Jadestone Energy Share Discussion Threads

[mount teide] 04/11/2021 15:49

L2 strengthened to 2 v 2 / 82p v 83p (rest between 84p and 89p)

[mount teide] 04/11/2021 14:50

China’s oil inventory hits four-year low ahead of OPEC meeting - World Oil

'China may be forced to start buying crude at elevated prices to replenish its thinning crude stockpiles, adding more pressure to a nation that’s facing energy shortages and seeking to avert a diesel crisis.

Commercial and strategic oil inventories have shrunk to the lowest level since November 2018 in terms of filled capacity, according to data analytics company Kayrros, which tracks supplies at about 190 terminals. China attempted to cool prices this year by releasing crude reserves, but that had little impact, and only exacerbated the steady decline in overall stockpiles.

“The level looks as low as it can go and refiners may start restocking from here,” said Yuntao Liu, an analyst with Energy Aspects Ltd. in London.

Oil has rallied this year as the market tightened following a rebound from the Covid-19 pandemic, driving crude to multiyear highs and making restocking of inventories less attractive. There’s been little respite for buyers, with a global energy crunch adding extra demand and OPEC+ taking a cautious approach to easing supply curbs. The cartel meets to discuss production policy on Thursday.

For China, shrinking oil stockpiles are another headache. It’s already juggling shortages of coal and natural gas that’s led to power rationing and crimped economic output. Some fuel retailers have also been forced to limit diesel volumes to customers as the nation seeks to avoid another energy crisis.

In a related move, China announced the release of diesel and gasoline reserves to ease supply shortages as part of an annual rotation, the National Food and Strategic Reserves Administration said in a statement on Sunday.

China doesn’t publicly disclose the size of its vast crude inventories, but a number of companies use tools such as satellites to estimate supplies. Kayrros forecast commercial and strategic stocks have slid about 10% since mid-March to around 919 million barrels. Ursa Space Systems and Kpler, which use slightly different methodologies, see stockpiles at the lowest since February 2020.

Refiners are likely to restock their inventories at a more measured rate given crude prices are now exorbitantly high, said Serena Huang, lead market analyst for Asia at Vortexa Ltd. Global benchmark Brent is near the highest level since 2018, while West Texas Intermediate has climbed to a 2014 high.

China’s state-owned oil companies have already increased crude purchases over the past two months to replenish commercial inventories, despite stronger oil prices, said Samuel Kong, a senior analyst at industry consultant FGE.

“Several months of drawdowns have largely depleted their inventories, prompting them to increase imports to maintain a certain level of crude stocks,” he said. “We could see purchases for stockpiling picking up in the coming months when crude prices are expected to ease.” '

[mount teide] 04/11/2021 12:44

Since it will take around a week to .....prep the jack-up rig for the move, tow it at around 3.5knots to Buffalo and then moor it for spudding......this suggests that JSE should be releasing the rig around mid month (next weekend).

[squareloss] 04/11/2021 12:34

Thanks all, much appreciated

[fozzie] 04/11/2021 10:44

We got to 93p a few weeks ago Croas, I can't understand why this share meanders around like it does. This is a compelling growth story but we regularly seem to have these 10+ pull backs.

[on target] 04/11/2021 10:43

ADV buffalo-10 apparently now expected to spud late November (was early, then mid..) - suggests JSE are hanging onto it longer than expected for some reason?

[croasdalelfc] 04/11/2021 10:41

Once the rig stood down - should be an operational update shortly - days not weeks

[squareloss] 04/11/2021 10:21

Does anyone have a view when we should hear about the work overs? Thanks

[croasdalelfc] 04/11/2021 10:12

22% from here to 100p - Mcap £465m46% to 120p Mcap £558mExpected operating cash flow in 2022 ~$475m at $85 BrentEven if you allocate $175m to capex in 22 - the rest of the cash will need a home at some point - > acquisitions, dividends, and growing cash pile are threeCould do with another capital markets day which signals their intent for the next two years for all developments with capital allocations and timelines

[fardels bear] 04/11/2021 08:46

Well it's not bounced off 83 this time has it?

[mount teide] 03/11/2021 00:08

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

Selected O&G Sector Company Analysis

0.03% - Jadestone Energy / (No change)

0.34% - Advanced Energy / (Down from 0.58%)

0.43% - Savannah Energy / (No Change)

0.66% - PetroTal / (down from 0.68%)

1.81% - Shell / (down from 1.86%)

2.67% - Pantheon Resources / (up from 1.85%)

3.76% - BP / (down from 3.83%)

3.00% - Enquest / (down from 3.99%)

6.18% - Cairn / (up from 5.62%)

8.37% - Touchstone Exp / (down from 8.39%)

[mount teide] 02/11/2021 22:14

Montara Acquisition Document - Contingent Amounts

To date JSE had not triggered any payment under the arrangement that has up to $160m of potential value to the seller - the only remaining trigger event with the potential to generate a payment during this decade is:

A $20 million consideration for:
'Total quantity of hydrocarbons produced from the Montara infill well during the first 12 month period following first commercial production is equal to or greater than 1.5 MMbbl(4,100 bopd).'

Although the H6 infill well initially produced circa 10,000 bopd of flush production, the management elected to stabilise production at 3,100 bopd ..... presumably to maximise field recovery and avoid the prospect of triggering a payment event.

At $60 Brent a $20 million payment would be equivalent to the operating cash flow generated by 1,370 bopd for 12 months. And at $85 Brent it would be 842 bopd.


With respect to future development of Montara and its Satellite Fields - its worth revisiting the original plan in the acquisition document

Future development

'There is significant upside associated with the Montara Assets, with ERCE’s 3P reserves case including an additional 10.2 MMbbls (gross and net) and an NPV10 uplift of US$313.3 million versus the 2P reserves case. Furthermore, Jadestone has identified several different areas in which it believes it can potentially realise value in the future. Such areas are not included in ERCE’s reserves case and include:

* Further infill drilling, not included in ERCE’s reserves case, have been identified by Jadestone management in the Montara and Skua fields. This includes one further platform well on the Montara field which would be a sidetrack of H4, capturing remaining volume along the northern bounding fault, and two further subsea wells on Skua capturing volumes further north along the crest. Each of these wells would have an initial rate of 3 mbbl/d and targeting a combined rate of 5.3 mbbl/d;

* Tie-back additional existing in-field and near-field discoveries as facilities become available, currently the well head facilities are either fully utilised or allocated to existing and near-term production;

* Spare capacity in the FPSO means discoveries can be monetised quickly;

* The Company has identified further prospects in the blocks and intends to shoot 3D seismic surveys over the blocks(The survey was carried out in Q1/2021). This is expected to help to further define the existing prospects and identify further prospects across the blocks which the Company may target in the future;

* In the blocks neighbouring the Montara Assets there are multiple oil and gas discoveries and previously suspended fields. Many of these discoveries are currently stranded as they are not of a size that can economically justify a standalone development. Currently the Montara Assets infrastructure is the only infrastructure in the area through which these discoveries could potentially be produced. The Company may in the future explore opportunities to monetise these assets which may be through acquisition, farm-in or third party tariff arrangements( The seismic survey covered many of the neighbouring blocks)'

Montara has a circa 500 billion cft gas cap - when the oil recovery has reached the end of its commercial life, the huge gas cap could be commercialised through a tie-in to Shell's nearby Crux field project ..... Shell are actively looking for near field (within 30km of Crux) nat gas discoveries that could be tied-in, to maximise the potential commercial life of Crux.


Shell Website - Crux Project Schedule
As of April 2021, the project has completed Front End Engineering Design (FEED) and is preparing to evaluate proposals for the Detailed Engineering and Execution phases, followed by the Final Investment Decision (FID)


AIMHO/DYOR

[fardels bear] 02/11/2021 17:42

It's a game, innit.

[bamboo2] 02/11/2021 16:41

fwiw, I was trying to buy at around 4.25pm, and could not get an online quote.

[fardels bear] 02/11/2021 11:56

He doth protest too much, methinks.

[mount teide] 02/11/2021 10:49

$100/bbl operating cash flow! Pass the smelling salts !

Jadestone could not have timed better the doubling of its production to 20,000 bopd at sub $20/bbl OPEX - with the Maari deal potentially taking it to 23-25,000 bopd (plus a circa $70m cheque) , the stage looks set for a tremendous 2022!


Bank Of America Sees $120 Oil By June 2022 - Oilprice.com

'The Brent crude benchmark will hit $120 per barrel by the end of June 2022, Bank of America said in a research note this week, cited by Bloomberg.

The catalyst for BofA’s increased price forecast is the current global energy crisis that has seen prices for crude oil, coal, natural gas, and LNG skyrocket as the market tightens.

Just a month ago, BofA had forecast that oil could reach $100 over the next six months—and that was if we had a winter that was colder than usual. At the time, this was expected to be the most important driver of the global energy markets.

BofA feels even more so now that the global oil demand recovery will continue to outpace supply over the next year and a half, resulting in dwindling inventories that set the stage for higher oil prices.

In September, BofA pointed to the grim situation in the European energy markets, which have seen depleting inventories that have triggered vigorous price volatility as a sign of what’s to come.

Now, BofA sees rebounding diesel, jet fuel, and gasoline—along with refining capacity restraints—accelerating this price rally into next year.

OPEC+ production will be reevaluated on Thursday this week, although it is widely expected that the group will stick to its plan to add back in another 400,000 barrels per day. The issue with this plan for added production is that OPEC+ has failed to add back the barrels under its plan so far.

Other traders and banks feel oil is heading for $100, with Goldman Sachs estimating that oil demand is nearing 100 million bpd—a pre-Covid figure—and demand is only set to strengthen as the winter heating season approaches and on calls for increasing jet fuel demand early next year.'

[mount teide] 02/11/2021 10:43

IMO 2020 Premiums Strengthening:

Asia crude oil: Key market indicators for Nov 1-5 - S&P Global Platts

'Market participants will also be closely watching trade activities for Australian heavy sweet crudes such as Vincent and Van Gogh, for which sentiment has slightly strengthened since the start of the month amid stronger LSFO cracks.'

[mount teide] 02/11/2021 09:23

L2: as suggested likely, the Bid has been taken down to the 200 DMA - the ask side has only two MM's below 87p.

Currently: 3 v 1 / 83p v 85p (then 1 x 86p, 2 x 87p, 3 x 88p, 2 x 89p and 1 x 90p)

[mount teide] 30/10/2021 20:12

Update on Global Oil Demand - Goehring & Rozencwajg / Nat Resource Investors

'Last summer, we predicted global oil demand would quickly regain its pre-COVID peak as travel restrictions were lifted. Clearly, in retrospect, we were too optimistic. As various second and third waves propagated through the fall, winter and spring, many countries chose to reimpose lockdowns and quarantines, leading to ongoing demand disruptions.

On the other hand, underlying demand trends have remained extremely strong even in the face of such measures. In many cases, oil demand never fell as sharply as expected and most often surged back faster than anyone believed possible.

During the worst of last year’s oil rout, analysts questioned whether demand would ever regain its old peak. The IEA laid out a “Sustainable Development Scenario” as recently as October 2020 that concluded oil demand may have peaked in 2019. While we have not yet surpassed the old highs, we are well on our way.

In both the US and China, where most restrictions have been lifted, oil demand has already surpassed all-time highs. Neither country is yet back to normal in terms of air travel and so demand will likely continue to surge from here.

In their most recent Oil Market Report, the IEA now predicts 2021 global demand will average 96.4 mm b/d. While this is a dramatic improvement over last year’s 91.1 m b/d, it is still a far cry from 2019’s 99.7 mm b/d. Furthermore, the 2021 demand figure was revised lower by 600,000 b/d between the IEA’s December 2020 and July 2021 reports. While on the surface this is a bearish development, we believe the headline numbers are misleading.

First, the “balancing item” averaged a robust 600,000 b/d during the first half, implying that COVID related lockdowns never impacted demand as much as the IEA estimated in their downward revisions. As our readers know, the IEA introduces a balancing item when it cannot get supply, demand, and inventories to properly balance.

We have long argued the balancing item represents underestimated demand and historically a large balancing item has been followed by upward demand revisions. We believe this time will be no different. Adding a 600,000 b/d balancing item takes 2021 demand to 97.0 mm b/d, flat with the IEA’s projections from December 2020.

Next, the bulk of the disappointment during the first half came from India as COVID-19 spread at an alarming rate. Indian demand was revised down in the first half by over 325,000 b/d or 6%. Removing India and adding the balancing item to the IEA’s demand figures suggests the rest of the world outperformed the IEA’s expectations for the first half while projections for the second half are now nearly 600,000 b/d higher than they were in December 2020. Given that Indian case numbers are thankfully falling dramatically, we expect to see a strong rebound there as well.

In their most recent report, the IEA admits that demand surged by over 3m b/d in June and believes “robust global economic growth, rising vaccination rates and easing social distancing measures will combine to underpin stronger global oil demand for the remainder of the year.” While we agree with the sentiment, we believe this reality is not yet reflected in their demand figures.

The IEA currently projects 2022 demand will average 99.5 mm b/d, still below 2019 levels. Instead, we believe ever more countries will surpass their previous demand records and that 2022 demand will need to be revised higher by nearly 1 mm b/d.'

[mount teide] 30/10/2021 09:44

Exxon followed Chevron's lead last night reporting a huge improvement in YOY Q3 earnings driven by the post pandemic V shaped recovery in global energy demand/ oil and gas price rally it triggered.

Exxon To Resume Share Buybacks After Surge In Q3 Earnings - Oilprice.com

'ExxonMobil (NYSE: XOM) will start next year share repurchases of up to $10 billion after its quarterly profit surged to multi-year highs on the back of improved global energy demand and the oil and gas price rally.

The U.S. supermajor reported on Friday earnings of $6.8 billion, or $1.57 per share assuming dilution, for the third quarter of 2021, compared to a loss of $680 million, or a $0.15 per-share loss, for the same quarter of 2020.

Higher oil and gas prices, improved refining margins, and strong demand in chemicals helped Exxon book earnings in all three core businesses—upstream, downstream, and chemicals.

Excluding divestment and government mandates, Exxon’s oil-equivalent production rose by 4 percent in the third quarter, compared to the prior-year quarter, including growth in the Permian basin and Guyana.

In the upstream, average realizations for crude oil increased by 7 percent from the second quarter. Natural gas realizations jumped by 28 percent compared to Q2 2021.

Permian production in Q3 averaged around 500,000 oil-equivalent barrels per day, up by 30 percent from the third quarter of 2020. Exxon’s focus remains on continuing to grow free cash flow by lowering overall development costs and increasing recovery through efficiency gains and technology applications.

The supermajor has a strong cash flow outlook going forward, which will allow it to resume share repurchases after years of pausing them.

“We anticipate the company's strong cash flow outlook will enable us to further increase shareholder distributions by up to $10 billion through a share repurchase program over 12-24 months, beginning in 2022,” Exxon’s chairman and CEO Darren Woods said in a statement.

“Free cash flow more than covered the dividend and $4 billion of additional debt reduction. With the progress made in restoring the strength of our balance sheet, this week we announced a dividend increase maintaining 39 consecutive years of annual dividend growth,” Woods noted.

Also on Friday, the other U.S. oil and gas supermajor, Chevron Corporation (NYSE: CVX), reported its biggest quarterly profit since 2013 for the third quarter and its highest free cash flow on record, as oil and gas prices rallied and demand rebounded.'

[mount teide] 29/10/2021 21:49

The O&G sector's post pandemic V shaped recovery in Free Cash Flow !

Chevron's Q3 earnings up more than 30 fold on 2020.

Oil, Gas Rally Lifts Chevron’s Quarterly Profit To 8-Year-High - OilPrice.com

'Chevron Corporation (NYSE: CVX) reported on Friday its biggest quarterly profit since 2013 for the third quarter and its highest free cash flow on record, as oil and gas prices rallied and demand rebounded.

Chevron booked earnings of $6.1 billion for the third quarter of 2021, compared with a loss of $207 million for the same quarter last year.

Adjusted earnings jumped to $5.7 billion, or $2.96 per diluted share, for the third quarter of 2021, up from adjusted earnings of $340 million, or $0.18 per share, for Q3 2020.

The adjusted earnings per share of $2.96 this past quarter easily beat market expectations of $2.20 adjusted EPS.

Sales and other operating revenues nearly doubled to $43 billion, compared to $24 billion in the year-ago period, while Chevron’s worldwide net oil-equivalent production rose to 3.03 million barrels per day in the third quarter of 2021, up by 7 percent from a year ago.

In its U.S. upstream operations, Chevron earned $1.96 billion in Q3 2021, compared with $116 million a year earlier, primarily due to higher crude oil prices and sales volumes. Chevron’s average sales price per barrel of crude oil and natural gas liquids was $58 in third quarter 2021, up from $31 a year earlier. The average sales price of natural gas was $3.25 per thousand cubic feet in third quarter 2021, up from $0.89 in last year’s third quarter.

“Third quarter earnings were the highest since first quarter 2013 largely due to improved market conditions, strong operational performance and a lower cost structure,” Chevron’s chairman and chief executive officer Mike Wirth said in a statement.

“Our free cash flow during the quarter was the best ever reported by the company,” Wirth added. “We paid dividends of $2.6 billion, reduced debt by $5.6 billion, and repurchased $625 million of shares during the quarter.”

Following the results release, Chevron’s shares were up 1.75 percent in pre-market trade.'

[e43] 29/10/2021 20:14

The supermajors falling share of the global oil market and lack of investment into it,will inevitably lead the West and especially Europe over exposed to Russian and Middle East state controlled oil and gas.
The ESG mania looks likely to come with a v high price for the West both economically and politically.

[mount teide] 29/10/2021 17:58

Don't rely on the Oil Majors to smoothly deliver the World's transition from fossil fuels to renewables.

Despite collectively doubling their upstream capital spending during the last decade, they were still unable to increase production or get remotely close to replacing it with new reserves. Consequently, their cost to find and develop a new barrel of reserve nearly doubled to $26.40.


The Incredible Shrinking Oil Majors - Goehring & Rozencwajg / Nat Resource Investors

'Oil production growth outside of OPEC+ and the US shales has been extremely difficult to achieve — even before the recent ESG pressures. Over the last 20 years, oil supermajors Exxon, Chevron, Royal Dutch Shell and Total have found it challenging to maintain their reserve base and production level.

Even though upstream capital spending has surged, production and reserves have persistently declined. As ESG pressures constrain upstream spending, both oil reserves and production at these four companies will likely enter severe declines. Because of the tremendous corporate dislocation created by the 2010 Macondo oil spill, we have left BP out of this study.

Since 2000, every oil supermajor has targeted 5% production growth. Not only were these growth projections far too ambitious, two of the four supermajors are now actually smaller than they were 20 years ago. Exxon’s upstream production is down 12% while Royal Dutch Shell is down 9%. Only Total and Chevron have distinguished themselves by showing any annual production growth at all — 1.7% and 0.6% CAGR respectively since 2020.

Proved oil and gas reserves paint the same picture. Exxon’s reserves are 27% lower while Royal Dutch Shell’s are 56% lower and Chevron’s are 3% lower. Only Total has grown at all over the last 20 years: its proved oil and gas reserves are 14% greater than in 2000.

Things look significantly worse if you focus only on crude oil. While Exxon’s crude oil production has declined by 8% over the last 20 years (in line with gas production), Royal Dutch Shell’s crude production has collapsed by 20% while Chevron’s has fallen by 7%. While Total is once again the only company to show any growth, it has been modest: oil production is up 0.8% CAGR over the last 20 years.

Proved oil reserves tell a similar story. Exxon’s proved oil reserves are down 26% while Royal Dutch Shell’s have collapsed by 57% and Chevron’s have fallen 29%. Even Total’s proved oil reserves have contracted by 16% since 2000.

Reserves have fallen faster than production, causing the reserve-to-production ratio (R/P) to decline. Exxon’s R/P for total proved reserves fell from 10.1x in 2000 to 8.4x by 2020 while Royal Dutch Shell’s ratio fell from 14.6x to 7.4x and Chevron’s fell from 11.9x to 9.9x. Even Total was unable to halt the decline of its R/P ratio. Despite reserves growing, production grew more causing their total proved reserve R/P ratio to fall from 13.8x in 2000 to 11.1x by 2020.

Once again, focusing only on oil is even worse. While all four supermajors saw their total proved R/P ratios fall by 26% on average, their oil-only proved R/P ratios fell by 30%. Of the four companies, only Exxon’s proved oil R/P ratio remained above 10 in 2020.

While these upstream metrics alone point to a challenging future for the supermajors, when you factor in the massive capital spending that took place over the last decade, the true severity of the situation becomes clear.

Between 2000 and 2010, the four supermajors spent $615 bn on upstream capital expenditures. Over the same period, they produced 50.3 bn barrels of oil equivalent (boe) and found 41.1 bn boe of new reserves, resulting in a reserve replacement ratio of 86% (not very good) at an average finding and development cost of $14.30 per boe.

Between 2010 and 2020, upstream capital expenditures surged to $1.15 tr. Over the same time, the companies produced 50.6 bn boe and found 43.3 bn boe of new reserves — very much in line with the decade prior. Even though upstream capital spending nearly doubled, the companies were still unable to replace production with new reserves. In fact, reserve replacement was unchanged at 85% despite the increase in spending. As a result, the cost to find and develop a new barrel of reserve nearly doubled from $14.30 per boe to $26.40.

These numbers highlight the challenges facing the supermajors. With the addition of ESG pressures, the future for these companies has gone from challenged to incredibly bleak.'