JKX Inks Gas Sales Agreement with Shell in the Ukraine

JKX Oil & Gas' wholly owned Ukrainian subsidiary, Poltava Petroleum Company, has concluded a Gas Sale and Purchase Agreement with Shell Energy Ukraine for domestic delivery of a minimum of 250 million cubic meters (8.75 billion cubic feet) of gas over a 12 month period commencing September 2006 after an initial delivery in August 2006.

The GSA contains provisions to increase the gas delivered above the contracted volume and to extend the term of the contract.

In June of this year, Shell signed a Joint Activity Agreement with the state oil and gas company, Naftogaz of Ukraine ("NAK"), relating to exploration in the Dneiper-Donetsk basin. Shell Energy Ukraine has also recently been granted a natural gas trading license by the National Energy Regulatory Commission of Ukraine. Shell Energy Ukraine is the local operating business for Shell Energy Europe, the European natural gas marketing business of Royal Dutch Shell plc.