Jadestone Energy Share Discussion Threads

[thedudie] 01/12/2022 12:29

MT - Thanks - I had forgotten about Lemang Capex.
I would hope (and expect) some more non-organic growth to come along soon to boost those numbers.

[mount teide] 01/12/2022 12:05

td - I'm assuming that the infill well programme for 2023 at Stag and the PM assets can maintain production at or close to 20,000 bop/d. The $100m may be a little light considering the funding required for the Lemang Nat Gas asset in 2023.

I expect the management to give the market a lower production figure of circa 17,500 to 20,000 boepd for 2023, as they like to build in a decent insurance margin.

[mount teide] 01/12/2022 11:58

s100 - always try to keep 3-5% of my portfolio in cash to be in a position to take advantage of opportunities thrown up by the market - and use it to treat dividend cash as good as in my account from the ex Dividend date.

I believe the Q3 SBLK dividend will likely earn a lot more over the winter invested in JSE than SBLK.......that was the reason for not hanging around investing it....that and my view that an update on Montara re-entering production could drop at any time, with the structural integrity repair work now complete.

[thedudie] 01/12/2022 11:47

MT ..
I would have thought that your figure of $100m capex would give JSE more than just decline replacement - but I may be wrong? In fact what sort of blended decline would be expected now on 20000, if indeed Montara is back online by end of year?

I guess there maybe some sort of flush production initially after Montara has been shut in for months, raising rates above the expected but not sure how long that would continue for?

[spawny100] 01/12/2022 11:46

You've done well to invest the Q3 SBLK dividend here MT given it won't be paid for another 11 days! But I know what you mean by investing it early thinking that JSE may have moved up by then.

[mount teide] 01/12/2022 11:07

At 70p a share the market cap is $370m. Knocking off the estimated year end cash position of $120m, suggests an EV of circa $250m.

At a $85 Oil Sales Price($87 inclusive of IMO and regional premiums), entering 2023 with Montara back operational and total production of 20,000bopd , $100m capex, $30m admin, and a 45% blended tax rate, I get 2023 FCF of about $190m. So, an EV/FCF ratio of 1.31, and a FCF yield of about 52%!

At an $85 Oil Sales Price($87 inclusive of IMO and regional premiums), at the current est 11,000 bopd , $100m capex, $30m admin, and a 45% blended tax rate, I get a current annual FCF of about $40m. So an EV/FCF ratio of 6.25, and a FCF yield of about 11%(better than most of the S&P 500).

[mount teide] 01/12/2022 09:08

Why 2023 Is Likely To See Much Higher Oil Prices - Alex Kimani /Oilprice.com today

* Oil traders have been cautious amid a new wave of COVID-19 in China.

* The oil markets flip-flopped mid-week to refocus on the pending EU ban on seaborne Russian oil and a G7 price cap on Urals crude next week.

* Many oil analysts see higher crude prices in 2023 as pent-up demand from China could strengthen oil fundamentals in 2023.

'Earlier this week, oil prices plunged to 2022 lows as energy markets panicked about demand amid COVID chaos in China that has resulted in an unexpected and extraordinary manifestation of street protests and even calls for Chinese President Xi Jinping to step down.

The market’s response to this, according to Rystad Energy, was an overreaction. Rystad believes that China’s zero-COVID policy and its new wave of lockdowns to counter a surge in new cases will have only a minor impact on its short-term oil demand.

Indeed, the market is sentimental and fickle these days, with volatility running at an all-time high. By Wednesday, oil prices were trending in the opposite direction with just as much zeal.

Suddenly forgetting its China fears despite a worsening COVID situation there, the oil markets flip-flopped mid-week to refocus on the pending EU ban on seaborne Russian oil and a G7 price cap on Urals crude next week. Gains would have been even higher were it not for rumours of OPEC+ preparing for more output cuts.

The oil markets are trading on the day’s news, and have been since earlier this year. Unable to grasp true fundamentals. Fundamentals are now a moving target thanks to Russia’s war on Ukraine, the renewed power to control the markets by OPEC+, an uncooperative American shale industry and China’s zero-COVID policy.

Wall Street is in a state of disarray, and for commodities traders, it’s either boom or bust, on a day-to-day basis.

The volatility would be far greater without OPEC, the expanded cartel suggests. In a new study published by KAPSARC (King Abdullah Petroleum Studies and Research Center), during the height of the COVID pandemic, OPEC reduced oil price volatility by 50% due to the management of its spare capacity. OPEC intervention, the report claims, boosted average oil prices during the pandemic from $18 to $54 per barrel. Now, this is serving as a justification for OPEC+’s recent decision to cut output at a time when Washington was gunning for a production increase to bring prices down.

True to form, OPEC rumours likely succeeded mid-week in calming the reversal of losses in oil price once the market decided to drop its Monday fears coming out of China and refocus on Russian oil.

So what about Wall Street?

As the Wall Street Journal notes, Wall Street is overall bullish on oil, even if that is not necessarily reflecting current prices. It’s a case of “mind the gap”.

There is a clear belief that oil prices will be much higher in 2023.

Goldman Sachs forecast $110 oil for next year, but recognizes the uncertainty. On Tuesday, Goldman Sachs’ Jeff Currie, global head of commodities, said that recent downgrades to oil prices were because of the dollar and China.

“First and foremost, it was the dollar. What is the definition of inflation? Too much money chasing … too few goods,” Currie told CNBC.

And on China’s COVID situation, Currie said “it’s big”. “It’s worth more than the OPEC cut for the month of November, let’s put it in perspective. And then the third factor is Russia is just pushing barrels on the market right now before the December 5th deadline for the export ban.”

JP Morgan now forecasts $90 oil for 2023, down from its earlier forecast of $98, “on the grounds that Russian production will fully normalize to pre-war levels by mid-2023”.

Rystad Energy also thinks the recent oil price plunge based on Chinese demand is overblown.

While it is true that in November, OPEC and the IEA both reduced their 2023 oil demand growth estimates because of what is happening in China, Rystad believes it will have far less impact than the market panic of Monday suggested.

"Oil markets may be misjudging news of China’s lockdown," said Claudio Galimberti, senior vice president at the Norway-based consultancy, as reported by Bloomberg.

The latest curbs “appear to be mimicking previous ones, with nationwide road traffic only marginally affected while selected provinces undergoing comparatively severe lockdowns try to suppress Covid outbreaks”.

While street protests continued in China and daily infection rates surged beyond 40,000 by Tuesday, the overall effect is not worth a 4% plunge in oil prices, as we saw on Monday. And Wall Street seems to view this as a mere “gap” and not a long-term situation that will keep oil prices from JP Morgan or Goldman Sachs’ $98-$110 ranges next year.

Brent crude delivered in August next year has a 46% probability of settling more than $20 higher than its current price, WSJ notes.

China could actually end up being the icing on the oil price cake. It’s like saving up for a surge.

“The pent-up demand out of China is going to be enormous. “That could swing demand by at least a million barrels a day, and that could easily make the difference between an oil price forecast of $95 to $105 versus $120 to $130. Easily,” Amrita Sen, director of research for Energy Aspects, told WSJ.'

[fardels bear] 01/12/2022 08:48

I'm craning my neck, nige but I don't see 'em. Where are all these e&ps that are flying, pray?

[nigelpm] 30/11/2022 20:09

Certainly the weight of selling seems to be keeping the price stationary even with the buyback mitigating some of the selling weight. Whilst everything else in E&P universe is flying it maintains 70p - great opportunity assuming a reasonably swift return to sensible oil production from Montara.

[mount teide] 30/11/2022 19:02

U.S. Energy Information Administration reported a crude oil inventory decline of 12.6 million barrels for the week to November 25.

[mount teide] 30/11/2022 11:06

Invested most of the chunky 6.3% Q3 dividend yield from Star Bulk into JSE this morning - adding 27.5k.

On the basis, I expect SBLK to go largely sideways during Q4/22 and Q1/23 but, likely still generate very substantial dividends because of its huge revenue generating operational advantage over 85% of the world's Dry Bulk shipping fleet. Thought the risk/reward at JSE over the next 6-12 months is likely to offer better upside potential than reinvesting the dividends in SBLK at least until Q2/3 2023.

[mount teide] 29/11/2022 18:45

Nine months after invading Ukraine and just two months before the EU's ban on diesel imports from Russia by sea commences, Europe and the UK still get 45% or 600,000 bopd of diesel from Russia's Baltic Sea refineries.

Sourced from the Middle East and SE Asia, that 600,000 bopd will require 8 times the LR2 Product Tanker capacity to handle post the ban. Good luck finding the shipping for that.......when increasing numbers of the LR2 global fleet is being chartered by Middle East crude oil producers and shippers at spot market rates around $160,000/day, due to a lack of crude oil tanker ship capacity from owners rerouting the global fleet in preparation for the EU's ban on crude oil imports from Russia commencing next week.



Europe Remains Russia's Biggest Diesel Buyer - Oilprice.com

* The EU and the UK continued to be the largest importers of Russian diesel in November, with nearly half of seaborne diesel coming from Russia.

* With the embargo on Russian petroleum products coming into effect on February 5th, flows to the EU and the UK are rising.

* As of February 5th, Europe will have to compete with non-Russian diesel buyers for U.S., Indian, and Middle Eastern exports.

'Europe continues to be the biggest buyer of Russian diesel, with nearly half of EU and UK seaborne diesel imports having come from Russia this month, according to data from Vortexa compiled by Bloomberg.

The EU and the UK imported an average of 1.34 million barrels per day (bpd) of diesel-type fuel between November 1 and 24, of which 45% — or 600,000 bpd—came from Russia, Vortexa’s data showed.

The still high dependence on Russian diesel could become a big problem for Europe in just two months, when the EU embargo on imports of Russian oil products by sea enters into force on February 5.

Russia is still the biggest supplier of diesel to Europe, which will have to replace more than 500,000 barrels per day (bpd) of diesel supply after February, the International Energy Agency (IEA) says.

“While a flood of East of Suez diesel imports has improved Europe’s positioning for the upcoming winter, Russia-Europe flows are rising again ahead of the 5 Feb EU import ban,” David Wech, Chief Economist at Vortexa, wrote in an article earlier this month.

It is even more challenging to make calls about what will happen with Russian diesel after the EU embargo than with what will happen with Russian crude oil, the ban on which begins on December 5, according to Vortexa.

Per the IEA estimates in its Oil Market Report for November, EU countries had reduced Russian diesel imports by 50,000 bpd to 560,000 bpd by October.

“When the crude and product embargoes come into full force in December and February, respectively, an additional 1.1 mb/d of crude and 1 mb/d of diesel, naphtha and fuel oil will have to be replaced,” the IEA said in the report.

As the EU embargo on imports of Russian diesel enters into force, “The competition for non-Russian diesel barrels will be fierce, with EU countries having to bid cargoes from the US, Middle East and India away from their traditional buyers,” the agency said. '

[mount teide] 29/11/2022 17:36

Never thought I'd live to see the day I would hear the level of dissatisfaction and colourful language I do now, at our local Conservative Association meetings, when discussing the leadership and direction of the Party/Government......most of the membership are absolutely fuming at the behaviour of PM Hunt and his deputy in training Sunak.

[fardels bear] 29/11/2022 16:30

Many Tory voters are apoplectic with rage at this shower. I'm one of them.

[fardels bear] 29/11/2022 15:36

God alone knows what the debt would be and how far the economy would have collapsed had your pinko pals been in charge of the shop over the last three years.

[fardels bear] 29/11/2022 14:27

They could pay for them out of the imaginary money that labour uses for everything.

[kaos3] 29/11/2022 10:58

or as it is done in my place .... pumping water to a higher altitude for the later hydro el production...

[ngms27] 29/11/2022 10:18

The only way I can see wind power working is as follows:1) Wind power producers make approx 50% more when the wind is blowing but there is no demand. This is usually overnight but can be due to lack of connectivity between Scotland and England. They thus are paid handsomely to shut down. This is the green levy on our bills.2) Producing green hydrogen is about 50% efficient. I.e it takes 2 units of electricity from Wind to make 1 unit of electricity from Hydrogen produced.3) Rather than shutting down wind when there is no demand why don't we produce hydrogen? This is effectively energy storage and the suppliers get paid the normal rate NOT the enhanced shut down rate. The hydrogen can be used for vehicles or power stations etc. This cost wise is 75% efficenct.It needs Government to do this.

[fardels bear] 29/11/2022 08:35

That was always the problem with a get out of jail free card. Anticyclonic conditions bring cold but windless days. Everybody knows this. It's the major reason I never bothered with renewables on my house. No sun in winter, no wind when it's very cold.

[tom111] 28/11/2022 21:29

May have to wait till March March winds will blow-----

[mount teide] 28/11/2022 21:18

Unreliability of renewable energy laid bare today in the UK.

'Over the last 40 hours, the UK wind power industry has swung from producing 16.4 GW to generating 0.4 GW

The drop in electricity production is equal to, give or take, switching off 14 nuclear power stations. That's the reason why UK power markets are tight today.' Javier Blas / Bloomberg

[tom111] 28/11/2022 17:55

No surprises there Albert