Jadestone Energy Share Discussion Threads

[mount teide] 02/2/2021 15:38

Brent up 2.75% to $58

Suggesting JSE will be getting circa $68/bbl for Stag and circa $62/bbl for Montara - a circa $64/bbl weighted average.

With an average opex of circa $21.5/bbl, this suggests at the current production of 12,231 bopd, cash flow of $42.5/bbl - circa $16.23 million a month / $195 million a year.


AIMHO/DYOR

[bamboo2] 02/2/2021 15:12

Personally, being a trader myself, I find others' trades and reasons for them quite interesting.

I can see the possible H&S mentioned by kaos3, although it would need an eod close below 65.8 to confirm. Like any other trendlines, necklines can offer support, and this one does match the recent historical support zone.

What has me back in here today is the oil chart, which looks like it will confirm an upbreak of the bull flag with a tp just below $60. A longer term pattern may also be confirmed, tp approx $85.

[buffythebuffoon] 02/2/2021 14:00

“h & S,high TA metrics,sold at 70p,today I got confirmation

(trading has nothing to do with value)”

Many would say nothing to do with investment either.

Failing to look at the big picture and focussing on the head and shoulders means you miss the fact the person is walking up a very very long staircase. Sure, pauses for breath will happen, but when the person reaches the top to find someone with a very very large wad of cash you’ll regret spending your relatively very small amount of money on a takeaway.

For the avoidance of doubt, the foregoing was an analogy. I have not been taking mind altering narcotics, although I do get quite high on the prospects for my investment in Jadestone.

Buffy

[thedudie] 02/2/2021 12:08

Brent at $57.6 (about a 12 month high) suggests companies like Jadestone will turn back strongly to growth mode soon having weathered the storm that was 2020.
Hopefully the market guidance statement later this month will provide clarity on the plans for the Lemang and the Vietnam assets.
Bought some more today...

[mount teide] 01/2/2021 16:52

L2: closed 6 v 1 / 67p v 70p (then 1 x 71p, 4 x 72p, 3 x73p and 1 x 74p)

[kaos3] 01/2/2021 14:24

h & S

high TA metrics

sold at 70p

today I got confirmation

(trading has nothing to do with value)

[c0lin1] 01/2/2021 14:12

very strange 69p to buy

[mount teide] 01/2/2021 12:27

L2: opened 2 v 1 / 69p v 71p (then 3 x 72p, 3 x 73p and 3 x 74p)

Now: 3 v 1 / 70p v 72p (then 3 x 73p, 2 x 74p and 4 x 75p)

[croasdalelfc] 01/2/2021 09:38

Also - net cash was stable between end Nov 2020 and end Dec 2020 - $82m - they paid $12m in cash for Lemang . Without that it would be $94/95m

[croasdalelfc] 01/2/2021 09:27

Dec production was 12321 bopd (they probably did delayed workovers in Nov as oil price picked up) .Also note capex was below guidance - $26m vs $30-35m

[buffythebuffoon] 01/2/2021 09:12

Hi MT,

“...i would not be surprised if oil's performance against gold is stronger than the market may be expecting.”

Ah, there I would agree with you, but a friend is a long term commodities trader and he expects gold to drop. That was the main reason I mentioned it.

Cheers,

Buffy

[mount teide] 01/2/2021 09:05

buff.....against a backdrop of the global energy market transitioning to gas, record low exploration investment by OPEC, the majors and NOC's for a number of years, the collapse of the US shale industry which is unlikely to bounce back anytime soon, surging demand in the high growth economies of China, SE Asia and India as they bounce back extremely strongly in 2021 from the Covid Pandemic, and huge new government spending/economic stimulus in the USA and Europe - I strongly suspect the fundamentals may be in place for the oil price risk to surprise to the upside over the next 2-3 years.

With respect to the Gold/Oil ratio, the fundamentals perhaps suggest the likelihood of a larger contribution from gold than oil on its inevitable return journey back to its long term average figure - but, i would not be surprised if oil's performance against gold is stronger than the market may be expecting.

AIMHO/DYOR

[buffythebuffoon] 01/2/2021 08:39

MT,

Why is the expectation that the price of oil will shoot up? Surely we might see a big drop in the gold price, or a combination of the two with the larger contribution from the drop in the gold price?

Buffy

[mount teide] 01/2/2021 08:18

L2: opened 2 v 1 / 69p v 71p (then 3 x 72p, 3 x 73p and 3 x 74p)

Now 2 v 3 / 69p v 72p

[dunderheed] 01/2/2021 08:10

Yes I like that, i like that very much re wh tax issue.
EDIT Oh yes and of course the results and excellent mgt. as well, lol.

[mount teide] 01/2/2021 08:03

In a year which saw oil prices hit all time record lows, it was an outstanding management performance to double the net cash position and pay a maiden dividend, against a backdrop of the decimation of the US shale industry, and the profit collapse at the majors forcing them to make massive write offs and take a machete to their dividends.

The action of the management in 2020 has positioned the company to perform very strongly in 2021 and beyond, even in a $55 Brent oil price environment.

Good to see the Canadian withholding tax issue dealt with.

[dantes3] 01/2/2021 07:18

From today's update:
"it is our intention to effect a corporate reorganisation whereby our British Columbia incorporated parent company will be substituted for an England and Wales incorporated entity, targeted to be complete in the first half of 2021."

So... no more Canadian withholding tax, is that correct? Fantastic news if so.

[lauders] 01/2/2021 01:30

Not really a great fan of Malcy but he comments on JSE among others that quite a few here follow. His 2021 "Bucket List".

Guess we all agree about the "quality management team" here or we wouldn't be long term holders.

[mount teide] 01/2/2021 01:16

China and SE Asia to deliver explosive growth in 2021 according to latest IMF forecast.

'China and India are set to expand by 8.1pc and 11.5pc this year – and now account for over a quarter of global GDP adjusted for living standards, twice their joint share back in 2010.

What the IMF defines as “emerging and developing Asia” – the two Asian giants plus smaller but evermore significant economies like Indonesia and Malaysia – will grow 8.3pc this year.

That bloc, now a third of the world economy, will drive post-Covid growth to an even greater extent than before this pandemic.

The US will grow 5.1pc, says the Fund, raising its forecast by two percentage points since last autumn, due to a combination of vaccines and massive stimulus support. Now Joe Biden’s Democrats controls both the White House and Congress, there will be even more fiscal and monetary largesse. Japan is in line to grow by 3.1pc, also up on October’s estimates.'

Source: Liam Halligan - Telegraph

[mount teide] 29/1/2021 14:24

Gold - Oil Ratio hits 160 year high



'Between 1900 and today, one ounce of gold has purchased 20 barrels of crude oil on average, with a standard deviation of 8 (using monthly data). Eighty percent of all observations are between 10:1 (gold is cheap relative to oil) and 30:1 (oil is cheap relative to gold).

The gold-oil ratio has been a reliable indicator of when to invest in oil and when to invest in gold over the past 120 years. Since 1900, crude has averaged a 12-month gross return of 7% while gold has averaged a 12-month gross return of 5%. Oil has generated a negative 12-month return 39% of the time while gold has generated a negative return 32% of time.

However, looking only when the gold-oil ratio has exceeded 30:1 (i.e., oil is cheap relative to gold), crude has returned 32% on average over the next twelve months (over four times its long-term average), while gold has returned 4% on average. Oil was lower only 13% of the time (70% less often). On average, oil outperformed gold by 28% during these periods compared with 2% normally.

We last used this analysis in early 2016 to justify our investments in oil-related securities. At that point, the gold-oil ratio hit a then-record 47:1. We argued that oil prices were set to surge and invested in oil-weighted E&P securities as a result. Over the next 30-months, oil rallied by 191% from $26 per barrel to $76 per barrel by October 2018. Oil stocks (as measured by the XLE ETF) advanced by 56%.

Given today’s ratio, we believe an extremely strong buying opportunity is presenting itself in oil and oil-related stocks. Nearly every example of an extreme high reading in the gold-oil ratio is followed by a full reversal to an extreme low reading of 10:1. If that is correct, then oil prices are set to increase dramatically.'

Source: Goehring & Rozencwajg - Nat Resource ~Investors

[buffythebuffoon] 29/1/2021 10:25

OK thanks.

I ask, as I remember having a chat with the CEO of Petroceltic years back. Tom was a ‘James Parsons light’ sort of character. When I’d calculated the likely net profit for the proposed development in Algeria I couldn’t see where the profit was coming from. He said cashflow was the lifeblood of the company.

I am not suggesting in anyway, that cashflow isn’t vital for continuing the operations and creating value in a company, but I can’t tell you how many shop owners I’ve known in their first venture who splashed out on new cars out of the takings each week, only to find that they were running to stand still when it was apparent the bottom line was insufficient to feed the mouths expecting to be fed. Eventually the treadmill had to stop.

Not relevant as a read across, but that’s why I often ask when I read about cashflow without reference to how profitable that cashflow is.

Of course, the one figure that isn’t ambiguous is the size of the cheque that we get on completion of the deal!

Buffy

[mount teide] 29/1/2021 09:38

Buffy - no.

According to Horizon Energy's financial figures, Maari's OPEX figure is inclusive of well workovers.

The NZ Ministry of Economic Development estimates that the Government receives around 42% of an oil company's profits in corporate taxes and royalties - among the very lowest globally.

O&G companies operating in NZ pay a royalty in respect of producing wells. This is the higher of an ad valorem royalty, based on 5% of gross sales value, or a royalty based on 20% of "accounting profits".

For virtually all of New Zealand's producing offshore O&G fields, the 20% accounting profits royalty far exceeds the 5% ad valorem royalty.

[buffythebuffoon] 29/1/2021 08:29

MT,

Excellent information as ever,

I was wondering if you had made a stab at calculating the likely profit from that circa $100m operating cashflow?

Buffy

[mount teide] 29/1/2021 00:45

Maari Acquisition - Purchase Price $50 million

In post 4934 - From the effective acquisition date of 1/1/2019, I estimated the operating cash flow before tax for the two year period 2019-2020 net to Jadestone, as $88.15 million using a conservative combination of actual and estimated production data and opex, and spot Brent.

Pleased to report that with actual data for production, opex and oil sales for the period now available from Maari Shareholder Horizon Energy the gross operating cash flow before tax is likely to be circa $95.3m.

2019
4,511 bopd - Average Maari Production Net to Jadestone
$28.2/bbl - Average OPEX
$70.8/bbl - Average Oil Sales Price
$70.3m - Net cash flow to Jadestone

2020
3,420 bopd - Average Maari Production Net to Jadestone
$22.2/bbl - Average OPEX
$42.0/bbl - Average Oil Sales Price
$25.0m - Net cash flow to Jadestone

2021 - Current Production and OPEX Data and estimated Cash flow
3,657 bopd - Average Maari Production Net to Jadestone
$16.5/bbl - Average OPEX
$55.5/bbl - Current Brent Price
$2.0/bbl - Maari IMO 2020 Premium to Brent
$41/bbl - Net Cash Flow to Jadestone
$4.64m - Average Monthly Cash Flow
$55.7m - Average Annual cash Flow

By the end of Jan 2021 - the Maari Field may have generated circa $100m of operating cash flow before tax net to Jadestone ..... and by the end of Q1/2021.... it could reach $110m at $55 Brent.

Strongly suggests on completion during Q1/2021 Jadestone may well pick up the Maari asset with its current circa $55.7m a year of operating cash flow(@ $55 Brent) for free along with a very decent cheque.

AIMHO/DYOR

Data Source: Maari Field Shareholder - Horizon Energy

[c0lin1] 28/1/2021 11:38

yes I got some at 66.5