Montara Operations Update

RNS Number : 4352P

Jadestone Energy PLC

20 June 2022

 

Jadestone Energy 

Montara Operations Update

20 June 2022 - Singapore: Jadestone Energy plc ("Jadestone", or the "Company") an independent oil and gas production company focused on the Asia-Pacific region, provides the following update on operations at the Montara field offshore Australia.

On 17 June 2022 during routine production and crude oil cargo operations, crude oil was being transferred between two crude oil tanks onboard the Montara Venture FPSO.  During the transfer, oil was observed on the surface of the sea adjacent to the FPSO.  Transfer operations were ceased immediately and production from the Montara fields was shut in as a precautionary measure.

The release of oil to sea was quickly halted by pumping water into the tank, indicating a leak somewhere at the tank base.  A subsequent inspection using an ROV confirmed a small 30mm diameter hole in the bottom of the tank.  Having now controlled the release of oil, the next step will be to apply a temporary repair in order to remove the remaining oil from the tank.  Following this, the tank will be accessed and cleaned in order to complete an inspection and permanent repair. This is the same work plan which has already been applied to all the other main crude oil storage tanks, as part of the five yearly inspection and repair programme which has been underway since Jadestone assumed operatorship of the Montara assets, and which is a normal and accepted process approved by regulators and Class inspectors globally.

The volume of released oil is estimated at three to five cubic metres, which was monitored and had fully dispersed by the morning of 19 June 2022.  The National Offshore Petroleum Safety and Environmental Management Authority ("NOPSEMA") was notified of the incident immediately and will initiate an onsite inspection of the Montara facilities on 21 June 2022.

Jadestone's preliminary estimate is that it will take approximately four weeks to complete the tank inspection and effect repairs sufficient to re-commence production at Montara, with appropriate isolation of the crude oil tank.  Thereafter, following consultation with key stakeholders, a full remediation programme will be conducted, similar to that which has been completed on all the other main crude oil tanks.  At this early stage, Jadestone estimates the cost of securing the leak site and permanent repair of the crude oil tank at US$2-3 million.  This is consistent with the overall expenditure to date on the tank inspection and repair work, which totals US$11 million over the past three years.

On the basis that full production from the Montara fields can be restarted as estimated, Jadestone expects that full-year 2022 production would be around the lower end of the previously announced guidance range of 15,500 - 18,500 boe/d.

Paul Blakeley, President and CEO commented:

"Whilst we deeply regret this event, immediate and decisive action by the Jadestone team limited the quantity of oil released and made the facility safe, and I commend the work of both the offshore crew and the onshore operational staff for their quick response in managing this incident.

The integrity of our facilities is at the heart of our strategy and this oil tank was due for inspection within the next few weeks as part of our five-yearly maintenance cycle, which would have been the final key step in the significant inspection and repair plan that has been underway on the Montara Venture since we assumed operatorship in 2019.  Over this period, we have worked extensively and spent significant sums to restore the vessel and associated infrastructure to the condition required in order to deliver a long, safe and productive field life.  

Safety and sustainability are core values for Jadestone, and we will now work closely with the Class inspector, NOPSEMA and other stakeholders to develop and execute a plan to safely and permanently repair the hole in the crude oil tank.  There are many precedents for this type of activity, both within the Asia-Pacific region and globally, and we will deploy the necessary expertise to provide confidence in the solution we implement.  It's particularly frustrating for this event to occur so close to the planned inspection and repair activity, but our investment in the facilities to date is bearing fruit, with facility uptime now over 90% and with further improvements in the planning stage. "

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For further information, please contact:

Jadestone Energy plc
Paul Blakeley, President and CEO	[phone] (Singapore)
Phil Corbett, Investor Relations Manager	[phone] (UK)
	[e-mail]
Stifel Nicolaus Europe Limited (Nomad, Joint Broker)	[phone] (UK)
Callum Stewart
Jason Grossman
Ashton Clanfield
Jefferies International Limited (Joint Broker)	[phone] (UK)
Tony White
Will Soutar
Camarco (Public Relations Advisor)	[phone] (UK)
Billy Clegg	[e-mail]
Georgia Edmonds
James Crothers

About Jadestone Energy

Jadestone Energy plc is an independent oil and gas company focused on the Asia-Pacific region.  It has a balanced, low risk, full cycle portfolio of development, production and exploration assets in Australia, Malaysia, Indonesia and Vietnam.

The Company has a 100% operated working interest in the Stag oilfield and in the Montara project, both offshore Australia. Both the Stag and Montara assets include oil producing fields, with further development and exploration potential.  The Company also has interests in four oil producing licences offshore Peninsular Malaysia; two operated and two non-operated positions.  Further, the Company has a 100% operated working interest in two gas development blocks in Southwest Vietnam, and an operated 100% interest (assuming completion of the Hexindo stake acquisition, as announced in November 2021) in the Lemang PSC, onshore Sumatra, Indonesia, which includes the Akatara gas field development.

In addition, the Company has executed a sale and purchase agreement to acquire a 69% operated working interest in the Maari Project, shallow water offshore New Zealand, and is working with the seller to obtain final New Zealand government approvals. 

Led by an experienced management team with a track record of delivery, who were core to the successful growth of Talisman's business in Asia, the Company is pursuing an acquisition strategy focused on growth and creating value through identifying, acquiring, developing and operating assets in the Asia-Pacific region.

Jadestone Energy plc is listed on the AIM market of the London Stock Exchange.  The Company is headquartered in Singapore.  For further information on the Company please visit www.jadestone-energy.com .

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No. 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018.

Glossary

FPSO	floating, production storage and offloading vessel
ROV	remote operated vehicle

 

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