Jadestone Energy Share Discussion Threads

[mount teide] 27/2/2021 10:49

FB - 'I got bored with txp and sold at 14p.'

Admire your fortitude - it takes a brave man to admit he walked away from a subsequent circa 13 bagger within barely a year!

If its any solice....you were in good Company, one modest sized Canadian Hedge Fund sold out of a 4-5% position at a similar time at around 14p - only to watch the share price go on to reach 175p within 15 months - ouch!

[mount teide] 27/2/2021 10:40

Buffy..........relative to investment risk......I see JSE as my O&G sector banker.....its an ultra high cash flow/bbl production business at $65 Brent, run by an outstanding management who have demonstrated to the sector for well over two decades they're virtually peerless at generating capital growth as specialist second phase O&G field acquirers, operators and developers.

I have seven figures holdings in TXP, JSE, SAVE and PTAL. If forced to hold only one for the next 5 years - it would be JSE, since i believe it would offer, for my risk appetite, the best combination of low risk upside potential and outstanding downside protection for a single all-in O&G sector holding.

In 2020, the JSE management demonstrated what they can do in an oil market with record low prices - at $65 Brent, inclusive of the IMO 2020 premium, JSE generates cash flow per barrel equivalent to what much of the O&G industry were generating when Brent was averaging over $100/bbl between 2010-2014.

With production being ramped up during 2021, and a year end production exit rate of perhaps 17-18,000 bopd(assuming Maari completes as expected); a "high $teen/bbl OPEX during Q4/2021", at the current Brent price, this could generate another huge step change increase in the current excellent cash generation going into 2022.

In addition, it was clear that the next acquisition is very likely to be a producing asset ....Paul sounded very bullish on this yesterday... "little competition, many sellers ... a buyers market!".

So, JSE could well be a 20,000+ bopd producer in 2022 with sub $20/bbl OPEX,- such a production growth scenario could potentially generate cash flows of circa $400m per annum at $65 Brent(plus IMO 2020 Premiums) and $600m at $100 Brent.

While the other O&G holdings may well have the potential to achieve a better capital growth performance than JSE over the next 3-4 years, I consider JSE's risk reward to be superior, particularly when considering the excellent downside protection, which today, despite its importance proving the test of time over at least 70 years of stock market history, and which proved invaluable for JSE in 2020, seems to be given a much lower investment case weighting by many PI's than it deserves, if many of the comments on Advfn are a reliable guide.

What the two high performing hedge funds(and I suspect many PI's) want is for Paul Blakeley and his team to continue replicating at Jadestone, what they did outstandingly successfully at Talisman Energy North Sea and SE Asia. ie use the same low risk O&G business MO of buying and operating efficiently, high quality assets with excellent re-investment potential, acquired at valuations which meet or exceed their demanding screening process.

As Edgar Bergen (and Warren Buffett) so aptly said, “Hard work never killed anyone, but why take the risk”.

AIMHO/DYOR

ps; if the question was; "which has the greatest potential for capital growth over a 1-2 year outlook regardless of risk to the investment capital": then SAVE, which like JSE is a very high cash flow generating business with near 80% operating margins and more than 94% of its revenues underwritten by the World Bank, and currently the subject of very strong interest from new investors would have been my selection.

Declaration - I hold 2.2m in SAVE, 90% of which were purchased at an average of circa 9.0p in December 2020, following the announcement in Lloyds List that the African continent's first mega shipping port and industrial city to challenge the dominance of the Chinese and SE Asian giants, had received Government approval and would be built in SAVE's back garden, where they're the sole provider of nat gas for clean energy generation, to the three hugely under-utilised power stations which service the province and, own the associated 260km network of gas pipeline infrastructure.

[fardels bear] 26/2/2021 23:02

I got bored with txp and sold at 14p.

[zorija] 26/2/2021 22:50

And how many times out of boredom and you have sold only to see to share price rocket...

[buffythebuffoon] 26/2/2021 22:48

That’s the one MT. I must confess I’d never thought of it that way.

I find it interesting that several people have said to me how brilliantly JSE are doing, but the share price is not going to be anywhere near as explosive in a two year time frame as SAVE and TXP, so their money is going there for now.

Buffy

[fardels bear] 26/2/2021 21:10

Forgot I'd left my limit buy order on. D'oh!

[mount teide] 26/2/2021 19:11

Today's 55 million transaction volume is the highest since the London 2018 IPO.

Buffy ....Mentioned that on the SAVE thread about JSE - that a company like JSE producing 11,000bopd at $50/bbl cash flow, not only generated more cash flow but offered tremendous downside protection compared to a company producing 33,000 bopd at $15/bbl cash flow.

JSE demonstrated brilliantly in 2020 that it offers huge downside protection in a very low oil price world - the company more than doubled its net cash position, paid a maiden dividend, took advantage of the collapse in O&G pricing to make a highly distressed £12m acquisition, while paying down £46m of loan interest and capital repayments!

[thedudie] 26/2/2021 18:59

55 million trades -- got to be the highest by a factor of nearly 2. I know most of them had balanced sells to each buy but still...
Someone or some people keen but loose stock being found from somewhere.

[thegreatgeraldo] 26/2/2021 16:23

Those metrics are handy, but as a starting point for further investigation....imvh

[buffythebuffoon] 26/2/2021 15:40

I can’t recall if it was Zengas or MT, but one of them mentioned that another angle is to look at margins if the oil or gas price dropped. It could take a lower margin producer into a loss making organisation. BOPD or BOEPD is fine, but unless the production is hedged (and how often is there a 100% hedge) it’s not the only thing to hang your hat on.

Buffy

[dcarn] 26/2/2021 14:39

I concur.

Both excellent companies with their own individual strengths.

[fardels bear] 26/2/2021 14:27

No that's not correct. I don't know why we are even discussing this in here. SQZ is excellent as is Jadestone. Just ignore the pillock who is trying to sow discord.

[thegreatgeraldo] 26/2/2021 13:52

btw, not sure about this metric for JSE....."EV/ Flowing bopd $58.9"

Looks out to me

[thedudie] 26/2/2021 13:49

Have a look at 2020 numbers (NOTE excludes hedges for both companies)
I think SQZ produced 23000boepd with OPEX costs of $14 and average selling price of $20 per boe
That gives the $6 per barrel margin - Revenue $168m. ( There was then an additional cost associated with the 40% of cashflow that accrues to the previous owners of Rhum etc)

JSE on the other hand produced about 11500 boepd had OPEX costs $23 ish and average selling price of $45 per boe
That gives $22 per barrel margin (nearly 4 x SQZ) with revenue at $189m (Actual Rev I assume inc hedging $218m)

Number of barrels doesn't matter JSE cashflow is higher than SQZ by some margin.

And I am a SQZ holder as well....

[thegreatgeraldo] 26/2/2021 13:33

yellowdog
26 Feb '21 - 13:17 - 5307 of 5308
0 0 0
Look at these metrics.

JSE EV/2P boe $11.9 EV/ Flowing bopd $58.9
SQZ EV/2P boe $8.7 EV/ Flowing bopd $20.9

Again showing JSE too expensive.

..SQZ is a well run company mainly producing gas...JSE is also well run, but sells mainly oil & a decent chunk of that at a premium (heavy, sweet crude).

[fardels bear] 26/2/2021 13:21

It actually shows that SQZ is very undervalued.

[yellowdog] 26/2/2021 13:17

Look at these metrics.

JSE EV/2P boe $11.9 EV/ Flowing bopd $58.9
SQZ EV/2P boe $8.7 EV/ Flowing bopd $20.9

Again showing JSE too expensive.

Time to sell.

[fardels bear] 26/2/2021 12:54

I wouldn't touch I3E even with something very long, and with gloves on.

[fardels bear] 26/2/2021 12:53

It's not been at an all time high for a long time. All the way through last summer it was at an all time low. I see an investment in SQZ as complimenting one in JSE. I do hold more here though at present.

[thegreatgeraldo] 26/2/2021 12:47

Checked earlier, latest price I could find for UK gas was 41p/therm.......some way off an all time high ....Winter may be over

[yellowdog] 26/2/2021 12:45

All good points and JSE does deserve a premium rating but not so much of a premium against other O&G companies which have a similar amount of production but are substantially cheaper.

SQZ 80% gas - which is good. Gas price at all time high. Cash of £100m and lots more to come. EV of £240m. 34,000 boepd next year and they keep 100% of revenue - at the moment BP receive 40% but that changes 2022.

[fardels bear] 26/2/2021 12:42

Sqz cost is about $12boe and yes it is just about all gas. Sqz is about as undervalued as JSE. I am happy to hold both.

[croasdalelfc] 26/2/2021 12:34

27000 boepd . Isn't it 80% gas . Price per boe is likely less than half what JSE get . A barrel of oil equivalent is not a barrel of oil. Jse get Brent plus $5. Ie $71 a barrel now SQZ get maybe $40 a barrel

[king suarez] 26/2/2021 12:11

And what proportion of those producers is gas v oil? How much debt or net cash do they have? What is the quality and track record of the BODs and how stable is the geographical/geopolitical locations?

Have you actually done any proper comparative research? JSE will be ending the year at 18k+ BOPD also..

What are the costs of those producers?

Do any of them receive a premium to Brent like JSE does?

[yellowdog] 26/2/2021 12:04

It's too expensive.

Mkt Cap of £357m for 11500 - 13,500 boepd.

Look at i3E Mkt Cap £54m 9,500 boepd or JKX Mkt Cap £65m 10,500 boepd.

Or even better SQZ Mkt Cap £340m for 27,000 boepd

SQZ is cheaper and produces more than twice as much.