Jadestone Energy Share Discussion Threads

[mount teide] 15/3/2019 22:22

Yes, their reputation as mariners is hard earned and well deserved - that they managed to navigate their way across the Atlantic in open longboats without access to modern navigation equipment centuries before Columbus discovered America is remarkable.

[fardels bear] 15/3/2019 21:48

Well done the Vikings then.

[mount teide] 15/3/2019 21:45

Good photo someuwin - you could count on the fingers of one hand the number of days a year you would see the sea state like that 150 miles out into the Northern North Sea!

When i managed a ro-ro freight ferry service between Finland and the UK, it often took between 3 and 7 days to do the North Sea crossing from south of Oslo, Norway to Dundee such were the atrocious sea and weather conditions commonly encountered between September and May - its a sea passage that in relatively calm weather should have been achievable in 24hrs.

[homebrewruss] 15/3/2019 21:27

Thanks MT,
RRE is well worth a look and is supposedly designed to prosper in a low oil price environment. I'd be interested to hear what you think about it.

I agree with all the points you have made on JSE. It is very well positioned and I really like what the management have done to date.
I have a decent sized position now but will look to add on any dips.

I'm also involved with HUR and know how much they have spent on their FPSO in the last year which makes the JSE Montara deal seem all the more remarkable.

[fardels bear] 15/3/2019 20:59

That is a quite remarkable deal if the floater is included at that price.

[someuwin] 15/3/2019 20:45

FPSO Montara Venture...

[mount teide] 15/3/2019 20:19

hbr - after watching the North Sea prove a graveyard for so many small cap O&G companies while invested in Ithaca Energy, i elected to end my investment relationship with North Sea oilers on Ithaca's take over.

A number of factors including extremely challenging year round sea and weather conditions saw Ithaca's production development plans delayed by years - a problem that seems to affect most, if not all North Sea operators. Most projects seem to come in late and over budget.

Having said that i did take a brief look at RRE this afternoon and it does at first glance look an interesting prospect worthy of selection for further research.

In the shipping, O&G and Industrial metal sectors, I look for companies with exceptional assets, a management with a long track record of success in the sector, and focus mainly on the average 6-9 year recovery stage of these long, highly cyclical markets. The last commodity market cycle bottomed after a near 8 year decline/recession stage in H1/2016.

The investment attraction of JSE for me is the quality of the management and long regional experience; re-investment potential of the assets; that they operate in a region where the competition for high quality mature assets is very thin, the number of very experienced second phase operators very low; demand for O&G is growing rapidly and attracts a premium price; operating costs are relatively low; and the mostly benign sea and weather conditions enable field production development and maintenance work to be carried out year round - combined this offers significant investment downside protection rarely found in the North Sea and especially West of Shetland.

That the FPSO 'Montara Venture' was included in the $82m net Montara purchase price is nothing short of astonishing considering the previous owners paid $50m for the hull and another $58m to complete the two year conversion in a Singaporean shipyard. Such is the extremely low cost compared to a similar chartered in vessel(Premier Oil are paying an annual charter fee of $210m a year for the FPSO BW Catcher on their Catcher field) ; if the management were able to increase production from Montara and its satellite fields above 20,000 bopd, they may well see Montara's operating expenses per barrel drop into single $figures.



AIMHO/DYOR

[homebrewruss] 15/3/2019 19:12

Ok Fardels, perhaps better on the RRE board but this should give you the flavour:

[fardels bear] 15/3/2019 18:49

Don't you think you ought at least to express your concern with Andrew Austin since you're slandering his reputation?I was in igas for some years and I rather thought that it was debt and the last oil recession that kiboshed them. I'm not in igas now but that's Nimby related and I am in RRE where I think you and I will do very well by AA..

[homebrewruss] 15/3/2019 18:24

Thanks Spangle, I appreciate this is the JSE board but they have a slightly similar approach in assets bought/developed. I own both having only bought RRE in September at around £5.

With the latest RRE acquisition they will have over 20,000 boepd with another approx 10,000 coming on stream in 20/21 and probably more acquisitions along the way.

Their current market cap is approx £100m but no doubt there will be a sharp rise post current suspension.

Arguably RRE is much cheaper so I'm interested in possible valuation methodologies.

On the other hand I think I prefer the JSE management and there is a slight red flag over the RRE ceo's history at iGas.

[spangle93] 15/3/2019 18:01

o/t Russ - ref your question, TBH it listed when, for personal reasons, I wasn't following small O&G companies, and I've never looked at it since. So I don't know enough about it to have any views at all, let alone either way.

[homebrewruss] 15/3/2019 15:32

Zengas, Spangle and MT a quick question if I may - I'm trying to improve my knowledge in this space.

Did any of you look at RRE at all?
I can't see any of you posting on that board so just wondering if you looked but then looked away and if so why?

Reserves? Decom costs? Management? - All 3?

Thanks

[zengas] 15/3/2019 15:10

Dry your eyes Paul.

[purple11] 15/3/2019 15:06

OOO

time to let out a little gassss....

[zengas] 15/3/2019 15:03

JSEs 2P reserves = 45 mmbo approx at Stag/Montara. From infill drilling, current reserves production is expected to be replaced.

This years development deals with U-Minh and Nam Du where approx 33 mmboe will move to 2P this year. That will take JSE closer to 78 mmboe 2P.

Tho Chu is expected to be developed once spare capacity becomes available which would mean further 2P reserves. Planned 640 mmcf/d 28" pipeline to meet south west gas demand including 2.9 gigawatt Mon power complex.

Within the blocks that contain the Nam Du, U-Minh and Tho Chu discovered fields are over 15 further prospects so again likely able to find additional future reserves to replace production.

We hope to be in the producing Ogan Komering (OK) PSC later in the year. This was previously giving Jadestone 60/40 gas/oil ratio and 1500 boepd net.
There are 3 existing discoveries on OK - Jantung Baru, North Meraska and Bandar Agung with a gross 16.5 mmboe approx - and has further upside exploration of 20 mmbo oil and 15 mmboe gas upside. None of these are in JSEs valuation but would add production and reserves.

They might farm down some of their Vietnam interest later in the year.

On SC56 Philippines JSE has a further 25 mmboe 2C.

In total and not counting any further acquisitions or entry into Ogan Komering, Jadestone has circa 45 mmbo 2P and 135 mmboe 2C ie some 180 mmboe 2P/2C.

Through cash generation to help fund production/reserves acquisitions imo 200p+ should be achievable with patience as the pace of acquisitions/development picks up.

[mount teide] 15/3/2019 14:46

Spangle - indeed - thought it a high quality document.

The highly transparent and detailed information within the section covering the contingent liabilities of the Montara acquisition is well worth shareholders being familiar with. The financial benefit JSE will have received by the time they trigger any potential payment looks mostly likely to be many multiples of these payments.

[spangle93] 15/3/2019 14:04

MT - the CPR in the AIM admission has great information about each field, as you'll be aware.

ERCE noted that the very good reservoir properties assist with reservoir projections, and that even though there's a complexity issue caused by tilted of the field after oil charge, even the watered oil zones deliver some oil production. They mapped production from Montara to 2030 based on just one new well (there is only one free slot from which to drill on the platform). I'm sure that as JSE gains experience managing the field, they may see other opportunities (like he alluded to with MAST when Talisman took it over from BP), and hence push out the oil production period, but these would be infill drilling by sidetracking existing wells.

Note that it also says the new well is expected to deliver 3000 bopd as the company reiterated, but ERCE stated that this would be at the expense of some production from other wells, so the field as a whole would not gain the full 3000

[sja123] 15/3/2019 13:08

Excellent explanation spangle...thanks for that. What I know technically about oil/gas production can be written on the back of a stamp....so good information...

My investment here was based more on the experience of the board, growth areas of the world and energy requirements thereof, size of business and cash generation enabling ongoing investment to build and grow...nice mix of oil and gas going forward etc...

[zengas] 15/3/2019 13:07

Perhaps the field in a gas context will still be worth as much as we paid for it when the oil is finally depleted.

[mount teide] 15/3/2019 12:34

Spangle - thanks for the detailed technical explanation - the CEO in his Presentation/Q&A was not suggesting any near term value from the gas cap.

He said with the recent announcement of the development of the Crux field by Shell, it would add value to Montara in the context of answering the question;
What is the likely field life of Montara?(which he suggested with the proposed infill programme is circa 2035).

[spangle93] 15/3/2019 12:15

MT, Croasdale, someuwin

Ref Montara gas

I'd lay odds that it won't be produced until 2030, so it's not immediate benefit.

1. Shell's Crux field is described as minimum facilities, i.e. to suit the size of the Crux field. So until that comes off plateau, it can't accept third party gas. Given that it's just in FEED according to the articles, it won't be approved until the end of 2019 at the earliest, and more likely mid-2020. Then it has to be designed, built, installed and commissioned. First gas from Crux, maybe 2024-25.

2. The Montara field is a thin (14m) oil rim, underlain by a regional aquifer, and overlain by the gas cap you mentioned. Balancing dynamic equilibrium in a thin oil rim is a real challenge. They currently inject gas above the oil leg to preserve reservoir pressure, and stop aquifer encroachment upwards if the pressure falls. Nonetheless, water cut in existing horizontal wells is over 50%.

If you stop injecting gas, the pressure preventing aquifer rise will not be sufficient to stop the oil wells watering out [also, the oil-gas equilibrium will increasingly turn to gas]

Most oil rim developments therefore have an oil production phase, in which everything is done to preserve the integrity of the oil leg and produce as much liquids as can be commercially managed. Then once this doesn't appear sustainable, the fields switches to gas blowdown, when the injectors are switched over to producers and maybe another well is drilled at the top of the structure.

The oil profile show at least 1,500-2,000 bopd from Montara out until 2030. So I'd reckon for those two reasons that Montara gas will be a late life field entension, and not something that's going to concern us in the short- or medium-term

Again, only conjecture

[someuwin] 15/3/2019 11:18

So much going on with this company. Hugely exciting

[gersemi] 15/3/2019 10:41

Jadestone to receive bids
Today 10:20
Russell Searancke
Wellington
14 Mar 2019 23:00 GMT
Jadestone Energy will soon receive competing bids from contractors keen to provide the main production facilities for the Nam Du-U Minh offshore gas and condensate project in Vietnam.
The Singapore-based operator intends to place small wellhead platforms on the Nam Du and U Minh fields, and tie them back to a leased floating production, storage and offloading vessel.
Sources said competing bids are due in late March for the small leased FPSO with storage capacity of up to 350,000 barrels.
Local contractors Vietsovpetro and PetroVietnam Technical Services Corporation are competing for the FPSO contract, as is Singapore-based Omni Offshore Terminals, with floater specialist HBA Offshore assisting Vietsovpetro, said sources.
The FPSO will be provided on a lease basis on a multi-year basis, while operations and maintenance of the FPSO is also required, added sources. It is understood the floater is to be spread moored.

As for the engineering, procurement, construction and installation of the two small wellhead platforms, it is understood just Vietnamese companies are vying for that contract; the platforms will be installed by a jack-up drilling rig.

Other offshore elements include two 12-inch diameter interfield pipelines from the two fields to the FPSO totalling 25.5 kilometres and one 34-kilometre 14-inch diameter pipeline from the FPSO and hot-tapped to the existing PM3-Ca Mau export pipeline, which will have spare capacity.

Jadestone chief executive Paul Blakely said in the company's latest financial results that his company was making "excellent progress toward development sanction of the Nam Du and U Minh gas fields. We are forecasting completion of front-end engineering and design, gas sales agreement negotiations, and major contract tendering, leading to formal final investment decision, all within the year".

Jadestone said financing arrangements are also forecast to be finalised in the third quarter this year.

"Jadestone has built a highly experienced project management organisation at its Ho Chi Minh City office, in preparation for the detailed engineering, design, and construction phase, leading to forecast first gas production from U Minh and Nam Du in 2021," said Jadestone.
The Vietnam government approved the Nam Du-U Minh outline development plan last May.
Jadestone has said previously the two fields contain 496.8 billion cubic feet of gas and 11 million barrels of condensate on a best estimate contingent resource basis.
Jadestone has a 100% interest in the development, but is receptive to having a farm-in partner.
Other important agreements are needed prior to the project being sanctioned by Jadestone including a gas sales agreement with PetroVietnam and a pipeline transportation agreement with PV Gas for the PM3 pipeline.
The operator, formerly known as Mitra Energy, said that recent established domestic wellhead gas prices in Vietnam were between $7 per mi

[mount teide] 15/3/2019 09:57

Shell's mega LNG Crux Project involves the development of the Crux gas field located in the Browse Basin, approximately 160km offshore north-west Australia.

As recently posted by Zen and covered by the CEO in his City Investor Presentation this week - Shell's Crux field actually sits on Montara's 'doorstep' - Crux is located closer to Montara than our tied back Skua Field.

Montara is located in 80 metres of water and has a 10 metre oil column "under a very large" 25 metre gas cap.

"Shell announced a couple of weeks ago the development of the Crux gas discovery and are looking for gas into their infrastructure - i think this is great for us, it will add value and extend the field life(Montara) beyond the projected life(2035)" Paul Blakely.


The Crux Project


Project location - Activities relating to the development of the Crux field and surrounding reservoirs will be located in an area 30 km around the proposed platform. The project area also includes the 165 km pipeline which will connect Crux to the Prelude FLNG facility.

[walter walcarpets] 15/3/2019 09:36

You can't have all buys - it's a stock EXCHANGE