Jadestone Energy Share Discussion Threads

[lord gnome] 30/6/2021 17:07

Anyone had the divi yet? ii are usually very quick, but nothing so far.

[croasdalelfc] 30/6/2021 15:13

5m barrels accrued at ~$66 for the acquisitions.That is a whole years production ie 2019 was 4.6m from Montara and Stag iirc.

[croasdalelfc] 30/6/2021 14:31

The 3.6m barrels accrued (4m by end Sept) via Maari acquisition is one big factor - worth $257m revenue by Sept.Alone imo that is worth 20p on share price.The PM assets transaction also has 1.1m boe accrued ( 1.6m by End Sept) worth ~$100m revenue by End Sept .That is worth another 10p on share price given the lower transaction cost .H6 well completion on time and budget with 2000 bopd is worth 5p .Skua workovers another 3p.

[fardels bear] 30/6/2021 14:25

No, it needs to see Maari complete.

[king suarez] 30/6/2021 13:54

I don't understand the low share price and low broker targets for Jadestone.

Close to 20% of the market cap is covered by net cash, so the market value is a very low multiple of annual free cash flows?

Does the market just need to see an expansion of reserves at Montara before being valued more favourably? I can only think this is what holds up back right now?

[bradvert] 30/6/2021 12:39

Broker Jefferies began Jadestone coverage today. Initial PT 100 pence.

[mount teide] 30/6/2021 09:47

On Wednesday 23rd June 2021 - NZ Energy and Resources Minister Dr Megan Woods said legislation put before Parliament this week would impose an explicit statutory obligation on petroleum permit and licence holders to carry out and fund decommissioning of petroleum fields. Source: NZ Herald

Today.....'Both OMV NZ and the Company continue to work to satisfy the remaining outstanding conditions and to complete the transaction.'

Since the NZ Government's new legislation reshape's the rules of business by potentially creating unlimited perpetual liability for former O&G field owners/operators - today's RNS suggests OMV are sufficiently comfortable with their responsibilities under the new legislation to continue working with JSE to meet the remaining outstanding conditions to complete the transaction.

AIMHO/DYOR

[croasdalelfc] 30/6/2021 09:46

https://www.nzherald.co.nz/business/government-changes-rules-on-oilfield-clean-up-after-taxpayers-foot-bill-for-tui/7GGLM27HWHC7HXU6CS7P53ZYAA/

[croasdalelfc] 30/6/2021 07:23

Yes probably increased confidence they can close Maari deal - only a two month extension

[mount teide] 30/6/2021 07:17

'Further to the Company’s announcement on 9 June 2021, we are pleased to confirm that following discussions with the seller OMV New Zealand Limited (“OMV NZ”), both Jadestone and OMV NZ have agreed to extend the long stop date under the Maari sale and purchase agreement to 31 August 2021. Both OMV NZ and the Company continue to work to satisfy the remaining outstanding conditions and to complete the transaction.'

An improvement on H2/2021 - suggesting improved confidence.

[fardels bear] 29/6/2021 23:28

Which great recession are they referring to? They seem to come around with increasing regularity these days.

[mount teide] 29/6/2021 23:08

‘A mix of government financial aid, vaccination rollout and strong consumer demand have come together to generate an economic recovery with growth in international trade not seen since the Great Recession’

Hackett Associates - Maritime Strategy and International Trade Logistics Consultants

[mount teide] 29/6/2021 22:37

Drilling Rig 'Valaris 107' is stationary in position 1km SSW of FPSO Montara Venture - tugs are no longer in attendance - suggesting market notification of the commencement of drilling the Montara Infill Well should be imminent.

[mount teide] 29/6/2021 08:25

Opened 1 v 2 / 72p v 74p (rest between 75p and 78p)

Now 2 v 1 / 72p v 74p (rest between 75p and 78p)

[mount teide] 28/6/2021 15:59

Now 1 v 2 / 72p v 74p (rest between 75p and 78p)

[mount teide] 28/6/2021 14:32

Now 1 v 3 / 72p v 74p (rest between 75p and 78p)

Paul Blakeley on completion of the Montara acquisition described it as the best deal he had negotiated in the last 25 years - the performance of the field since completion of the $82m net deal has been remarkable and fully support his view - as does his more recent comment that Montara's huge free cash flow will be the principal driver of the company's business development over the next 5 years.

Since 28/09/2018 Montara has produced circa 9.6m bbls of oil, generating around $400m of operating cash flow before changes in working capital. As of 31/12/2020, Montara has 2P Reserves of 23 mm bbls based on a reserves report prepared by ERCE.

Current Montara and Birds OPEX is in the range of $17.5-20/bbl, which should drop to around $15/bbl after successful completion of the H2/2021 Montara Infill and Skua Well Work-Over programme.

Some background on the Montara Field - it was expected to commence production at 28,000 - 35,000bopd of light, low sulphur crude but, the owner PTTEP (Thai National Oil & Gas Company) elected to save money on the upfront development costs, and so cut the number of initial production wells by 50%. This resulted in first production peaking at circa 14,000 - 15,000bopd ...... nearly a decade later and with just one infill well drilled since (by Jadestone), Montara's production is still in the 9,000 bopd - 10,000 bopd range from field uptime in the mid 80% range since taking ownership - up from under 70% under PTTEP's troubled operatorship. On completion of the acquisition, the Jadestone management estimated that field production for the previous 6 months was circa 7,000 bopd and OPEX North of $40/bbl.

AIMHO/DYOR

[mount teide] 28/6/2021 14:26

Now 1 v 2 / 72p v 73p (rest between 74p and 77p)

[mount teide] 28/6/2021 14:11

Now 1 v 1 / 71p v 72p (rest between 73p and 76p)

[thedudie] 28/6/2021 14:07

It's alive !
Maybe it will now start to catch up with the oil rally - Brent Crude $76

[mount teide] 28/6/2021 13:48

L2: Opened 2 v 1 / 69p v 71p (rest between 72p and 75p)

Now 1 v 3 / 71p v 72p (rest between 73p and 76p)

[mount teide] 27/6/2021 07:23

Considering the quality of the management, production development potential of the assets, the attractive purchase price and quality of the acquisitions nearing completion, and the unprecedented pipeline of priced to sell high quality assets becoming available from major and National Oil companies disinvesting/transitioning from the sector into renewable energy, I intend to hold for at least a further 3-5 years.

I believe the strengthening tail wind generated by the quick recovery in oil demand following the huge destruction of production wreaked by the global pandemic, when layered on top of the waterfall drop in exploration by the industry over the last 5 years, the outstanding regional energy market growth prospects, and fundamentals for specialist second phase operators; the huge cash flow generating potential of Montara driving the business for many, many years to come, makes the risk/reward of the Jadestone Energy investment case highly compelling/almost unique in the sector.

As Wood Mac recently confirmed, there is a growing number of M&A opportunities emerging within the maturing O&G basins of SE Asia, Australia and the Pacific Rim with very limited competition for the assets. Excellent opportunities are being sold at highly distressed prices by North Sea standards. The fundamental value proposition however, is the reinvestment prospects post acquisition, where Jadestone always looks for much greater potential than the headline acquisition price.

The primary difference between Jadestone and the North Sea players is that the company is focused on the Asia Pacific region where the returns are on average much higher, the competition very limited and asset purchase prices relatively modest - high quality assets are increasingly being sold via bilateral deals, with no competition.

What’s more, product pricing is highly favourable in South East Asia. Low sulphur crude oil is routinely sold at a material premium to Brent and natural gas is mostly contracted in the $8.00 – $9.00/mcf range (an average of more than three times the US Spot market price over the last decade).

In common with Hedge Fund Manager, Jadestone NED and major shareholder David Neuhauser I believe Jadestone Energy can be worth £1.50 - £1.75 a share during 2022, assuming management successfully execute the fully funded production development programme and complete the proposed New Zealand and Malaysian acquisitions. And perhaps much more if they add another Montara scale acquisition in the interim.

At $75 Brent, with Montara's ultra low OPEX/bbl providing huge cash flow generation and excellent investment downside protection, as a result of having an early life $108 million converted cost FPSO servicing the Montara field, generating just $17.5/bbl op expenses for Montara and its satellites on production of just 10,000 bopd, I see current fair value today as somewhere in the 100p range. By way of comparison, Premier's Catcher field FPSO OPEX/bbl on a similar production volume would be circa 5-6 times higher!

The investment case is underpinned by having a management highly experienced at operating in the Asia Pacific region with longstanding relationships with the principal stakeholders, and deep insight into many regional M&A opportunities. They’re already credited with creating two highly successful independent E&P businesses - one in the North Sea and the other in Asia Pacific - and like our two high performing hedge fund shareholders, believe they can replicate this success again at Jadestone Energy, not least since they're now operating with the advantage of the recovery stage of a new oil market cycle, a post pandemic recovery in demand, and a huge programme of disinvestment from the mature O&G basins of the world by the oil majors; rather than the head winds of the much more demanding decline stage of the oil market investment cycle they mostly operated under when at Talisman Asia.

Since Jadestone, in common with most O&G industry quoted companies, is currently trading at a deep discount to the value of the company’s assets, there is a wide margin of safety here. An investment today in Jadestone Energy is not just a direct play on the recovering oil and gas price, but a play on the management’s ability to successfully execute organic growth projects and, identify and buy distressed/unwanted assets at attractive prices and, develop/considerably extend the production life through reinvestment.

If the astonishing 2018 Montara acquisition deal ($195m gross/ $82m net / with an estimated annual operating cash flow of circa $200m at $75 Brent), and their incredible track record at Talisman Energy is a reliable guide, an investment here is probably in as safe a pair of hands as the industry can offer.

AIMHO/DYOR

Declaration: Currently hold 1.22m.

[mount teide] 25/6/2021 20:54

Leigh Goehring on the Many Factors Sending Oil Prices Higher - 24 June 2021

'Managing Partners Leigh Goehring and Adam Rozencwajg recently hosted a video conference call along with Stacy Havener, CEO and Founder of Havener Capital Partners. During the event, they discussed the outlook for different natural resources including oil and copper as well as factors affecting investors such as inflation. Here is Leigh discussing the current state of oil-related equities.

“Oil today is in the class of being an uninvestable asset. And if you just look at the way oil stocks are performing, they've gone up a lot. They've gone up about 120% off their bottoms that were reached back in the beginning part of April of last year. But as far as we can tell, there has been no real buying that has taken place in the oil names. This is hard to believe, but since they bought them back over a year ago, most of the upward pressure on oil stocks has come from short covering from both hedge funds and algorithmic traders who have been massively short the energy space over the last several years. Of course, it's that massive shorting which has made oil stocks such radical underperformers.

And just to give you a statistic to show you that this is indeed true. If you look at the E&P index which is embodied in the XOP ETF, the open interest in that ETF over the last year, since it bottomed back in April last year, is only up 15%. And usually what happens is that when true buying comes to the open interest, ETFs begin to expand. Now, you compare oil relative to copper, where there has been real buying and we'll talk about copper in a minute. For example, the various copper ETFs, their open interest in the copper stock ETFs are up 700% over the last year. Now how'd you like that? 700% versus 15%.

There's no buying taking place with long only fund managers in the oil space. However, that is going to change because the underlying fundamentals in the oil market are excellent. And there's several issues in the oil market today that very, very few people understand. In fact, I would say that next year, we're going to enter a situation in global oil markets where we have never ever been before in the 160 years of history of oil, since it was discovered back in Oil Creek, Pennsylvania 1850 by Colonel Drake.

The global oil market has always been what I would call a structural surplus. There's always been more supply than there has been demand. Even back in the two energy crisis in the 1970s, the '73 Arab oil embargo and the 1978 and 1979 Iranian hostage crisis. There was a temporary supply disruption, but there was never a situation where there was more demand and there was oil supply. However, based upon our modeling going forward over the next year, given the fact that global oil supply has now fallen by about 2 million barrels a day, specifically outside of OPEC, that if we ever get back over 100 million barrels of global oil demand a day, which we think we're well on the way to have that happening, that next year we're going to be in a situation where we're going to have 101 million barrels a day of demand. And we may only have 100 million barrels of oil supply. And like I said, we have never ever been in that situation before in global oil markets. How oil prices react to that, is going to be very, very interesting. But that's the setup.

And there's also something else that's very interesting about oil. I don't know if you've followed the various news headlines last week, that the IEA, that is the International Energy Agency, which is sort of the global energy watchdog group that monitors global oil markets for the OECD countries. The IEA came out with a grand pronouncement, that they're recommending that all oil companies cease upstream capital spending starting now.

So we're already supply constrained in oil because of the huge cutbacks in capital spending that have taken place in the last two years. And the fact that the shales, which have been 100% of the world's supply growth over the last decade have now stopped growing for a lot of interesting geological reasons, which we've written extensively about in our letters - this is only going to further crimp global oil supply going forward. And so the setup for oil, which, like I said in our last call, we outlined that it had fallen firmly into the bucket of being an uninvestable asset, is now going to wind up being the star performer in this coming decade as we progress through the 2020s.” '

[mount teide] 24/6/2021 13:42

Baltic Dry Index - Cost to ship commodities world-wide - has surged to a 12 year high of 3,147 after bottoming at 298 in 2016 following 8 year of falls post the 2008 shipping cycle peak, and 398 at the pandemic low in early 2020.

[croasdalelfc] 24/6/2021 12:11

An example of how JSE extend field life:Dec 2017 CPR Montara and Stag reserves:1P : 27.9mb2P: 45.3mb3P : 61.1mbDec2020 CPR :1P: 23.2mb (-4.7mb)2P: 37.1mb (-8.2mb)3P: 54.4mb (-6.7mb)In that time they have produced 10.5m barrels.After H6 is online then some 2P moves to 1P