JKX Oil Spuds Ukrainian Well

JKX Oil & Gas spud the development Well 111 as part of its 2002 work program at Poltava onshore Ukraine on September 28th. The well is scheduled to be completed in 35 days with a cost of US $2.5million, and is being funded from the Company's cash resources.

Production from Well 111 is anticipated to be in excess of 500 boepd and will be processed using existing field facilities. Oil production will be marketed under the existing export contract to Poland with gas production being sold into the domestic market. The well is located in the Ignatovskoye Field, which is one of the four fields licensed to JKX's Ukrainian subsidiary, Poltava Petroleum Company, which has been continuously producing oil and gas since 1995.

The 2002 work program in Poltava comprises upgrading of field processing facilities and a drilling program. As previously reported, installation of dew point control equipment was successfully completed in July and since then has increased oil and gas production by 15 per cent. Well 111 initiates the drilling phase of the program and will be followed by the re-entry and sidetracking of two existing producing wells in the Ignatovskoye Field to increase oil recovery. Drilling will be performed by a Skytop TR80 rig under contract from the Polish Company, Oil & Gas Exploration Cracow (OGEC).

Well 111 is a vertical well, drilled on the north-west flank of the structure to a depth of 2,453m; the well location is adjacent to the village of Sokolova Balka. Its primary objective is the oil and gas bearing Visean carbonates which form the principal reservoir in the Ignatovskoye Field. The well is targeted to penetrate a total of 200m of the Visean reservoir, the lower 50m of this being oil bearing and the remainder gas bearing. The secondary objective for the well is the Devonian sands, which underlie the Visean formation. Well costs and performance are optimized by using a slim-hole well design and open-hole completion to ensure maximum communication with the secondary porosity of the Visean carbonates.