JKX Oil & Gas plans 'measures' in Ukraine after tax hike

(Reuters) - JKX Oil & Gas Plc (JKX.L) said it would take "operational and financial measures" to protect its interests in Ukraine after the introduction of emergency legislation that will raise oil and gas production taxes.

Shares of JKX fell 13 percent in early trading to their lowest in more than a decade. The stock was one of the top percentage losers on the London Stock Exchange.

Ukraine's parliament agreed last week to amend the 2014 budget to take account of falling revenue and release more funds to finance a military conflict with pro-Russian separatists in the east of the country.

An additional 1.5-percent personal income tax will be levied until the end of the year to cover the military. Taxes were raised on tobacco and mining, as well as the oil and gas sector.

Ukraine contributed 84 percent of JKX's revenue last year.

The company said the most significant tax increase would apply to gas production, where the rate would almost double to 55 percent between Aug. 1 and the end of the year. Gas accounts for more than 90 percent of JKX's reserves in Ukraine.

JKX, which has most of its production assets in Ukraine and Russia, said it was evaluating the impact of the legislation on its investment programme.

The company gave no further details about the measures that it plans to take.

JKX said in its half-yearly report on July 28 that its operations in the region had not been affected by unrest in Ukraine or the deterioration in relations between Ukraine and Russia.

Regal Petroleum Plc (RPT.L), an AIM-listed oil and gas company with operations in Ukraine, said on Friday that the tax increase would hurt its current financial year results and delay its ability to commit to future capital investments in Ukraine.

Shares of JKX were trading down 13 percent at 35.00 pence at 0755 GMT (8.55 a.m. BST).

(Reporting by Roshni Menon in Bangalore; Editing by Robin Paxton)