JKX Oil & Gas, the explorer and developer focused on Russia and the Ukraine, has slipped 6% after it revealed another delay to one of its projects.
JKX said the start of production at the Koshekhablskoye gas field in Russia would be put back by two years from its original date to October 2010, because the existing facility would have to be completely replaced. In August the company had said the project would be delayed until this year. So depite reporting full year profits up 13% to $127.6m, the company's shares have lost 15.25p to 227p. Evolution Securities said:
"The delays in the operations and production growth have become a bit of a feature of JKX, and are probably a reflection of the difficulty of doing business in Ukraineand Russia. In our view, JKX has an excellent balance sheet with net cash and cash flow from operations sufficient to fund the development programme going forward. However, from an investor's perspective the persistent late running of the programme detracts from the underlying growth story based on the normalisation of Ukrainian and Russian gas prices towards European import levels. Other companies are doing a better job of delivering on a growth strategy. We cut our target price to 350p (from 450p) to reflect the delays to the production profile."
Elsewhere the market seems to have reacted fairly calmly to today's UK economic news, which has seen final quarter GDP revised down from a 1.5% fall to a 1.6% decline. Despite this, the FTSE 100 is still just about in positive territory, up 4.73 points to 3929.93.
