Jadestone Energy Share Discussion Threads

[thefartingcommie] 14/3/2019 12:50

someuwin
14 Mar '19 - 11:22 - 568 of 570
0 1 0
In English...

14 march 2019 - Cantor Fitzgerald reiterates JSE 'Buy' rating with target price increased from 94p to 97p


...pedants corner clearly.....tant pis

[mount teide] 14/3/2019 12:22

Now there is a rare sight - an intra-day chart turnaround.


Oil Demand/Supply - Medium Term - some thoughts:

What has the last 10 years taught us about the likely growth in future oil demand over the next 10 years in the boom and bust oil industry?

There's little doubt on my part about these 3 assumptions:
A) Demand is growing and will continue to grow in the foreseeable future
B) Demand and the behaviour of OPEC+ will control the price dynamics in the foreseeable future (not the high cost, hugely indebted US shale industry or the political problems ref: Venezuela/Iraq problems)
C) The march of demand is pretty robust and not particularly sensitive to the price unless it spikes dramatically from a high base level as in late 2007.

Brent was $97 a barrel when the global financial crisis hit in Q4/2007, some nine months later it topped out at $147 before briefly collapsing to circa $40 and then recovering back above $100 in 2010.

Between 2008 and 2015 Brent averaged $95 - yet global consumption grew from to 84.3m bopd to 94.9mbopd - an average annual increase of 1.37m bopd.

Since Brent bottomed in H1/2016 at $28.7/bbl it has averaged $58.9 - from 2016 to 2018 oil consumption increased to 99.3mbopd - an annual average increase of 1.47mbopd.

So, even during a period with high historic average oil prices ($95 during 2008-2015) the growth in consumption hardly varied to that when prices are averaging nearly 40% cheaper(2016 to date).

This is largely due to developing Nations accounting for all of the growth and this is where the very high population Asian Nations dominate, with about eight out of every 10 extra barrels consumed globally. India’s oil demand growth is expected to outpace China by 2020. While electric vehicles are an important growing factor for oil demand, the IEA estimates they will displace only very limited amounts of transportation fuel by 2025.

The supply side of the Oil Industry:

Rystad Energy reports that 2017 was yet another record low year for discovered conventional volumes globally. Less than seven billion barrels of oil equivalent was discovered.

“We haven’t seen anything like this since the 1940s,” says Sonia Mladá Passos, Senior Analyst at Rystad Energy. “The discovered volumes averaged at 550 million barrels of oil equivalent per month. The most worrisome is the fact that the reserve replacement ratio in 2017 reached only 11% (for oil and gas combined) - compared to over 50% in 2012.” According to Rystad’s analysis, 2006 was the last year when reserve replacement ratio reached 100%; largely thanks to the giant onshore gas field Galkynysh in Turkmenistan.

Not only did the total volume of discovered resources decrease – so did the resources per discovered field. An average offshore discovery in 2017 held 100 million barrels of oil equivalent, compared to 150 million boe in 2012. “Low resources per discovered field can influence its commerciality. Under our current base case price scenario, we estimate that over 1 billion boe discovered during 2017 might never be developed”, says Passos.

“While there have been some notable successes this year, we have to face the fact that the low discovered volumes on a global level represent a serious threat to the supply levels down the road,” says Passos. “Global exploration expenditures have decreased year-over-year for three consecutive years now, falling by over 60% from 2014 to 2017. We need to see a turnaround in this trend if a significant supply deficit is to be avoided in the future.”

The dramatic price decline of oil between 2014 and 2016 and the slow recovery that followed resulted in deep cuts in exploration and development throughout the industry.

The International Energy Agency has been waving its arms for some time that this dearth of investment will mean constrained supplies after 2020.

Dr Fatih Birol, the IEA’s Executive Director said “This is no time for complacency. We don’t see a peak in oil demand any time soon. And unless investments globally rebound sharply, a new period of price volatility looms on the horizon.”

Data Sources: IEA, Rystad Energy and Statistics Portal

The Industrial metals mining industry - particularly Copper, has very similar supply/demand challenges to the oil market as a result of an identical collapse in pricing in the 8 years through to 2016, which generated an even greater collapse in development and exploration Capital expenditure. Despite a partial recovery in pricing over the last two years, both the global oil(outside US shale) and copper industries have barely increased capital expenditures much above the decade lows - just as happened in the early years of the last oil and copper market cycle recovery stage of 2000 - 2008. A period during which(2000-2006) copper and oil went up by 498% and 167% respectively while the wider market FTSE was still in correction territory some 20% plus down!

AIMHO/DYOR

[thefartingcommie] 14/3/2019 10:53

Jadestone Energy JSE Cantor Fitzgerald Buy 47.40 47.40 94.00 97.00 Reiterates

[sja123] 14/3/2019 10:20

Bought in here over the last few days. I see this as a solid banker to hold and accumulate over the coming months and years....

Great management, winning strategy that they have years of experience with and a fast growing area of the world in need of their product...

Blakeley comes over very well in the LSE presentation....calm, confident and methodical....

All IMO etc

[zengas] 14/3/2019 08:44

With acquisitions on the cards, I can't see any share buy backs in the next 2 years minimum. They aren't an explorer except with a small 'e' as they say. They intend to look at the dividend in September as well so there will be competition as to where to best use the cash.

[cashandcard] 14/3/2019 08:41

With Spangle on this one, buybacks tend to be a poor use of shareholders money, I appreciate there are exceptions as mentioned above. They are done with an eye to managing the divi ratio buy way of manipulating the sharecount. There are certainly better ways and circumstances where money can be used. I would prefer straight cash/share dividend than any massaging of the equity, I'll have the cash and decide what I want to do with it. Better yet, opportunistic acquisitions or reduce debt.

I'm taking another look at this and following with an eye to investment.



Cash

[mount teide] 14/3/2019 08:17

Spangle - 'Surely there are better investment opportunities for realising shareholder value than that, or just start dividends'

Mostly yes, but there are some extremely good exceptions to the rule.

Low cost Copper producer Central Asian Metals started a large buy back programme of its shares during the brutal recession period 2012-2016 of the last copper market cycle and saw its share price go up 170% - they iced the cake by in addition paying out a circa 6% dividend.

By comparison sector heavyweight Glencore's valuation dropped 85%, they suspended the dividend and then diluted shareholders with a massive placing to strengthen the balance sheet.

I agree that against the backdrop of the early stages of the recovery phase of the latest oil market cycle the cash would probably be much better spent on acquiring more high quality assets with production and re-investment opportunities and paying a modest dividend than share buy-backs.

[spangle93] 14/3/2019 07:53

I'd hoped that was tongue-in-cheek ;-) Surely there are better investment opportunities for realising shareholder value than that, or just start dividends

[someuwin] 14/3/2019 07:45

I also note that he says that if the market doesn't acknowledge the value here, they'll start buying back shares.

[zengas] 13/3/2019 21:36

Points for me and why i bought in here last summer -

Adopted the Talisman philosohpy.
Compelling investment.

33 mmboe of Vietnam 2C will add to the 2P reserves = over 70 mmboe P2 (before Ogan Komering, other assets and any acquisitions).

Most telling comment re Montara - We have a lot of gas - no value attributed to it. Fields oil is under a very large gas cap.

Which i pointed out here a few days back and reiterated by the CEO - "Couple of weeks back, Shell announced development for their Crux field" (which is barely 25km away)."Looking for gas into that infrastructure. I think this is great for us."

In my own view we are sitting i believe on well over 100 mmboe oil/gas before OK and any other acquisitions.

Huge free cash flow generation - and could fund another sizeable production asset in turn with similar cash flow/reserves/production.

Still significantly undervalued because the market doesn't recognise the story - this should change and i would expect fair value to be above 80p.

[spangle93] 13/3/2019 21:31

Indeed - with the Jacky tieback and workovers/reperfs greatly extending the life and reducing opex/bbl.
IAE was a dream share to get into, taken out on the cheap IMHO.

[mount teide] 13/3/2019 20:55

spangle - recall Ithaca Energy taking over Beatrice as a third phase operator for £10m and getting another 4 years or so of highly profitable production from the field following Talisman's 20 years as a second phase owner/operator.

[spangle93] 13/3/2019 20:41

Just watched the recording - wow, he has a face that could be used as the pictorial representation of jetlag.

Also, what was with the first questioner??? - 1 min 30 seconds of uninformed waffle

Would have liked to have heard more of Ogan Komering, would love to hear of real progress there

Left hand graph on Slide 5 has the wrong ordinate axis title

I remember the BP MAST "nissen hut" (portacabin actually) though he forgot Clyde.

Overall, good to hear the story verbally, didn't appreciate the tax pool at Montara which helps me to understand why Australian assets are attractive, but the best thing was verbal confirmation that his 30000 bopd target will be internally funded with no recourse to equity markets.

[mount teide] 13/3/2019 19:58

Brent up to $67.73 - a new four month high.

Jadestone after adjustment for the circa $2.5/bbl regional premium to Brent will currently be generating circa $76.00/bbl($73.49 + $2.50) for its 5,500 bbs of hedged Montara production and over $70/bbl for the other circa 7,600 bbls.

[someuwin] 13/3/2019 19:31

Cheers for posting the link homebrewruss. That is a fantastic presemtation!

[mount teide] 13/3/2019 19:00

Standout point for me from Paul Blakeley's presentation last night:

2019 Free Cash Generation:

In 2019:

* Our average crude oil production is expected to be between 13,500-15,500 bbls/d

* Our average unit production costs are expected to be US$21-24/bbl

At an average $65 oil price for 2019 (40% of forecast production is hedged at $72/bb)
We expect to be able to fully fund

* Our Capital and other major offshore spending of US$116-131 million

AND STILL HAVE $100 MILLION OF FREE CASH LEFT OVER!

Incredible performance from an acquisition that is forecast to generate the overwhelming majority (circa95%) of that Free Cash and only completed last September for a net cost of $82m!

Suggests a chunky Dividend payment is nailed on for 2019!

[meteors] 13/3/2019 18:48

Too right!! Say it how It is :)
@fardelsbear You’ve nominated yourself as Spam police! hehe

P.s thanks for the link Russ, great rise today, :D

[fardels bear] 13/3/2019 18:03

Why on earth would we want to buy that, when we have these?

[homebrewruss] 13/3/2019 16:46

New proactive promo article:
hxxps://www.proactiveinvestors.co.uk/news/details/216411/jadestone-energy-primed-to-expand-as-asia-pacific-oil-province-matures-216411.html

edit:
and the LSE video from last night's investor evening is now here:

[homebrewruss] 13/3/2019 16:44

Some massive buys after the bell. About 3.5 million shares in total!

[someuwin] 13/3/2019 14:09

As they said the other day...

"We're in a number of data rooms right now"

[zengas] 13/3/2019 13:44

Management here built a $6b valuation oil company (Talisman) in the same region as they now operate with JSE. CEO awarded the OBE for services to the UK oil and gas industry.

Stag, Montara oil project, Nam Du/U-Minh worth up to cdn 260c (circa 150p) so currently only representing under one third of that at 48p.

Philippines SC56 and Vietnam Tho Chu or Indonesia's Ogan Komering producing PSC not in the valuation model.

Further acquisitions a distinct possibility and is their objective.

[croasdalelfc] 13/3/2019 13:24

Keep looking through the posts #jse is under the radar on twitter , like RRE this time a year ago