JKX Oil Closer to Privatization of Ukrainian Subsidiary

JKX Oil & Gas has signed an agreement on May 16, 2003 in Kyiv with the State Property Fund of Ukraine to exercise its priority right to purchase the 33.8% State holding in Poltava Petroleum Company (PPC) which is to be privatized. JKX currently holds 66.2% of PPC. This represents significant progress in JKX's efforts to progress privatization of the State interest.

Privatization will be subject to a number of legal and administrative approvals and procedures, which include clearance by the Anti-Monopoly Committee of Ukraine and the registration of the revised shareholding with the relevant Ukrainian authorities. A period of 60 days has been agreed for completion of all formalities. While there is no cost on exercising the priority right, JKX expects the total cost of any privatization (including all associated costs to be borne by JKX) to be less than $5 million.

Dr. Paul Davies, JKX Chief Executive, stated "I look forward to finalization of this important step for the Company which will send a positive message to all foreign investors in Ukraine".