Such announcements don't usually trigger such excitement among ASX investors. But the agreement will allow the junior oil explorer to unlock value in its Kazakh assets.

This explains the 123% surge in the Jupiter Energy share price to a more than one-year high of 7.8 cents at the time of writing.

Jupiter Energy share price surges on infrastructure deal

The binding framework agreement was signed with Kazakh registered Sleipnir Technologies. It sets a timetable for the development and lodgement of a detailed project development plan that will provide Jupiter Energy with the appropriate infrastructure to achieve 100% gas utilisation on the Akkar North (East Block), Akkar East and West Zhetybai oilfields.

Under Kazakh law, oil and gas wells can only be granted a Commercial Production License if they have the right infrastructure in place. Then only can the well operator sell to international markets.

Current output limited by license restrictions

Currently, Jupiter Energy can only sell oil to the Kazakhstan domestic market as it operates under a Trial Production Licence or during the "Preparatory Period" as it transitions to a full commercial license.

"During the 'Preparatory Period', Jupiter is able to produce from any well located on a field with an approved Commercial Production Licence without having the requisite gas utilisation infrastructure in place, only if all excess gas that is produced during production is used on the field for power, heating and the like," said Jupiter Energy.

"Jupiter's production is therefore already currently constrained on the Akkar North (East Block) and Akkar East fields as both fields are operating under 'Preparatory  Period' restrictions. 

"The West Zhetybai field has just commenced the approval process to transition from Trial Production to Commercial Production and when this approval process is complete, the West Zhetybai field will return to production, also under 'Preparatory Period' restrictions, until the appropriate 100% gas utilisation infrastructure is in place."

Production output set to increase

The Akkar East and Akkar North (East Block) fields current produce around 225 barrels of oil a day. When the West Zhetybai field returns to production, the cumulative daily output from the three oilfields should increase to 340 barrels per day.

But following the successful commissioning of the gas utilisation infrastructure, Jupiter Energy should achieve cumulative daily production from the current wells of circa 700 barrels per day.

Additional oil production could then come from future, successful, drilling on the three fields.

Jupiter Energy and Sleipnir aim to lodge the project development plan with the the Kazakh Ministry of Energy by early 1Q 2022.

The big rise in the Jupiter Energy share price on Thursday pushes its one-year gain to 30%.

The post Why the Jupiter Energy (ASX:JPR) share price more than doubled today appeared first on The Motley Fool Australia.

At the time of writing, Jupiter Energy shares are changing hands at 6.5 cents a piece, up 75.68% on the day.

Let's take a closer look at what the company posted earlier this morning.

What is Jupiter Energy?

Jupiter Energy is an oil and gas exploration company that has appraisal, development and production interests for oil and gas in Kazakhstan.

According to its website, it owns "100% of an exploration permit in the Mangistau Basin, West Kazakhstan".

At the time of writing, it has a market capitalisation of $5.7 million.

Jupiter's quarterly results

In its report, the company exhibited unaudited sales revenue of approximately $1.196 million, up 6% from the previous quarter.

This revenue was based on the sale of approximately 32,000 barrels of oil, at an average price of US$29 per barrel.

In the previous quarter, it had realised sales of 34,000 barrels of oil, albeit at a lower price of US$25 per barrel.

Cash receipts for the quarter came in flat to the previous quarter at $1.4 million.

Jupiter also completed the transition of its Akkar North interests into commercial production during the quarter.

Additonally, the company laid out further details of its "strategic review" that has been underway since 2020. Under the review, the company is discussing the implementation of a "100% gas utilisation plan". If successful, the plan would see Jupiter start selling oil for export.

The board has ensured it will "keep shareholders informed of any material progress in this area" over time.

Investors have relished this morning's release as Jupiter shares continue to remain in the green in afternoon trading.

Jupiter Energy share price snapshot

The Jupiter Energy share price has posted a 35% return this year to date. It has also gained 320% over the past 12 months.

Jupiter shares have outpaced the S&P / ASX 200 Index (ASX: XJO)'s return of 22% over the past year.

The company's shares are trading off their 52-week high of 17 cents, but are aloft the 52-week low of 1.8 cents.

The post Jupiter Energy (ASX:JPR) share price surges 75% on activities report appeared first on The Motley Fool Australia.