Jadestone Energy Share Discussion Threads

[farmscan] 29/11/2023 14:44

Not sure if I've done the right thing, but I've parked my Serica divi here. Watch it tank!

[fardels bear] 29/11/2023 13:50

Nice one. :D

[king suarez] 29/11/2023 13:12

Fardels Beard...

[fardels bear] 29/11/2023 13:06

My beard will have grown long

[1senn] 29/11/2023 11:25

Once this seller is dine should head towards 50p must be odey??

[1senn] 29/11/2023 11:24

Did the top man not say 90p is cheap with what's coming early 24

[1senn] 29/11/2023 11:19

70p is far to cheap imho think it will be close the that come spring summer 24.

It was over £1 with far less than they have coming on stream April May time

ATB

[winnet] 29/11/2023 11:01

dunno, if a bid came to 70p ish tomorrow, i'd take it as it'll be another 12 months before we get anywhere near that IMO.

[ashkv] 29/11/2023 10:25

Hopefully a cheap bid in the 60-70p range doesn't take us out prior to H2 2024!!!

[ashkv] 29/11/2023 10:24

Indeed - could easily 3x in 6-12 months with Akatara online, minimal debt nearly reduced, oil price strength, further acquisitions, Montara consistency etc etc

Even the most pessimistic analyst has a 12 month target price of 55p!!!

Whereas the other analysts are in the 80p range - AND THIS IS A CONSERVATIVE FIGURE!!!

winnet28 Nov '23 - 14:00 - 20317 of 20319
0 3 0
Wish i had more cash to throw at this. The chart looks good and 2024 should be transformational.

[ashkv] 29/11/2023 10:22

Another troll handle? "s34icknote"

[fardels bear] 29/11/2023 08:31

I take Visa.. ;)

[winnet] 28/11/2023 14:00

Wish i had more cash to throw at this. The chart looks good and 2024 should be transformational.

[s34icknote] 28/11/2023 13:06

50 k blocks !

[s34icknote] 27/11/2023 13:09

100 k blocks again

[ashkv] 27/11/2023 09:33

Anyone here attending the in-person investor in London planned for early December?

Fingers crossed an update prior / or on the day that Montara is 100% operational and no tankers required...

We are also due for an Akatara update... just around 4-5 months to initial production per prior guidance :) :)

JSE is a steal...

[s34icknote] 24/11/2023 18:44

Seller still here !

[1ajm] 24/11/2023 17:31

Nice post Winnet.

Let's see if next week brings retrace #56633 in JSE history or if momentum continues

[11_percent] 24/11/2023 12:15

Thanks for posting from behind the paywall winnet......nice summary.....but as FB says......production will be north 20k next year.


Liked this.

Encouragingly, a recent trading update revealed better than expected production from the four new wells at East Belumut. "The three wells drilled to date in the 2023 drilling programme are currently producing at a gross rate of 6,200bopd, significantly exceeding the pre-drill gross rate expectation for all four wells of 3,500bopd," Jadestone said. And on the day before the update, production hit 8,800bopd. The company owns 60 per cent of the project, so that is an addition of 5,300bopd net.

[lord gnome] 24/11/2023 10:26

Thanks for that winner. Quite a comprehensive and balanced trot through the risks and opportunities.

[fardels bear] 24/11/2023 10:12

Thanks winnet. As usual, some errors, like adding Akatara production to the reduced 2023 guidance figure and coming up with 20k boepd for 2024. Why not add the Akatara to the current production figure plus new CLWH addition and get 30k boepd for 2024?

[winnet] 24/11/2023 10:01

Bear, here you go...

After a terrible 12 months, there are good reasons to anticipate a better 2024 for this mid-tier oil and gas company.

Jadestone Energy JSE 32p AIM: OIL: CRUDE PRODUCERS

• Increasing production • New projects reduce portfolio risk • Dividend return expected in 2025 • Supportive June fundraising • Possible project delays • Management structure

Energy stock declines have outpaced oil and gas price falls this year, although earnings are still at or above historic averages. As a result, dividend yields in the sector can exceed 10 per cent (and even 20 per cent in the case of Diversified Energy (DEC).

But some of the most glaring discounts, and recent price falls, are to be found among those companies - such as Jadestone Energy ( JSE) - that have fallen offthe dividend list. The company stopped paying out amid an eightmonth production shutdown at its Montara field last year, and has been prevented from resuming dividends by high capital spending.

Although production at Montara has resumed, Jadestone's earnings have suffered, pushing the shares down by over 60 per cent, and making it an outlier in an already weak pack. For us, this presents a buying opportunity. While some investors need to see income from their oil and gas holdings, Jadestone's valuation and overall situation is sufficiently compelling to compensate for the current lack of cash distributions.

Sell-offThe company was punished for the Montara debacle, rightly, given its business case was buying mature assets and improving their operating performance. The knock was reflected in first-half numbers: sales fell by 62 per cent to $87mn (£69mn), leading to an operating cash outflow of $24mn. While a 23 per cent drop in realised oil and gas prices didn't help, the decline in production did most of the damage.

The company did have enough cash to cushion the blow of the Montara suspensions, but by mid-year this had narrowed to $7.8mn from $123mn six months before. The company will slip into a net debt position at the end of this year (Peel Hunt forecasts $47mn) but expects the balance sheet to "exhibit a deleveraging trend by the end of 2024". Meanwhile, the company has maintained its reserves-based lending facility at $200mn, despite weaker energy prices. June's sale of $51mn-worth of shares at 45p apiece also shored up the balance sheet and handed a bigger stake to existing investor Tyrus Capital, which now holds 21 per cent.

So far, not so compelling. However, a shift to development alongside a new non-operated acquisition means the company will soon be better insulated from nasty surprises at individual operations. The focus on the Asia Pacific region also provides a point of difference from other UK-listed small- and mid-cap players, which largely operate in the North Sea, the Americas and offshore Africa.

Jadestone is currently building up a new onshore gas project in Indonesia, which should contribute to a significant climb in production next year, to 20,000 barrels of oil equivalent per day (boepd) from this year's upper guidance of 13,700 boepd. That second figure is lower than existing capacity due to the Montara suspensions.

That increase will also be supported from new wells at the Malaysian East Belumut field and the acquisition of a greater (non-operated) stake at the CWLH fields, offshore Western Australia, taking the total holding to one-third of the asset. Output, net to Jadestone, is now around 3,000 barrels of oil per day (bopd).

Encouragingly, a recent trading update revealed better than expected production from the four new wells at East Belumut. "The three wells drilled to date in the 2023 drilling programme are currently producing at a gross rate of 6,200bopd, significantly exceeding the pre-drill gross rate expectation for all four wells of 3,500bopd," Jadestone said. And on the day before the update, production hit 8,800bopd. The company owns 60 per cent of the project, so that is an addition of 5,300bopd net.

The hiccup in the well drilling programme is the cost, which was $7mn more than the $21mn expected. This has pushed 2023 capital spending to the top of guidance of between $110mn and $125mn, although Jadestone believes higher output to date means the drilling campaign's total outlay should be "fully cost recovered by Q2 2024".

Montara itself is back at 5,700boepd, with "good well performance".

The beginnings Jadestone listed on Aim in 2018 as the second major project of Paul Blakeley, three years after the first - the Canada-focused Talisman Energy - was acquired by Repsol (ES:REP) for $8bn. He served as executive chair after the takeover, having run the Asia Pacific division for a decade.

At Jadestone, a more US-style leadership structure - under which Blakeley has taken on the president title - has received a mixed reception from investors. At June's AGM, 10 per cent of shareholders voted against Blakeley's re-election to the board. On the morning of the meeting the company made a promise to appoint a chief operating officer and an effort to "enhance internal succession [options]".

The development moves in the past two years are not Jadestone's first, either. An offshore discovery in Vietnam - for which it was "targeting project sanction" by the end of 2019 - has been stymied by the need for a buyer. Jadestone sees the operator of a gas power plant in Vietnam as the obvious candidate, and Blakeley put the case to the Vietnamese prime minister in August. This could still turn into a cash generator for Jadestone.

Peel Hunt still puts a 9p-a-share value on the two fields, even as its core net asset value (NAV) numbers have tumbled from Montara and fellow Australian offshore field Stag, which are down from 63p and 23p to 24p and 10p, respectively. The drop-offcomes despite Stag's decent performance in the past year (even with a planned shutdown in 2022), and Jadestone consistently being paid a premium of $20 a barrel for its output.

Here too, however, costs have been a bugbear. In the first half of 2023, a mix of shutdown issues and tanker costs meant Montara and Stag saw a combined $18mn increase in operating costs to $41mn.

Tanker turning With the assumption that Montara reaches consistent performance from now on, the new production from Indonesia and Malaysia means Jadestone could quickly bounce back after a tough run. Progress in Vietnam would be the cherry on top. Getting through 2023 with a new loan facility, enough cash to fund both new production, the added CWLH stake and the East Belumut wells can be seen as a victory. Now the task is rolling everything into a much better 2024.

In September, Blakeley told Investors' Chronicle that much closer attention was being paid to Montara. The second shutdown, in July, was due to a defect in a tank on the Montara floating production, storage and offloading (FPSO) ship. "In using a finer probe we found and resolved why we missed it the first time around," Blakeley said. Put simply, "we now have a higher confidence that we can predict greater reliability by adopting this inspection method".

This is a game of millimetres and microns, until it isn't: Montara is famous in Australia as the site of one of the region's worst oil spills in 2009 when under the control of PTTPEP, owned by the Thai state. Jadestone also suspended the operation over safety concerns in 2019.

Given the vigilance being applied, Jadestone's wider portfolio should amount to a more resilient and diversified investment case. Barring disaster, Peel Hunt even sees the dividend coming back in 2025. If that's an item on next November's trading update, then it's more than likely the share price will have recovered, too.

JADESTONE'S VALUATION AND SITUATION IS SUFFICIENTLY COMPELLING TO COMPENSATE FOR THE CURRENT LACK OF CASH DISTRIBUTIONS A RECENT TRADING UPDATE REVEALED BETTER THAN EXPECTED PRODUCTION FROM THE FOUR NEW WELLS AT EAST BELUMUT

[1ajm] 23/11/2023 20:54

Good couple of days.