Jadestone Energy Share Discussion Threads

[11_percent] 31/12/2019 16:13

Posted on the TXP BB.

Good but long...….oil price into 2020 and beyond.

Gives a history - peak oil, peak production.

The shale downturn, capex spend (or lack of it), EVs & SUV numbers.

The opportunity, E&P shares at all time low, inc 2008 and 2016.

[bubblingup] 31/12/2019 13:50

Jadestone Energy
@JadestoneEnergy
The Jadestone Energy (CVE:JSE) Share Price Is Up 206% And Shareholders Are Boasting About It via
@YahooFinance
$jse $jadsf

[mount teide] 31/12/2019 13:06

The video of the New Zealand inter island ferry demonstrates well why Jadestone shareholders should be very pleased the previous owners of the Maari FPSO Raroa II spent the best part of $70million post commencement of oil production at the Maari Field in 2009(in addition to the circa $107 million to buy and convert the vessel), on upgrading the shipboard mooring system swivel, eight mooring lines, chain attachments, shackles and various associated components with higher strength fittings/equipment BEFORE Jadestone made the acquisition of OMV's 69% shareholding for $50m with an effective commencement date of 1/1/2019.

The field shutdown to effect the failure of the original shipboard mooring swivel together with a number of original mooring lines on Roroa II saw oil production halt for over 5 months - some of the cost of the replacement swivel and mooring lines were recovered from Marine Insurers but not the lost cash flow.

Data Source: Original Field Partner Cue Energy's historic Quarterly Results Reports from 2010.

[mount teide] 31/12/2019 12:26

L2: ends on what has been very satisfactory year at: 2 v 2 / 92p v 93p

From 33.9p to 92.0p in a calendar year = 171% capital gain.

Currently averaging a GAGR of 83% since the August 2018 London IPO - to maintain this growth rate over the first two years would need a share price of 117p by August 2020.

[mount teide] 31/12/2019 12:07

Three big trades totalling 650,000 shares at the mid 91.5p price and one of 450,000 shares at 91.86p from yesterday afternoon just reported.

[hiddendepths] 31/12/2019 11:49

They're finding a few sellers this morning but the stock is being easily absorbed - I'm guessing by MMs who have been unwilling shorts due to the buying of recent days.

I suspect the buying will become more pronounced in the New Year. Interesting to see if the 100p mark will tempt some topslicing or whether we'll fly through it without pausing for breath.

This is my second largest holding after the recent gains but I'm not topslicing at anywhere near current levels. Doubt it'll happen next year in fact, even if we double or treble from here.

[mount teide] 31/12/2019 10:34

IMO 2020 - Shipowners, managers, charterers and the Marine Insurance Industry's highly legitimate and responsible concerns about avoiding at all costs engine breakdown issues are well founded and based primarily on the safety of the ship, cargo and personnel.

Below is an amateur video of the passenger and freight ferry that operates between the relatively sheltered waters of the North and South Islands of New Zealand down in the Southern Ocean, generally considered by professional mariners, elite yachtsman and the late Ernest Shackleton as the most demanding and challenging ocean by far to operate a ship or yacht in regardless of size. A ship without the use of engines, drifting beam on to massive breaking seas is to be avoided at all costs.

As a professional mariner and veteran of seven round the world voyages down to New Zealand and back via Cape Horn i have no hesitation in agreeing with those views. The Southern Ocean(year round), and North Atlantic and North Pacific in winter has zero tolerance of an unprepared or a poorly maintained ship, the foolish or the stupid.

[croasdalelfc] 31/12/2019 09:39

Q4 results should be spectacular. $41.2m lifting on Oct 1st plus 494k barrels of inventory ($20m) just for starters. Low capex in the Q . Record production . Brent average slightly higher than Q3. Imo cash generation will be 15-20p a share .

[bamboo2] 31/12/2019 09:09

I took profit on 20/12/2019, on a potential turn.
The share price did start to ease back, back the retrace was not as deep as I had expected, so have bought back in over past few sessions.

Current chart pattern has a tp approx 99.5

[mr. t] 31/12/2019 08:57

Thanks as always for your helpful insight MT.

[mount teide] 31/12/2019 08:48

MrT - the market could well be partially factoring in the $2/bbl forecast uplift to global light sweet crude prices from IMO 2020 expected in 2020.

Only in recent weeks has the market started to become aware that the shipping industry would be buying much more LSFO than forecast on commencement of IMO 2020 due to concerns(technical issues that were entirely predictable) with operating ship's engines designed to run on heavy fuel oil.

Within the range of grades of LSFO there is a further pecking order of demand - blended LSFO produced from mixing Heavy and light sweet crudes at a ratio of circa 14:1 will be in much greater demand than refinery manufactured LSFO which is closer to MGO in specification.

The grade of LSFO our Stag production is used to produce, is like a low sulphur version of the heavy fuel oil the global fleet's engines have run on for 70 years.

Will a petrol car engine run on expensive aviation fuel? Possibly, but for how long and at what maintenance cost? Most engineers would probably prefer to run it on something closer to the spec of petrol.

[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!