Jadestone Energy Share Discussion Threads

[mount teide] 25/10/2021 09:16

La Nina threatens to worsen Asian energy crisis with colder winter - Energy Voice today



'.....Temperatures plunged early last week across most of eastern China, and are already colder than usual in some northern areas, according to the country’s National Climate Center. Provinces including Heilongjiang, Shaanxi and Shanxi began the winter heating season between four and 13 days earlier than in previous years. Local government-controlled systems — typically powered by coal or gas — are fired up to warm residents’ homes in many areas.......'

[fardels bear] 23/10/2021 20:34

I don't have any salary. Though HMG does provide a pension next February.

[fardels bear] 23/10/2021 20:34

The 80k was because I sold out of DEC. It dropped 31p on a single negative Bloomberg article. The 20 grand is the wife's money in her ISA. She's been sitting in cash for too long.

[thommie] 23/10/2021 18:54

Fardel really, where do you shuffle all this money from? 80k last week, 20k next week. I thought you were already all in in Jse. you must have a good salary :)

[fardels bear] 23/10/2021 18:15

I've put a twenty grand limit order in for the wife's ISA at 89p. Watch 'em open up on Monday morning.

[zeusfurla] 23/10/2021 17:24

Thommie Agreed but given the strength of the bid in recent months (and last week) if Sandgrove are selling up there appear to be willing II buyers. Given likely rising oil prices pre year end this is an opportunity to top up at an attractive share price I have a decent holding but will add some more over the coming weeks. 150p is not an unreasonable expectation for Q1 2022 if all goes to plan.

[bamboo2] 23/10/2021 15:30

Brent chart here suggesting that the past week saw successful testing of the prior breakout zone [approx $83.50-$84.00]. It's a lovely looking consolidation.

Only one or two more sessions until it makes an attempt on the historical resistance, approx $86.72, probably 25/10/2021 and/or 26/10/2021

Possible turns on the chart mean it could be immediately slapped down to test the new breakout level. Should be an interesting week.

I hope management are considering the possibility of hedging at some point

[thommie] 23/10/2021 08:22

1,5m sells yesterday in very big trades. nlooks like our II is offloading more.

[donald pond] 23/10/2021 07:47

I think they could manage their PR better. Their metrics on places like sharepad don't look as good as they should. You guys do a great job getting the story out there, but if the company were to produce a monthly summary of its activities that might help raise its profile

[croasdalelfc] 23/10/2021 07:32

Offtake stated at Montara Benture a few hours ago. Brent closed at $85.8 the highest weekly close for years . Tapis probably $88.5/barrel 500k barrels at $88.5 = $44m . A nice initial return for the capex spend.There should be another offtake in Dec probably for another 500k barrels.

[fardels bear] 23/10/2021 07:26

Everything about this company is extremely positive. But then...

[mount teide] 22/10/2021 15:41

Why the demand for marine fuel oil is at record levels with prices to match!

Pandemic's impact on global supply chain's:

Sea freight to ship a 40ft container from Shanghai, China to Rotterdam during H2/2021 to date is currently up 5 fold to circa $20,000....with a passage time of about 3-4 weeks quay to quay.

Sea freight to ship a container from Rotterdam to Shanghai is up about 8 fold to circa $3,500 ..... with a similar passage time of about 3-4 weeks quay to quay.

Purchase cost of a new 40ft deep sea container is circa $5,000 with a 10-15 year commercial life.

Shipping lines generated more operating cash flow in H1/2021 than in the previous 10 years put together.

[mount teide] 22/10/2021 12:58

JPMorgan: "We Could Be Just Weeks Away From Cushing Effectively Running Out Of Crude"

- Zero Hedge today



'Back in April 2020, the landlocked West Texas Intermediate crude oil price briefly crashed into negative territory - a stunning turn of events that cost traders massive losses - when the spot oil market found itself with an unprecedented glut as there was literally too much oil to be stored, and as such those traders who were assigned delivery would pay others just to take the physical oil off their hands. Well, in just a few weeks we may see the opposite scenario: no physical oil at all in the largest US commercial storage facility, leading to what may be a superspike in the price of oil.

In a note predicting the near-term dynamics of the oil market, JPMorgan's commodity Natasha Kaneva writes that in a world of pervasive nat gas and coal shortages which are forcing the power sector to increasingly turn to oil (boosting demand by 750bkd during winter and drawing inventory by 2.1mmb/d in Nov and Dec), Cushing oil storage - which just dropped to 31.2mm barrels, the lowest since 2018..... may be just weeks from being "effectively out of crude." The bank's conclusion: "if nothing were to change in the Cushing balance over the next two months, we might expect front WTI spreads to spike to record highs—a “super backwardation” scenario."

Before we get into the meat of the note, first some background which as usual these days, begins with Europe's catastrophic handling of its energy needs...............'

[mount teide] 22/10/2021 10:30

Skua Work-overs - According to an industry professional on the Advance Energy thread with a premium shiptracker account, there is "a boat being worked on location as we speak and two additional supply vessels and two tugs within the rigs proximity. Move preparations are definitely underway."

[mount teide] 22/10/2021 08:48

Stifel alone on the BID at 88p picked up 500k this morning without blinking.

[croasdalelfc] 20/10/2021 19:33

Each week that passes over $80 a barrel moves the needle towards revenue hitting $350m+ for 2021 (provided they hit guidance) . It would be nice for the board to provide group production and group Opex/barrel after completion of Skua workovers (or failing that narrow year guidance). The 730k barrels between low and high guidance is worth $58m @ $80 Brent and is about 15-20% of potential yearly revenue. Quite significant.Putting 'certainty' to annual revenue via narrowed guidance or similar metrics after a 120 days drill and workover program would add 5-10p to share price imo. Uncertainty is a share price killer

[e43] 20/10/2021 18:08

Agree M/T,the recent 20% breakout at RDSB(my 2nd largest holding after JSE)looks v promising for the whole sector,still feels like the cycle is only in the 'foothills'.
As KS posted the money is flowing into O&G companies coffers far faster than the steady rerate of the sector.
You can bet your life plenty of professional institutional investors are nashing their teeth at having missed out on the rise in the sector this year.

Ps, took a few ADV too, looks interesting

[mount teide] 20/10/2021 18:08

A good example of the pace in the recovery (and continuing rate of growth) in oil demand across SE Asia is India, where gasoline consumption today is already 15% above pre-Covid levels; and diesel 6-10% above pre-Covid levels.

[mount teide] 20/10/2021 17:13

KS - thanks for your analysis.

Following previous oil price crashes - the equities without exception lagged the recovery in the oil price. It seems the market always wants to see any massive potential improvement in cash generation before giving its seal of approval.

This is likely to come when the sector/majors shortly report a V-shaped free cash flow recovery for H1/2021 to record levels.


O/T - Advance Energy - if only this game were as easy as taking a position on Friday and making 30% in three days! Hopefully, a few others saw the value and got 'lucky' too!

Edit: For the avoidance of any confusion - IMO Advance Energy has the fundamentals/potential to generate multiples of today's valuation over the minimum 2-3 year investment outlook I have for the business.

It has many similarities to an early stage Jadestone Energy .......high quality management; focus on Asia/Pacific's maturing O&G basins being vacated by the majors; looking to grow by acquiring potentially low operating cost producing assets with re-investment potential, and through yet to be developed discoveries.

AIMHO/DYOR

[zeusfurla] 20/10/2021 17:00

KS I couldn't agree more with your sentiments. I suspect PI's who look at Stockopedia or other sources see a backward looking position rather than the value being created today which will become highly visible in the next few months eg in Stockopedia 2021 estimated EPS is 1.6c growing to 16.8c in 2022. Even these figures understate reality. However, other O&G companies may look superficially more attractive. I lose no sleep over JSE and its excellent management unlike some other investments I hold.

It is possible that Sandgrove are selling below the threshold which may explain a lack of upward movement in the share price in recent days as the price of oil rises - a temporary blip.

[king suarez] 20/10/2021 15:32

I reckon we are currently priced at around $45 to $50 Brent at most - assuming a $20 - $25 netback at those prices.

The longer oil stays around this level, and JSE share price does not go up, the bigger and bigger bargain this becomes.

Is the market always this slow?

20k bopd next year at this price would be generating somewhere in the region £200m of profit after tax? Pretty soon cash in bank is going to exceed market cap..

Just checked the FY 21 accounts and depreciation was at c$16 a barrel with Opex at $23.

So $83 Brent + a couple dollar premium, less $16 depreciation and say $20 Opex (if they can get it down a tad with increased production, presumably?) gives you around $50 a barrel is net profit pre-tax.

20k x 365 x $50 = $365m pre-tax

Corp tax is 30%? At today's exchange rate gives not far off £200m post tax profits. AND we have over $100m net cash in the bank AND that doesn't include any production from Maari nor the cash owed on change of ownership.

It is not a hard calculation to see the value is it?

MT has already done the cash flow analysis, which is ginormous.. (thank you)

[bamboo2] 20/10/2021 15:22

Re Brent. The consolidation zone continues to form, just below historical resistance, gathering strength. Price holding above the breakout zone approx $84

The possible turn for today I mentioned earlier in the week looks like it will confirm as a low or valley turn at approx $83.63

[mount teide] 20/10/2021 09:24

2020's - the Decade of high energy prices!

Previous energy crises were supply side shocks with geopolitical origins. Today, supply constraints around gas and oil are evident once more but, crucially, and as some here predicted, these constraints are happening at a time when energy markets are trying to continue absorbing the massive and still accelerating 20-year Asian energy demand shock, increasingly now exacerbated by the naive rush over the last decade by the green, woke West's 'transition' into expensive and comparatively poorly performing renewables.

Per capita energy consumption in China was more than 750% higher in 2020 than in 1973, yet today, despite importing more oil than the entire annual production of Saudi Arabia, Norway and the UK combined, and recently usurping Japan as the world's largest LNG importer, Chinese energy consumption per capita is still only one eighth of the USA.

There has been no historical equivalent to the recent situation of the Chinese government demanding that energy companies procure supply of all energy sources at any cost.

The scale of the energy demand problem is given perspective by the fact that the energy demand per capita of the 3.4 billion emerging nation populations of SE Asia and India (excluding China - population 1.4 billion) is accelerating faster than China, while still having an average per capita energy consumption around one fourteenth of the West.

Data Source: mostly from Lloyd's list and BP's Annual World Energy Review

[mount teide] 19/10/2021 09:38

IMO 2020 spike aside, ship bunker prices hit further new 7 year highs this week, not seen since the days of $100 Brent in 2014.

At today's $85/bbl Brent price, Jadestone's Stag production should be realising circa $92/bbl inclusive of the most recent premium to Brent.

Marine Fuel Oil and Major Oil Benchmark pricing - Change compared to pricing on 9th December 2020 in brackets - (all prices rounded to nearest whole number)

$121 / (+42) - Marine Gas Oil - APAC Average
$101 / (+37) - VLSFO - APAC Average
$92 / (+34) - Jadestone / STAG - $10.15/bbl latest premium to Brent)
$86 / (+34) - Jadestone / Montara - $1.5/bbl latest premium to Brent
$86 / (+34) - Jadestone / Peninsula Malaysia - est $1.5/bbl premium to Brent
$86 / (+34) - Maari - est $1.5/bbl premium to Brent
$85 / (+36) - Brent
$85 / (+41) - High Sulphur Fuel Oil - APAC Average
$83 / (+35) - WTI

At today's Brent price, 2021 guidance OPEX and latest IMO 2020 premiums to Brent, Jadestone should be realising circa $66/bbl operating cash flow for its Stag and Montara production, and circa $68/bbl for its Peninsula Malaysian production.

With estimated current total production of circa 19,500 bopd(13,000 bopd /Montara and Stag - 6,500 boepd / PM), Jadestone should be realising circa $475 million/yr of gross operating cash flow per year, with the potential to increase to $535 million/yr by December on completion of the Skua and Swift work-overs, and up to $620 million/year on completion of the Maari acquisition.

Current market cap: $568m.


Estimated Annual Revenue at $85/Brent:
$620m - Current
$700m - Plus Skua and Swift Work-overs (Early November)
$810m - On Maari Completion (plus a circa $65m-75m net consideration cheque)

AIMHO/DYOR

[mount teide] 18/10/2021 20:57

B2 - thanks for the info.

Sand Grove are a special situation hedge fund located in the City - since inception in 2015, they've achieved an annualised return of 11.8%.

Significantly less than our two founding hedge fund shareholders who have previously stated their ideal Jadestone Energy exit strategy would be the sale of the company as a mid cap - the 38% annualised return their investment here has achieved since the 2018 London IPO suggests the strategy is progressing very well.