Jadestone Energy Share Discussion Threads

[mount teide] 04/1/2022 12:17

With Brent back up to $79.5/bbl, production doubling in H2/2021 to circa 20,500 bopd, and OPEX dropping $6/bbl(21%) to circa $22.50/bbl, Jadestone Energy's high denomination bank note printing press business has entered 2022 firing all on cylinders!

Jadestone's Stag production should currently be realising circa $92/bbl inclusive of the most recent heavy sweet crude regional premiums to Brent, while the light sweet Montara and PM grades around $84/bbl inclusive of the current $4.50 Tapis premium.

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)

$117 / (+38) - Marine Gas Oil - APAC Average
$102 / (+38) - VLSFO - APAC Average
$92 / (+35) - Jadestone / STAG
$84 / (+31) - Jadestone / Montara
$84 / (+31) - Jadestone / Peninsula Malaysia
$84 / (+31) - Maari
$79 / (+31) - Brent
$77 / (+33) - High Sulphur Fuel Oil - APAC Average
$76 / (+28) - WTI

Asian demand for marine fuel oil is at an all-time record level, and is driving very strong price premiums to Brent for both light and heavy sweet crudes.

At today's Brent price, management guided current OPEX of $22.50/bbl and the latest IMO 2020 heavy sweet and Tapis premiums to Brent, Jadestone should be realising a staggering circa $64/bbl of operating cash flow for its combined circa 20,500 bopd Stag, Montara and PM production.

Suggesting the business should currently be realising circa $479 million/yr of operating cash flow(pre Capex), with the potential to increase to $554 million/yr by Q1/2022 on completion of the Maari acquisition.

Current market cap: $557m.

Estimated Annual Revenue at $79.5/Brent:
$643m - Current
$745m - On Maari Completion (plus a circa $75-80m net consideration cheque)

Assuming Maari completes in Q1/2022, Jadestone Energy may well then have over $200m in cash, no debt, and generating $554m/yr of operating cash flow at $79.5 Brent.

AIMHO/DYOR

[mount teide] 04/1/2022 12:01

L2: moved to 2 v 1 / 89p v 90p (rest between 91p and 95p)

[thommie] 04/1/2022 11:48

Fardel, I hope so for you. Although as I often said I would love to go into the rise with a much bigger Jse position myself, but wasnt able to do so, as I had to stick to my risk spread approach. Ofc, selling some positions some time ago and accumulating Jse would have been a wise move in hindsight. But easy to say now :) I first bought shares end 2019 atm the all time high, they are near breakeven now :)

[mount teide] 04/1/2022 11:40

L2: 1 v 2 / 88p v 90p (rest between 91p and 94p)

[croasdalelfc] 04/1/2022 09:58

https://twitter.com/croasdale01/status/1478299874936430595?s=21

[multibagger] 04/1/2022 09:46

Good morning all !

Poised for the next tick up :)

[mount teide] 04/1/2022 09:30

MM's offering 85.5p to sell with a 84p v 86p headline spread!

Moved to 2 v 2 / 85p v 87p

[arphillips] 04/1/2022 09:12

My limit order placed with II has just gone through. Took about 20 minutes to transact.

[mount teide] 04/1/2022 09:10

Can sell in quantities of up to 100,000 instantaneously with II.

L2: opened 2 v 3, now 4 v 2 / 83p v 85p (rest between 86p and 93p)

[fardels bear] 04/1/2022 09:04

HL try putting a limit order or a fill and kill.

[lord gnome] 04/1/2022 08:45

No online quote available from ii for that quantity, either. You may need to buy in smaller lots (what a pain) or place an order

[the_gold_mine] 04/1/2022 08:33

Been trying to increase my holding here by £5,300 this morning, my broker won't let me purchase? Hargreaves Lansdown.

[croasdalelfc] 03/1/2022 14:48

H1 revenue $138mQ4 Production 18000 boepd.Brent average $78 plus average $5 premium = $8318k * 92days * 83 = $138m

[mount teide] 03/1/2022 14:39

The blueprint/holy grail for generating exceptional O&G business growth would probably be a second phase specialist with a long track record of previous success, in the recovery stage of the oil market cycle in a maturing O&G basin, servicing a very high population emerging Nation region where energy demand growth is rising exponentially and routinely generates price premiums to global benchmarks, and where oil majors, NOC's and large independents are starting to disinvest.

Throw in the steroids of the Climate Change lobby pushing Oil Majors and large independents into transitioning into renewables on a totally unprecedented scale together with, a dearth of buyers, never mind professionally well regarded and financially strong buyers that could be seriously considered by the sellers and regulators to safely run the assets, and you have the ingredients for a once in a lifetime investment opportunity.

This highly potent scenario is what is starting to be increasingly seen today....an O&G market where very high quality assets with excellent re-investment potential are now being picked up by recession leaned second phase buyers and, at what would be considered incredibly attractive prices in a $50 oil environment, never mind a $75 oil market.

The second phase sector of the O&G industry, particularly in the Asia Pacific region is in the early stages of a rising super equinoctial spring tide that will not only lift all boats and make serious money for even the poorest operators but, has the potential to generate extraordinary capital growth for the shareholders of the best operators; some of whom have already secured assets in deals priced at a level that would have been considered completely ridiculous at any time in the past 20 years.

I understand from friends employed at a senior level in two oil majors that there is a huge amount of private equity interest/money that's extremely keen to get some of the oil major/large independent disinvestment action but, because of technical/competency/safety factors their interest is mostly not being given serious consideration by the sellers.


AIMHO/DYOR

[croasdalelfc] 03/1/2022 14:28

Which Alt right book did you get for Xmas?

[mount teide] 02/1/2022 22:03

Need for investment is critical for oil, gas industry: World Petroleum Congress panelists - S&P Global Platts - Dec 2020

' More investment is needed in the upstream oil and gas sector not only to sustain production as global demand grows, but to drive the transition to cleaner energies, conference panelists said.

Oil and gas investment declined in 2020 and 2021 because of the pandemic, which is a "recipe for more volatility," Joseph McMonigle, secretary-general for the International Energy Forum, said on a panel at the World Petroleum Congress.

"Capex cuts by international oil companies and national oil companies in 2020 was about 35%," he said. "We're now showing another 23% reduction in capex levels" from pre-pandemic levels this year.

In 2019, E&P companies spent $525 billion, an amount which plummeted to $341 billion in 2021, he added.

"We have to get back to $525 billion over several years until 2030 to restore market balance," McMonigle said. "I'm afraid what we're seeing with the energy crisis is on our doorstep."

According to a report released by the IEF and IHS Markit, the "next two years will be critical for sanctioning and allocating capital toward new projects to ensure adequate oil and gas supply comes online within the next 5-6 years."

Prices at the pump have affected US consumers, and winter heating oil prices have jumped to the point where the Biden administration said it will release about 50 million barrels of crude from the Strategic Petroleum Reserve early in 2022, aiming to offer price relief.

Investment in energy supply represents the "greatest challenge the oil and gas industry faces today," Hess Corp. CEO John Hess told the panel. "We're way short of where we need to be."

The CEO noted, as did many other speakers at the conference, that even though research and development is soaring in alternative energies and technologies aimed at diversifying and at some point largely eliminating fossil fuels, oil and gas will remain at the center of energy use for the next few decades.

"At the end of the day, to have an orderly transition, oil and gas are part of the solution, not the problem," he said. "Our carbon footprint is 10% less now than 10 years ago. The real takeaway is that the energy transition will take a long time, cost a lot of money, and need technologies that don't exist. We need climate literacy, energy literacy and economic literacy." '

[mount teide] 02/1/2022 21:58

Oil And Gas Discoveries Plunge To Lowest Level In 75 Years - Zero hedge

'Much to the celebration of environmental "activists" and the chagrin of anyone applying common sense to the argument of why gas prices are so high at the moment, the world of oil and gas discoveries has run bone dry.

Oil and gas firms are currently having their worst year for new fossil fuel discoveries since 1946, a new report from Quartz revealed this week.

The industry is set to discover 4.7 billion barrels of oil this year, marking the worst performance in 75 years. The ratio of "proven reserves to production" is now at its lowest level since 2011, according to data from research firm Rystad Energy.

Large discoveries have typically account for most of the world's new reserves, the report notes. 40% of all petroleum discovered has come from just 900 oil and gas fields, Quartz writes, stressing the importance of these new discoveries for the industry. Once discovered, existing wells then begin to deplete. In fact, global oil production declines by about 7% per annum without additional investment in existing fields.



But not only have there been no major new discoveries, cash for reinvesting in new supply is reportedly "scarce". Cap Ex at oil and gas firms has been slashed due to the shockwave Covid send through the industry.

The API told Quartz: “The industry was in a survival mode throughout 2020, reducing its capital expenditures to match with low cash flows through the 2020 covid-19 recession.”

Peter McNally from research firm Third Bridge, commented: “The companies are being run to generate free cash more than growth.”

The continued supply crunch, coupled with "re-opening" demand rising, could continue to push up prices into next year, the report says. "The next two years could require nearly all of the world’s spare oil production capacity," Quartz concluded. '

[mount teide] 01/1/2022 10:25

Australian oil exports rose 19% year on year on in October on the back of very high demand by Asian buyers for heavy sweet crude, which were expected to continue to contribute heavily to its refinery feedstock exports in 2022, according to Asian crude traders and refinery sources.

Singapore was the destination for almost half of the total. September and October were two of only three months on record that Australian exports to Singapore have been above 4 million barrels/month; the third was in October 2011. Monthly volumes since then have only breached 3 million barrels/month on nine occasions.

Most of the shipments to Singapore were heavy sweet crude grades. Australian producers were expected to continue registering strong sales to the Asian oil trading hub due to strong demand for low sulphur bunker fuel in the region, crude traders said.

Australian heavy sweet crudes including Vincent, Pyrenees and Van Gogh, (and Stag) are seen as ideal for blending into low sulphur marine fuels due to their rich fuel oil yield, very low sulphur content and unique specifications such as low pour point and high flash point, industry and Asian refinery sources said.

Latest reported premiums to Brent for Australian heavy sweet crudes were in the $12-15 /bbl range. Premiums have also surged for Australian and Malaysian sweet crudes which are now in the $3-6/bbl range.

Data Source: Lloyd's List & Shell

[tim000] 01/1/2022 08:55

Joe (“Let’s Go Brandon”) Biden is not only a certified crook (extorting money from Russian and Chinese billionaires via his son Hunter) but also is patently senile. He signs whatever executive order is put in front of him by his minders, without any decision making by himself. In no sense is he a functioning President. So who actually is controlling the administration is an interesting question. I’ve heard it said that it is the senior people from the Obama administration, who are doing everything they wanted to do but were unable to, during his tenure. Hence the breakdown in law and order across the nation (record homicide rates in every city with a large black population for example), and open borders, resulting in a massive inflow of millions of Haitians etc. The stated aim of the Democrats is to make the country minority white asap, and hence a one party state. At the same time importing millions of unskilled, violent people who are a drain on the resources and cohesion of the nation. Just look at what is happening to San Francisco for example. But these are the policies supported by people like Soros, who fund the Democrats.

[fardels bear] 31/12/2021 21:57

Leo Tolstoy, eat your heart out.

[mount teide] 31/12/2021 18:17

The U.S. oil industry is facing a sharp increase in production costs, according to the Dallas Fed energy survey’s latest report.

The survey found that while activity in the oil&gas sector continued to recover during the fourth quarter and production rose faster, costs also rose, for the third quarter in a row, and they rose sharply. The fourth-quarter reading is a record high.

Chronic Underinvestment Could Push Oil Prices Higher In 2022 - Oilprice.com

'Long-suffering Americans grappling with runaway inflation are finally enjoying some reprieve. After a relentless climb, prices at the pump have been heading south, with national average gas prices tumbling to a 10-week low of $3.28 a gallon, according to AAA.

Fuel prices started leveling out after President Joe Biden announced on November 23 the biggest-ever release from the Strategic Petroleum Reserve, though experts have dismissed it as a mere band-aid. Whereas many people have placed the blame for high gas prices on the Biden administration, the real culprit has more to do with Wall Street than Pennsylvania Avenue.

The genesis of today's high gas prices can be traced back to financial pressure on oil companies from a decade of devastating losses and poor shareholder returns that have forced them to dramatically alter their business models. For years, Wall Street has pressured oil and gas companies to cut capex, and shift their cash to financial goals like boosting dividends and buybacks, paying down debt, as well as decarbonization, after the fracking revolution left the U.S. shale patch bleeding cash and deeply indebted.

Consequently, investment in new wells has crashed 60% since its peak in 2014, causing U.S. crude oil production to plummet by more than 3 million barrels a day, or nearly 25%, just as the Covid virus hit, and then failed to recover with the economy.

With Wall Street breathing down its neck, U.S. shale is literally running on empty: according to the U.S. Energy Information Administration's latest Drilling Productivity Report, the United States had 5,957 drilled but uncompleted wells (DUCs) in July 2021, the lowest for any month since November 2017 from nearly 8,900 at its 2019 peak. At this rate, shale producers will have to sharply ramp up the drilling of new wells just to maintain the current production clip.

The EIA says the sharp decline in DUCs in most major U.S. onshore oil-producing regions reflects more well completions and, at the same time, less new well drilling activity--proof that shale producers have been sticking to their pledge to drill less. Whereas the higher completion rate of more wells has been increasing oil production, especially in the Permian region, the completions have sharply lowered DUC inventories, which could sharply limit oil production growth in the United States in the coming months.

The two main stages in bringing a horizontally drilled, hydraulically fractured well online are drilling and completion. The drilling phase involves dispatching a drilling rig and crew, who then drill one or more wells on a pad site. The next phase, well completion, is typically performed by a separate crew and involves casing, cementing, perforating, and hydraulically fracturing the well for production. In general, the time between the drilling and completion stages is several months, leading to a significant inventory of DUCs that producers can maintain as working inventory to manage oil production.

According to S&P Capital IQ data, 27 major oil makers tripled capital spending between 2004 and 2014 to $294 billion and then cut it to $111 billion by last year. Once old wells were capped, new ones haven't been available to fill the production gap quickly. The question is how long the restraint by publicly traded oil companies will last. Capital spending is expected to clock in around $135 billion next year, good for a 21.6% Y/Y jump but still less than half 2014's level.

Other than severely limiting new drilling activity, U.S. shale has also been keeping its pledge to return more cash to shareholders in the form of dividends and share buybacks.

A recent report by progressive advocacy group Accountable.us says that 16 of 24 large U.S. energy companies have raised their dividends this year, while 11 made special dividend payouts totaling more than $36.5 billion. That's a pretty impressive payout ratio considering that the sector has so far reported $174 billion in profits this year. Indeed, "variable dividends" that allow companies to hike dividends when times are good and to lower them when the going gets tough has become a favorite tool for oil and gas companies.

Meanwhile, oil and gas companies have spent a more modest $8 billion in share buybacks, though ExxonMobil and Chevron have pledged to buy back as much as $20 billion of stock in the next two years. The energy sector has made robust share gains in the current year, which could explain the reluctance to spend too much on share repurchases.

The most important reason, however, why oil prices are likely to remain high in the coming year is OPEC discipline:

"You have a cartel that is traditionally as disciplined as Charlie Sheen's drinking, and for the last year, they've been as disciplined as Olympic gymnasts," Tom Kloza, president of Oil Price Information Service, has hilariously told CNBC.

According to the IEA, crude consumption is expected to improve to 99.53 million barrels per day (bpd), up from 96.2 million bpd this year, leaving it just a hair short of 2019's daily consumption of 99.55 million barrels. That will, of course, depend on the world bringing the new Omicron variant of Covid-19 quickly under control.

Higher oil demand will put pressure on both OPEC and the U.S. shale industry to meet demand. But let's not forget that numerous OPEC nations have already been struggling to add to output, while the U.S. shale industry has to deal with investor demands to hold the line on spending. So far, the U.S. shale industry has not responded to higher oil prices as they had done previously, with overall U.S. production averaged 11.2 million bpd in 2021 compared with a record of nearly 13 million bpd in late 2019. U.S. production is expected to only increase by 700,000 b/d in 2022 to 11.9 b/d, according to Rystad Energy's senior vice-president of analysis, Claudio Galimberti.

Canada, Norway, Guyana, and Brazil could try to bridge the supply-demand gap, but several Wall Street punters are betting it will not be enough and oil prices will remain elevated.

In fact, Barclays has predicted that the WTI contract price will increase from the current rate of $73 to an average price of $77 in 2022, noting that the Biden administration's sale of oil from the Strategic Petroleum Reserve isn't a sustainable way to bring down prices. Barclays says prices could go even higher than that forecast if COVID-19 outbreaks are minimized and thus allow demand to grow more than expected.

Goldman Sachs shares that bullish outlook and has predicted a Brent price of $85 per barrel by 2023 compared to the current $76.30.'

[mount teide] 31/12/2021 17:57

mb - Good to hear you've joined us - the timing at the current valuation following the recent doubling of production, a 20% fall in OPEX/bbl and, a rising Brent and regional oil price premium looks prescient.

[multibagger] 31/12/2021 09:18

Good morning MT and all :)

The economics is compelling...

I have put in an order for about £67k worth of JSE shares...

Good luck all !

Edit: Picked up 78778@86p :)