Jadestone Energy Share Discussion Threads

[croasdalelfc] 03/1/2020 09:05

#JSE #HUR.consider : @$68 Brent #JSE production and opex for 2020 circa 20k bopd and $20.5 opex giving REe yearly operating cash flow of circa $400m#HUR forecast 2020 production range 17-20kbopd Opex $20/b giving yearly Operating Cash flow circa $250m-$300m#JSE EV £375m #HUR EV ~£800m

[mount teide] 03/1/2020 08:17

L2: 2 v 1 / 92.5p v 93.0p ( rest spread between 94p and 97p)

Sp93 - thanks for the reservoir engineering perspective

[spangle93] 03/1/2020 07:59

"So the decline rate has been very modest to date - probably because the initial development of the field commenced with just three wells(rather than the six planned) at a production rate around 50% of the 28,000 bopd that was to be targeted."


Also because the field is underlain by an active aquifer and they are reinjecting gas above the oil, hence there is little pressure decline - oil rate decline instead comes from a higher water cut.

[mount teide] 03/1/2020 07:55

Brent hits $69 on US air strike in Iraq.

[mount teide] 02/1/2020 22:07

MrT - that's an interesting question. Looking forward to the management shedding some light on that for 2020 over the next month or so.

What we do know from the CPR in the 2018 AIM Document is that Montara came on production in 2013(two years late) and peaked at 15,000 bopd in 2014, was producing at circa 7,100 bopd from 4 wells on takeover(with a field uptime below 70%), and following the light well intervention work this year came back on at 12,000 bopd(with the 'birds' and a H1/2019 field uptime of 84%).

So the decline rate has been very modest to date - probably because the initial development of the field commenced with just three wells(rather than the six planned) at a production rate around 50% of the 28,000 bopd that was to be targeted.

In H2/2020, some six years after Montara reached peak production, the field could well be producing at a rate exceeding the 2014 peak rate. Now there's a thought!

AIMHO/DYOR

[mr. t] 02/1/2020 21:33

Thanks Mount Teide, so that would take us up to circa 25,000 boepd together with Maari if there's no depletion. What sort of depletion would you expect to see next year across all fields, as I imagine there must be some?

[mount teide] 02/1/2020 21:07

Further to MrT's post 2769:

'Valaris announced two days ago that their jackup JU-107 (the same one that carried out the Stag infill drill last year) has been awarded a two well contract with Jadestone starting in June, I assume for the planned Montara infill drills:

'two-well contract with Jadestone Energy offshore Australia, with an estimated duration of 115 days from June 2020 to September 2020;'

Interesting they have elected to drill two Montara infill wells back to back - earlier in the year it was not certain a second infill well would be drilled on Montara in 2020.

Montara has three additional infills targeting 5.3 mmbbl above 2P(plus eight other leads identified). Each is expected to add circa 3,000 bopd - suggesting a potential 6,000 bopd uplift in production during Q3/2020.

[spangle93] 02/1/2020 20:28

Maybe this is too far away, but there might be synergies with this discovery for the timing of the Montara gas blowdown phase. I think Montara is closer to Prelude than this new discovery



Bratwurst: A significant discovery for Shell

Dec 20, 2019

Shell Australia today announced a significant gas and condensate discovery in the Browse Basin off the North West Coast of Western Australia.

Drilling of the Bratwurst -1 exploration well, within title AC/P64 (100% Shell Equity, Operated), was safely and successfully concluded on 4th December 2019 after a 78-day campaign. This campaign was completed in just over 18 months from bidding and 12 months from award of the AC/P64 title.

This discovery is located 160km north east of the Shell operated Prelude FLNG facility and presents an opportunity for a future tie-back to Prelude. It supports Shell’s growth plans for more and cleaner energy, with LNG being the predominant focus for Shell in Australia.

“Gas is a core component of our strategy to provide more and cleaner energy solutions” said Zoe Yujnovich, Executive Vice President, Shell Australia. “Today’s announcement shows how, through exploration, we are building a strong pipeline of discoveries to support our assets in Western Australia.”

[beeks of arabia] 02/1/2020 11:29

30k now showing, marked on afn as a sell.Low volume day, buys matching sells.

[beeks of arabia] 02/1/2020 10:26

current prices - 92 to sell, 92.3 to buy.

A family member just bought 30k (not showing).

[lauders] 02/1/2020 01:34

Does all this news mean that we are still cheap ?

Yes, per slide 16 of the most recent corporate presentation (see below) when JSE stated that the NAV should be in the area of 200-250p. The share price at that time was around 72p mind you so we have improved quite a bit, but there appears to be room to grow still. The Vietnam update should land anytime too and that might provide the kick to get us over 100p.

[mount teide] 01/1/2020 22:44

At $68 Brent the calculated average realised oil sales price inclusive of the Montara oil price hedge, last lift oil sales premiums and 4,500 bopd of Maari production is $74.75/bbl for 20,350 bopd of production.

At a calculated average OPEX of $20.75/bbl(may well be lower in Q4 from the near 30% uplift in Montara production versus Q3), this would generate circa $1.1m of daily cashflow and $401 million annually.

[mad foetus] 01/1/2020 21:37

Rather than cheap, I think the increased cashflow resulting from the change in shipping fuel regs will accelerate the company's development. We'll drill and likely make acquisitions earlier than would otherwise be the case.

[jeanesy] 01/1/2020 21:02

Does all this news mean that we are still cheap ?

[mount teide] 01/1/2020 18:44

On the first day the new IMO 2020 Low Sulphur Fuel Oil Regs take effect, LSFO prices at Singapore continue to surge!

New sales price records have been set almost daily over the past few weeks.

LSFO at Singapore the worlds largest bunkering hub is up 11% in a week to $111/bbl, with prices reaching $117 for small volumes. HSFO at $55.5/bbl, set a new record spread with LSFO of $55.5/bbl today.

LSFO at Fujairah, the largest ship bunkering facility in the Persian Gulf is currently averaging $117/bbl with prices up to $128/bbl paid for smaller sized orders. HSFO at $45/bbl, set a new world record spread of $72/bbl with LSFO.

MGO is currently $106/bbl and $117/bbl respectively at Singapore and Fujairah.

[mount teide] 01/1/2020 16:19

Its worth remembering that the current Jadestone management built Talisman North Sea and Talisman SE Asia into multi $billion businesses WITHOUT the benefit of the tailwind of the IMO 2020 Sulphur Cap on oil pricing, and in the case of Talisman SE Asia, the benefit of an oil market cycle recovery stage(prices were in a falling trend from 2009 to 2016).

At Jadestone Energy they have the tailwind benefit of the highly positive impact of the IMO 2020 Sulphur Cap on oil sales pricing together with the historically strongest years of an oil market cycle recovery/boom stage ahead.

[mount teide] 01/1/2020 15:28

IMO 2020 - Sulphur Cap - the challenge of supplying the demand for LSFO will be further exercised by the 30%(1.5m bopd fuel oil demand) forecast growth of the global shipping fleet during this decade - in line with the expected growth of the global economy.

[mr. t] 01/1/2020 13:16

On another note, Valaris announced two days ago that their jackup JU-107 (the same one that carried out the Stag infill drill last year) has been awarded a two well contract with Jadestone starting in June, I assume for the planned Montara infill drills:



New Contracts and Extensions

Valaris has also continued winning new work for its high-quality rig fleet, as new contracts and contract extensions with associated revenue backlog of approximately $100 million have been awarded to the Company since its last contracting update press release on November 25, 2019:
...
-VALARIS JU-107 contract extended due to the exercise of a one-well priced option with Chevron offshore Australia, with an estimated duration of 30 days from late February 2020 to late March 2020; the rig has also been awarded a two-well contract with Jadestone Energy offshore Australia, with an estimated duration of 115 days from June 2020 to September 2020;

[mount teide] 01/1/2020 13:09

Asia Pacific’s upstream industry in 2020 - Wood Mac

M&A opportunities aplenty - The pipeline of assets for sale remains strong. The Majors alone hold US$18 billion worth of non-core assets in Asia Pacific. Divesting late-life assets, low-return, pre-FID projects and positions with limited growth potential will be priority. Chevron’s Indonesia Deepwater Development and Repsol’s PM3 CAA are two examples of key assets expected to change hands over the next 12 months.

Australia leads in bumper year for Asia Pacific FIDs - Asia Pacific is expected to see a boost in major project sanctions next year. About US$35 billion of new development expenditure and 4.6 billion boe of resource could be sanctioned in 2020, compared to only US$5.5 billion and 1.2 billion boe of new projects getting the go-ahead in 2019.

After a dearth of project sanctions in the last few years, Australian project final investment decisions (FIDs) are now back on the cards in 2020.

Barossa is closest to the line as new operator Santos looks to backfill the Darwin LNG plant. We expect Woodside to sanction Scarborough to underpin the Pluto Train 2 expansion, and Shell is set to take FID on the Crux field to backfill the Prelude FLNG facility.

Exploration: Wildcats out, brownfields in? - After a record year for Asia Pacific exploration in 2019, attention is expected to switch to delineating some of the key discoveries over the last 12 months. Appraisal drilling at Repsol’s Kali Berau Dalam, Eni’s Ken Bau, PTTEP’s Lang Lebah, and CNOOC’s Yongle 8-3 will prove up commerciality ahead of development planning.

The outlook for pure wildcat exploration looks more limited in 2020. But there are still some potential play-openers in New Zealand’s Great South Basin, deepwater Myanmar, offshore North Sumatra and offshore Papua.

In Australia, it will be a pivotal year for the Beetaloo and McArthur Basins, long thought to hold significant resource potential, that could be the saviour of the Australian east coast gas market.

This could be the breakout year when we find out if all the hype is justified. Origin, Santos and Empire Energy are hoping to get a better understanding of the rock mechanics and well deliverability with their exploration programmes in 2020. Flowrates above 5 million ft3/d would be considered a success

The cooldown in Asia exploration activity in the last few years reflects a global shift in resource capture strategies, with greater emphasis on getting more from existing fields.

In 2020, we expect a growing focus on improving recovery rates by NOCs and smaller specialist players. PERTAMINA will hope to slow declines at Offshore Mahakam via an ambitious drilling campaign and new well and platform designs. PTTEP aims to recover more contingent resources from G1/61 (Erawan) and to lower development costs through synergies with its nearby assets.

[mount teide] 01/1/2020 12:39

We are fortunate that the specification of Australian heavy sweet crude is considered a premium product by marine oil processors for blending purposes with other oils to produce IMO 2020 compliant fuels.

Some oil processors using other crude oils have clearly been sailing a little too close to the wind with their oil blending in an attempt to maximise profits and been found out.

According to my two oil transportation and storage industry friends, both Shell and BP have been buying Australian heavy sweet spot cargoes for IMO 2020 purposes since Q1/2019 - to carry out fleet field testing of these premium quality grades blended with a range of other oils in order to determine the optimum blend for their engines.

For major oil companies like Shell and BP which mostly carry only their own oil production, paying a little more for a premium quality heavy sweet crude to produce an optimum field tested blended fuel oil product for their own fleet is considered cash well spent.

[mount teide] 01/1/2020 11:16

Happy New Year!

IMO 2020 Sulphur Cap - is seeing huge premiums paid for heavy, sweet low sulphur crudes

What the marine fuel oil market wants is heavy sweet crude with an API less than 20, sulphur content below 0.5% and as close to 0% as possible.

The chart below plots the global oil industry's circa 100 million bpd of production according to density(API) and percentage sulphur content.

What the IMO 2020 sulphur cap( together with the shipping industry's historic engine design) has done, is move the sweet spot for premium crude oil pricing along the bottom line (X Axis) of the graph from an API of 40+ to sub 20.

As can be seen, this moves the availability of supply from feast to famine.



Certain heavy sweet crudes like that of the Australian producers and the UK Kraken grade can go, almost directly, into vessels’ fuel tanks with very little adjustment. It all depends on a few key parameters, including sulphur content, density of the oil, and how flammable or combustible it is.

Rather than going to a refinery, such grades can simply be blended with other products to make premium IMO 2020 compliant LSFO ideally suited for low speed(60 RPM) engines designed to run on residual fuel oil(bottom of the refinery barrel).

Following the implementation of the IMO 2020 sulphur cap, where fuel oil is concerned, shipowners, managers and charterers will be highly motivated by two things; price and not messing up their engines(and increasing their maintenance costs) - the passage of time(2020 and beyond) is highly likely to show that the latter is far more important than paying a little more for the optimum fuel.


AIMHO/DYOR

[mr. t] 01/1/2020 00:29

Happy new year!

I'm no economist, but I find this platts statement incredible:

"Singapore is expected to receive only 2 million-2.5 million mt/month of low sulfur fuel oil in early 2020, well short of the anticipated 4 million mt/month of bunker demand."



A 1.5+ million tonne deficit, or >10 million barrels, is huge for an inelastic commodity such as oil. If true, I can only see prices going through the roof and Jadestone being a big beneficiary...

[bluerunner] 31/12/2019 18:17

Best wishes to all JSE investors - and a particular shout out to those who make this such a great bulletin board.This is my second largest holding so am very happy with one bagging to date.Let's hope 2020 is as good as this year has been for Jadestone investors.