Jadestone Energy Share Discussion Threads

[mount teide] 31/12/2019 08:19

Current Crude Oil, Fuel Oil(Singapore) and Marine Gas Oil(Singapore) Prices Per bbl the day before commencement of IMO 2020.

$109 - Low Sulphur Fuel Oil
$106 - Marine Gas Oil
$78 - Stag (assuming $11.5 premium to Brent - last lift)
$72 - Jadestone's ave oil price hedge on 50% of Montara's 2019 Production
$71 - Montara (assuming $4.6 premium to Brent - last lift)
$69 - Maari (assuming $2.0 premium to Brent - last lift)

$66.5 - Brent
$61.5 - WTI
$56.0 - High Sulphur Fuel Oil

Stag, Montara and Maari production is sold FOB (buyer pays the shuttle tanker costs).

At Fujairah, Saudi, LSFO is currently $117/bbl, MGO: $118 and HSFO: $45, giving a staggering $72 spread between high and low(0.5%) sulphur fuel oil.

Over the last few months LSFO has gone from a $25/bbl discount to a $3/bbl premium at Singapore, the World's largest Ship Bunkering hub.

Much of the global shipping industry expected LSFO to trade at a circa $50 tonne(circa $7.5/bbl) discount to Brent by 1/1/2020. Maersk, the world's largest container line provisionally based their Bunker Surcharge on that discount to MGO in October and have since had to materially adjust the figure upwards.

[mount teide] 31/12/2019 08:03

Mr T - I very much doubt the overwhelming majority of the wider market has the faintest idea as to the relationship between Jadestone's oil production, IMO 2020 and the LSFO Price.

[mr. t] 31/12/2019 07:52

Singapore VLSFO and LSMGO up another almost 3% yesterday, or circa $3 a barrel.I wonder how much of Jadestone's recent share price rise is from the increase in VLSFO price, and how much is a change in investors underlying valuation of the company?

[gord959] 30/12/2019 13:42

CGK - just to add to that, there is also the 4,000+ bpd coming from Maari (JSE's 69% share). The operating cashflows are attributable back to Jan 1, 2019 and give JSE further exposure to the current IMO2020 rush which hopefully continues on for a while as the shipping industry finds its steady operating state. Maari is light ULSFO (sub .1% sulphur).
The net cashlows up until the eventual close date will result as an adjustment on close and will reduce the purchase price for accounting purposes (similar to Montara and Stag acquisitions) as opposed to consolidating into the financials back to Jan 1, 2019, but the IMO2020 exposure is still being fully realized. It is really a fixed 50MM purchase price with full operating exposure. Side note, an additional benefit of this arrangement will also come from JSE working closely with OMV during the approx 12 month close period to implement the "Jadestone philosophy" resulting in a larger cash adjustment from the improved operations and also hit the ground running on close.
I am sure everyone is aware of this just restating it again during this exciting time.

[mount teide] 30/12/2019 13:21

15,850 bopd @ circa $68 Brent generates operating cash flow of circa $57.50/bbl, equivalent to $333 million(71.7p a share) per year.

Oil Tanker charter rates have doubled from $50k/day to over $100k/day in the last 6 weeks on the Middle East to China trade route. Source: Baltic Exchange.

It takes an average of 75 days to have exhaust scrubbers fitted to a ship and only 3% of the global fleet are currently equipped, with hundreds of ships still waiting weeks at anchor to enter shipyards to undergo installation; as a consequence, tanker charter rates are very likely to stay at highly elevated levels throughout H1/2020, and probably beyond now the tanker fleet is largely back in balance with oil industry demand for the first time in 7 years.

Contrary to analysts forecasts, with demand for LSFO now far, far higher than expected as a result of shipowners, managers and charterers preferring LSFO to MGO for technical reasons, and with initial IMO 2020 compliance now expected to be considerably higher than industry forecasts(our thanks to the Marine Insurance Industry for making it very clear to owners that non compliance means you're not insured), the perfect storm is brewing for very high H1/2020 demand/pricing for heavy sweet and light sweet crude in a low sulphur fuel oil IMO 2020 world.

The icing on the IMO 2020 cake is that producers in the SE Asia/Pacific Rim region will be attracting a further additional, highly material price premium by having very much lower delivery costs into the SE Asian market together with delivery times between 3 and 6 times shorter than the competition outside the region.

AIMHO/DYOR

[compound growth king] 30/12/2019 10:15

fozzie - would not be surprised to see £1.25 hit during H1/2020

IMO 2020 - as predicted here, relative to MGO, LSFO is proving to be in much greater demand by the shipping industry than the analyst forecasts suggested.

This is very good news for Jadestone - as it suggests demand for our heavy and light sweet production will be very strong/much higher than the already lofty projections the industry has been forecasting.

With Jadestone's OPEX probably now below $20/bbl and still on a declining trend this should see some spectacular current cash flow generation, when considering our 15,850 bopd production is currently generating an average realised sales price (inclusive of Montara hedge) north of $77.5/bbl

Out travelling so posting this from an old mobile phone account !

[beeks of arabia] 30/12/2019 10:15

I have let some go today. The wife spotted the share account balance and decided "we" needed to liquidate some!

[croasdalelfc] 30/12/2019 10:10

NAV for reserves alone is around £1.20 - with nothing built in for JSE magic dust. But yes - I can see a pullback - which is never a bad thing - consolidation before the next push up . I will not be trading - and will be waiting for 200p minimum. The story has only changed for the better - why sell ?

[spangle93] 30/12/2019 09:59

Fozzie - I tend to agree, although in this case it was serially undervalued (rather than a classic P&D), so there's more chance of the peak, whatever that will be, dropping back to a much higher baseline than in 2019

[fozzie] 30/12/2019 09:56

I am not complaining but this rise has been meteoric. Too far too fast?

MT - Do you have a price target in mind here? Thank you for the Level 2 info btw

[mount teide] 30/12/2019 09:51

L2: 1 v 2 / 93p v 94p (rest spread between 95p and 98p)

[morph7] 30/12/2019 09:48

I'm glad I haven't worked out my end of year portfolio figures yet. JSE has seriously distorted them in the last week or so! Happy New Year to all!

[mount teide] 30/12/2019 09:48

L2: 2 v 1 / 92.5p v 93.5p (rest spread between 94p and 97p)

[mount teide] 30/12/2019 09:42

Berenberg finally get 10k but had to pay 92.5p for them.

[mount teide] 30/12/2019 09:40

L2: 1 v 2 / 92.5p v 93.0p (rest spread between 93.5p and 97.0p)

Berenberg has picked up virtually nothing on the bid this morning - they were one of the MM's that were behaving like this on the bid immediately prior to the Maari Acquisition announcement

[lord gnome] 30/12/2019 09:39

Please, pretty please, no more price rises until January 2nd. This is one of my picks in two stock picking comps for 2020 and these rises are increasing my starting prices. ?

[mount teide] 30/12/2019 09:34

IMO 2020 set to boost Fujairah’s bunker industry - Hellenic Shipping News - today

Port News

'A century after the shipping industry moved from coal to oil as its primary energy source, another change on the same scale is now under way – one prompted this time by a change in environmental regulations.

The shift could provide a significant boost to the status of the UAE’s East Coast Port of Fujairah as a global oil hub.

The London-based UN body, the International Maritime Organisation, has toughened its rules on marine fuel emissions, setting a global sulphur content limit of 0.5 percent to come into effect from 1st January 2020.

At present most of the shipping industry burns high-sulphur fuel oil, a dense, dirty refinery by-product, as its main fuel, but these new regulations will force most to shift to new 0.5 percent sulphur blends that more closely resemble diesel.

The current situation puts Fujairah at a price disadvantage compared with other bunker ports. The bulk of the world’s high-sulphur fuel oil is made in the older, less complex refineries of Russia and Europe, and prices are more competitive at ports closer to those production locations.

But the more complex refining industries of the Middle East and Asia-Pacific, with a high yield of middle distillates, will be better placed to produce blending components for 0.5 percent sulphur fuels. Fujairah’s proximity to these producers will improve its position on price among the world’s bunker hubs.

At a local level, production of the new 0.5 percent sulphur fuels is being developed quickly. Since 2017, Uniper Energy Fujairah has run a topping refinery at the port with a marine fuels production capacity now reaching 3.6 million mt/year, including low-sulphur fuels. The oil storage company Brooge Petroleum and Gas Investment is set to build a 24,000 b/d unit to produce 0.5 percent sulphur bunker fuel as the first phase of its plans for a 250,000 b/d refining complex in Fujairah in conjunction with Sahara Energy Resources.

The impact of IMO 2020 is already being felt in Fujairah’s oil storage terminals. Heavy fuel oil stocks at the Middle Eastern hub have almost doubled from their level at the end of 2018 to 12,265 million barrels by 12th December, according to data from the Fujairah Oil Industry Zone, FOIZ. Middle distillate inventories are also on the rise, gaining more than 150 percent over the same period.

All commercial terminal operators in Fujairah participate in the weekly stock reporting at the request of FOIZ, the Middle East’s largest commercial storage facility for refined products. A total of 11 terminals participate, including storage volumes involved in activities such as blending and refining.

The next step for terminal operators will be to determine how much fuel oil storage is still needed as shipping moves on to cleaner fuels. A small number of shipowners have chosen to install emissions-cleaning scrubber systems on board their vessels to allow them to continue burning high-sulphur fuels – estimated by S&P Global Platts Analytics at about 2,400 ships out of the global commercial fleet of 80,000.

These buyers will still want fuel oil to be available at all of the major bunkering hubs, but represent a small niche in the market. Some power generation providers, notably in Saudi Arabia, will also be seeking to take advantage of low fuel oil prices to make greater use of their oil-fired generation capacity. In general, however, the market will be looking for more storage of cleaner products from the middle distillates range.

Looking beyond 2020, Fujairah will need to look at developing a supply chain for alternative fuels if it is to maintain its status among the world’s top bunkering ports. The IMO has set a target of 50 percent cuts to shipping’s greenhouse gas emissions from the 2008 levels by 2050. This is unlikely to be compatible with oil remaining the predominant bunker fuel.'

[croasdalelfc] 30/12/2019 09:27

Does anyone think they could achieve FCF of 125m Sterling in 2020 ? Or approx 29p a share ,Is £150m possible - 34p a share

[mikeoxard] 30/12/2019 09:26

£1 in the new year.

[jeanesy] 30/12/2019 09:25

Onwards and upwards. Inching up towards that magical 100p mark :)

[awise355] 30/12/2019 09:23

MT you can't keep up lol not a bad thing.

[mount teide] 30/12/2019 09:23

L2: 1 v 1 / 92p v 92.5 - Berenberg acting almost in desperation with the bid to attract some stock

[mr roper] 30/12/2019 09:23

Lovely start to the day here

[mount teide] 30/12/2019 09:17

L2: 1 v 1 / 91p, then immediately to 91.5p v 92p (Berenberg continue to keep pushing up bid for more stock which is proving elusive).