Jadestone Energy Share Discussion Threads

[spangle93] 04/1/2019 08:22

So, Montara still not yet onstream.

on 15-Nov, "A restart of production is expected in early December"
on 11-Dec, "The Company expects production to restart later this month"
now 4-Jan, "That close-out [reintroduce hydrocarbons] is anticipated within days"

Full marks for updating the market when deadlines are missed

Also, few industry turnarounds are delivered on time or budget. The blowouts are on average greater than brownfield or greenfield projects. So they are by no means unique.

Maybe they found a lot more issues but do not wish at this stage to diss PTTEP further

Nonetheless, the company has done a lot of trumpet blowing about how good it is on delivery of plans, and at face value this overrun does not align with such confidence.

[king suarez] 31/12/2018 12:57

Good little interview that, thanks for linking.

[zengas] 30/12/2018 17:32

"One of the things we committed to our investors at the time of the capital raising was to consider and put out a statement around dividends. As a business model, we are generating a lot of cash and that's one of the ways we can give an early reward to our shareholders."

Jadestone CEO interview 11th December 2018

[zengas] 19/12/2018 10:40

Don't disagree with you on the perception thing, but company should be making very good money in that period and also transitioning into gas. Might also make any future oil acquisitions that bit cheaper.

[ifthecapfits] 19/12/2018 10:15

Yes I get that. But weak oil puts a dampener on the whole sector. It's a perception thing.

[zengas] 19/12/2018 10:14

Half hedged at $74.30 for the next year and a quarter, the rest at market (Montara at $2/b premium to Brent).

$74.30 and a $56/b market price means $65/b in line with the CPR pricing.

If oil fell to $45/b we'd still be averaging $60/b.

[ifthecapfits] 19/12/2018 09:38

We need price of oil to start going back in the right direction.

[zengas] 12/12/2018 14:13

Net debt around end of November is put at $52.7m.
I think this reduces to $42.7m if the $10m cash guarantee for the bank were included.

With the exception of December, the company could be theoretically debt free by early Q2 or holding $110m-$120m cash (equalling debt) while generating $8m-$10m/month going forward.

In this latest presentation the Stag infill well is pencilled in for sometime in Q1 at circa $20m from memory. I can't see it until mid Q1 earliest so means the cash level is building.

2 Montara wells are scheduled for Q3 and Q4 next year and a 2nd Stag infill also in Q4 next year.

It will be interesting to see if they now start some workover well work once Montara production restarts. In the Q&A they said they could be ready to go on that once the maintenance programme was complete. I haven't heard any mention of the 3 well interventions since coming to Aim which were to be done in the 2nd half of 2018 so these must be Skua-11, Swift-2 and Swallow-1 wells using a 'light well intervention vessel' for a cost of $9.1m.

The high cash level going forward could lead to another decent acquisition and perhaps put a new financing agreement entered into, to replace the current $120m facility.

[dorset64] 12/12/2018 13:15

Zengas, thanks for posting the December presentation, whats not to like in there, looks great going forward with a hard hand on the CAPEX & OPEX to boot.

[spangle93] 12/12/2018 12:49

Zengas, thanks for getting back, and for the link to the new presentation. The OK farm in could be read in different ways, so it's good that it's sorted.

I read an article last month in Asian Oil & Gas Monitor that was basically saying that things were pretty gloomy in Indonesia, largely due to government inefficiency in awarding new licences, and difference of opinion between the government and regulator.

I can't find how to upload documents to mail here, so I can't send it to you, but the gist is in these sentences

"Bureaucratic delays in decision-making has deterred some [oil company] investors, while state-owned Pertamina’s continued acquisition of expired licences will have made others equally wary. Foreign firms hold contracts for around 12 blocks that are due to run out in 2021-26, and their operators have begun to question the value of investing in new exploration following Per­tamina’;s move to take over 15 licences expiring in 2017-21. An auction of six blocks that started in August has attracted limited interest, suggesting that developers have lost their appetite for Indo­nesia’;s upstream. This is most unfortunate for Indonesia, given that the country’s upstream and downstream are projected to need least US$150 billion worth of investment between now and 2025"

It seems from this that delays are par for the course.

But with my rose-tinteds on, it would appear that if industry interest is waning, and the government is desperate for investment, then any company that can crack the code has a real opportunity to get some choice, and material, farm ins

[zengas] 12/12/2018 10:05

Spangle I stand corrected re the possibility of a 100% farm down by Pertamina of Ogan Komering.

The December 2018 presentation by JSE states farming in for up to 40%.

[mount teide] 11/12/2018 15:05

Hi Spangle - 'I don't recall the shutdown being planned, with its cost and lost in production revenue, when JSE came to market.'

It seems to have come about following the start of the operator transition process in early October, identifying a backlog of maintenance and inspection activities largely as a result of the incumbent operators poorly managed MMS; since rebuilt by Jadestone.

Recent events suggest NOPSEMA will likely be keen to effect the transfer of operatorship of the Montara field to Jadestone sooner rather than later - "Jadestone has also completed the secondment of a number of key operational leaders, both onshore and offshore, and is now well positioned to advance a seamless transition over the next few months while the Jadestone safety case and environment plan are under review, prior to acceptance by NOPSEMA."

Although Jadestone previously expected the transfer of operatorship to proceed in H1/2019 - the above comments suggest it may well now come forward into Q1/2019 as a result of the work carried out during the last month or so.

[spangle93] 11/12/2018 10:31

It's always sad when Malcy has a wonderful opportunity for a 1:1 with a CEO, and ends up regurgitating what's in RNS's. Still, it may open the eyes of some of his subscribers who have overlooked it to date.

For instance, you could look at today's RNS, which has a positive spin about greatly increased uptime, setting the asset up for the future, etc, but I don't recall the shutdown being planned, with its cost and lost in production revenue, when JSE came to market.

I'm not saying it's the wrong thing to do. Quite the opposite, it seems that the company has acted quickly and delivered a turnaround on a facility they are only just getting to know, on time and close to budget, which many of the majors would be proud of achieving. They must have established a positive rapport with NOPSEMA as a result (and previous experience on Stag). And if you're going to have to shut the facility down, then get as of the identified long term activity, especially hot tie-ins, done in that period as you possibly can.

So looking forward, it promises to advance the progress to the promised uptime improvements, but it must have led to a change of thinking driven by a change in cash flow expectation. Maybe this was asked in the conference call - I was also travelling on vacation at the time.

Anyway, it's good that it will soon be back on stream, and disappointing that Malcy couldn't add any detail to what was already known.

[zengas] 10/12/2018 20:11

Thanks ifthecapfits. Nice to be in a stock where you've done your research and then oil analyst Malcy comes along some months later and recognises it's potential also. Personally believe this will be a very successful growth story. Director last week picking up further stock to an already substantial holding.

[mount teide] 10/12/2018 14:37

ITCF - thanks for posting Malcy's meeting with the management - good to see that he too considers the Montara acquisition as a complete steal on every metric.

[dorset64] 10/12/2018 13:26

ifthecapfits10 Dec '18 - 13:01 - 222 of 222



Thanks for posting the interview ITCF.

[ifthecapfits] 10/12/2018 13:01

Malcy FWIW.

I met with Paul Blakeley, CEO and Dan Young, CFO of Jadestone last week, I had been looking forward to this as the former Talisman team are experienced in the area and with the Montara acquisition looking like a complete steal it merited further investigation. The management are indeed impressive and the strategy of putting together a portfolio of production assets to start with, that whilst seemingly goes against the trend, gives it a strong platform for growth.

When you delve more deeply into the Montara deal it looks more and more like a no-brainer on almost every metric. Production is being increased with gas lift installation and general optimisation, with facilities uptime expected to rise from 72% to 84% in two years, operating costs being reduced by 20%and corporate charges by 50% this really is low hanging fruit. With infill drilling and exploration upside inevitable as there is spare capacity in the FPSO any success can be brought on and paying back extremely quickly.

In addition to Montara the company has attractive assets elsewhere in the area with its Southwest Vietnam gas assets providing a range of possibilities for both near term and longer term growth from the asset. It is worth remembering that many of the key people at Jadestone are ex Talisman staff who worked in the area and are therefore able to use this knowledge to bring the project through the development stage.

Jadestone is generating significant cash flow from its portfolio at current oil prices and with strong gas demand in the region markets are hungry for energy. It is fully funded for a busy work programme over the next few years and has even suggested that by the end of next year might pay a dividend from its strong free cash flow. This will not impede current strategy to do further deals as the balance sheet is ungeared and could be used if appropriate.

Jadestone has every chance of being one of the big stories in coming months and years as the London market get to see more of the management who are indeed very impressive and I am sure will deliver the goods. The arrival on the Aim market was a wise move and the company raised money from what I can see is a wide range of quality investors across the board. As well as institutions I am aware that a large number of retail investors have looked at Jadestone and they would be wise to climb aboard whilst the company is so cheap as it surely won’t remain so for very long…

[mount teide] 10/12/2018 01:19

After the first two weeks of a three week 'investment research' visit travelling around SE Asia the observations that have most influenced my thinking, in terms of future commodity demand(since a previous visit three years ago), is the massive increase in vehicle and smartphone(4G networks) ownership and property development/modernisation and national transport infrastructure development.

Incredibly, the phenomenal increase in demand for oil, gas and industrial metals by this fast growing region over the last decade is still in its infancy, accelerating and likely to remain highly elevated for decades more. Even today the per capita consumption of copper and oil compared to the West, is still barely ONE SEVENTH ACROSS THIS HIGH POPULATION REGION AND ONE FIFTEENTH IN INDIA.

Since, the fast growing and developing Nations of China, SE Asia and India have a population more the 4 times greater than the West, from what i've seen on this visit to date, at this stage of the latest commodity market cycle i am very comfortable indeed having over 80% of my investment portfolio currently in oil and industrial metals equities.

What many unfamiliar with this fast developing region may be overlooking, is that the average 4.50% to 6.75% GDP growth today generates a much greater annual increase in demand for oil and copper than the 7% to 10% growth achieved 15 years ago since, most of the economies are now more than twice as big.

AIMHO/DYOR

[mount teide] 02/12/2018 10:12

Sometimes you just get lucky in life - JSE took out the Montara oil price hedges on 1st October when Brent was $84.75 - from a timing perspective it could not have been better to lock in an optimum rate deal.

[mount teide] 29/11/2018 15:25

Zen - Thanks for the feedback - was on route to Singapore so missed the Conference call.

Very interesting news ref: the historical well performance versus expectation from the Montara Field - an acquisition which the more we learn, increasingly supports the management's 'deep value' claim/assertion it has the potential to largely self fund JSE's 3-5 year SE Asia asset development plan to transform the company into a mid cap, second phase, regional specialist.

Following the long oil sector recession and decade low 2016 oil price, the Montara acquisition looks an extremely well timed and negotiated deal for a high quality, previously poorly managed asset in the World's fastest growing and highest price energy market.

[zengas] 28/11/2018 09:05

Rig for Stag was estimated for finishing with Vermilion around 18th Dec but depends on whether any of Quadrants 2 well options are exercised and if it can go to JSE first before going back to Quadrant should their 2 well options be taken up.

Enscos end of November fleet status report has not been released yet, but the 29th October report stated 107 was "contracted for 160 days with Quadrant (estimated
duration May 18 to Oct. 18). Assigned to Vermilion for two wells (estimated duration Oct. 18 to Dec. 18). Plus two 1-well options with Quadrant thereafter".

From JSE today on both Stag and Montara drilling - "Infill drilling programme to commence in 2019. Based on the operators' latest rig availability schedule infill drilling at Stag will commence in Q1 2019, with infill drilling at Montara to begin following completion of regulatory approvals, which are anticipated in H1 2019;"

[zengas] 28/11/2018 07:53

Not counting the $22.45m of materials and spare parts, the company had $74.28m of cash and restricted cash, plus $22.5m of oil inventory at end of September. Not far off the loan amount. Rig delay will preserve cash and see it build and Montara start up again hopefully within 14 days from now.

[mount teide] 27/11/2018 20:17

Montara Capped Swap Summary

Swaps cover approximately 50% of planned 2PD production for first 24 months on a Monthly settlement basis:

Average swap prices
— US$78.26/bbl for Q4/2018
— US$71.72/bbl for all of 2019
— US$68.45/bbl for Q1-Q3 2020

Upside participation secured on 66% of swapped barrels in 2019/2020 via purchased calls
— US$80/bbl strike in 2019
— US$85/bbl strike in 2020


Source: Latest Presentation dated November 2018

[alan00] 27/11/2018 15:16

I bought the Canadian listed line, prior to them listing on Aim. I have a simple formula that shows the difference between the two lines. Seems just a minute ago London line was about 9% higher, at a point when both markets are open. Anyone else looking at this? Seems a bit wide.