Award of Multi-Stage Fracture Stimulation Contract

JKX Oil & Gas plc ("JKX") is pleased to announce the award of contracts between its wholly owned subsidiary, Poltava Petroleum Company ("PPC"), and Schlumberger to perform fracture stimulation ("frac") operations on well-R103 in the Rudenkovskoye licence, Poltava, Ukraine.

Well R103 was drilled in 2010 to a total measured depth of 4,589m including a sub-horizontal component of 1,000m in a low permeability gas bearing Devonian sandstone unit. Detailed geological and engineering studies have concluded that the well will benefit from a multi-stage fracture treatment.

In 2011, Schlumberger won a competitive bid to design the R103 multi-stage frac. Following a further tender process, additional contracts have now been signed with several other Schlumberger divisions to source the chemicals, materials, equipment and services necessary to perform a 9-stage frac operation.

Pre-frac preparations on the well, which include the replacement of the liner, are well advanced, with the injectivity test scheduled to be completed in the third quarter of 2012. It has been agreed to perform the bulk of the frac operation in the second quarter of 2013 in recognition of both the complex logistics sourcing and mobilisation of long-lead items into Ukraine and the adverse climatic conditions of the Ukrainian winter.

JKX Chief Executive, Dr Paul Davies, commented:
"We are very pleased to have placed these series of contracts with an industry leader and look forward to the successful completion of one of the largest frac operations in the region."