Jadestone Energy Share Discussion Threads

[nigelpm] 14/11/2023 19:43

I hope not - an RNS tomorrow is more likely to be bad news I'd say.

[winnet] 14/11/2023 19:39

Agree Nigel.

Anyway, what price 3 in a row, tomorrow 7am?

[wooster4] 14/11/2023 19:09

50p is a long way off at the moment

[nigelpm] 14/11/2023 19:01

Indeed buying this asset has so strengthened Jadestone that CEO Paul Blakeley said to me this morning that the company is in a better place than it was back at 90p and I can understand that.

Possibly - not sure I'm in total agreement with that point though and remember there's the dilution and warrants out at 50p.

[nigelpm] 14/11/2023 18:43

I tend to agree with him but his record has been appalling so not sure that's a good thing.

[sea7] 14/11/2023 17:38

malcy today...

The question I have been asking of Jadestone in recent months has been simple, how does its undoubtedly high quality management move in the next few months in the wake of the Montara debacle and start to climb the hill to get back to the heights of an appropriately higher rating.

I say this because the share price is in a bad place and having had to raise equity funds at these low levels, whatever the company does on the inorganic growth front, it will have to be done without any recourse to equity markets. So, today they have announced what looks like a fantastic deal that ticks almost all my boxes.

The initial cash spend is very low ✔️ and buying into an asset the company knows well for $9m plus paying into the decommissioning fund next year is also very good and also extremely accretive ✔️. Knowing the asset is important and neither of the other parties will pre-empt which is good and has two ramifications, firstly it means that JSE can and probably will return for another stake before long and secondly the company now has a big enough stake to act as a block should the need arise ✔️.

The 2P acquisition cost of $1.70/ bbl is very cheap and the 2p and 2C number is less than $1/bbl, a price that could not find in any comparable basin anywhere in the world ✔️. Indeed buying this asset has so strengthened Jadestone that CEO Paul Blakeley said to me this morning that the company is in a better place than it was back at 90p and I can understand that.

So, finally I would like to assess that call, firstly Montara is back up and running and making a meaningful contribution and perhaps more importantly Akatara which will come onstream next year and Blakeley is confident that it will ‘surprise on the upside’. He also says that the opportunity set is getting better and so ticking the final box, that which says that as a result of being in a number of data rooms and with imaginative funding, I believe that that Jadestone is back on the growth trail and that certainly✔5039; my last box.

[nigelpm] 14/11/2023 17:14

I see it as seller willing to sell into more liquidity but that won't continue forever if things go well.

[chessman2] 14/11/2023 17:11

Some good business done today - a high turnover is good for MMs and for the share price except when holders are selling!!!

The large trades all look like buys especially the £2m at 3.28pm.

I am confident/hopeful more big buys are being considered by IIs.

[swanvesta] 14/11/2023 16:21

"the CWLH CAPEX budget for the next 4 years was forecast to average circa $12.5m/yr ($2.72/bbl @ 2,100 bopd)"

I think you meant @ 12,600 bopd. That comes out at just over $2m pa for 2,100 bopd, vs the $7m I allowed above. The issues earlier this year must have been expensive.

[croasdalelfc] 14/11/2023 16:20

4 liftings in the next 13 months . Two for each assets. Around $210m revenue to substantially pay for $22m remaining from BP asset and around $98m for the second asset.

[thedudie] 14/11/2023 15:37

I can see that JSE may want to take Chevrons lump as that would take them to 6-7Kboepd but would be surprised if they were really after Woodside's 50%. Apart from the circa £300million funding needed for the abandonment there is again the problem of too much concentration on a mid-late life asset.

After the Montara fiasco the management wanted diversification and have achieved what they set out that they would do -- ie make Montara a reducing percentage of the overall mix.
Taking the ownership up to 83.3% would just put CWLH in place of Montara as the asset too big to fail.

My feeling of the webcast was that they are after the next 16.6% lump and would then seek to influence the operator to invest and with recent experiences, for the foreseeable future I would be happy with just that!

[mount teide] 14/11/2023 15:29

NWS Oil Project Asset - What is remarkable is the low OPEX of the CWLH fields considering their age and production profile.

The Catcher field in the North Sea has a BW FPSO on charter at a cost of circa $210m a year for the initial 9 year fixed charter period - which at circa production of 26k bopd in 2020, indicates an operating cost JUST for the FPSO of $26.7/bbl. At a production level similar to the current gross 14k bopd of the CWLH assets, it would increase to $41.2/bbl, JUST FOR THE FPSO.

Initial production at the CWLH fields were circa twice that at the Catcher Field, averaging circa 72,000 bopd over the first 15 years of its life to 2010, and 27,600 bopd since. With a large STOIIP of around 890 mmstb - the JSE management believe there is considerable potential to add incremental reserves through infill drilling, targeting unswept oil across all four fields(three of the fields currently only have on a single producing well), and an opportunity to extend the asset life beyond 2031, the initial design life of the double skinned Okha FPSO.

The North West Fields have a current OPEX of less than $25/bbl INCLUSIVE of the finance and operating cost of the Okha FPSO.

In 2022, as a consequence of the comprehensive maintenance work plan carried out in 2021, the CWLH CAPEX budget for the next 4 years was forecast to average circa $12.5m/yr ($2.72/bbl @ 2,100 bopd), while the OPEX was forecast to average $100m/yr(circa $21.75/bbl) for 2022 and 2023, and an average of $110m in 2023/24.

The first CWLH deal provided the blueprint for the industry to provide Governments/Regulatory Authorities with the comfort necessary to enable the future transfer of large company mid/late life O&G assets to smaller players.

By implication, it also means from a competition perspective that only smaller players with considerable cash resources and industry experience are likely to be considered for such assets now increasingly becoming available across SE Asia and the Pacific Rim as their O&G basins mature....... meaning a very small pool of potential buyers for a very large pool of mid/late life assets.

[fardels bear] 14/11/2023 15:24

That's what we inferred a year ago, MT. I believe this is still PBs gameplay at CWLH.

[sea7] 14/11/2023 15:05

Yes and as we move through 2024, I expect to see a similar deal struck for chevrons share, potentially into 2025.

after all, chevrons latest annual report says..

The company’s worldwide net oil-equivalent production in 2022 was 3 million barrels per day.

The company estimates that 2023 Capex will be approximately $14 billion.

.....

and from what I understand from PB comments today, they aren't really interested in developing their non operated share of the CWLH fields.

[nigelpm] 14/11/2023 14:45

Looks about right Swan - feels very much like a bigger player wanting to reduce management time on something that is immaterial to them.

[winnet] 14/11/2023 14:35

Good maffs, that would be great if it materialises. As an oil bull, i am expecting more than 80 into the late 2020s. Goldman have it at 100 plus... but then they are always wrong i suppose.

[swanvesta] 14/11/2023 14:30

Trying to figure out future FCF based on the expected ~$12-15m completion adjustment.

Since effective date there has been one lifting in Jan 23. Lets assume ~650k bbls @ $80/bbl = $52m. In the webinar, PB suggested costs of $18-20m pa, which will come to about $27-30m (18 months) between effective and completion dates. So operating cashflow will have been about $22-25m. Subtract $12-15m completion adjustment and that suggests capex of $10m over 18 months. They incurred extra expense early this year for remedial work, but lets assume they have to cover 2/3 of that or $7m pa.

There will be no incremental G&A cost.

So, @ $80 brent, annualised revenue will be of the order of 2000 * 365 * $80 or about $60m pa. Subtract from that $20m opex and $7m capex and CF comes to $33m pa before tax. PRRT is apparently shielded for a while. Will they still pay corporation tax though?

Anyway, if you include the Feb lifting the cost of that CF works out around $50m. Which doesn't seem too bad. Assuming I've made no howlers.

[1ajm] 14/11/2023 14:26

Surprised the goon squad on here let the you say someone doesn't see potential in the asset. I'd have been slated.

[nigelpm] 14/11/2023 14:24

Yes MT - reminds me a lot of what Serica have done in the North Sea - and their rewards have been substantial.

[1ajm] 14/11/2023 14:17

interesting thought MT, had shares here since 2018, luckily averaged down in the 20's, the potential here looks good.

[mount teide] 14/11/2023 14:10

Another significant add-on chunk of a very high quality asset - particularly if your investment outlook is longer than the lifecycle of a mayfly.

Reading between the lines of Paul Blakeley's webinar comments - Interesting that JSE see serious re-investment potential in the asset, while the other partners do not since the upside is no longer material for them. Infers that JSE may not only be in the market for a further slice of the asset in the future but, possibly operatorship too.

[fardels bear] 14/11/2023 13:41

After another quick 1500 notes

[1ajm] 14/11/2023 13:41

your positive only thinking is right only if everythimg goes to plan. welldone. I bet you guys are first to winge if something goes wrong. you probably winge even before your beloved est. share price givers get chance to downgrade their estimates.

[nigelpm] 14/11/2023 13:37

Same here - it's forrest.

[fardels bear] 14/11/2023 13:28

Filtered. Clown.