British oil and gas company JKX Oil & Gas has successfully completed a second sidetrack of well M-166X in the productive Devonian sandstone reservoir in the Molchanovske North field, the company said in a press release.

This announcement comes on the eve of a June 5 meeting at which the company's largest Ukrainian shareholders, Ihor Kolomoisky and Hennadiy Boholiubov, will raise the issue of replacing JKX's management due to inefficiency.

According to Thursday's press release, "the initial 12-hour flow rate stabilized at an average of 1,710 bopd with 2.13 MMcfd gas through a 1 1/8" choke, with a flowing well head pressure of 600 psi. After further testing, a lower choke size will be chosen to optimize flow conditions and manage the reservoir."

"M-166X is the first well in the 2013 Ukrainian drilling campaign following a seven month drilling break. The Skytop N-75 rig has now spudded Ignatovskoye well IG-132, targeting the shallower Tournaisian Carbonate reservoir in the Molchanovske field," the press release said.

"Test production from the second sidetrack of well M-166 is above our original prediction and is an excellent start to our 2013 Ukrainian drilling program," JKX's Chief Executive Paul Davies, who Kolomoisky and Boholiubov want to dismiss, is quoted as saying in the press release.

As reported, Eclairs Group, which is under control of the co-owners of PrivatBank Kolomoisky and Boholiubov and which holds a 27.5% stake in JKX, has called on other shareholders to replace Davies and commercial director of the company Peter Dixon due to the company's losses and the fall in its share value.

The largest shareholder said that the share price has fallen 88% in the last five years, as the market capitalization of the company has declined from 838 million British pounds as of May 21, 2008, to 100 million pounds as of May 21, 2013, and the price of a share fell from 535.97 pence to 58.75 pence.

Besides that, JKX's Ukrainian shareholders pointed out the substantial decline in hydrocarbon production and problems with operating activities.

In response, JKX's board of directors suggested that shareholders not support Eclairs Group's initiative to replace the top managers, which is supported by Glengary Overseas Limited, belonging to businessman Alexander Zhukov, who owns 11.45% of JKX's shares.

"The Board of JKX considers that the collaborating parties are acting only in their own interests and not in the interests of all shareholders," reads a letter of the board to the shareholder published on Wednesday. According to the board, this poses risks for the company's activities in Russia and Ukraine.

In 2012, JKX saw an $11.34-million net loss compared to a $59.137 million net profit the year before. The revenues of the company last year were down by 14.4%, to $202.86 million, while average daily production fell by 8.4%, to 8,280 boepd.

JKX owns Poltava Petroleum Company in Ukraine, which holds four licenses to develop oil and gas fields that are part of Novomykolaivsky complex in the Poltava region, covering 271 square kilometers. It also has three exploration permits: for the Zaplavske, Yelyzavetivske and Chervonoyarsko-Skhidne fields covering a total of 171.2 square kilometers. JKX also has operations in Russia, Hungary, Bulgaria and Slovakia.