over the contract period. Gas deliveries commenced to Velke Kapuszany, Slovakia on 1st November 2003 at the minimum rate of 20 million cubic meters per month (approximately 60 per cent of PPC's current gas production). Commercial terms are confidential; however, net realizations for exported gas are expected to be about 30 percent above those achieved currently for domestic sales in 2003.

Confirmation has now been received from the relevant authorities that export of the November nominated gas volume was successfully completed.

JKX announced on June 25, 2003 that it had entered into an Agreement in Principle with Benam Holdings Ltd. The gas export contract realizes an intent of this agreement. A further announcement will be made in due course.

Dr. Paul Davies, JKX CEO, stated 'Initiation of gas export is an important milestone. The positive input of the Ukrainian state oil and gas company, Naftogas of Ukraine, in this achievement underlines the commitment of the Ukrainian government to attracting western investment in the accelerated development of its indigenous gas resources.'