12383123821201612321122341071712230LONGHORN10708R10708L11441ST 242©2005FRANKMORROWCOMPANY800.556.7688 . 401.941.3900website:www.frankmorrow.come-mail:sales@frankmorrow.comfax:401.941.3810creative ideas in metals since 1929JKX Oil & Gas plc Annual Report 201135At a glance01-17Board statements18-23Operational review24-36Financial review37-47CSR review48-61Directors' reports62-83Financial statements84-136Remaining reservesas at 31 December 2011 Proved Probable Prov+ProbOil 0.0 0.30.3(MMbbl)Gas 0.9 3.14.0(Bcf)Oil + Gas 0.2 0.81.0(MMboe)installed at the end of the first quarter 2012 to ensure that the full market price can be obtained for the product. a small compressor was about to be installed on well Gh-1 for a February re-start of gas production. a second production well is under consideration in Gorbehaza but is contingent on the performance of well Gh-1 after it re-commences production. the local gas market remains strong with 2011 realisations in excess of $13/Mcf.Further Hernad exploration activity. The Tiszavasvari-6 well was tested in January 2011 after encountering a 300m gross reservoir interval with excellent gas shows below 2,580m. Three reservoir intervals were tested with a maximum rate of 1.5 MMcfd being recorded. The well was suspended in anticipation of a possible reservoir stimulation programme. . A larger tilted fault block structure with amplitude supported Lower Pannonian reservoir intervals lies updip from the first structure and appraisal drilling is planned for the second half of 2012. . The Tiszavasvari-5 well was drilled in May 2011 to a TD of 800m and tested a new play on the northern end of the Pegasus Ridge. The stacked sands encountered were all water wet and the well was plugged and abandoned.. The 200sq.km 3D seismic data acquisition in the Jaszsag area to the south of the Hernad II licence was completed and interpretation of the preliminary data indicated a number of small but low risk prospects. Two of these prospects were selected for drilling in the first quarter 2012.. The larger of the two prospects Pely-02, was drilled in January but with disappointing results: the primary target reservoir interval was poorly developed and a secondary objective, while evidently gas bearing, had insufficient reservoir quality to justify completing and testing. The well has been plugged and abandoned and the decision to drill the second well has been deferred pending further study of the seismic and Pely-02 well correlation.Hernad (I and II) and Gorbehaza reservesHadjunanas Field: the unsurprising consequence of the water influx in the main Pannonian gas reservoirs during the year has been to reduce the reserves and field life; this has been partially offset by the success of the Miocene oil reservoir test. Remaining gross reserves in the field are now 8.0 Bcf gas and 0.6 MMbbl oil (JKX net 1.0 MMboe).In March 2009, JKX farmed-in for a 25% interest in a 15.6sq.km area of the Veszto exploration licence held by HHE in the east Hungarian Pannonian Basin.Following the extended well test production in 2010, a Mining Plot is under application and is expected to be granted in the first quarter of 2012. The Operator is continuing the evaluation of appraisal locations and a further well is under consideration for the second half of 2012, following award of the Mining Plot.JKX entered into a farm-in agreement to participate in the drilling of up to seven shallow wells located in the Turkeve area of north east Hungary in late 2010. Under the terms of the agreement, JKX funded 66.67% of the drilling and completion costs to earn 50% of future mining plots formed to develop discoveries, and funding 75% of any pipeline connection costs. . Six wells were drilled during the period of which five were dry or sub-commercial.. Turkeve Ny-7 well encountered gas, flowing at 2.0 MMcfd through a 6mm choke with a WHP of 1,680 psi, but with more than 25% of carbon dioxide. The operator is evaluating treatment and development options with a view to bringing the field into production.. Limited rate pilot production is planned from Ny-7 for the second quarter of 2012 with full rate production expected to start towards the end of 2012 once a suitable development option is approved. Turkeve reservesBased on the proposed development plan, Turkeve P50 reserves are 3.2 Bcf gas and 70 Mbbl condensate (net to JKX 0.3 MMboe).VesztoTurkeve7Wells drilled2Wells worked over

36Operational review Slovakia / BulgariaSvidnik, Medzilaborce and SninaSLOVAKIA (JKX 25%)JKX holds a 25% interest in the Svidnik, Medzilaborce and Snina exploration licences, covering a total area of 2,278sq.km in the Carpathian Fold Belt in north east Slovakia. Acquisition of 500 km of 2D seismic data in 2008 through 2010 provided basic regional information in the two eastern licences, as well as infill data in the western Svidnik licence. During 2011:. acquisition of a further 300km of regional 2D seismic data acquisition was completed. the Cierne-1 exploration well location in the westernmost Svidnik licence was selected and drilling is expected to commence in the fourth quarter of 2012. The well will be drilled to more than 3,500m with multiple targets identified in this sub-thrust play.BULGARIA (JKX 40% and operator)JKX operate the B1 Golitza licence, covering 971sq.km in eastern Bulgaria. Following the lack of success in the 2010 drilling programme JKX and its co-venturers reviewed the information from these wells together with the 3D seismic data and concluded that there was insufficient prospectivity to justify applying for a production licence.There are now no plans for further activity and the licence expires in March 2012.(JKX 18%)JKX has a 18% carried interest in the 1,787sq.km Provadia licence operated by Overgas. The 380 km 2D seismic survey has been completed and the data is now being processed.Martin MillerTechnical DirectorGolitzaProvadia