Jadestone Energy Share Discussion Threads

[highly geared] 02/10/2018 19:16

Interesting!

Even assuming a conservative 15,000BOPD, 300 days production and a $35 operating cost differential, this generates $157.5 million net revenue ( ex G&A) and assuming similar metrics for Montana.

So, c. £120 million net revenue.

They are likely to be at c 20,000BOPD by this time next year which will smash the above figures out of the park if Brent stays around current levels.

Seems a steal at current levels?

[wanobi] 02/10/2018 19:08

MT, think I'll have some of these too,,, many thanx, cheers Wan

[mount teide] 02/10/2018 17:38

The Admissions document highlights well the potential Montara holds to increase production and reduce operating costs once JSE takes over as operator - currently expected by year end.

However, JSE's material 2019 production growth and cost saving targets for Montara could well prove conservative if the very modest performance of the existing field and FPSO operator is a reliable guide. And with a 3-5 year asset development plan based on $55 oil the Montara acquisition timing looks inspired.

Admission Document - Montara

'The Company has already identified multiple operational improvements at the Montara Assets and believes it can execute these improvements to increase production, whilst also reducing fixed operating costs by up to 20%. The Company has already made significant cost savings at Stag, reducing fixed operating costs by 35%, cutting sustaining capital expenditure and stabilising production. The Company is now focused on increasing production at Stag through drilling infill wells over the next two years and completing well workovers.

The limited number of qualified offshore operators in Australia looking to deploy second phase specialisation, and Jadestone’s recently proven ability to obtain regulatory approvals, in particular approval as operator culminating in the transfer of operatorship of Stag in July 2017, proved a significant competitive advantage when engaging with the seller.

Reflecting on the savings obtained at Stag to date, the Company is confident of its ability to deliver significant additional value creation at the Montara Assets following a successful transition period and subject to the required investment by the Company.'


The analysis below of the trend between the price of Brent and the operating cost per bbl of the Stag Field gives some good insight of Montara's potential under JSE as operator.

In H1/2017 the Stag Field under the previous operator saw the differential average $8.00, rising to $24.00 in H2/2017 under Jadestone operatorship, and $43.50 in Q2/2018 (all rounded to nearest 0.50 cents). At current Brent pricing it will be close to $55.00 inclusive of the $2.50 regional price premium to Brent.

Brent average Prices
$39.00 - H1/2016
$48.50 - H2/2016
$51.50 - H1/2017 - Stag Op Cost/bbl: Q1($45.84)/(Q2/$41.23) - Previous Operator
$56.50 - H2/2017 - Stag: Q3($32.99)/Q4($32.15) - Jadestone as Operator
$66.75 - Q1/2018 - Stag: Q1($34.27)
$76.50 - Q2/2018 - Stag: Q2($33.09)
$85.00 - Current Spot Price


AIMHO/DYOR

[ifthecapfits] 02/10/2018 15:27

Yes i get that - but don't have the cash yet!

[highly geared] 02/10/2018 15:15

The move up has hardly started ITC. If everything comes together and oil stays above $80 for a prolonged period, Zengas valuation of 200p will look conservative. Potential 5 bagger over 18 months from here as materially undervalued to NPV of assets.

[ifthecapfits] 02/10/2018 14:13

Well done holders. I had this on my watch list and was waiting funds to arrive. Annoying.

[mount teide] 02/10/2018 13:47

L2: 3(45,000) v 1(7,500) / 43.0p v 44.0p

[mount teide] 02/10/2018 13:06

L2: 3 v 1 / 42.6p v 43.0p (2 on 44.0p rest of 44.6p or above)

[zengas] 02/10/2018 08:59

With oil at $80+ there is an even greater disconnect re value.

Montara and Stag are now significant cash cows and no doubt that this will now help in getting further acquisitions from the majors offloading non core Asian fields of both production and existing discoveries.

Investor presentation valuation of some £655m based on $66/b for 2018, $67/b 2019 and $68/b thereafter (page 6).

Montara NPV $479.5m (£355m).
Stag $84.2m (£62m).
Nam Du $226m (£167m).
U Minh $96m (£71m).
Total $885.7m (£655m). Excludes OK PSC. Using ex rate £1=$1.35.
Very significant $3billion adjustment to offset re Montara.



At $66-$68/b oil - the £655m valuation is 142p/share.

Ogan Komerang 1155 km2 PSC to be ratified this quarter which is a sizeable producing asset and which isn't included in the CPR nor in the valuation.

Should be a 20% uplift in forward production numbers from infill drilling and new reserves classification across Montara/Stag.

With 'OK' production PSC to come and 2 other assets in the portfolio with no CPR valaution + a further acqusition this imo has potential for 200p of value creation using just the $66-$68/b oil price range.

[highly geared] 02/10/2018 08:52

Read the header notes which are extracted from the latest JSE presentation. £655 million NPV versus a current market cap around £200 million.
JSE will drive operational efficiencies at Montara and their other assets + we will see cash flow / profit leverage from the high POO if it remains over $80.
JSE are pumping c 14,000Bopd from the Aus assets and this will increase over the next 6 months in line with the FDP. 14,000 x $80 x 300 ( days)= $336,000,000 gross revenue...

[wanobi] 01/10/2018 22:48

Brasso3, I don't think you've posted on JSE so I'll continue to post here if that's ok with you? Thanks, cheers Wan

[wanobi] 01/10/2018 22:23

thanx MT, will look at those to start with, cheers Wan

basem1, bit strong but fair enough, sorry to have upset you once again.

best to all, cheers Wan

[mount teide] 01/10/2018 22:18

Wanobi - the Oil and Gas Conference Presentation and Investor Presentation links in the header should provide a useful starting point together with the content of the header.

[wanobi] 01/10/2018 20:48

Hi MT,

Also,

Please can you tell me in a nutshell why JSE is a buy right now??
Most appreciated, thanks, cheers Wan

Apologies for the laziness and my direct question, it just seems that you are the most knowledgeable here and I've always tended to rely on local knowledge!!

I fully understand if you tell me to bog off and do some research; thing is, I don't have a lot of time to do that with so many seemingly great investment opportunities on offer...

Another intriguing one!

Thanx
Cheers
Wan

[mount teide] 01/10/2018 20:41

Brent flying up 3% to $85.28

Jadestone will be getting close to $88 with the regional premium.

Montara purchase timing is looking prescient - JSE will almost certainly have initiated discussions to discuss terms on/before the effective start date when Brent was $55-$60 - which is likely to have heavily influenced the purchase price.

[highly geared] 01/10/2018 19:28

With Montara acquired, profit seriously leveraged if Brent continues up toward $100. Asset purchase impeccably timed!

[mount teide] 01/10/2018 17:31

Brent surges to $84.50

[highly geared] 01/10/2018 13:46

Still trading at less than 1/3 net present value. With Montara at 100% ownership, the gap should start to close.

[puzzler2] 01/10/2018 13:40

Duplicate post

[puzzler2] 01/10/2018 13:39

Added earlier today

[walter walcarpets] 01/10/2018 13:08

Also picked up a few this morning. Thanks MT for thread and info.

[mount teide] 01/10/2018 12:58

Welcome aboard Mr T.

L2 continuing to strengthen: 1 v 2 / 42.0p v 43.0p