Jadestone Energy Share Discussion Threads

[fardels bear] 13/2/2024 13:50

You are the bandwagon, Ash.

[fardels bear] 13/2/2024 13:49

Yeah, I gave him a tick up for that.

[e43] 13/2/2024 13:40

As a shareholder in previously cash rich Serica,their Tailwind acquisition was all about management keeping their jobs and making SQZ unattractive as a takeover target.It lacked any imagination, yes great write downs,but all your profits taxed away.

[ashkv] 13/2/2024 13:36

Serica and Tailwind - MT what do you have to say on the transaction?

Nigelpm is very much in awe of the deal and has been extremely laudatory of the transaction on the SQZ board for nearly a year!!!

Would be keen to hear your thoughts. Thx

At USD 20 plus EV/2p and north of USD 55k EV/Flowing Barrel in high tax UK, also paid for in part with cheap SQZ shares - I am part of the bandwagon that view the transaction as hugely value destroying...

IMHO has led to the ouster of the CEO and a shambles of a share price to below the net cash SQZ held prior to the Tailwind transaction.

nigelpm13 Feb '24 - 13:28 - 20992 of 20992
0 0 0
Great point made elsewhere around utilisation of tax credits - might make the deal really nice ala Serica and Tailwind.

[nigelpm] 13/2/2024 13:28

Great point made elsewhere around utilisation of tax credits - might make the deal really nice ala Serica and Tailwind. Not something Carlyle will have and possibly not the Malaysian concern either.

[nigelpm] 13/2/2024 13:26

That's a fair point yasX that I don't necessarily disagree with. I was also hoping to buy some more in the low 20's so I might now be unable to do that.

I'd think it more likely than not we walk away from the deal but we'll see.

[ashkv] 13/2/2024 13:20

If the deal is structured as a reverse takeover akin to HBR / Wintershell than JSE shares in all likelihood should be "fairly valued" based on "intrinsic/replacement/market value".

HBR shares were valued at 360p for reverse takeover purposes for their recent deal when trading close to 200p - a near 80% premium!!!

SteMiS13 Feb '24 - 08:49 - 20961 of 20989
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But presumably will leave Woodside with a majority stake in JSE (unless they can place some of the shares) and a lot of the upside dependant on how expensive/cheap are the assets they acquire. Effectively would dilute some of the upside (to the extent it materialises) from the existing assets...

[yasx] 13/2/2024 13:15

Nigel, If all those events were to occur while the shares are suspended it would be a great shame since one assumes this would have enabled holders to benefit from short term upside. We sustained the fall on the recent stag/montara news to re-vist the lows only to be suspended just as newsflow was set to improve.

[mount teide] 13/2/2024 13:02

O/T - Chris_engel - 'What's your view on the current stage of oil majors' divestment in Africa, Asia, and Australia? It seems to me that the momentum is particularly increasing in Africa, but it's challenging to assess accurately. How do you perceive the situation?'

Written many posts on the Afentra board on this subject over the last 6 months. As a location, Africa is leading the way in mature asset O&G disinvestment activity among those three regions - principally to avoid leaving huge reserves in the ground the disinvestment there of mature and mid-life assets by the majors, NOC's and large independents is being driven overwhelmingly by deals in Angola, the continent's largest producer.

According to a H2/2023 study by Rystad Energy, Angolan O&G M&A accounted for 70% (US$15 billion) of all M&A transactions across Africa in 2022.

The reason Angola is leading the way is because it has greatly sweetened new and existing O&G fiscal deals to attract new fossil fuel investment. It's interesting to note that upon following Angola's deal sweetening lead Malaysia too is now enjoying a very sharp uplift in M&A activity for its mature assets.

A few of the recent posts I put on the Afenta thread on the subject:

The huge increase in Angolan O&G sector M&A activity has been the result of implementing a major programme of legislative and fiscal reforms to attract foreign investment to the industry:

The government reduced the headline tax rates for marginal fields. For fields with discoveries of fewer than 300 million barrels of oil, the petroleum production tax was reduced from 20% to 10%, while the petroleum income tax was also reduced from 50% to 25%.

Paulino Jerónimo, the President of ANPG - the regulatory body in charge of regulating, supervising and promoting oil & gas operations - stated that the new fiscal and contractual terms are "focused on incentivising the exploration and the production of such reserves for both African and international medium-sized E&P companies."

The State Budget Law for 2021 further evolved the tax landscape by approving a reduction from 15% to 6.5% of the withholding tax rate applicable to services provided by non-resident entities to oil companies with permanent establishments or residency in Angola.

A new private investment law, also reduces the minimum capital requirement, facilitates the repatriation of capital and eliminates the requirement that local investors must have a 35% stake in foreign investment projects. This last point is a significant development, given the economic and legal challenges created by what was typically a carried interest.

Source: Bloomberg and International Law firm White and Case.
Angolan O&G Industry


Angola - O&G Industry - following the collapse in the oil price in 2014, the waterfall drop in infrastructure maintenance capex and production development investment that followed, was the principle reason why the Nation's O&G industry has since experienced a 35% decline in oil production.

After the announcement of a number of government fiscal incentives in 2021/2 to halt the decline in oil production, 2022 saw the first production increase in nearly a decade.

Between 2022 and 2023 Angola has since seen a significant increase in investment in the sector, rising from $5.6bn to $12.0bn.

Investments of $71bn are planned in the sector over the next 5 years in addition to investment in incremental production, according to ANPG, the National Oil, Gas and Biofuels Agency in charge of supervision, regulation and promotion of activities in Angola’s oil and gas sector.

Created in 2019, the ANPG has a clear strategy - to boost Angolan oil production by negotiating new agreements with the various stakeholders operating the country’s oil and gas blocks and develop exploration activities by organising tenders.

When considering the size of the reserves of most of the mature offshore Angolan fields, the dearth of production maintenance and development investment over the last decade and the highly material financial incentives being offered by the Government to maximise the recovery of oil from these fields, it is increasingly providing an excellent low risk, high upside, investment opportunity for small second phase O&G companies like Afentra.

As a consequence, I would expect the Afentra management to continue to focus on Angola as their key investment market for shareholders funds.

Afentra - New fiscal terms from the Supplementary Admission Doc.



An article that sums up well the tremendous O&G industry growth opportunities available in Angola and the wider, rapidly developing African Continent over the decades ahead.


Afentra - thoughts on the current valuation:

With asset production up 56% in 2023, H1 reserves replacement up 150%, and a major improvement in license fiscal terms recently renewed and extended to 2040: suggests the management's previous $35/bbl break even price is now likely to have significant potential for a material downward revision.....with FCF generation going in the opposite direction.

So, what investors currently get for their money is a company with zero net debt and a market cap of $87m, generating circa $50 million free cash flow per annum at $75 Brent from a huge 3 billion barrel OIP asset, that has rapidly increasing production AND reserves as a result of being starved of production development investment for nearly a decade, together with low development cost satellite fields that could collectively add a further gross 10-20k bopd.

Even in these educationally devalued times - that's got to make a lot of sense!

AIMHO/DYOR

Declaration: I hold a 7 figure position at an average of 25.9p

AIMHO/DYOR

[chris_engel] 13/2/2024 11:16

Thanks for the link nigelpm.

Mount Teide, I've been in JSE way too long already. Luckily I've managed to invest at the right time in AET and TNZ but unfortunately missed out in VLE.

What's your view on the current stage of oil majors' divestment in Africa, Asia, and Australia? It seems to me that the momentum is particularly increasing in Africa, but it's challenging to assess accurately. How do you perceive the situation?

[fardels bear] 13/2/2024 11:13

Found a new palantir, have you?

[tom111] 13/2/2024 11:11

Talking about a bad toothache like you did the other day,well

[yasx] 13/2/2024 10:50

I reckon if KSE is not the preferred bidder (and that is likely the probable outcome) it might not be a bad thing. It seems a step too far for PB based on his handling of matters the past couple of years.

[fardels bear] 13/2/2024 10:25

Yes, I suppose there are some knockers about who never understood the philosophy here.

[nigelpm] 13/2/2024 10:24

Agreed MT - no harm in re-iterating the point.

[fardels bear] 13/2/2024 10:18

That's what I thought, MT. That's why we are all here, isn't it? Gor blimey.

[mount teide] 13/2/2024 10:15

npm - Chris is a little late to the party - some of us have been writing(and investing in regional second phase O&G specialists) about the oil majors, NOC's and large independents divesting from the maturing O&G markets of SE Asia and Africa for over 5 years!

[nigelpm] 13/2/2024 10:14

If JSE fails in this bidding process, will the market’s reaction be severe punishment or indifference ?

Apart from some opex and management time I doubt it will make any odds.

[tom111] 13/2/2024 10:11

Fromw what i have been reading a reverse takeover takes 1 to 3 months

[klassic] 13/2/2024 10:11

Question;
If JSE fails in this bidding process, will the market’s reaction be severe punishment or indifference ?

[fardels bear] 13/2/2024 09:47

Sometimes you just have to go with the flow.

[mount teide] 13/2/2024 09:42

Woodside first put the Pyrenees assets up for sale in August 2023 - suggesting, there may well be the potential to negotiate a backdated effective economic date.

At 29,000 boepd of production a day, with most commanding a huge premium to Brent - that's potential revenue of circa $250m a quarter at the current Brent price - the accrued financial benefit for a backdated effective economic date could quickly knock a major hole in the suggested circa $500m headline price.

[yasx] 13/2/2024 09:26

This proposed deal is not in keeping with the recent publicly declared JSE strategy of reduced reliance on a specific asset, reducing risk and financial discipline.

I do wonder what Pb is up to…

[e43] 13/2/2024 09:16

Hope it happens faster than the ongoing suspension and acquisition of and by SAVE