Jadestone Energy Share Discussion Threads

[captainfatcat] 28/1/2019 13:07

Solid update this morning.

[mount teide] 28/1/2019 12:56

Montara 2018

The production performance of the Montara field between the effective transaction date of 1st Jan 2018 and the 28th September closing date resulted in the transfer to JSE of $92m of cash and crude oil.

During that nine month period Montara production averaged circa 10.0k bopd during Jan and Feb, circa 7.0k bopd during March to June (due to statutory facility shutdown in March/April and loss of production from the Skua and Swift/Swallow subsea tie-back wells being shut-in until June due to a failure of a subsea well communication umbilical, and circa 10.0k bopd during July-September.

Consequently, an average production rate of circa 8,750 bopd during Jan-Sept 2018 at an average Brent price of $71.5, was sufficient to generate a transfer of US$92m of cash and oil on completion.

Operating Costs: Jan-Sept 2018
Operating costs in Q1,(excluding corporate G&A and legal fees which are for the account of the Seller) were US$22.8/bbl. Operating costs increased in Q2 and Q3 due to the routine annual shut down and non-routine activities referenced above - they are expected to return to circa US$22/bbl in Q4 2018 before declining further once Jadestone starts to implement its practices.

The current programme of maintenance and remediation work at Montara is expected to generate a 12% increase in uptime and circa 25% decrease in operating costs within 12 months of assuming the operatorship, which is expected in Q1/2019. Jadestone estimates this will increase annual production by circa 1.7k bbls/d in 2019.

In addition, a well intervention program is planned to reinstate gas lifting at the Swift 2 and Skua 11 wells, and also add a perforation in Swallow 1. This is expected to result in the restoration of peak production to approximately 5.6 mbbl/d from these wells.

Post the 28th September closing date for the purchase of Montara, the field shutdown in Nov/Dec to address regulatory and outstanding planned maintenance issues resulted in PTTEP Australasia, as seller of the Montara assets, agreeing to provide US$22m to Jadestone in relation to the shutdown of the facilities, including associated costs, of which approximately US$4 million was directly attributable to shutdown work scope'.

[mount teide] 28/1/2019 12:14

JSE's two year oil price hedge covering circa 50% of production at an average price of circa $72.5 looks extremely well timed with the cost of hedging expected to increase significantly in 2019 following the demise of a material percentage of the market as a result of huge losses in 2018.


'The decline in speculative interest in oil is creating a serious problem for some independent producers because these firms need to hedge some or all incremental output against price declines. Declining interest in oil will raise the cost of hedging, possibly putting it out of reach of some firms. This, it can be argued, is fracking’s Achilles’ heel.'

'The oil hedge data can be read as a warning that the capital expenditures of independent producers may be constrained in 2019. All these firms will meet with their bankers in the next two or three months. The bankers will likely demand to see the companies’ hedging plans. In some cases, the E&P firms will discover that the cost of hedging their next few wells will force them to curtail or even cancel their 2019 drilling programs.'

Trouble In Paradise For US Frackers - OilPrice.com

[mount teide] 28/1/2019 10:59

China and India's current energy consumption is 21 times and 5 times respectively that of the UK and whereas our and the West's consumption is static/falling, China, India and SE Asian energy consumption continues to grow at a breakneck speed (it is responsible for ALL of the 34 million bopd increase in global oil consumption of the last 40 years) - and is predicated to continue growing at a high single digit annual clip for decades. The International Energy Agency projects that Asia will be responsible for a whopping two-thirds consumption of global natural gas supplies by 2040.


'Southeast Asia Has A $2.7 Trillion Choice To Make - OilPrice.com today

For many years Southeast Asia has been a cautionary tale for what not to do in terms of energy sector economics. Once one of the world’s most active energy markets, Southeast Asia was hit with wave after wave of economic and political hardships that arrested its energy growth, from political instability in Thailand to growing nationalization paired with devastating natural disasters in Indonesia, not to mention myriad offshore territorial disputes throughout the region. This all dovetailed with historically low oil prices around the globe, making Southeast Asia woefully undesirable to investors.

Now, as Southeast Asia continues to urbanize at a breakneck speed, the developing region is projected to see a massive growth in energy demand over the next 20 years. Demographic changes are to produce a staggering 100-150 million new middle-class consumers in the region. Vietnam will match China as a 50 percent urban country by 2030, with the Philippines and Indonesia, each home to mega-metropolises and massive populations, not far behind.

Expected to increase by a whopping two thirds by the year 2040, Southeast Asia’s energy demand will require enormous investment and infrastructure in the energy generation and transmission sectors. The surging demand begs the question: will Southeast Asia lean harder into coal and carbon or move ahead with more sustainable resources like renewables and natural gas?

By just 2030, it is anticipated that the Association of Southeast Asian Nations (ASEAN) region will become the fourth largest energy consumer in the world. The installed energy capacity in the region will more than double, from 240 gigawatts to 565 gigawatts, meaning that Southeast Asia will be adding a larger quantity of energy capacity in the next 20 years than the current entire capacity of the World's fifth largest energy consumer Japan.

ASEAN--which is made up of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam--is home to a number of poor and developing countries that will be hit particularly hard by skyrocketing energy demand over the next two decades. Projections show that Indonesia, the Philippines and Vietnam will grow by 6-10 percent annually, while Myanmar, Cambodia and Laos will likely see growth in the double digits each year, meaning great economic pressure to come for these developing nations. The International Energy Agency has estimated that US$2.7 trillion will be necessary to meet the growing needs in Southeast Asia for energy supply, transmission and efficiency measures.

Currently, the Southeast Asian energy industry is dominated by coal. According to findings from a 2018 report published by CoalSwarm, a research institute based in San Francisco, California, ASEAN nations make up a quarter of the world’s top 20 investors in new coal capacity. Half of all the ASEAN nations made the top 20: Vietnam, Indonesia, the Philippines, Thailand and Cambodia.

Vietnam alone is projected to increase their coal generation by nearly five times, increasing from a little more than 10 gigawatts in 2014 to an estimate of more than 55 gigawatts by 2030. For reference, this massive increase in coal generation equates to the 2017 electricity supply for the entirety of Thailand. While the rest of the world is moving away from coal, Southeast Asia has great access to coal supplies and China is notorious for domineering state-owned energy enterprises that push coal investment in neighboring countries. China is currently directly involved in funding or constructing a whopping quarter of all energy projects in the entire mainland region of Southeast Asia.

While coal still reigns supreme, however, liquid natural gas is a rising star in the ASEAN nations. While many of the Southeast Asian nations have been producing and exporting LNG for years, this trend is slowly but surely reversing as the countries reserve more and more of the resource for domestic use. Indonesia is on track to flip its traditional role as an exporter of LNG to become a net importer by 2022, Thailand is constructing a floating, offshore natural gas hub in a joint development area with Malaysia, and the Philippines is working on constructing a $2 billion LNG hub at Batangas Bay, the first in the nation.

China has its eye on this corner of the energy market as well, and is powering ahead with its ambitious Belt and Road Initiative through the construction of LNG pipelines from Central Asia and Myanmar’s Bay of Bengal that will adjoin to China’s own national LNG distribution network. In fact, Asia already consumes half of the entire global natural gas supply, and that share will only continue to increase. The International Energy Agency projects that Asia will be responsible for a whopping two-thirds consumption of global natural gas supplies by 2040.

In addition to coal and LNG, ASEAN also has some lofty goals to incorporate more renewables into the region’s energy mix, with an ambitious shared target of 23 percent by 2025. Most experts are in agreement that the goal is unrealistic, as the developing nations of ASEAN continue to fall behind the rest in terms of alternative energy initiatives. Even if the region is able to reach a fraction of the goal, however, it will be a step in the right direction for an energy-hungry block that could be consuming a lot more coal if they don’t plan very carefully for an impending explosion of demand.'

[cinquepercento] 28/1/2019 10:45

Very interesting, Alamaison? :-)

[alamaison5] 28/1/2019 09:29

Buying back in 5.5% cheaper...
The more I read the RNS the more convinced I am.

[alamaison5] 28/1/2019 08:39

preview order
Buying 2,605 JADESTONE ENERGY INC COM NPV (DI) shares
The price quoted cannot be guaranteed until the order is confirmed.
Price £0.38
Order DetailsSettlement Date T+2 - 30/01/19 Cost of Shares £989.90 Commission£10.00 Total To Pay £999.90

Even with a good RNS like this...38p...
Did well to sell at a profit at 40p then. :-}


Mont:
Perhaps you could explain to us WHY THE SELLER continue to SELL in huge volume and now hold LESS stock???

1 BUYER 1 SELLER

[someuwin] 28/1/2019 07:26

RNS Number : 2432O
Jadestone Energy Inc.
28 January 2019

Jadestone Energy Inc.

Jadestone Energy Provides
Montara Production Update and Hedging Guidance
January 28, 2019-Singapore: Jadestone Energy Inc. (AIM:JSE, TSXV:JSE) ("Jadestone" or the "Company"), an independent oil and gas production company focused on the Asia Pacific region, is pleased to provide an update on production and hedging for the Montara asset, located offshore Australia (Jadestone 100%).
Highlights
● Strong performance at Montara since production restart, with a period of flush production following the asset shutdown
● Near-term production anticipated to stabilise at approximately 10,000 bbls/d, compared to 2018 average production of 7,615 bbls/d
● Swaps in place covering approximately 2.0 mmbbls of Montara production in 2019, with an average price of US$73.49/bbl for Q1 2019, a gain of approximately US$12/bbl on current Brent spot prices
● Asset inspections and maintenance now fully up to date and an increase in uptime and average production rates are expected during 2019
Montara production
Since the Montara asset came back on stream on January 11, 2019 the asset has performed well, with a period of elevated rates, caused by significant flush production following the asset shutdown.
Jadestone anticipates that flush production will continue for a period of time but will decline to an anticipated average daily rate of approximately 10,000 bbls/d in the near-term. This compares to average 2018 Montara production of 7,615 bbls/d (excluding downtime for the recent inspection and maintenance work).
The recent shutdown rectified a significant inspection backlog and a number of notices of improvement issued to the current operator, by the offshore regulator. The Company anticipates that as a result of works completed during the shutdown, there will be no major planned shutdowns until at least H2 2020.
As previously disclosed, Jadestone has submitted its Montara safety case and environment plan, which are under review by the regulator. Upon acceptance, the regulator will permit the transfer of operatorship to Jadestone.
Montara hedging
Jadestone has swaps in place covering approximately 2.0 mmbbls of Montara production in 2019, with an average price of US$73.49/bbl for Q1 2019. At current spot Brent crude oil prices, these hedges represent a gain of approximately US$12/bbl. In addition, the Company's hedging arrangements also provide call options on 76% of the 2019 swapped volumes, at a strike price of US$80/bbl, meaning the Company has access to upside prices, should benchmarks increase.
At current prices, the forecast payback of the net cash consideration for Montara, inclusive of the US$22mm adjustment provided to Jadestone in respect of the inspection and maintenance shutdown, is less than two years, despite lower prevailing benchmark prices.
The Company will provide additional corporate guidance, covering its intended work programme and value delivery across the business for 2019, later this quarter.
Paul Blakeley, President and CEO commented
"Since restarting production at Montara, we have seen a strong response from the reservoirs with production rates higher than anticipated. We expect this to continue for a short period and then start to stabilise at our planned rates for the year. With inspections and maintenance now fully up to date, the facility is running smoothly, and I expect we will see a significant improvement in uptime and an increase in average production rates accordingly.
"In addition, our hedging position, covering approximately 50% of our anticipated production, will help underpin strong cash flow for the year and maintain our early payback from Montara."

[mount teide] 25/1/2019 16:29

alam - in common with spreadbet and CFD service providers most investors actually welcome nickel and dime short term traders as they provide some additional liquidity.

Sadly, its an industry fact that 95% plus of them fall victim to Einstein's definition of madness - someone who keeps doing the same thing(losing money) expecting a different result!

Perhaps you could explain to us and our two very high performing activist US hedge fund shareholders how JSE is currently too expensive - particularly when they continue to buy in huge volume and jointly now hold over a third of the stock.

[alamaison5] 25/1/2019 10:54

Ross: I did and already sold at a small profit.

But of course, I will buy again.
When a fund manager buys so many shares it does bring my attention to it.

RRE at 600p is cheap too. SIA at 70p. LAM at 53p and many more.

JSE has great prospect but to dear for me for now. I am looking for bargains.
Also, fund managers are after profits too, don't forget.

Last thing, when you have a resident ramper like Mount Teide always be suspicious, lol.

[mount teide] 24/1/2019 16:57

Another 20k for me.

Duckdown - probably one of the best value plays on AIM and certainly in the oil sector.

JSE is an extremely well managed company, likely debt free in Q1 and throwing off circa $8m-$10m of cash a month; with excellent organic growth prospects and operating in the fastest growing and highest priced oil and gas market in the world.

That JSE is still largely off the radar since it came to AIM last August has been very welcome to those looking to build large positions - two friends and I now hold 1.75 million between us. Like the high performing, value based approach activist hedge funds Tyrus Capital and Livermore Partners, we see exceptional value here over a 3-5 year view.

[dorset64] 24/1/2019 16:39

Now well over 65% now in insti's hands alone.

[king suarez] 24/1/2019 16:37

Pretty undervalued imo, but one of many bargains on AIM currently!

[duckdown] 24/1/2019 16:21

What's the deal here then?

[alamaison5] 24/1/2019 16:14

Well, that won't help, lol. 35.5p or nothing.

[mount teide] 24/1/2019 08:06

RNS - Hedge Fund Tyrus Capital buy another 8.5 million shares increasing their total holding to above 25%.

[alamaison5] 23/1/2019 17:50

Remember that millions and millions have changed hand at 35p.

[mount teide] 18/1/2019 14:06

Small-Cap Stock With Four-Bagger Potential - Value Walk



Value Investing

'Two years ago, in the December 2016 issue of Hidden Value Stocks, we profiled David Neuhauser, the founder of Livermore Partners.

The stock Neuhauser picked out as his favorite small-cap was Jadestone Energy. The partnership was initially attracted to Jadestone as it believed it could unlock significant value by replacing the management, and using the business to acquire depressed operating assets. Here’s David explaining his thesis back in 2016:

"When we first took a position in Jadestone, we saw an opportunity to transform the company by replacing the management and board and using the business to acquire depressed operating assets others must sell to de-lever their balance sheets and focus on core basins.

Producing assets (not exploration) with real cash flows and deep value. We feel that we’ve made excellent progress on this. New management has been brought in, and the company has been transformed.

New Jadestone is built on an “acquire and exploit” strategy not unfamiliar to some domestic E&P companies, whereby bringing operating capability and new capital to under-invested assets (or assets in the hands of super-majors for whom materiality in future activity is a concern to them), can add significant incremental value.

The difference with New Jadestone, compared to North American plays is that the company is focused on Asia Pacific opportunity where the returns are on average two or three times better than North America (IHS Herold annual performance reports), where the competition is very limited and therefore purchase price is very modest (often assets are sold on bilateral deals – no competition), and finally where opportunity options are on the increase."

He went on to say that he believes Jadestone could ultimately be worth $2 per share or more, as the company continues to roll-up assets:

"Timing is tough to determine, but today even with our capital raise, the shares are very cheap. Trading at only $15,000 a flowing barrel and a discounted 0.30 net asset value per share with no debt, $20 million of cash on the balance sheet and plenty of development opportunities in the pipeline this is a very compelling opportunity where we believe the downside is limited."

Two years later, and plenty has changed. The stock is up 50% and recently completed a significant acquisition that has the potential to throw off $100 million in annual free cash flow.'


A detailed update on Jadestone is available by subscription to their Hidden Value Stocks newsletter, published four times a year.

[someuwin] 18/1/2019 11:50

Impressive list of institutional holders...