REG - Jadestone Energy PLC - Trading update for half-year ending 30 June 2023

Jadestone EnergyAnnouncement

20/07/2023 07:15

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RNS Number : 6416G  Jadestone Energy PLC  20 July 2023

Trading update for the half-year ending 30 June 2023

 

20 July 2023 - Singapore: Jadestone Energy plc ("Jadestone", the "Group" or
the "Company"), an independent oil and gas production company focused on the
Asia-Pacific region, provides a trading update for the half-year ending 30
June 2023. The financial information in this update has not been audited and
may be subject to further review. Jadestone intends to announce its half-year
2023 unaudited results in September 2023.

 

Highlights

 

·    2023 Group production, underlying operating cost 1  and capital
expenditure guidance reaffirmed.

·    The Akatara gas development project in Indonesia is 42% complete and
remains on plan, budget and schedule for first gas in H1 2024.

·    East Belumut infill drilling campaign offshore Malaysia on schedule
to commence in August 2023.

 

Paul Blakeley, President and CEO commented:

 

"After a challenging period, we consider mid-year 2023 to be an inflection
point for Jadestone as we start to rebuild shareholder confidence in our
investment case and operational delivery.  We are benefiting from much
greater and more diversified production streams, with the potential to return
to a net cash position as early as end-2024.

 

Our first-half 2023 performance reflects Montara production being shut in
until late-March 2023 and a softening in oil realisations year-on-year, driven
by lower Brent prices. Montara is producing in line with expectations, with
work continuing on the tank inspection and repair programme to increase
storage capacity offshore and to reduce temporary logistics costs back to
normal levels.  Our financial position has been significantly strengthened
following the closing of the RBL in May and the additional funding
transactions in June, and we are focused on delivering to our guidance.  The
Akatara development project, now 42% complete, remains on schedule and budget
and we are preparing for our first infill drilling campaign in Malaysia, which
we expect to commence in late-August.  These are important steps for
near-term growth, and we are confident that their successful execution will
narrow the current significant discount to fair value, which is a key
priority."

 

H1 2023 Operating Performance

 

                                           H1 2023   H1 2022
 Production
 Group production 2                boe/d   c.12,300  15,008
 - Montara                         bbls/d  c.2,900   7,509
 - Stag                            bbls/d  c.2,900   2,057
 - CWLH                            bbls/d  c.1,600   n/a
 - Peninsular Malaysia ("PenMal")  boe/d   c.3,900   5,443
 - Sinphuhorm                      boe/d   c.1,100   n/a
 Liftings
 - Oil                             mmbbls  1.0       2.0
 - Gas                             mmcf    0.8       0.9

 

Group production for H1 2023 of c.12,300 boe/d primarily reflects the shut-in
of Montara production until late-March 2023 and lower production at the PenMal
assets largely due to natural decline, offset by higher production from Stag
as a result of the H2 2022 infill drilling, a full period of the CWLH assets
acquired in H2 2022 and the initial contribution from Sinphuhorm since its
acquisition in February 2023.

 

When comparing to Group production guidance of 13,500 - 17,000 boe/d between
April and December 2023 (inclusive), production between April and June 2023
averaged c.14,800 boe/d. Group production has averaged c.16,000 boe/d in
recent weeks, with Montara averaging c.6,000 bbls/d.

 

Oil liftings were lower year-on-year, primarily due to the shut-in at Montara
(one lifting in H1 2023 vs. three liftings in H1 2022) and the timing of
liftings from the PenMal assets. At 30 June 2023, there was a combined
inventory and underlift position of c.540,000 bbls.

 

H1 2023 Financial Performance 3 

 

                                                H1 2023  H1 2022

 Average oil price realisation     US$/bbl      86.2     109.5
 - Brent                           US$/bbl      77.3     102.5
 - Premium                         US$/bbl      8.9      7.0

 Revenues                          US$ million  86.7     225.6
 Underlying operating expenses 4   US$ million  87.1     69.8
 Capital expenditure               US$ million  25.9     13.6
 Net cash/(debt) at 30 June        US$ million  7.1      161.6

 

The average oil price realisation for H1 2023 reflects the year-on-year
decline in Brent prices, partially offset by an increase in the average
realised premium, due to Stag (which achieves the highest oil price
realisations in the Group) being a higher proportion of liftings in H1 2023
compared to H1 2022. Revenues in H1 2023 reflect the trends in liftings and
realisations highlighted above.

 

Underlying operating expenses are consistent with full-year 2023 guidance,
with H1 2023 largely reflecting a full period of CWLH opex and higher
logistics costs associated with the Australia operations. The majority of H1
2023 capital investment was incurred on the Akatara gas development.

 

Net cash of US$7.1 million at 30 June 2023 reflects c.US$118 million of
consolidated Group cash balances 5  (restricted and unrestricted cash) and
c.US$111 million of debt drawn at 30 June 2023 under the Company's
reserves-based lending facility.

 

Based on the revenues and underlying operating expenses disclosures in the
table above, Jadestone expects to generate a net loss for the first half of
2023.

 

The Company's 2023 production, underlying operating costs and capital
expenditure guidance are all unchanged:

 

l  2023 Group production (April to December inclusive): 13,500 - 17,000 boe/d

l  Underlying operating costs(4): US$180-210 million

l  Capital expenditure: US$110-140 million, with the majority to be spent in
the second half of 2023 due to the timing and phasing of spend on the Akatara
development project and the East Belumut infill drilling campaign.

 

The Akatara development project is currently 42% complete and remains on
schedule and budget for first gas in H1 2024, as does the PM323 infill
drilling campaign in Malaysia, where the rig is anticipated on location in
late-August 2023.

 

-ends-

 

For further information, please contact:

 

 Jadestone Energy plc
 Paul Blakeley, President and CEO                      +65 6324 0359 (Singapore)
 Bert-Jaap Dijkstra, CFO

 Phil Corbett, Investor Relations Manager              +44 (0) 7713 687467 (UK)
                                                       ir@jadestone-energy.com (mailto:ir@jadestone-energy.com)

 Stifel Nicolaus Europe Limited (Nomad, Joint Broker)  +44 (0) 20 7710 7600 (UK)
 Callum Stewart
 Jason Grossman
 Ashton Clanfield

 Jefferies International Limited (Joint Broker)        +44 (0) 20 7029 8000 (UK)
 Tony White
 Will Soutar

 Camarco (Public Relations Advisor)                    +44 (0) 203 757 4980 (UK)
 Billy Clegg                                           jse@camarco.co.uk (mailto:jse@camarco.co.uk)
 Georgia Edmonds

 Elfie Kent

 

About Jadestone Energy

 

Jadestone Energy plc is an independent oil and gas company focused on the
Asia-Pacific region.  It has a balanced and increasingly diversified
portfolio of production and development assets in Australia, Malaysia,
Indonesia, Thailand and Vietnam, all stable jurisdictions with a positive
upstream investment climate.

 

Led by an experienced management team with a track record of delivery, who
were core to the successful growth of Talisman Energy's business in
Asia-Pacific, the Company is pursuing a strategy to grow and diversify the
Company's production base both organically, through developments such at
Akatara in Indonesia and Nam Du/U Minh in Vietnam, as well as through
acquisitions that fit within Jadestone's financial framework and play to the
Company's strengths in managing maturing oil assets. Jadestone delivers value
in its acquisition strategy by enhancing returns through operating
efficiencies, cost reductions and increased production through further
investment.

 

Jadestone is a responsible operator and well positioned for the energy
transition through its increasing gas production, by maximising recovery from
existing brownfield developments and through its Net Zero pledge on Scope 1
& 2 GHG emissions from operated assets by 2040. This strategy is aligned
with the IEA Net Zero by 2050 scenario, which stresses the necessity of
continued investment in existing upstream assets to avoid an energy crisis and
meet demand for oil and gas through the energy transition.

 

Jadestone Energy plc (LEI: 21380076GWJ8XDYKVQ37) is listed on the AIM market
of the London Stock Exchange (AIM: JSE).  The Company is headquartered in
Singapore.  For further information on the Company please visit
www.jadestone-energy.com (http://www.jadestone-energy.com) .

This announcement does not contain inside information.

Glossary

 

 bbl     barrel of oil
 bbls/d  barrels of oil per day
 boe     barrel of oil equivalent
 boe/d   barrels of oil equivalent per day
 CWLH    Cossack, Wanaea, Lambert, and Hermes
 mmbbls  million barrels
 mmcf    million cubic feet of gas
 RBL     reserves-based loan

 

 

 

 1  Underlying operating cost guidance excludes non-recurring items and
certain costs such as workovers, transportation and expenditure associated
with non-producing assets offshore Malaysia. These excluded items are included
in the reported production costs in the Group's income statement.

 2  Totals may not add due to rounding.

 3  The Group's H1 2023 liftings, revenues, operational and capital
expenditures do not include any contribution from the Sinphuhorm asset, which
will be treated as an investment in associate and hence equity accounted in
the Group's consolidated financial statements.

 4  Refer to Footnote 1. The H1 2023 adjustments to reported production costs
which result in the underlying operating expenses figure are still under
review and may be subject to change.

 5  Consolidated Group cash balances are inclusive of the US$50 million net
proceeds from the placing and open offer in June 2023.

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