Jadestone Energy Share Discussion Threads

[mount teide] 08/2/2021 12:15

Maari Oil Field Acquisition - Jadestone (69%)

FPSO - Roroa

2006 - Conversion to FPSO carried out at Jurong Shipyard - Singapore (cost of hull and conversion similar to sister ship Montara Venture at circa $107m)

2009 - Went into commercial operation on the Maari Field under a 10 year fixed price charter rate contract (with annual uplifts), containing an option to buy after 4 years.

2012/3 - Maari Field Consortium bought FPSO from the owner (price not disclosed - would estimate $85m-$100m)

2013 - FPSO underwent a US$40m upgrade programme of work in Nelson Shipyard NZ - this included the upgrade of the processing equipment and the installation of a new swivel so it could rotate on its mooring.

During this time construction activities at the Maari field continued in preparation for the tie-in of new wells. This included the upgrade of the wellhead platform and the replacement of several mooring lines of the anchor-buoy for the Raroa.

2016 - Carried out a further US$30 million upgrade on Roroa - including the upgrade of all eight of the ship's mooring lines to a higher strength specification, and the chain attachments and mooring line components to 'future-proof' the in-field operation of the FPSO for at least 10 years. "The replacement will mean that no major mooring works will be required for the next 10 years."

Considering the likely price paid by the Maari Consortium for FPSO Roroa and cost of improvements since carried out to the vessel - two fellow shipping industry professionals and myself believe Jadestone's 69% ownership share of the FPSO Roroa currently has a market value considerably in excess of the $50m paid by Jadestone for the purchase of 69% of the Maari Field INCLUSIVE of the FPSO Roroa.

Effectively, by the expected completion date of the deal in H1/2021 - Jadestone could well find itself in a position where they receive cash from OMV (generated from the effective 1/1/2019 date of the deal, through to the H1/2021 completion date), up to double $50m Maari acquisition purchase price payable on closing, with the 69% ownership shareholding of the significantly upgraded FPSO Roroa thrown in for free (similar to the Montara deal).

AIOHO/DYOR

[mount teide] 08/2/2021 11:56

L2: 1 v 3 / 72p v 73p (then 2 x 74p, 1 x 75p, 3 x 76p and 2 at 77p)

[mount teide] 08/2/2021 11:02

L2: 3 v 2 / 71p v 72p (then 5 x 73p, 1 x 74p and 3 at 76p)

[mount teide] 08/2/2021 09:43

L2: 1 v 1 / 69p v 71p (then 4 x 72p, with the rest 73p and above)

[mount teide] 08/2/2021 09:27

L2: 2 v 1 / 68p v 71p (then 4 x 72p, with the rest 73p and above)

[mount teide] 08/2/2021 09:24

S93 and LG - it was a comment made by an oil sector analyst in a recent report openly questioning the major's ability to generate similar returns for shareholders from renewables.

I too suspect 15% is closer to what they achieve rather than target.

[lord gnome] 08/2/2021 09:09

I could well imagine that 15% not what they target but it is what they end up with :-)

[spangle93] 08/2/2021 09:08

Large oil firms generally target a return on oil investments of about 15%.

Interesting comment, MT. Is this your observation or from an industry source?

My experience is that they target more, then don't deliver projects as planned, but for quite a lot of the last 20 years they have been bailed out by a higher oil price than forecast.

[mount teide] 08/2/2021 08:29

Brent through $60 this morning - first time since Jan 2020.

[mount teide] 08/2/2021 08:07

L2: 7 v 2 / 67p v 71p (then 5 x 72p, with the rest 73p and above)

[mount teide] 08/2/2021 00:19

Mr Looney is taking the company down the renewable energy route; an approach with huge upfront capital investment costs.

The energy transition road will likely be very bumpy for BP and all the oil majors; since they have little experience in renewables and new investments will make them subject to the execution risk. Not all investments will probably prove to be successful.

Large oil firms generally target a return on oil investments of about 15%. BP recently said it expects returns of 8% to 10% from its low-carbon electricity investments, with the traditional oil and gas units pushing overall returns to 12% to 14% by 2030.

[fardels bear] 07/2/2021 23:51

Right. So I have just six figures of these. Next week I hope to receive the funds from an old pension transfer into my sipp. Does the team think I should fill my boots with more of these or buy some BP for the div?

[ilostthelot] 07/2/2021 23:20

You're a legend MT. Thankyou 👍

[mount teide] 07/2/2021 23:07

Update to an earlier post on operating cash flow calculations/projections for 2021.

2021 Assumptions:
Average production of 10,500 bopd, 3,000 bopd and 3,750 bopd respectively for Montara, Stag and Maari(Assuming Acquisition completes in H1/2021).

Infill well on Montara and Stag

Average IMO 2020 premiums to Brent of $4, $11 and $2 respectively for Montara, Stag and Maari,

Average OPEX/bbl
$18.50 - Montara - Est Current Actual
$25.00 - Stag - Est Current Actual
$16.50 - Maari - Current Actual

I calculate this would generate estimated 2021 operating cash flows of:

@ $45 Brent
$192.4 million / Montara - $116.8m + Stag - $33.9m + Maari - $41.7m

@ $50 Brent
$223.9 million / Montara - $135.9m + Stag - $39.42m + Maari - $48.60m

@ $55 Brent
$255.4 million / Montara - $155.1m + Stag - $44.9m + Maari - $55.4m

@ $60 Brent
$286.9 million / Montara - $174.3m + Stag - $50.4m + Maari - $62.2m

@ $65 Brent
$318.3 million / Montara - $193.4m + Stag - $55.8m + Maari - $69.1m

@ $70 Brent
$349.8 million / Montara - $212.6m + Stag - $61.3m + Maari - $75.9m

In addition, Jadestone management is actively evaluating attractively priced acquisition opportunities ranging from small bolt-ons to some greater than Montara in size ...... any secured at a valuation metric remotely similar to Montara would have the potential to generate a further large step change increase in cash flow.

With Montara's $120m bank loan fully repaid in Q1/2021; this suggests the management could comfortably access that or more again for a high quality mid/late life asset with excellent reinvestment potential, that might add 10-15k bopd and still be in a very comfortable position to pay the debt down in a relatively short time period at circa $55-60 Brent.

AIMHO/DYOR

[ilostthelot] 07/2/2021 20:10

Thommie7 Feb '21 - 13:56 - 5152 of 5157

Absolutely. Same with the small change 82M 😉. Easy money

[thommie] 07/2/2021 16:26

you could phone jacinda ardern, wasnt she your buddy?

[thommie] 07/2/2021 16:24

at least we hope it will :)

[fardels bear] 07/2/2021 16:11

Is it a foregone conclusion Maari will complete?

[thedudie] 07/2/2021 15:03

....or the $82 million of net cash

[thommie] 07/2/2021 13:56

and that doesnt count in the maari aquisition with ca 3500 bopd net plus cash check on final approval of New Zealand govt for production gains since 1.1.2019....

[ilostthelot] 07/2/2021 11:32

47 *12000 = $564,000 per day.or over 200M per year.

All for a market cap of 315M.
Seems pretty cheap to me!

[mount teide] 05/2/2021 22:23

Marine Fuel Oil continues to strengthen slightly ahead of the rate of increase of the Global Benchmark crude oil pricing:

Change compared to pricing on 9th December 2020 in brackets - (all prices rounded to nearest whole number)

$88 / (+13) - MGO - APAC Average
$75 / (+14) - VLSFO - APAC Average
$71 / (+15) - Jadestone / STAG - (est $11 / 18% Premium to Brent)
$65 / (+14) - Jadestone / Montara - ($4.0 / 8% Premium to Brent)
$60 / (+12) - Brent
$57 / (+8) - HSFO - APAC Average
$57 / (+11) - WTI

$24/bbl - Est Stag OPEX
$18/bbl - Est Montara OPEX
$16.5/bbl - Maari OPEX

$4 - VLSFO/STAG Spread
$15 - VLSFO/Brent Spread
$18 - VLSFO/HSFO Spread

Jadestone should currently be generating circa $47/bbl of cash flow on both the Stag and unhedged Montara Production inclusive of the IMO 2020 Premium.

[mount teide] 05/2/2021 22:05

Euroclear's latest Stock on Loan(short) Report published today:

0.00% - Jadestone Energy / No Change
0.22% - PetroTal / (up from 0.00%)
0.52% - Touchstone Exp / (down from 0.53%)
0.50% - Pantheon Resources / (Down from 0.58%)
0.65% - Savannah Energy / (down from 0.81%)
2.38% - Shell / (up from 2.32%)
3.04% - Enquest / (down from 3.55%)
3.76% - BP / (up from 3.47%)
5.76% - Cairn / (up from 5.36%)

[mount teide] 05/2/2021 16:05

L2: 7 v 2 / 67p v 71p (then 5 x 72p and the rest 73p and above).