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March 21, 2007 2:00 am
The rapid acceleration in Ukrainian gas prices to the European average helped JKX, the oil and gas producer, to double profits last year.
Nearly all its current production is focused on Ukraine and JKX sells all of its gas to that market, which presently imports approximately 75 per cent of its gas.
Paul Davies, chief executive, said that Russia's decision to allow its exported gas prices to rise by large amounts each year had helped support the price for locally-produced gas. "We sell gas in Ukraine at the internal market price, which is a reflection of the imported price," he said. "We now have gas prices lifting by between 20 and 30 per cent a year. These are big jumps."
On current estimates, gas prices in Ukraine will reach price parity with the rest of western Europe by 2011.
JKX's profits before tax more than doubled to $109.2m (£56m) on revenues ahead 59 per cent to $131.7m.
The company was also helped by a 20 per cent increase in volume of oil and gas produced following the drilling of nine new wells in Ukraine.
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