Jadestone Energy Share Discussion Threads

[someuwin] 25/2/2019 10:35

Hugely undervalued imo.

[mount teide] 23/2/2019 22:57

Energy Sector Research Data - Weekly 'Numbers Report' - OilPrice.Com Subscription Article so just a few snippets:


'OPEC+ cuts could push market into deficit:

* OPEC produced around 30.8 million barrels per day in January, down 880,000 bpd from a month earlier and down 1.5 mb/d from the November peak, according to Standard Chartered.
* Saudi Arabia has pledged to cut another 0.5 mb/d by March. That alone should be enough to eliminate the surplus.
* “We forecast that the oil market will move into a deficit of over 500kb/d in February and March, with the call on OPEC crude rising while output falls,” Standard Chartered concluded.
* Standard Chartered sees Brent prices moving back to $70 per barrel in the relatively near future.

Oil supply outages at highest level in years:

* Not only are the OPEC+ cuts slated to erase the supply surplus, but a series of unplanned outages are also tightening the oil market.
* Libya, Nigeria, Venezuela and Iran have all seen unscheduled outages. Canada cut production to rescue prices in the face of midstream bottlenecks. The volume of unexpected supply disruptions is arguably at its highest rate in years.
* “Angola and Mexico continue to over-comply due to lack of investments causing natural decline,” JP Morgan added in a report.
* These latest supply outage figures do not even include the unfolding rapid declines in Venezuela, nor do they include the deteriorating situation in Iran.
* JP Morgan argues that the markets are “not pricing in the risk premiums associated with such events fairly.” '

[someuwin] 22/2/2019 13:15

Can get an online buy quote for £3k. But not for £4k.

[mount teide] 22/2/2019 11:31

Brent now at $67.5 - with JSE's Montara oil price hedge and regional $2.5/bbl premium to Brent; they should currently be averaging 72.25/bbl on Montara's 10,000 bopd production.

With Montara's operating cost around $22/bbl - by my maths the Montara field should currently be generating $50+/bbl of operating cash flow / $15 million /month.

Applying a target of 84% field uptime rate for 2019 - that suggests a potential annual operating cash flow of $151.2 million at $67.5 Brent and average production of 10,000 bopd - not too shabby for an asset that cost $81 million net!

[mount teide] 22/2/2019 10:08

Further to the rig contract announcement for the Stag infill well:

'....Ensco Australia Pty Limited has agreed to provide the Ensco 107 jack-up drilling rig to Jadestone, after completion of its current operation in Dampier, Western Australia. Jadestone intends to drill the Stag-49H well from the Stag wellhead platform, as a horizontal oil producer, targeting unswept pay in the Stag reservoir southwest of the platform. The well will target approximately 1.2 mmbbl of incremental oil reserves from the field.

The Company is planning to spud the Stag-49H well in early March 2019 and drilling operations are expected to take approximately 34 days.'


The total sea distance from the Ensco 107's present contract position off Dampier to the Stag Field is just 16 nautical miles - so about 3-4 hrs tow time.

[spangle93] 20/2/2019 17:39

MT - it's not to say there aren't opportunities in Australia, and ultimately investment decisions would be based on some holistic parameters (NPV, IRR)

It's just that costs are so much higher in the Australian state and commonwealth waters relative to SE Asia, so margin on production should be greater elsewhere.

[mount teide] 20/2/2019 17:29

Spangle - Ref Asia-Pac over Australia - would largely agree, particularly with regard to gas over oil - however, if JSE were to find/negotiate another oil deal with Montara type margin potential off the Aussie coast, it would be difficult to believe the board would turn it down.


Interesting to note that Vietnam is set to experience a material nat gas deficit by 2020 according to their Ministry of Industry and Trade, and become increasingly reliant on highly expensive imported LNG to make up the gas shortfall for its fast growing clean energy generation needs and fertiliser industry.

Suggests JSE's proposed development plan for their Nam Du and U Minh shallow water gas projects(sanction target date H2/2019 with first gas in 2021), looks well timed and should be capable of securing strong sales prices (Vietnam is currently paying Nat Gas Import prices similar to the EU).


Viet Nam to face gas shortage in 2020:Ministry of Industry and Trade (MoIT) - Viet Nam News

'Viet Nam may have to import gas from 2020 to produce electricity for the country’s socio-economic development, according to the Ministry of Industry and Trade (MoIT).

Nguyen Quyet Thang, director of market division at the PetroVietnam Gas Corporation, told a conference on Wednesday that domestic gas supply is on decline but demand keeps increasing.

A MoIT report on the mining industry performance in the first half of 2018 showed natural gas output was estimated at 5.3 billion cubic metres, a yearly increase of 1 per cent, and liquefied gas production was estimated at 437,600 tonnes, up 18.5 per cent year on year.

Meanwhile, gas consumption in 2016-20 is estimated at 11-15 billion cubic metres each year and 13-27 cubic metres for 2021-25. Annual gas import is planned at 1-3 billion cubic metres for 2021-25 and 6-10 billion cubic metres for 2026-35.

By 2020, the percentage of gas used in power production accounts for 16 per cent of the country’s total gas production and it will reach 19 per cent by 2025.

Therefore, Việt Nam is expected to encounter a shortage of gas supply from 2020, Thắng said, adding the country needs to purchase liquefied gas from overseas exporters.

There are now 19 liquefied gas exporters, led by Qatar and Australia. The world’s total liquefied gas production is at 266 million tonnes per year and will reach 360 million during 2020-30.

The International Energy Agency (IEA) on Tuesday reported natural gas will replace coal to be the second largest energy source in the world in 2030 due to countries’ commitment to lessen environment pollution.

Global gas demand will rise 1.6 per cent annually until 2040 and it will be 45 per cent higher than the current demand.

According to Thắng, Việt Nam needs to invest in its storing infrastructure first. The country is building two gas storehouses Thị Vải in Vũng Tàu Province and Sơn Mĩ in Bình Thuận Province, which are scheduled to complete in 2020 and 2023, respectively.

Ngô Thúy Quỳnh, MoIT’s head of oil, gas and coal department, told the conference the gas industry has been well developing to meet the market demand and requirements.

Clean energies such as renewable energy and gas-based power are the new trend of the world and Việt Nam is a part of that trend in the context that thermal power production is facing limitations and challenges regarding environmental policies and financial requirements, she said.'

[mount teide] 20/2/2019 16:45

Brent through $67 today - with JSE's regional $2+ price premium to Brent and Montara production oil hedge contract; JSE should be achieving circa $72.25/bbl for all of its current 10,000 bopd Montara production.

$72.25/bbl is almost identical to the average Brent price($73) between Jan-Sept 2018 - period when Montara averaged circa 7,600 bopd of production and, generated $92 million in cash and oil on completion of the acquisition on 28th September 2018.

[spangle93] 20/2/2019 12:26

alamaison, ref 366 (sorry for delay)

"This appraisal going on feels like a 100% success. Therefore we can book another 1M barrel, yes?"

No, it's a development sidetrack, and the reserves are already booked. They are just being realised by this well. However, the production will be valuable.


ZENGAS, thanks for the latest presentation link
- with the greatest respect to the assets that they've picked up in Australia, which will generate positive cash flow for years, I think there would be higher margins and better returns in SE Asia, particularly in gas over oil. So while Asia-Pac doesn't exclude Australia, I hope they meant it to. ;-)

[meteors] 20/2/2019 07:41

nice climb on CAD today. Are the shares in issue less comparatively to LSE?

[meteors] 19/2/2019 23:21

if only i wasn't on off hols, i'd hold a little more. Nam Du, stag & Montara are looking promising for the H2 2019

[mount teide] 19/2/2019 11:03

Moving up on modest volume this morning - L2 showing just two MM's left under 40p - 6 have moved up.

Although Institutional Investors and Insiders recently increased the stock held by notifiable interests up to 69%, JSE, on the basis of the number of posts on Advfn and other investment websites, remains largely off the radar as one of AIM's best kept secrets with the retail investment community.

[fozzie] 15/2/2019 14:08

MT thank you for that . I have positions in CAML, JSE and TXP. I have watched ARS for weeks now and not bought, a mistake certainly after this weeks movement, and one i will rectify. I am aware of CKN but will have another look this weekend. Thanks again.

[mount teide] 15/2/2019 12:16

fozzie - CAML / JSE / CKN on a risk reward basis over a 3-5 year view at this point of the recovery stage of the new shipping/commodity cycle - which historically has averaged 6-9 years trough to peak.

TXP and ARS undoubtably have more upside potential but are a higher level of execution risk - however, in common with the above three companies they have an exceptionally talented management that can demonstrate an outstanding track record of success in the recovery/boom stage of the last oil and copper market business cycle - so, it would not surprise me if either outperformed the above three over a 5 year view, since the risk reward is materially greater.

[zengas] 15/2/2019 11:43

Vermilion have about 11% of their operations in Australia and where the Ensco 107 rig is currently.

152.5m shares in issue @ $24.55 ($1.30 = £1) = £18.88/share = £2.88 billion m/cap.
Net debt $2b.

300 mmboe 2P end 2017 + 210 mmboe contingent (mid case) resources.
Q3 2018 production = 96,200 boepd
2019 production guidance = 101,000 - 106,000 boepd.

Dividend yield 8.6%.
Monthly dividend 23c/share.

Paid accumulated total of $36.87 per share over last 15 years in dividends 2003-18.
Floated 1994 at 30c/share.


=====================================

JSE m/cap on 461m shares @ 38p = £175m.
Net debt circa $50m.
Reserves 45 mmboe 2P with circa 100 mmboe 2C plus a host of exploration opportunities.

Production 13k+ boepd. Infill drilling + if Ogan Komering is acquired - closer to 20k boepd next year and to be circa 30k boepd producer from existing assets within another 4 years (without any new acquisitions.).

Generating significant cash - expecting further acquisitions which in turn will lift prouction. See No1 mission statement re acquiring production.I expect this through debt/cash generation.

Management ex Talisman who have created $6b+ valuation.

December 2018 interview reference rewarding shareholders with dividend.

Would require $6.8m to pay 3% dividend against current 38p share price. (Revenue already circa $310m/yr with circa $8-$10m/month free cash flow). With further acquistions and the companys own 30,000 boepd target from 3 of the existing assets - could be capable of future $1b revenue and $100m+ dividend stream.

On a buy/hold basis at this price - could see very good long term growth trajectory in both dividends and share price once asset growth and momentum builds.

[fozzie] 15/2/2019 11:42

MT, by reading your posts on these boards i could have a good guess at your portfolio constituents. What would be your top 3 opportunities at this moment in time. You don't need to answer if that's too personal a question. I have been selling other stuff in my portfolio over the last 3 months and have built (for me) a fairly decent position here. I too have high hopes here.

[mount teide] 15/2/2019 11:32

A few of Advfn's nickel and dime traders said the same thing when i was suggesting beaten down shipbroker Clarksons was looking attractive at a share price of £0.90 at the bottom of the last shipping market cycle in 2000.

Matching my £50,000 investment then(i've averaged up 9 times over the years since) would have generated capital growth of £1.38 million, dividend payments of £410,000 and a current annual dividend of £44,000. Not too shabby for a £50k starter investment in another highly cyclical long term commodity market.

AIMHO/DYOR

[meteors] 15/2/2019 10:40

I thought I was the only one who thought that, wasn't sure if all his madness was hugely relevant to the more exp PI's or just ramblings.

They do seem to have a very suave business model which is why im surprised the share price has not been climbing at a quicker pace. Im here for the foreseeable future. And I have high hopes for the company come 9-12months down the line when proposed opportunities fall into place :)

[someuwin] 15/2/2019 08:19

Do we have any idea what the CoS is for this first infill well at Stag?

[mount teide] 15/2/2019 02:10

Some recent Oil Market Research from Natural Resource Market Specialists - Goehring & Rozencwajg

Looking Ahead in 2019: Oil Fundamentals - 02/ 14/ 2019

“Based on our models, inventories will now resume their steady draws throughout the rest of the year and prices will resume their advance.”

While the severe weakness over the past several months has been the result of short-term policy errors, it has hidden many long-term bullish underlying fundamental trends currently taking place in global oil markets, all with potentially large consequences. Now that OPEC has cut production, many of these bullish trends will start to regain importance as global oil markets slip back into deficit.

Many analysts blamed a combination of weak demand and surging shale production for the rise in inventories and price weakness. We strongly disagree with this assessment. Consider that, as of April, OPEC member countries plus Russia (so-called OPEC+) were producing 43.3 mm b/d. Using this as a baseline, OPEC+ increased production 1.4 mm b/d by November. In total over that period, we calculate 175 mm barrels were added to global oil markets. Over that same period, global inventories grew by only 25 mm barrels relative to long-term averages. Therefore, without the OPEC+ production increase, inventories would have drawn sharply by 150 mm barrels between April and November, or 725,000 b/d. Given that the market was undersupplied by 550,000 b/d in 2017, this suggests that absent OPEC’s decision to boost production, the market deficit would have actually accelerated in 2018, even accounting for the stronger-than-expected production from the US shales. We have long argued that the US shales would continue to grow, and the world oil market would need every barrel it could get. In retrospect, that seems to have been the case.

Today’s dynamics are materially different than the 2014-2015 experience. In November 2014, Saudi Arabia abandoned its role as swing producer and pumped 9.4 mm b/d. Over the next 24 months, it increased production by 1.2 mm b/d and added nearly 500 mm barrels to global oil supplies in aggregate. At the same time, global inventory levels rose by 350 mm barrels over that period (mostly in the US). In other words, in 2014-2016, 75% of Saudi Arabia’s additional production made its way into inventories, whereas today 75% of OPEC+’s increase was absorbed by the world’s oil market. What is keeping oil markets so tight this time, despite rising OPEC production? Longtime followers of our research will immediately recognize a few of the underlying fundamental forces that helped keep oil markets relatively balanced. We expect these forces will become even more severe throughout 2019 and beyond with very bullish results.

First, non-OPEC oil supply outside of the United States and Russia deteriorated materially over the past six months. In our Q2 2018 letter we explained how conventional non-OPEC oil supply was at risk of disappointing. Over the past decade, conventional non-OPEC discoveries totaled up to 110 bn barrels while consumption equaled 360 bn barrels. We have long argued that the dearth of conventional discoveries would soon result in declining non-OPEC production outside of the US and, as outlined in last quarter’s commentary, we believe this is now taking place. During Q4, the head of the IEA, Dr. Fatih Birol, stated that under-investment in conventional non-OPEC production would be the dominant force affecting global oil markets in coming years.

The one non-OPEC country currently bucking this trend is Russia. Over the last nine months, Russian oil production has increased by a material 450,000 b/d. We have traveled to Russia many times over the last 20 years, and in the past we have written in-depth on their oil production potential. We are in the process of undertaking a large research project on the Russian oil industry and will present our findings in our next quarterly letter. In the meantime, Russia has agreed to curtail production in 2019 in conjunction with the OPEC agreement made in November and so for the immediate term we do not expect Russian production to grow further.

While Russia has been a bright spot in conventional non-OPEC production, it has masked the intense deterioration in the rest of the world. Outside of Russia, we estimate that conventional non-OPEC oil supply declined by 1.0 m b/d between July and December. In particular, the North Sea, Mexico and Brazil all disappointed and we expect this to continue going forward. Although we have been commenting on the strains in conventional non-OPEC production for quite a while, these shortfalls have largely taken the market by surprise. When they first released their 2018 supply estimates in the summer of 2017, the IEA (which forms the basis for most energy analysts’ models) called for non-OPEC oil supply ex-the US and Russia to grow by 600m b/din 2018. This figure has now been revised down by 65% to 200,000 b/d but our models tell us that more revisions may be forthcoming.


Some further useful oil sector research can be found in their just released Q4/2018 Natural Resource Market Commentary

[mount teide] 15/2/2019 01:45

Brent back above $65 - oil market continues to draw comfort from Saudis Arabia's announcement this week to make a further 500,000 bopd of production cuts over and above the figure they initially committed to during the OPEC/OPEC+ Vienna Agreement, easing concerns about the global supply potentially getting out of balance.

[mount teide] 14/2/2019 17:40

Header updated with latest data for shareholdings declarable over 3%(currently total 69% of issued share capital), together with a link to the Feb 2019 Company Presentation Update.

[alamaison5] 14/2/2019 15:02

Mad volume above the bid. Are we now clear of the overhang? This appraisal going on feels like a 100% success. Therefore we can book another 1M barrel, yes?

[meteors] 14/2/2019 12:55

with approval with Nam Du, things could get exciting here!!