Operational update from the oil operations
Zhoda Investments ("Zhoda") announces an operational update from the oil operations in Ukraine.
"The year 2020 with volatile and low oil prices was challenging for the oil industry. I am, however, very happy to note that we have come through and that the oil prices are once again at a level where our oil operations can show a healthy profitability. The cost of producing oil in Ukraine is lower than in many other countries. In addition, oil is a very effective source of energy that will be in strong demand for decades to come. Despite the uncertainty that still exists in 2021, I therefore feel optimistic when it comes to the oil operations' ability to generate significant profits and value to our company", says Robert Karlsson, CEO of Zhoda Investments.
The current pandemic has had a significant effect on the oil price. The average Brent oil price during 2020 was 42 dollars per barrel, compared to 64 dollars per barrel in the previous year. Furthermore, the price was volatile and reached a low of 18 dollars per barrel in the spring of 2020. It is very satisfying to note that the price has since then risen sharply first to a level around 40 dollars per barrel during autumn and further to the current level above 60 dollars per barrel. The price increase shows that oil will be in great demand also in the future as the world economy step by step stabilizes and the vaccination programs are being executed around the world.
Zhoda's production was relatively stable during 2020 and amounted to 200 barrels per day, compared to 224 barrels per day the previous year. It is the company's objective to increase production, but due to the uncertain market conditions in 2020, the field operator only invested in simpler work overs and repairs and not into more complex programs that would enhance production in the long term. Given a further stabilization of the oil price, it becomes more financially attractive to launch a comprehensive investment program to increase production.
During 2020, the field operator sold its crude oil at state auctions or directly to a refinery. In order to reduce credit risk, the operator only delivers oil upon pre-payment. The effects of the pandemic on the Ukrainian economy have been significant. As in all countries whose economies are developing, there is a lack of liquidity, which in turn has created a discount between the local oil price compared to Brent. This is a pattern we have seen before when the world market oil price has fallen. As the world oil price has stabilized, the discount has then historically step-by-step decreased with the local price getting closer to Brent.
The oil operations' largest cost item is the production tax of 31% of the sales price at the state auctions. Since this is a variable cost, the cost base naturally decreases when the oil price is low, which softens the financial effect of low oil prices. In addition, the operator has implemented efficiency-enhancing measures that will lower the cost of lifting, processing and transportation of the produced crude oil. A third party handles these operations and the operator is finalizing negotiations to reduce these costs by SEK 5 million on a yearly basis.
Zhoda received a dividend of SEK 1 million from the oil operations during 2020.
Zhoda Investments owns through its subsidiary 45 per cent of the license holder and operator of the Lelyaki oil field. All the amounts above relate to Zhoda's 45 per cent working interest in the operator.
Zhoda Investments will publish the annual report for 2020 no later than three weeks before the annual general meeting, which is planned to be held in June.
For more information, please contact:
Robert Karlsson, CEO Zhoda Investments AB
+46 709 565 141, [email protected]
About Zhoda Investments
Zhoda Investments invests in selected unlisted European ventures and drives growth and profitability through active ownership and an entrepreneurial approach. In the coastal region of Dalmatia in Croatia, Zhoda owns and manages Testament Winery and Black Island Winery. Based on indigenous organic grapes and a two thousand year old wine tradition, it is Zhoda's award-winning winemakers' objective to create Croatia's best wine and to become the country's leading exporter of premium wines. The vision is to reach a production of one million bottles per year. The group also holds a 45 per cent interest in the Lelyaki oil field in Ukraine with 2P proven and probable oil reserves of 8 million barrels net to the company. Zhoda Investments is actively pursuing new investments. For more information, visit www.zhodainvestments.com.
This is an English translation of the Swedish original. In case of discrepancies, the Swedish original shall prevail.
Zhodas Investments helägda dotterbolag Testament Winery är Kroatiens första svenska vingård. Målet är att skapa Kroatiens bästa vin. Vingården har beviljats ett investeringsbidrag på upp till 15 miljoner kronor för att bygga ett nytt vineri för att öka och effektivisera produktionskapaciteten samt skapa nya intäktsströmmar från gårdsförsäljning och vinprovningar.
Zhoda Investments' wholly owned subsidiary Testament Winery is Croatia's first Swedish winery. The goal is to create Croatia's best wine. The company has been granted an investment subsidy of up to SEK 15 million for the construction of a new winery designed to increase and optimize production capacity and create new revenue streams from sales and tastings at the winery.
Inför dagens årsstämma lämnar Zhoda Investments ("Zhoda") en operativ uppdatering. Världens ekonomier stabiliseras och steg för steg har resande och restaurangnäringen börjat återgå till det normala, vilket ger väsentligt bättre marknadsvillkor för Zhodas verksamheter. Vinverksamheten redovisar en kraftigt ökad försäljning och dagens oljepris på över 70 dollar per fat ger gynnsamma förutsättningar för oljeverksamheten.
Ahead of today's Annual General Meeting, Zhoda Investments ("Zhoda") announces an operational update. The world economy has stabilized and international travel and the restaurant sector are step-by-step returning to levels that existed prior to the pandemic, which results in significantly improved market conditions for Zhoda's operations. The wine operations continue to show strong growth and today's oil price of over 70 dollars per barrel provides a healthy platform for the oil operations.
Zhoda Investments ("Zhoda") publicerar idag årsredovisningen för 2020.
Zhoda Investments ("Zhoda") publishes its annual report for 2020.
Aktieägarna i Zhoda Investments AB (publ), organisationsnummer 559030-3490 (nedan "Bolaget") kallas till årsstämma den 23 juni 2021 kl. 15.00 på Grev Turegatan 18 (Alpcot), 2 tr i Stockholm.
The shareholders of Zhoda Investments AB (publ), corporate identity number 559030-3490 (hereinafter the "Company") are hereby given notice to attend the Annual General Meeting to be held at 15.00 CET on 23 June 2021, at Grev Turegatan 18 (Alpcot), 2nd floor, in Stockholm.
Zhoda Investments ("Zhoda") lämnar en operativ uppdatering från vinverksamheten i kustregionen Dalmatien i Kroatien.
Zhoda Investments ("Zhoda") announces an operational update from the wine operations in the coastal region Dalmatia in Croatia.
Zhoda Investments ("Zhoda") lämnar en operativ uppdatering från oljeverksamheten i Ukraina.
Zhoda Investments ("Zhoda") announces an operational update from the oil operations in Ukraine.
Idag lanseras Testament Winerys första vin på hyllan. När Systembolaget skulle välja ut ett kroatiskt vin att sälja i 123 butiker vann The Dalmatian Dog. Detta är ett viktigt steg för Testament Winery att nå sitt mål - att skapa Kroatiens bästa vin.
Today Testament Winery is launching its first wine at Systembolaget. When the state monopoly selected a Croatian wine to be sold in 123 stores in Sweden, The Dalmatian Dog was chosen. This is an important milestone for Testament in reaching its goal - to create Croatia's best wine.
När världens största vintävling Decanter World Wine Awards nyligen avgjordes blev det storslam för Testament Winery. Ingen kroatisk vingård fick fler medaljer. Detta är ett stort erkännande för bolagets vinmakare och ett viktigt steg i målet att skapa Kroatiens bästa vin.
Testament Winery received more medals than any other Croatian winery when the results from the Decanter World Wine Awards, the world's largest and most influential wine competition, were announced. Judged by the top wine experts from around the globe, this is a huge recognition for the company's winemakers and an important step in reaching the objective of creating Croatia's best wine.
Zhoda Investments ("Zhoda") lämnar en operativ uppdatering avseende vinverksamheten belägen i kustregionen Dalmatien i Kroatien. Pandemin i världen har minskat resandet och inneburit en lägre aktivitet i restaurangnäring. Bolagets har trots detta hittills i år sålt lika många flaskor som för helåret 2019. Det varma vädret med låg nederbörd har inneburit en lägre skörd än tidigare år, men kvaliteten på druvorna är mycket hög och 2020 bedöms kunna ge den bästa årgången i bolagets historia. Att Testaments viner nyligen belönades med flera ädla medaljer i världens största vintävling Decanter är ett fint erkännande för bolagets vinmakare.
Zhoda Investments ("Zhoda") announces an operational update on the wine operations located in the coastal region of Dalmatia in Croatia. The outbreak of the pandemic has led to a decrease in international travel as well as lower activity in the restaurant sector. Despite this the company has managed to sell as many bottles to date in 2020 as for the full year 2019. The warm weather with little rain has led to a lower harvest compared to previous years, but the quality of the grapes is very high and 2020 has the potential to become the best vintage in the company's history. Testament's wines were recently awarded with several gold medals in Decanter, the world's largest wine competition, demonstrating the high level of expertise of the company's winemakers.