Jadestone Energy Share Discussion Threads

[1ajm] 19/6/2024 10:51

To be fair to JSE they are very good at paying into them and have the decom liabilities seemingly under good control.

It seems a bit rushed sometimes, the speed into which they payed into the CWLH fund was amazing at a time where cash was tight and they were needing to increase the RBL size just to get by.

Who benefits from having this mountain of cash locked away for decades? goverments/banks?

I'm not sure JSE have any say over the size of the decom liability fund.

I'd expect it would be wholey figured out from a unbias heavily regulated third party company.

If any oil company were to set the decom fund themselves in any way that would be alarm bells ringing for me personally.

I would probably be just as baffled looking at the size of other companies decom funds for assets, not having a jab at JSE specifically.

just the example of a 1,000day operation at a cash burn of $600k a day or 500 days at $1.2mn a day to decomission CWLH blows my mind.

[mount teide] 19/6/2024 10:49

1AJM- 'Montara and stag are barely hanging on being called assets at this point IMO, Partly due to the asset itself but also the concern on how JSE handle such events if they arrise.'

Like most offshore mid/late life fields operating with an FPSO, the overwhelming majority have the FPSO on long term charter. This is a very expensive way of operating, particularly once the field enters mid/late life.

By way of example:

Harbour Energy's North Sea Catcher Field has an FPSO on long term charter at an annual cost of $210m for the first 8 years of the Contract, with annual Inflation uplifts. The contract options to extend the charter beyond the fixed period does, in practice, usually result in only a modest reduction in the charter rate.

At Jadestone's current circa 5,500 bopd Montara production level, if they had the BW Catcher sitting over the Montara field(rather than a fully owned FPSO which was included in the net $82m completion price of the Montara asset), the OPEX/bbl JUST for the FPSO would today be $105/bbl!

Montara Venture - Under the inspection oversight of a DNV Classification Surveyor, once the highly expensive in-situ inspection, repair and maintenance work on the Montara Venture is finally completed in H2/2024, I think an average ongoing OPEX/bbl of $40-$50bbl for the Montara Field would be a very reasonable target across the remainder of this decade.

AIMHO/DYOR

[34adsaddsa] 19/6/2024 10:41

So you think they may benefit by overestimating decom costs, overpaying into abandonment funds and then getting the surplus back later?

I'd really like to know what the decom liability is for each asset, how much has been paid into the abandonment fund and what the expected deficit is.

[1ajm] 19/6/2024 10:35

CWLH abandonment trust fund, up to $102mn for 16.67%. Over $600mn

1,000 days, basically 3 years of $600k cash burn a day equivalent to decom an FPSO, subsea infastructure, well heads.

[34adsaddsa] 19/6/2024 10:24

"The decom liabilities I do still believe are mainly just a massive tax vehicle"

Can you explain this?

[fardels bear] 19/6/2024 10:22

Thing is, we can actually see you grinding your axe. We don't need to hear you as well..

[34adsaddsa] 19/6/2024 10:22

I guess we'll have to wait and see whether the net equity explodes upwards.

I think it's fair to assume Montara production will trend down to 2030. Do you think they're going to produce 5-6K bopd in 2029 and then cease production in 2030?

You say they'll be swimming in cash, but those same analysts whose target prices you're relying on are forecasting a net debt position up to 2026. Granted that is due to very high capex but still..

I don't think it works for shareholders with those OPEX levels at Montara & Stag. A big acquisition could offer a route out.

[ashkv] 19/6/2024 10:08

Montara has a drill scheduled for end year 2024/Early 2025 that WILL INCREASE PRODUCTION

From 2023 Full Year Results -> "On 4 October 2023, pressure was lost from the A annulus in the Skua-11 well, likely as a result of gas in the annulus escaping from a shallow leak point. The well was immediately shut in. A replacement operation, which includes a sidetrack to target volumes associated with Skua-11 and additional reserves in the vicinity is currently being planned and is expected to commence in Q4 2024."

34adsaddsa19 Jun '24 - 10:54 - 21900 of 21902
0 0 0
It's true that OPEX is expected to be lower next year, but it's still high and Montara's production likely falls up to 2030 so OPEX per barrel increases.

[mount teide] 19/6/2024 10:07

UK O&G Industry - Beware of unintended consequences!

Labour's proposed policy to increase the total tax take to 78% and end the deductibility of Capex, is very likely to lead to the complete collapse of exploration activity and most production development.

The financial distress of most small/mid cap UK focused E&P companies is a near certainty, with many likely to fail(who would want to buy their 'assets'?), thereby increasing the risk of a very substantial minority of the North Sea O&G sector's eyewatering decommissioning costs becoming the responsibility of the taxpayer.

What a contrast to the forward thinking governments of Angola and Malaysia - who this decade have made their O&G industries some of the most competitive in the world to attract foreign investment - with predictable results: a tsunami of new investment to enable the natural divestment of mid/late stage assets from NOC's and the Majors to second phase small/mid cap's with a proven track record of safely operating these type of assets.

AIMHO/DYOR

[34adsaddsa] 19/6/2024 09:54

It's true that OPEX is expected to be lower next year, but it's still high and Montara's production likely falls up to 2030 so OPEX per barrel increases.

Ithaca's position:

Total assets: $6,246,613,000
Total liabilities: $3,802,187,000
Net equity: $2,444,426,000
Market cap: £1.27B

Jadestone's position:

Total assets: $1,089,134,000
Total liabilities: $1,035,364,000
Net equity: $53,770,000
Market cap: £166M

The assets could be understated for Jadestone and overstated for Ithaca, but those are the positions at end of year and the difference is quite obvious.

That's why I wanted the - probably quite risky - acquisition to happen. Without it I think the company will really struggle.

"Given what JSE recently paid for CWLH assets, Sinuphorm, Akatara, Penmal etc and even taking Montara and Stag at ZERO value (not so in reality) JSE sum of parts valuation is significantly more than current share price reflects accounting for liabilities"

Then why don't the accounts reflect that? Why is the net equity $54M?

[34adsaddsa] 19/6/2024 08:51

I did but sold at an overall loss on the bounce back up to 35p. I think the OPEX for Montara & Stag changed the game and I feel lucky to have got out on that bounce.

I'm following it because I might invest in the future. I don't follow stocks which I can't imagine ever investing in.

[neo26] 19/6/2024 08:49

So you are not investing here then. :)

[34adsaddsa] 19/6/2024 08:38

Look at page 89 of the annual report: Total liabilities are $1,035,364,000.

Montara is expected to cease production in 2030 and Stag in 2035. The OPEX for those assets is very high and the liabilities are huge. I think that's why the shares are where they are.

Why is net equity $54M?

[ashkv] 19/6/2024 07:53

Throwing the kitchen this POS!!!

Current Payables / Receivables - practically cancel out [But for this malicious clown are LIABILITIES]

Long dated liabilities for Jadestone Energy are Decom -> $603,902,000 [Extremely manageable - compare to Tullow, Enquest, Ithaca, Harbour Energy etc vis-a-vis their production]


The other liability is the RBL -> which is guided to be paid down in 2025 at the latest with $80 plus Brent!!! Moreover factoring in cash the net liability leads to
Net Debt (USD) 31 May 24 -> $66,000,000

SO ALL LIABILITIES FOR JSE ARE AS OF LAST REPORTED 31 MAY 2024 US$ 670 million NOT BILLION PLUS PURVEYOR OF FALSEHOOD LYING POS SUPER TROLL 34adsaddsa!!!

34adsaddsa

Posts: 690

Price: 31.50

No Opinion

RE: Added18 Jun 2024 16:51
The liabilities are over a billion dollars. Mostly decommissioning, but also borrowings, trade and other payables etc.

[ashkv] 19/6/2024 07:39

Someone should report the below clown 34adsaddsa on the other bulletin board!!!

Posting false misleading items / and often outright fibbing/making items up!!!

Doesn't he appreciate even with Decommissioning costs included JSE is trading at 50% of Ithaca Energy EV/Flowing Barrel and 1/3rd of Ithaca Energy EV/2P!!!

This when JSE operates in low tax stable OECD regions and has multiple growth catalysts such as Montara Gas, Vietnam mega gas project etc

USD600mn of long dated liabilities (15-20 years) for a firm with 600mn of revenues and free cash flow of USD200mn plus at $80 brent is chicken feed.

And even included as a regular liability less than 5 years - it is no big deal!!!

MOREOVER ALL FIGURES ARE AUDIT APPROVED / BY A HIGHLY REPUTED BIG 4 ACCOUNTING FIRM!!! POS LIAR!!!

JSE shares a steal

34adsaddsa

Posts: 690

Price: 31.50


RE: AddedToday 01:09
Sadly not the case. Montara's production is now expected to cease in 2030 and Stag in 2035. They'll probably have the money to meet the liabilities but they are huge. Changes in costs/end of life year/required works have a big positive or negative impact.

Comments like Akatara exceeds the market cap so this is mispriced are idiotic because the liabilities are being ignored.

There's also this rather disturbing part of the annual report:

Currently, the Group’s approach to decommissioning is to leave subsea pipelines in situ at both Stag and Montara. NOPSEMA’s base case is full removal of subsea infrastructure, unless it can be proven there is a net environmental

benefit to leave the infrastructure in place. There is a risk that Jadestone would be required to remove subsea pipelines if the Group cannot prove a net environmental benefit of leaving them in situ. There have been no changes to the decommissioning risks associated with government policy in the regions in which the Group operates. The Group will accelerate studies to assess whether there would be a net environmental benefit from leavin subsea pipelines at Montara and Stag in situ. The Group will continually update it’s knowledge and understanding of decommissioning practices to ensure that decommissioning cost estimates can be reduced and risks eliminated.

[upwego] 18/6/2024 09:58

imminent news in the next week or so! confirmation maiden production with Ankatara.

Oh well the world has gone mad!

[mount teide] 17/6/2024 14:24

sp100 - suspect most LBE shareholders will be relieved. Norway has been very challenging for them.

[spawny100] 17/6/2024 12:43

LBE pivots to SE Asia - looking like a hot geographical location for O&G perhaps?

[mount teide] 16/6/2024 15:49

geri - no problem.


Visited or worked in over 120 countries during a long career running ships and ports.

The Canary Islands had the best climate of the lot, due to being surrounded by the Atlantic Ocean where, despite the islands being in the tropics, keeps the average daytime temperature between 20c and 28c year round, the humidity low, and a refreshing trade wind blowing. Yet, just one hundred miles away to the East is the African continent, where summer temperatures in the Sahara Desert often exceed 50c.

Christopher Columbus summed this all up very well when he described Tenerife as “the Island of Eternal Spring”.

Our favourite walks are in Mount Teide National Park above the 1,000m line.....where you often meet no more than a few people during an entire day's walking, despite having views that few other locations could match.

Tenerife’s most beautiful national park and protected areas, from pine forests to volcanic peaks - Isabella Noble

hxxps://www.lonelyplanet.com/articles/best-national-parks-tenerife