Jadestone Energy Share Discussion Threads

[mount teide] 21/6/2024 18:33

Once bitten twice shy?

Last weekend’s announcement that New Zealand’s government was lifting a ban on new oil and gas exploration, after it proved a disaster for the country - just 6 years after the ban was announced to great fanfare by former PM Jacinda Ardern, when with a straight face she claimed: “The world has moved on from fossil fuels,”, has created a problem for the new government:

Following the ban, the O&G industry widely commenced running down its existing exploration and producing operations. O&G sector analysts believe it will be a major challenge for the NZ government to entice them back into exploration, even were they to offer improved License/fiscal terms.

[mount teide] 21/6/2024 10:58

sea7 - as many have been pointing out on here for years - an entirely predictable outcome.

Yet another example of the extremely poor implementation and management of highly questionable policies with respect to the maintenance of energy security(at an affordable price), crafted and voted for mostly by grandstanding politicians looking to burnish their 'green credentials' with the eco loon/woke brigade.

[sea7] 21/6/2024 10:04

and australia is now suffering the same fate as new zealand..



Australia’s east coast faces natural gas shortages due to supply outages and higher gas-fired power demand amid cold weather and unusually low wind generation, the Australian energy regulator said this week.

and

The supply of gas in all or part of the east coast gas system may be inadequate to meet demand,” AEMO said in a notice late on Wednesday

and

Australia’s energy producers and utilities are also calling on the government to support the existing natural gas-powered generation as a smooth market mechanism to move to growing shares of renewables in the electricity system. Australia has been closing coal-fired power generation and raising solar and wind power, but without enough baseload generation, it risks power shortfalls and blackouts, industry officials have warned.

[fardels bear] 21/6/2024 08:39

On a Friday? Seriously? Weird.

[pughman] 21/6/2024 07:57

I've spent the last 2 years checking every morning for a JSE RNS to drop. I've learned not to build your hopes up.

[upwego] 21/6/2024 07:27

Looks like news probably Monday morning hopefully or some point next week.

I feel Monday would be a good day though.

[yasx] 20/6/2024 18:57

Mount Teide20 Jun '24 - 16:09 - 21929 of 21930
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Chart - 50 day moving average moves through the 200 day for the first time in well over a year. The circa 45 degree angle of approach suggests the move has plenty more upside.

--------------

Indeed - have had my eye on that aspect of the chart and mentioned that here a few weeks ago.

[jacks13] 20/6/2024 15:11

The hidden hypocrisy in all of this net zero nonsense is that we, along with all the other developed economies, export our carbon emissions by sourcing our windmills and batteries from places such as China.

[mount teide] 20/6/2024 15:09

Chart - 50 day moving average moves through the 200 day for the first time in well over a year. The circa 45 degree angle of approach suggests the move has plenty more upside.

[neo26] 20/6/2024 14:32

Get moving jse...

[mount teide] 20/6/2024 14:26

UK O&G industry - talk about kicking a dog when its down!

While China is busy building 100 new coal fired power stations a year to cheaply manufacture wind turbines for its huge export markets in the West, the UK's Supreme Court tells the UK O&G industry it must take into consideration emissions from burning fossil fuels when approving new projects! A hugely short-sighted move that is likely to have huge implications for the industry and could prove to be the final nail in its coffin, as it sets a precedent for legal challenges.

Greenpeace and Just Stop Oil will be salivating over the decision!


North Sea oil drilling threatened by landmark Supreme Court ruling - Telegraph today

The future of Britain’s oil and gas industry has been thrown into doubt after a landmark decision by the Supreme Court.

The court ruled on Thursday that emissions from burning fossil fuels must be considered when approving new drilling sites.

It is the latest development in the case brought by Sarah Finch, a Surrey resident who challenged the local council’s decision to allow the expansion of an oil site at Horse Hill in 2019.

Ms Finch, acting on behalf of Weald Action Group, argued that the environmental impact assessment had only considered emissions from the extraction of oil – and wrongly ignored those produced when the oil was burned.

The Supreme Court has sided with her, handing down a decision that has huge implications for the entire UK oil and gas industry.

Legal experts say the decision could influence the way in which new fossil fuel projects are assessed in the UK, forcing planning officials and energy companies to justify emissions generated by oil and gas.

Ms Finch triumphed at the Supreme Court after her case was dismissed by the High Court and the Court of Appeal.

Surrey County Council had sought to challenge her case on the basis that the law did not require it to consider “downstream221; emissions as part of the assessment.

In its decision on Thursday, Supreme Court justices ruled three-to-two in favour of allowing her appeal. In doing so, they also overturned the decision to grant planning permission for the Horse Hill drilling site.

In his judgement, Lord Leggatt said “it seems to me plain” that emissions created by burning oil extracted at the site “are effects of the project”, and as a result “it follows that the council’s decision was unlawful”.

In a ruling backed by Lord Kitchin and Lady Rose, he said: “The reasons accepted by the council for excluding the combustion emissions from consideration and assessing only direct greenhouse gas emissions from within the well site boundary are therefore demonstrably flawed.”

He continued: “In my view, there was no basis on which the council could reasonably decide that it was unnecessary to assess the combustion emissions.”

The Supreme Court’s decision is also likely to set a precedent for similar legal challenges against Shell’s Jackdaw project and Equinor’s Rosebank development.

Following the decision, Ms Finch said: I am absolutely over the moon to have won this important case. The Weald Action Group has always believed it was wrong to allow oil production without assessing its full climate impacts, and the Supreme Court has shown we were right.

“This is a welcome step towards a safer, fairer future. The oil and gas companies may act like ‘business as usual’ is still an option, but it will be very hard for planning authorities to permit new fossil fuel developments – in the Weald, the North Sea or anywhere else – when their true climate impact is clear for all to see.” '

[jrlomax] 20/6/2024 13:43

Much sense you speak young Jedi

[neo26] 20/6/2024 13:27

Akatara jas been a drain in developing now its time to repay the debt.Cashcow akatara will be..

[nigelpm] 20/6/2024 07:46

Into the "window" from the RNS on 6th June -


The project remains on schedule for gas into the Facility in approximately two weeks time and for commercial gas, LPG and condensate sales following shortly thereafter.

[ashkv] 19/6/2024 16:31

This likely is for the Montara gas :)

For Tahbilk-1, there is a potential path to commerciality with another operator which has not yet concluded. The EP states that “Jadestone plan to de-risk and develop to commercially produce from the existing Tahbilk-1 well. By the end of this EP’s Validity period, in 2027, one of the following criteria will be
met.

[sea7] 19/6/2024 13:08

On montara..from the recently updated and resubmitted environmental plan - accepted by NOPSEMA June 11 2024..

there is a lot about decomissioning in the document, plus...



page 31..

The EPBC approval is due to expire in 2028, which is before the current expected end of field life date. Therefore, Jadestone have prepared and submitted to DCCEEW an extension of the EPBC Act approval (refer Appendix G) to 2040 to allow for flexibility in the end of field life and for decommissioning activities to be completed. No amendment to any other conditions of approval has been requested.

page 63...

Suspended wells

Jadestone plans to undertake monitoring of the two temporarily abandoned (suspended) wells, Sea Eagle-1 and Tahbilk-1 via vessel-based activities. These wells are intended to be used for future hydrocarbon exploitation in the Montara field. The ongoing monitoring of these wellheads is described within the
NOPSEMA accepted Sea Eagle-1 and Tahbilk-1 Vessel Based Activity EP (TM-50-PLN-I-00004). This EP is valid until the end of 2024, a decision on the next steps for these wells will be made in Q4 2024 under the purview of the decommissioning working group

page 88...

The EP states that ”Jadestone plan to develop and commercially produce from the existing Sea Eagle-1 well in the 2027-2028 time period or sooner. Jadestone commit to that by the time this EP’s validity has expired (5 years following acceptance i.e. in 2027), the well will either be sanctioned for development with the
permissioning cycle started or permissioned for decommissioning.” Therefore, an EP to plug and abandon or develop Sea Eagle-1 is planned for submission at least 12 months prior to that (i.e. by May 2026).

For Tahbilk-1, there is a potential path to commerciality with another operator which has not yet concluded. The EP states that “Jadestone plan to de-risk and develop to commercially produce from the existing Tahbilk-1 well. By the end of this EP’s Validity period, in 2027, one of the following criteria will be
met.

1. The well will be permissioned for Permanent Abandonment.
2. If not already concluded, a commercial agreement will be in negotiation between Jadestone and the third-party Operator with a view to sanction for development. The expected date for a decision is Q2 2027 and it is anticipated that the commercial agreement would be in place, however this is dependent on third party operator timelines as well. Therefore, prior to the expiry of this EP, it is expected that the permissioning cycle will have started for decommissioning or development (additional approvals will be submitted).”

Therefore, submission of an EP to plug and abandon Sea Eagle-1 is planned for submission at least 12 months prior to that (i.e. by May 2026) if development is not planned. As a decision on both of these wells is expected by mid-2027, regulatory approvals for the next stage (either development or permanent abandonment) will be submitted in 2026

[ashkv] 19/6/2024 12:32

What is up no love most of my E&P firms!!! Oil on a tear and JSE plus others languishing in the doldrums!!!

JSE Enteprise Value of USD 276 million for 23,000 Boe/d Production in H2 2024 once Akatara online!!!!

JSE Share Price -> 30.50p
Brent Current Price -> $85.50
JSE Current Share Price vs 52 Week low of 21p on 18 Aug 23 -> 45.24%
JSE Current Share Price vs 52 Week High of 39.5p on 7 Sep 23 -> -22.78%
Shares Outstanding -> 540,817,144
GBPUSD -> 1.2700
JSE 2024 Production Mid-Guidance Revised Apr 24 (20,000-22,000 Boe/d) -> 21,000
JSE Average Production YTD 31 May 24 -> 17,200
JSE Production Average for 2023 (Montara Curtailed for a period) -> 13,800
JSE Production Average for 2022 (Montara Curtailed for a period) -> 11,487
Debt (USD) (USD 200 Million Reserves Based Lending (RBL) Draw) -> NA
Cash (USD) -> NA
Net Debt (USD) 31 May 24 -> $66,000,000
Available Credit (Remaining USD 200Million RBL Available + USD 35Million Standby Facility) -> $169,000,000
Available Liquidity -> #VALUE!
Market Cap (GBP) -> £164,949,229
Market Cap (USD) -> $209,485,521
ENTERPRISE VALUE (EV) (Market Cap + Debt - Cash) (USD) -> $275,485,521
EV/Barrel(USD) 2024 Mid Guidance Production 21,000 Boe/d -> $13,118
EV/Barrel(USD) Q1 2024 Average Production -> $16,017
EV/Barrel(USD) Jadestone Production Average for 2023 (Including Montara Shut-Down) -> $19,963
JSE Decommissioning Expense Provision i.e. Asset Restoration Liability per FY 2023 Results -> $603,902,000
EV/Barrel (USD) JSE 2024 YE Exit Boe/d 23,000 Boe/d Production (Q1 Avg + Akatara 6k boe/d H2 24) [Added Decommissioning Provisions Per FY 2023 Results to EV] -> $38,234
EV/Barrel (USD) JSE 2024 YE Exit Boe/d 26,000 Boe/d Production [Added Decommissioning Provisions Per FY 2023 Results to EV] -> $33,823
2P Reserves (Boe) as of 31 December 2023 -> 68,000,000
2P Reserves (Boe) YE 23 + 6.8 mmBoe Second CWLH Acquisition H1 2024 -> 74,800,000
EV/2P -> $3.68
EV(Including Decommissioning Costs)/2P -> $11.76
Bloomberg Analyst Summary -> JSE Target Price (Avg of all 5 Analysts Reviewing JSE per BBG) as of 16 Jan 2024 -> 71.50p
% Upside to 12 Month Analyst Target Price -> 134.43%

Asset Decommissioning year per 2023 Annual Report Published 27 April 2027 ->

Asset Decommissioning year
1. Montara 2031 [Likely to be extended if Gas assets developed as management has mentioned]
2. Stag 2036 [A long long way to go - 12 years!!!]
3. Lemang 2036 [Minimal cost USD 5.5Mn Provisioned as onshore and Per JSE likely to be extended]
4. PenMal 2024 onwards [Decommissioning expense provisioned in current year, however, majority of Penmal fields are producing assets and JSE is looking to redevelop a field that was shut due to a FPSO issue]
5. CWLH 2035 [Per JSE likely to be extended even further]

[ashkv] 19/6/2024 12:13

Super we agree for once :)

Is this the beginning of something special ;)

1AJM19 Jun '24 - 13:12 - 21918 of 21918
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JSE are in a good position with reference to their current decom liabilities agreed.

[1ajm] 19/6/2024 12:12

JSE are in a good position with reference to their current decom liabilities agreed.

[ashkv] 19/6/2024 12:10

Note 37 of the 2023 Annual Report for Asset Retirement Details -> (A snippet from the same)

The Group’s ARO comprise the future estimated costs to decommission each of the Montara, Stag, Lemang PSC, PenMal Assets and CWLH Assets.

The carrying value of the provision represents the discounted present value of the estimated future costs. Current estimated costs of the ARO for each of the Montara, Stag, Lemang PSC, PenMal Assets and CWLH Assets have been escalated to the estimated date at which the expenditure would be incurred, at an assumed blended inflation rate. The estimates for each asset are a blend of assumed US and respective local inflation rates to reflect the underlying mix of US dollar and respective local dollar denominated expenditures. The present value of the future estimated ARO for each of the Montara, Stag, Lemang PSC, PenMal Assets and CWLH Assets has then
been calculated based on a blended risk-free rate. The base estimate ARO for Montara, Stag, Lemang PSC, PenMal Assets and CWLH Assets remains largely unchanged from 2022. The blended inflation rates and risk-free rates used, plus the estimated decommissioning year of each asset are as follows ->

Asset Decommissioning year
1. Montara 2031 [Not 2030 as the troll 34d was conveying - also likely to be extended if Gas assets developed as management has mentioned]
2. Stag 2036 [A long long way to go - 12 years!!!]
3. Lemang 2036 [Minimal cost USD 5.5Mn Provisioned as onshore and Per JSE likely to be extended]
4. PenMal 2024 onwards [Decommissioning expense provisioned in current year, however, majority are producing assets and JSE is looking to redevelop a field that was shut due to a FPSO issue]
5. CWLH Assets 2035 [Per JSE likely to be extended]

2023 Annual Report Published 27 April 2024

[ashkv] 19/6/2024 11:49

From JSE Annual Report re Asset Retirement Estimates ->

The Group reviews and updates its decommissioning obligations at least annually, and estimates are subsequently reviewed by third-party experts.
The annual review process is on a three-year cycle based on a detailed bottom-up cost assessment followed by two years of top-down assessments. This ensures at least once every three years the portfolio of assets has a full detailed cost assessment performed that is independently and resources by a third-party expert.
Legislative changes are monitored, and changes discussed with relevant bodies including regulators and industry bodies. From time to time, the Group obtains independent legal opinions, as required.
When reviewing acquisition opportunities, any required acceleration of funding of decommissioning liabilities generally decreases the net present value of the opportunity, which is incorporated in the Group’s purchase price consideration.

[ashkv] 19/6/2024 11:49

Asset Retirement Obligations are Discounted to Present Value based on future estimates.

This all audited / and overseen by regulators / auditors [It is applicable for every firm and given JSE production the asset retirement obligations are in the lower quartile] [Reference Ithaca, Tullow, Harbour etc]

Anecdotes that I recall from my asset retirement / decommissioning provisions review of JSE assets ->

CWLH Decom all paid for per payments from JSE as part of both bolt on acquisitions -rest of liftings are pure upside!!! No further liabilities other than any Capex!!!

Penmal - Original operator / developer has already paid the major amount into the the decommissioning fund!!! JSE has minimal obligations!!!

Montara -> The major asset retirement obligation!!!

Sinuphorm -> Minimal obligations

Akatara -> Onshore / long lived / minimal retirement obligations!!!

Stag ->

[1ajm] 19/6/2024 11:29

These funds that sit there for a decade after needing to be filled ASAP are;

1. probably being used by goverments and banks

2. then have to pay for services at a rate that has say 10 years of inflation added to it. the sheer cost of havimg to put cash away potentially for a decade from a buying power point of view is silly, oil companies hopefully get a fair interest rate.

3. When the big oilers start moving out of an area roughly the same time there hopefully will not be an influx in the amount of assets that need decom activites at certain periods, would only serve as justification for companies to hike costs.