Results for the Period Ending June 30, 2019
Jadestone Energy Inc.
Jadestone Energy Results for the Period Ending June 30, 2019
Record second quarter cash from operations and almost US$100 million cash from operations in the first six months of 2019
August 27, 2019-Singapore: Jadestone Energy Inc. (AIM:JSE, TSXV:JSE) ("Jadestone" or the "Company"), an independent oil and gas production company focused on the Asia Pacific region, reported today its consolidated interim unaudited results, as at and for the three-month and six-month period ended June 30, 2019.
Financial highlights
· Net revenue during the second quarter of US$115.3mm, more than double Q1 2019 and nearly seven times Q2 2018. Net revenue for the six-month period to June 30, 2019 was US$171.7mm compared to US$35.8mm for H1 2018;
· Positive cash generated from operations of US$59.3mm, before changes in working capital, interest and taxes, in Q2 2019, a more than 60% jump on Q1 2019 cash from operations of US$36.7mm, and compared to US$0.1mm for the same quarter a year ago. Cash generated from operations over the six-month period to June 30, 2019 was US$96.4mm compared to a net outflow of US$0.3mm for H1 2018;
· Average price realisations of US$71.70/bbl, an increase of 6% over Q1 2019. Differentials at Montara and Stag continue to improve, with the latest liftings achieving total differentials to Dated Brent of US$4.32/bbl and US$10.60/bbl respectively;
· Operating costs of US$21.74/bbl, excluding non-routine opex, including the Montara riserless light well intervention ("RLWI"), decreased by 9% from the prior quarter of US$23.75/bbl, and down 34% from the same quarter a year ago of US$32.70/boe;
· Quarterly profit after tax of US$22.6mm, nearly a three-fold increase over Q1 2019 profit of US$8.4mm, and versus a loss of US$4.9mm in Q2 2018. Profit after tax for the six-month period to June 30, 2019 was US$30.9mm, compared to a loss of US$21.5mm for H1 2018;
· Gross debt of US$73.4mm, reduced from US$86.6mm at end March 2019, as the Company continues to pay down its reserve-based lending facility; and
· Gross cash and bank balances of US$66.4mm, excluding US$10.0mm cash deposited in support of a bank guarantee, resulting in a net debt position of US$7.0mm. Inclusive of restricted cash, the Company is in a net cash position.
Operational highlights
· Ongoing safe operations at all assets, with the Stag production facility achieving nearly seven years without a lost time injury1;
· Montara uptime was 82% in Q22, down slightly from 85% in Q1 due mainly to weather-related downtime in April, but materially ahead of the same period in 2018;
· Production for the quarter averaged 13,315 bbls/d, decreased 8% from production reported for the March 2019 quarter3, due to planned downtime associated with commencement of the RLWI programme at Montara and weather, but nearly a four-fold increase over the same period a year ago;
· Achieved three production liftings during the quarter, setting a new record of 1.6mm bbls sold, or a total of 2.3mm bbls for the six-month period to June 30, 2019, which compares to 0.6mm boe for H1 2018;
· Completed drilling the Stag 49H infill well, which targeted 1.2mm bbls of reserves, and was brought on production in late May at a rate of 1,400 bbls/d. 49H is continuing to produce in line with expectations;
· Completed the RLWI programme at Montara. This innovative programme, which would otherwise have required a significantly more expensive rig-based intervention, was completed on budget in mid-August, with all three accessed wells now contributing to the complex's production;
· Signed a heads of agreement ("HoA") for the Nam Du/U Minh project gas sales and purchase agreement between Petrovietnam and the Company's wholly owned Vietnamese subsidiaries in April, 2019;
· Submitted the environmental impact assessment for the Nam Du/U Minh development project;
· Completed front end engineering design ("FEED") studies for the Nam Du/U Minh development project's offshore facilities and pipelines; and
· Finally, the Company's safety case for the Montara assets was accepted by Australia's offshore safety and environmental regulator, and operatorship of the asset was transferred to Jadestone on August 6, 2019.
Outlook
· Group production in the second half of the year will continue benefitting from the Stag 49H infill well, in addition to the successful RLWI programme at Montara, and continued optimisation of production operations across the business;
· Full year average group production guidance is reconfirmed at 13,500 - 14,500 bbls/d, within the larger range set out in Q1 2019;
· Opex guidance for the full year is maintained at US$21- 24/bbl, reflecting an acceleration in opex reduction initiatives at Montara, following the transfer of operatorship;
· Full year major spend remains on budget with the exception of the first infill well at Montara, where the tightening rig market in Australia will likely push the H6 infill well into H1 2020. This results in a reduction in full year major spend to within a range of US$73-88mm, but does not impact production guidance for this year;
· Award recommendations for the Nam Du/U Minh offshore facilities engineering, procurement, and construction contract and floating production, storage, and offload vessel contract are expected in Q3 2019;
· The Nam Du/U Minh field development plan is scheduled to be submitted to Petrovietnam and the Vietnam Government for approval, in late Q3 2019, leading to anticipated approval and final investment decision by end of 2019, as planned;
· Continuing positive discussions with Pertamina and Indonesian regulators relating to the Company re-establishing an interest in the Ogan Komering asset, with timing driven by Indonesian regulatory processes; and
· With Montara transition completed we are now starting to consider further inorganic opportunities to broaden the base, provide accretive value and grow the business, and subject to the Company's strict evaluation criteria.
1 Lost time reporting for Montara will commence in Q3, post transfer of operatorship on August 6, 2019
2 After excluding downtime due to well interventions
3 Montara production averaged across the period Jan 11, 2019 to Mar 31, 2019, equivalent to Group production of 13,059 bbls/d if averaged across the full 90 days of Q1 2019
Paul Blakeley, President and CEO commented:
"I'm very pleased to report Jadestone's results to June 30, 2019, with record quarterly revenue, profits and cash generation, and providing almost US$100 million cash from operations for the first half of the year. We are building a material business that is strongly cash flow generative, while providing growth through organic investment, both within our existing producing assets in Australia, as well as the new gas developments in Vietnam.
"In Australia, we successfully completed the Stag 49H infill well, which came on production at 1,400 bbls/d in May and continues to produce in line with expectations. At Montara, we completed an innovative subsea well intervention campaign which has successfully restored gas lift to key subsea wells and accessed additional reservoir sands. Importantly, all work at Montara is now being conducted with Jadestone as operator, following our safety case acceptance earlier this month by Australia's upstream regulator. This is an arduous process in one of the world's most highly regulated regimes and I have absolute confidence in our team's ability to uphold our high standards with regards to health, safety, and environmental stewardship in our operations.
"In addition, we're continuing to make good progress with our gas commercialisation in Vietnam, with acceptance of our environmental impact assessment for the Nam Du/U Minh development, and completion of front end engineering and design work for offshore facilities and pipelines. We're also advancing contracts for major project components and commercial gas sales negotiations, leading towards field development plan submission in late Q3 2019, and continue to work towards formal development sanction later this year.
"Our balance sheet is in excellent shape, with net debt effectively eliminated by mid-year, just nine months since we closed the Montara acquisition with a US$120 million RBL financing arrangement. 2019 is a transformational year for Jadestone and our forecast remains intact for organic cash flow to meet all ongoing re-investment plans, as well as generating distributable earnings for shareholders in the future."
Operations update
Montara
Production at Montara (Jadestone 100%4, and operator) averaged 10,700 bbls/d for Q2 2019. Operations were affected by an unusually late cyclone season, resulting in weather-related downtime in April, and a partial shutdown of some subsea wells in June during the Company's RLWI campaign.
Jadestone completed the RLWI campaign in mid-August, on budget. The Company expects to deliver 100% of the forecast reserves and production from the campaign, which includes protecting ongoing production by restoring gas lift and accessing additional reservoir sands. Completion of this innovative campaign was a critical milestone toward achieving the Company's production volume guidance for the year.
The Company is preparing to replace the subsea umbilical from the Skua and Swift/Swallow subsea wells to the Montara owned FPSO, anticipated to be complete in Q3 2019. In addition, advanced planning continues for the Company's first infill well at Montara, which will be drilled from an existing slot on the Montara wellhead platform, targeting 1.8mm bbls of unswept oil, with a target initial production rate of 3,000 bbls/d. Jadestone will be prepared to drill the H6 infill well in late 2019 and is actively canvassing the drilling rig market for a suitable jack-up rig to drill the well.
The Company is also progressing its plans to acquire new 3D seismic, to improve reservoir imaging, to more accurately target future infill wells beyond H6 and Skua-12, and to assess further exploration step-out potential. Timing and detailed planning will be influenced by vessel availability in the region.
There were two liftings from Montara in Q2 2019 of a total of 1.4mm bbls.
4 99% legal interest in the associated production licenses, subject to regulatory approval and held on trust by the seller.
Stag
Production at Stag (Jadestone 100%, and operator) averaged 2,615 bbls/d in Q2 2019. Production was negatively affected by unplanned downtime due to extreme weather activity in April and several wells requiring workovers over the reporting period, awaiting completion of 49H.
The Stag 49H infill well came on production in May and is contributing in line with expectations. Subsequent to quarter-end, all wells but one have been successfully worked over and production has been restored to approximately 4,000 bbls/d. One crude oil cargo was lifted from Stag in Q2 2019, for total sales of 0.2mm bbls.
Vietnam
The Company continues to make good progress on its Southwest Vietnam gas developments. In April, 2019, two Jadestone subsidiaries signed an HoA with Petrovietnam, relating to gas sales from the Nam Du and U Minh fields (Jadestone 70%5 working interest, and operator). The HoA establishes key terms including the agreed daily contract quantity of 80mmscf/d, and stipulates other key commercial terms and principles, including a take-or-pay commitment by the buyer, and a plateau production period of 55 months.
The Company submitted its environmental impact assessment for the Nam Du/U Minh gas development in June, a milestone in environmental governance for the project, and a critical step toward achieving formal development sanction. In addition, the Company completed FEED for the offshore facilities and pipelines during Q2 2019.
Jadestone continues to progress tendering for major contracts, in addition to negotiating the remaining commercial terms and in accordance with its signed HoA. The project remains on track for a final investment decision and project sanction by end of 2019.
5 Jadestone's working interest will increase to 100%, following registration of Petrovietnam's relinquishment of its 30% working interest in block 46/07 and block 51
Financial overview
Results for the quarter reflect a more than doubling of sales volume from 0.7mm bbls in Q1 2019 to 1.6mm bbls in Q2 2019. Meanwhile, realised prices also increased for the quarter, to US$71.70/bbl, an increase of 6% over Q1 2019. The Company reported record revenue of US$115.3mm, versus US$56.4mm in Q1 2019.
Production costs for the quarter were US$39.3mm, versus US$22.7mm in the prior quarter, reflecting an increase in well workover costs associated with the Montara RLWI and other maintenance costs, as well as increased lifting volumes of 1.6mm bbls compared to 0.7mm bbls in Q1 2019. After adjusting for non-routine opex including the Montara RLWI, this equates to US$21.74/bbl6, versus US$23.75/bbl in Q1 2019, and US$32.70/boe in Q2 2018.
Jadestone generated an adjusted positive EBITDAX of US$75.4mm for the quarter ended June 30, 2019, compared to US$23.7mm for the prior quarter, and US$0.3mm in the same quarter a year ago.
On an unadjusted basis, the Company reported a net profit before tax of US$34.0mm, compared to a net profit before tax of US$10.7mm in the prior quarter and a net loss before tax of US$3.9mm in the same quarter a year ago.
Net cash generated from operations before working capital, interest and tax was US$59.3mm, compared to US$36.7mm cash generated in Q1 2019, and US$0.1mm of cash used in Q2 2018.
Cash used in investing activities in Q2 2019 was US$27.7mm, including work on the Stag 49H infill well and the Montara RLWI campaign. This compares to US$9.8mm used in investing activities in Q1 2019, and US$0.2mm used in investing activities in Q2 2018.
Cash used in financing activities in Q2 2019 was US$11.9mm, which was primarily the result of a scheduled quarterly repayment of the outstanding RBL balance. This compares to cash used in financing of US$15.7mm in Q1 2019, and US$0.3mm used in Q2 2018.
At the end of the quarter, the Company had US$51.9mm cash, plus US$14.5mm of restricted cash, primarily related to its debt service reserve, and a further US$10.0mm of cash in support of a bank guarantee. Net debt was US$7.0mm, excluding the US$10.0mm of cash in support of the bank guarantee.
Additionally, the Company's existing capped swap provides robust support for 2019 cash generation establishing, as it does, a floor benchmark crude oil price of US$71.72/bbl for 50% of planned 2PD production at Montara, before allowing for the realised premium, which in the most recent lifting was US$4.32/bbl above Dated Brent.
6 This excludes the impact of workovers and repairs and maintenance at Stag given their unpredictable timing, and costs associated with the Montara RLWI which are opex related and will be tracked separately as per 2019 guidance
Selected financial information
The following table provides selected financial information of the Company, which was derived from, and should be read in conjunction with, the consolidated interim financial statements for the period ended June 30, 2019, available on SEDAR and the Company's website at www.jadestone-energy.com/financial-results/.
|
Quarterly comparison |
Jun 2019 quarter |
Jun 2018 quarter |
Change (%) |
|
Production, mboe7 |
1,211.7 |
325.9 |
271.8% |
|
Sales, mboe7 |
1,589.4 |
270.7 |
487.1% |
|
Avg realised liquids price, US$/boe7 |
71.70 |
71.46 |
0.3% |
|
Sales revenue, US$mm |
115.3 |
17.5 |
558.9% |
|
Capital expenditure8, US$mm |
23.1 |
0.3 |
N/M |
|
Quarterly comparison |
Jun 2019 quarter |
Mar 2019 quarter |
Change (%) |
|
Production, mbbls |
1,211.7 |
1,175.3 |
3.1% |
|
Sales, mbbls |
1,589.4 |
748.9 |
112.2% |
|
Avg realised liquids price, US$/bbl |
71.70 |
67.59 |
6.1% |
|
Sales revenue, US$mm |
115.3 |
56.4 |
104.4% |
|
Capital expenditure8, US$mm |
23.1 |
7.7 |
200.0% |
|
Year-to-date comparison |
H1 2019 |
H1 2018 |
Change (%) |
|
Production, mboe7 |
2,387.0 |
695.0 |
243.5% |
|
Sales, mboe7 |
2,338.2 |
603.7 |
287.3% |
|
Avg realised liquids price, US$/boe7 |
70.39 |
65.15 |
8.0% |
|
Sales revenue, US$mm |
171.7 |
35.8 |
379.6% |
|
Captial expenditure8, US$mm |
30.8 |
0.8 |
N/M |
7 Production, sales volume and average realised prices are expressed on a barrels of oil equivalent basis as the underlying data includes gas production from Ogan Komering for the prevailing period based on Jadestone's 50% participating interest up until May 19, 2018
8 Payment for oil and gas property, plant and equipment and intangible exploration assets. Excludes acquisition related capital expenditure and lease payments that under IFRS16 are included in cash used in investing activities
Conference call and webcast
The management team will host an investor and analyst conference call at 9:00 p.m. (Singapore), 2:00 p.m. (London), and 9:00 a.m. (Toronto) on the same day, Tuesday, August 27, 2019, including a question and answer session.
The live webcast of the presentation will be available at the below webcast link. Dial-in details are provided below. Please register approximately 15 minutes prior to the start of the call. The results for the period ended June 30, 2019 will be available on the Company's website at: www.jadestone-energy.com/investor-relations/.
Webcast link: https://event.on24.com/wcc/r/2052870/9B39318BD0B3417B45159AC8001E593E
Event conference title: Jadestone Energy Inc. - Second Quarter Results
Start time: 9:00 p.m. (Singapore), 2:00 p.m. (London), 9:00 a.m. (Toronto)
Date: Tuesday, August 27, 2019
Confirmation ID: 66806740
|
Country |
Dial-In Numbers |
|
Australia |
1800076068 |
|
Canada (Toronto) |
416 764 8609 |
|
Canada (Toll free) |
888 390 0605 |
|
France |
0800916834 |
|
Germany |
08007240293 |
|
Germany (Mobile) |
08007240293 |
|
Hong Kong |
800962712 |
|
Indonesia |
0078030208221 |
|
Ireland |
1800939111 |
|
Ireland (Mobile) |
1800939111 |
|
Japan |
006633812569 |
|
Malaysia |
1800817426 |
|
Singapore |
8001013217 |
|
Switzerland |
0800312635 |
|
Switzerland (Mobile) |
0800312635 |
|
United Kingdom |
08006522435 |
|
United States (Toll free) |
888 390 0605 |
Area access numbers are subject to carrier capacity and call volumes.
- Ends -
Enquiries
|
Jadestone Energy Inc. |
+65 6324 0359 (Singapore) |
|
Paul Blakeley, President and CEO |
+1 403 975 6752 (Canada) |
|
Dan Young, CFO |
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|
Robin Martin, Investor Relations Manager |
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|
|
|
|
Stifel Nicolaus Europe Limited (Nomad, Joint Broker) |
+44 (0) 20 7710 7600 (UK) |
|
Callum Stewart |
|
|
Nicholas Rhodes |
|
|
Ashton Clanfield |
|
|
|
|
|
BMO Capital Markets Limited (Joint Broker) |
+44 (0) 20 7236 1010 (UK) |
|
Thomas Rider |
|
|
Jeremy Low |
|
|
Thomas Hughes |
|
|
|
|
|
Camarco (Public Relations Advisor) |
+ 44 (0) 203 757 4980 (UK) |
|
Billy Clegg |
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|
James Crothers |
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About Jadestone Energy Inc.
Jadestone Energy Inc. 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, Vietnam and the Philippines.
The Company has a 100% operated working interest in Stag, offshore Australia, and a 100% legal and beneficial interest in the Montara assets, and a 99% legal, subject to regulatory approval, beneficial right, title, and interest in the associated production licences AC/L7 and AC/L8 (the "Montara Titles"). The remaining 1% legal interest in the Montara Titles is being held on trust by the seller, in favour of the Company, until Australian regulatory approvals relating to the transfer of operatorship of the Montara assets are obtained. Both the Stag and Montara assets include oil producing fields, with further development and exploration potential. The Company has a 100% operated working interest (subject to registration of PVEP's withdrawal) in two gas development blocks in Southwest Vietnam and is partnered with Total in the Philippines where it holds a 25% working interest in the SC56 exploration block.
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 throughout the Asia- Pacific region.
Jadestone Energy Inc. is currently listed on the TSXV and AIM. The Company is headquartered in Singapore. For further information on Jadestone please visit www.jadestone-energy.com.
Cautionary statements
Certain statements in this press release are forward-looking statements and information (collectively "forward-looking statements"), within the meaning of the applicable Canadian securities legislation, as well as other applicable international securities laws. The forward-looking statements contained in this press release are forward-looking and not historical facts.
Some of the forward-looking statements may be identified by statements that express, or involve discussions as to expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of phrases such as "will likely result", "are expected to", "will continue", "is anticipated", "is targeting", "estimated", "intend", "plan", "guidance", "objective", "projection", "aim", "goals", "target", "schedules", and "outlook"). In particular, forward-looking statements in this press release include, but are not limited to statements regarding target reserves volumes, production forecasts, cost projections, timing and results of exploration and development activities on both Stag and Montara, timing and results of the Montara replacement of subsea umbilical, expected costs, commodity prices and timing of the gas sales agreement for Nam Du and U Minh.
Because actual results or outcomes could differ materially from those expressed in any forward-looking statements, investors should not place undue reliance on any such forward-looking statements. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, which contribute to the possibility that the predicted outcomes will not occur. Some of these risks, uncertainties and other factors are similar to those faced by other oil and gas companies and some are unique to Jadestone. The forward-looking information contained in this news release speaks only as of the date hereof. The Company does not assume any obligation to publicly update the information, except as may be required pursuant to applicable laws. This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 and is disclosed in accordance with the Company's obligations under Article 17 of that Regulation.
The technical information contained in this announcement has been prepared in accordance with the March 2007 guidelines endorsed by the Society of Petroleum Engineers, World Petroleum Congress, American Association of Petroleum Geologists and Society of Petroleum Evaluation Engineers Petroleum Resource Management System.
Henning Hoeyland of Jadestone Energy Inc., a Subsurface Manager with a Masters degree in Petroleum Engineering who has been involved in the energy industry for more than 17 years, has read and approved the technical disclosure in this regulatory announcement.
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, and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Glossary
2PD proved and probable developed reserves
bbls barrels of oil
bbls/d barrels of oil per day
boe barrels of oil equivalent
EBITDAX earnings before interest, tax, depreciation, amortisation and exploration expenses
FPSO floating production, storage and offloading vessel
mbbl thousands of barrels of oil
mboe thousands of barrels of oil equivalent
mm bbls millions of barrels of oil
mmscf/d millions of standard cubic feet per day
PVEP Petrovietnam Exploration Production Corporation
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
for the three and six months ended June 30, 2019
|
|
Notes |
|
Three months ended June 30, 2019 USD'000 |
|
Three months ended June 30, 2018 USD'000 |
|
Six months ended June 30, 2019 USD'000 |
|
Six months ended June 30, 2018 USD'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated statement of profit or loss |
|
|
|
|
|
|
|
|
|
|
Revenue |
4 |
|
115,341 |
|
17,496 |
|
171,707 |
|
35,783 |
|
Production costs |
5 |
|
(39,337) |
|
(10,657) |
|
(62,057) |
|
(23,465) |
|
Depletion, depreciation and amortisation |
7 |
|
(33,222) |
|
(2,264) |
|
(45,114) |
|
(5,064) |
|
Staff costs |
|
|
(5,112) |
|
(3,780) |
|
(8,890) |
|
(6,805) |
|
Other expenses |
8 |
|
(2,171) |
|
(2,952) |
|
(5,037) |
|
(5,397) |
|
Impairment of assets |
9 |
|
- |
|
- |
|
- |
|
(11,902) |
|
Other income |
10 |
|
1,939 |
|
154 |
|
2,098 |
|
166 |
|
Finance costs |
11 |
|
(4,944) |
|
(1,863) |
|
(10,016) |
|
(3,077) |
|
Other financial gains |
12 |
|
1,458 |
|
- |
|
1,936 |
|
- |
|
Profit/(loss) before tax |
|
|
33,952 |
|
(3,866) |
|
44,627 |
|
(19,761) |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
13 |
|
(11,368) |
|
(1,046) |
|
(13,683) |
|
(1,742) |
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss) for the period |
|
|
22,584 |
|
(4,912) |
|
30,944 |
|
(21,503) |
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss) per ordinary share |
|
|
|
|
|
|
|
|
|
|
Basic and diluted (US$) |
14 |
|
0.05 |
|
(0.02) |
|
0.07 |
|
(0.10) |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated statement of comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss) for the period |
|
|
22,584 |
|
(4,912) |
|
30,944 |
|
(21,503) |
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
Items that may be reclassified subsequently to profit or loss |
|
|
|
|
|
|
|
|
|
|
Gain/(loss) on unrealised cash flow hedges |
23 |
|
3,105 |
|
(3,933) |
|
(29,691) |
|
(4,916) |
|
Hedging gain reclassified to profit or loss |
23 |
|
(1,376) |
|
- |
|
(7,128) |
|
- |
|
|
|
|
1,729 |
|
(3,933) |
|
(36,819) |
|
(4,916) |
|
Tax income/(expense) relating to components of other comprehensive income |
13,23 |
|
(519) |
|
1,180 |
|
11,046 |
|
1,475 |
|
Other comprehensive income/(loss) |
|
|
1,210 |
|
(2,753) |
|
(25,773) |
|
(3,441) |
|
Total comprehensive income/(loss) for the period |
|
|
23,794 |
|
(7,665) |
|
5,171 |
|
(24,944) |
|
|
|
|
|
|
|
|
|
|
|
All comprehensive income is attributable to the equity holders of the parent.
The accompanying notes are an integral part of the consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at June 30, 2019
|
|
|
June 30, |
|
December 31, |
|
|
|
2019 |
|
2018 |
|
|
Notes |
USD'000 |
|
USD'000 |
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Intangible exploration assets |
15 |
99,894 |
|
95,607 |
|
Oil and gas properties |
16 |
419,616 |
|
415,365 |
|
Plant and equipment |
17 |
1,884 |
|
1,709 |
|
Right of use assets |
18 |
69,303 |
|
- |
|
Derivative financial instruments |
30 |
2,738 |
|
15,339 |
|
Restricted cash |
21 |
18,493 |
|
23,561 |
|
Deferred tax assets |
13 |
21,198 |
|
21,287 |
|
|
|
633,126 |
|
572,868 |
|
Current assets |
|
|
|
|
|
Inventories |
19 |
32,257 |
|
29,831 |
|
Trade and other receivables |
20 |
68,113 |
|
32,800 |
|
Derivative financial instruments |
30 |
11,251 |
|
35,985 |
|
Restricted cash |
21 |
6,006 |
|
5,083 |
|
Cash and cash equivalents |
21 |
51,880 |
|
52,981 |
|
|
|
169,507 |
|
156,680 |
|
TOTAL ASSETS |
|
802,633 |
|
729,548 |
|
|
|
|
|
|
|
EQUITY AND LIABILITIES |
|
|
|
|
|
Equity |
|
|
|
|
|
Share capital |
22 |
466,573 |
|
466,562 |
|
Share based payments reserve |
24 |
23,066 |
|
22,375 |
|
Hedging reserves |
23 |
9,707 |
|
35,480 |
|
Accumulated losses |
|
(278,212) |
|
(309,156) |
|
|
|
221,134 |
|
215,261 |
|
Non-current liabilities |
|
|
|
|
|
Provision for asset restoration obligations |
25 |
299,069 |
|
277,697 |
|
Borrowings |
28 |
25,277 |
|
49,420 |
|
Lease liability |
27 |
50,929 |
|
- |
|
Other payables |
26 |
6,703 |
|
10,351 |
|
Deferred tax liabilities |
13 |
72,339 |
|
92,468 |
|
|
|
454,317 |
|
429,936 |
|
Current liabilities |
|
|
|
|
|
Borrowings |
28 |
48,124 |
|
52,393 |
|
Lease liability |
27 |
19,430 |
|
- |
|
Trade and other payables |
29 |
30,130 |
|
30,674 |
|
Provision for taxation |
13 |
29,498 |
|
1,284 |
|
|
|
127,182 |
|
84,351 |
|
Total liabilities |
|
581,499 |
|
514,287 |
|
TOTAL EQUITY AND LIABILITIES |
|
802,633 |
|
729,548 |
|
|
|
|
|
|
The accompanying notes are an integral part of the consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENT OF EQUITY
for the three and six months ended June 30, 2019
|
|
|
|
Share |
|
|
|
|
|
|
|
|
|
|
based |
|
|
|
|
|
|
|
|
Share |
|
payments |
|
Hedging |
|
Accumulated |
|
|
|
|
capital |
|
reserve |
|
reserves |
|
losses |
|
Total |
|
|
USD'000 |
|
USD'000 |
|
USD'000 |
|
USD'000 |
|
USD'000 |
|
|
|
|
|
|
|
|
|
|
|
|
At January 1, 2018 |
364,466 |
|
21,855 |
|
- |
|
(278,123) |
|
108,198 |
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the period, representing total comprehensive loss |
- |
|
- |
|
- |
|
(21,503) |
|
(21,503) |
|
Other comprehensive income for the period |
- |
|
- |
|
(3,441) |
|
- |
|
(3,441) |
|
Total comprehensive loss for the period |
- |
|
- |
|
(3,441) |
|
(21,503) |
|
(24,944) |
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation, representing transaction with owners, recognised directly in equity |
- |
|
273 |
|
- |
|
- |
|
273 |
|
|
|
|
|
|
|
|
|
|
|
|
At June 30, 2018 |
364,466 |
|
22,128 |
|
(3,441) |
|
(299,626) |
|
83,527 |
|
|
|
|
|
|
|
|
|
|
|
|
At January 1, 2019 |
466,562 |
|
22,375 |
|
35,480 |
|
(309,156) |
|
215,261 |
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the period, representing total comprehensive profit |
- |
|
- |
|
- |
|
30,944 |
|
30,944 |
|
Other comprehensive loss for the period |
- |
|
- |
|
(25,773) |
|
- |
|
(25,773) |
|
Total comprehensive income/(loss) for the period |
- |
|
- |
|
(25,773) |
|
30,944 |
|
5,171 |
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued |
11 |
|
- |
|
- |
|
- |
|
11 |
|
Share-based compensation, representing transaction with owners, recognised directly in equity |
- |
|
691 |
|
- |
|
- |
|
691 |
|
|
|
|
|
|
|
|
|
|
|
|
At June 30, 2019 |
466,573 |
|
23,066 |
|
9,707 |
|
(278,212) |
|
221,134 |
The accompanying notes are an integral part of the consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the three and six months ended June 30, 2019
|
|
Notes |
|
Three months ended June 30, 2019 USD'000 |
|
Three months ended June 30, 2018 USD'000 |
|
Six months ended June 30, 2019 USD'000 |
|
Six months ended June 30, 2018 USD'000 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities |
|
|
|
|
|
|
|
|
|
|
Profit/(loss) before tax |
|
|
33,952 |
|
(3,866) |
|
44,627 |
|
(19,761) |
|
Adjustments for |
|
|
|
|
|
|
|
|
|
|
-Interest income |
10 |
|
(275) |
|
(32) |
|
(578) |
|
(66) |
|
-Loss on ineffective hedge recycled to profit or loss |
|
|
70 |
|
- |
|
514 |
|
- |
|
-Interest expense |
11 |
|
1,285 |
|
- |
|
2,747 |
|
- |
|
-Other finance costs |
11 |
|
1,843 |
|
1,674 |
|
5,289 |
|
2,468 |
|
-Unrealised foreign exchange gain |
10 |
|
(96) |
|
(73) |
|
(93) |
|
(175) |
|
-Change in fair value of contingent payments |
12 |
|
(1,458) |
|
- |
|
(1,936) |
|
- |
|
-Depletion, depreciation and amortisation |
7 |
|
23,436 |
|
2,264 |
|
45,113 |
|
5,064 |
|
-Share based payments |
|
|
573 |
|
127 |
|
691 |
|
273 |
|
-Impairment of intangible exploration assets |
|
|
- |
|
- |
|
- |
|
11,902 |
|
|
|
|
59,330 |
|
94 |
|
96,374 |
|
(295) |
|
Changes in working capital |
|
|
|
|
|
|
|
|
|
|
-(Increase)/decrease in trade and other receivables |
|
|
(55,574) |
|
43 |
|
(36,013) |
|
1,181 |
|
-(Increase)/decrease in inventories |
|
|
17,602 |
|
(2,288) |
|
(1,049) |
|
(4,007) |
|
-Increase /(decrease) in trade and other payables |
|
|
6,697 |
|
99 |
|
(1,130) |
|
1,664 |
|
Cash generated from operations |
|
|
28,055 |
|
(2,052) |
|
58,182 |
|
(1,457) |
|
Interest paid |
11 |
|
(1,285) |
|
- |
|
(2,747) |
|
- |
|
Tax (paid)/refund |
|
|
6,243 |
|
(531) |
|
6,243 |
|
(1,049) |
|
Net cash generated from operating activities |
|
|
33,013 |
|
(2,583) |
|
61,678 |
|
(2,506) |
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
|
|
|
|
Payment for oil and gas properties |
|
|
(20,113) |
|
(182) |
|
(26,078) |
|
(389) |
|
Net payment for plant and equipment |
|
|
(276) |
|
13 |
|
(370) |
|
11 |
|
Payment for intangible exploration assets |
|
|
(2,680) |
|
(69) |
|
(4,287) |
|
(358) |
|
Lease payments |
27 |
|
(4,952) |
|
- |
|
(7,372) |
|
- |
|
Interest received |
|
|
275 |
|
32 |
|
578 |
|
66 |
|
Net cash used in investing activities |
|
|
(27,746) |
|
(206) |
|
(37,529) |
|
(670) |
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of shares |
|
|
- |
|
- |
|
11 |
|
- |
|
Repayment of borrowings |
|
|
(13,653) |
|
(276) |
|
(29,406) |
|
(645) |
|
Restricted cash transfers |
|
|
1,776 |
|
- |
|
4,145 |
|
- |
|
Payment of bond facility and stand-by fees |
|
|
- |
|
(32) |
|
- |
|
(64) |
|
Net cash used in financing activities |
|
|
(11,877) |
|
(308) |
|
(25,250) |
|
(709) |
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents
|
|
|
(6,610) |
|
(3,097) |
|
(1,101) |
|
(3,885) |
|
Cash and cash equivalents at start of the period |
|
|
58,490 |
|
9,662 |
|
52,981 |
|
10,450 |
|
Cash and cash equivalents at end of the period |
21 |
|
51,880 |
|
6,565 |
|
51,880 |
|
6,565 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the consolidated financial statements.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
for the three and six months ended June 30, 2019
1. CORPORATE INFORMATION
Jadestone Energy Inc. (the "Company" or "Jadestone") is an oil and gas company incorporated in Canada.
The Company's ordinary shares are listed on the TSX Ventures Exchange ("TSX-V") and the London AIM market. The Company trades on both markets under the symbol "JSE".
The financial statements are expressed in United States Dollars ("US$" or "USD").
The Company and its subsidiaries (the "Group") are engaged in production, development, exploration and appraisal activities in Australia, Vietnam and the Philippines. The Company's current producing assets are in the Carnarvon and Vulcan basins, offshore Western Australia.
During the comparative periods for the three and six months ended June 30, 2018, the Company had a participating interest in the Ogan Komering PSC in Indonesia. The terms of the PSC expired in May 19, 2018, after which the Company no longer held an interest in the PSC.
The Company's head office is located at 3 Anson Road, #13-01 Springleaf Tower, Singapore 079909. The registered office of the Company is 10th Floor, 595 Howe Street, Vancouver, British Columbia V6C 2T5, Canada.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
STATEMENT OF COMPLIANCE
These unaudited condensed interim financial statements (the "Financial Statements") are prepared in accordance with International Accounting Standard IAS 34, Interim Financial Reporting, on a going concern basis under the historical cost convention. They do not contain all disclosures required by International Financial Reporting Standards ("IFRS") for annual financial statements, and should be read in conjunction with Jadestone's audited consolidated financial statements for the year ended December 31, 2018.
These Financial Statements were approved for issuance by the Company's Board of Directors on August 27, 2019 on the recommendation of the Audit Committee.
3. BASIS OF PREPARATION
These Financial Statements have been prepared on an historical cost basis, except for financial instruments classified as financial instruments at fair value, which are stated at their fair values, and operating leases which are stated at the present value of future cash payments.
In addition, these Financial Statements have been prepared using the accrual basis of accounting.
Adoption of new and revised standards
New and amended IFRS standards that are effective for the current period
The Group has applied the following standards and amendments for the first time with effect from January 1, 2019.
- IFRS 16 Leases.
IFRS 16 Leases
General impact of application of IFRS 16 Leases
The Group, for the first time, has applied IFRS 16 Leases (as issued by the IASB in January 2016) as at January 1, 2019.
IFRS 16 introduces new or amended requirements with respect to lease accounting. It introduces significant changes to lessee accounting, by removing the distinction between operating and finance lease. IFRS 16 requires the recognition of a right of use asset and a lease liability, at commencement for all leases, except for short-term leases and leases of low value assets. Details of the new requirements are described in note 18, right of use assets. The impact of the adoption of IFRS 16 on the Group's consolidated financial statements is described below.
The Group has applied IFRS 16 using the "modified retrospective" approach, and has elected not to restate comparatives.
Impact of the new definition of a lease
The Group has made use of the practical expedient available on transition to IFRS 16 not to reassess whether a contract is or contains a lease. Accordingly, the definition of a lease in accordance with IAS 17 and IFRIC 4 will continue to be applied to those leases entered or modified before January 1, 2019.
The change in definition of a lease mainly relates to the concept of control. IFRS 16 determines whether a contract contains a lease, on the basis of whether the customer has the right to control the use of an identified asset for a period of time, in exchange for consideration.
The Group applies the definition of a lease and related guidance set out in IFRS 16 to all lease contracts entered into or modified on, or after, January 1, 2019 (whether it is a lessor or a lessee in the lease contract). In preparation for the first-time application of IFRS 16, the Group has carried out an implementation project. The project has shown that the new definition in IFRS 16 will not change significantly the scope of contracts that meet the definition of a lease for the Group.
Impact on lessee accounting
On adoption, IFRS 16 changed how the Group accounts for leases previously classified as operating leases. The impact to the Group accounts are:
- Recognises right of use assets and lease liabilities in the consolidated statement of financial position, initially measured at the present value of future lease payments;
- Recognises depreciation of right of use assets and interest on lease liabilities in the consolidated statement of profit or loss; and
- Separates the total amount of cash paid into a principal portion (presented within financing activities) and interest (presented within operating activities) in the consolidated statement of cash flows.
Under IFRS 16, right of use assets are tested for impairment in accordance with IAS 36 Impairment of Assets. This replaces the previous requirement to recognise a provision for onerous lease contracts.
Financial impact of initial application of IFRS 16
The recognition of the present value of the minimum lease payments resulted in an additional US$38.0 million (note 18) of right of use assets and associated lease liabilities. The Company has recognised the lease liabilities in relation to lease arrangements, previously disclosed as operating lease commitments under IAS 17, that meet the criteria of a lease under IFRS 16.
Upon recognition, the Company's weighted average incremental borrowing rate used in measuring lease liabilities was 6% percent.
The nature of the Company's leasing activities includes vessels, helicopters, buildings and the Stag FSO, all of which are used in producing and storage of hydrocarbons where the Company has a right to substantially all of the economic benefits.
The Company's lease contracts may contain termination, renewal, and/or purchase options, residual value guarantees, or a combination thereof, all of which are evaluated by the Company on a quarterly basis. The Company accounts for such contract options when the Company is reasonably certain that it will exercise one of these options.
New and revised IFRS's on issue but not yet effective
The Group has not applied the following new and revised relevant IFRS that have been issued, but not yet effective:
- Amendments to IFRS 3 Business Combinations.
The amendments are effective for annual periods beginning on, or after, January 1, 2020, and generally require prospective application. The Group is currently performing an assessment of the standard, and does not anticipate a material impact on the financial statements of the Group in future periods, with the exception of the item listed below.
Amendments to IFRS 3 Business Combinations
The definition of a business has been amended under IFRS 3, on October 22, 2018, clarifying that to be considered a business, rather than an asset sale or purchase, an acquisition would have to include an input and a substantive process that together significantly contribute to the ability to create outputs. The definition of the term outputs is narrowed to focus on goods and services provided to customers, generating investment income and other returns. The amended definition will be applied to reporting period's beginning on, or after, January 1, 2020 prospectively.
4. REVENUE
The Group derives its revenue from contracts with customers for the sale of oil and gas products. Revenue is presented in the consolidated statement of profit or loss, net of royalties.
|
|
Three months ended June 30, 2019 USD'000 |
|
Three months ended June 30, 2018 USD'000 |
|
Six months ended June 30, 2019 USD'000 |
|
Six months ended June 30, 2018 USD'000 |
|
|
|
|
|
|
|
|
|
|
Liquids revenue - after hedging |
|
|
|
|
|
|
|
|
Montara |
100,455 |
|
- |
|
145,377 |
|
- |
|
Stag |
14,886 |
|
14,523 |
|
26,330 |
|
28,608 |
|
Ogan Komering |
- |
|
2,812 |
|
- |
|
7,965 |
|
|
|
|
|
|
|
|
|
|
Gas revenue |
|
|
|
|
|
|
|
|
Ogan Komering |
- |
|
998 |
|
- |
|
2,759 |
|
|
115,341 |
|
18,333 |
|
171,707 |
|
39,332 |
|
|
|
|
|
|
|
|
|
|
Royalties |
- |
|
(837) |
|
- |
|
(3,549) |
|
Total revenue derived from contracts with customers |
115,341 |
|
17,496 |
|
171,707 |
|
35,783 |
All royalties included in the comparative period ended June 30, 2018, relate to production entitlement in Indonesia. The Ogan Komering PSC expired on May 19, 2018, and hence no revenue or royalties arose in the current period.
5. PRODUCTION COSTS
|
|
Three months ended June 30, 2019 USD'000 |
|
Three months ended June 30, 2018 USD'000 |
|
Six months ended June 30, 2019 USD'000 |
|
Six months ended June 30, 2018 USD'000 |
|
|
|
|
|
|
|
|
|
|
Operating costs |
12,996 |
|
8,385 |
|
28,491 |
|
17,075 |
|
Workovers |
7,131 |
|
2,106 |
|
10,278 |
|
5,536 |
|
Logistics |
3,967 |
|
1,090 |
|
12,031 |
|
2,345 |
|
Repairs and maintenance |
6,731 |
|
1,214 |
|
11,219 |
|
1,979 |
|
Movement in inventory |
8,512 |
|
(2,138) |
|
38 |
|
(3,470) |
|
|
39,337 |
|
10,657 |
|
62,057 |
|
23,465 |
6. ACQUISITION OF MONTARA ASSETS
On September 28, 2018 (the "acquisition date"), Jadestone Energy (Eagle) Ltd, a wholly owned subsidiary of the Company, closed the acquisition of the Montara Assets, obtaining control and 100% of the legal ownership from PTTEP Australasia (Ashmore Cartier) Pty Ltd ("PTTEP Australia"), apart from interest in the associated licenses. The Company received 99% interest in the Montara titles on May 30, 2019, and following transfer of the Montara operatorship to Jadestone on August 6, 2019, the Company has now requested transfer of the final 1%.
6.1 Fair value of consideration transferred
The consideration for the Montara Assets on the acquisition date comprised a cash payment of US$133.1 million, as set out below.
|
|
|
|
|
|
|
USD'000 |
|
|
|
|
|
|
|
|
|
|
|
Asset purchase price |
|
|
|
|
|
195,000 |
|
|
Crude inventory value |
|
|
|
|
|
6,657 |
|
|
Capital charge |
|
|
|
|
|
6,982 |
|
|
Net income adjustment (from January 1, 2018 to the date of acquisition) |
(75,547) |
|
|||||
|
Cash payment on acquisition date |
|
|
|
|
|
133,092 |
|
In addition to the upfront cash consideration set out above, there are deferred contingent payments payable, depending on the outcome of a number of trigger events. The trigger events relate to future Dated Brent prices in 2019 and 2020, production from the infill well drilling scheduled for 2019, and any future final investment decision for developments with significant 2P reserves. The Group has reviewed all the contingent payment trigger events and recognised the following two potential payments, based on current and future anticipated potential prices of Dated Brent crude oil.
- Annual average Dated Brent crude price exceeding US$80/bbl in 2019: US$20.0 million; and
- Annual average Dated Brent crude price exceeding US$80/bbl in 2020: US$10.0 million.
Management has assessed the fair value of the above deferred contingent consideration using a Monte Carlo option simulation model, which considered inputs such as spot Dated Brent oil prices at the completion date, the prevailing risk-free rate, volatility of oil prices, and the period of time over which the contingent payment will apply. At the date of acquisition, the Company recognised a fair value of US$15.8 million for the two contingent payments. This amount was reduced to US$3.8 million at December 31, 2018, and at June 30, 2019 the revised fair value is US$1.8 million (Note 26).
The maintenance and inspection shutdown that occurred at Montara between November 1, 2018 to January 11, 2019, resulted in a deferral of production and revenue during that period of time, as well as an increase in costs due to overheads still being incurred and additional maintenance and inspection work required to rectify the safety issues. As a result, on January 7, 2019, PTTEP Australia and the Group agreed that PTTEP Australia would fund cash calls capped at US$22.0 million. Management believes that the shutdown was a result of facts and circumstances that existed as at the acquisition date. As such, the US$22.0 million has been adjusted against the consideration transferred for the Montara Assets.
Since the date of acquisition, the Company has been reviewing the fair value of the assets and liabilities acquired in accordance with IFRS 3 Business Combinations. This assessment has resulted in the restatements below.
|
|
June 30, 2019 USD'000 |
|
Restatement USD'000 |
|
December 31,2018 USD'000 |
|
|
|
|
|
|
|
|
Asset purchase price |
195,000 |
|
- |
|
195,000 |
|
Crude inventory value |
6,657 |
|
- |
|
6,657 |
|
Capital charge |
6,982 |
|
- |
|
6,982 |
|
Net income adjustment |
(75,547) |
|
- |
|
(75,547) |
|
Cash payment on acquisition date |
133,092 |
|
- |
|
133,092 |
|
|
|
|
|
|
|
|
Deferred contingent consideration |
15,805 |
|
- |
|
15,805 |
|
Prepaid asset for future cash calls |
(22,000) |
|
- |
|
(22,000) |
|
Working capital adjustment |
1,816 |
|
819 |
|
997 |
|
Total fair value consideration on acquisition date |
128,713 |
|
819 |
|
127,894 |
6.2 Assets acquired and liabilities assumed at the date of acquisition
The fair value assessment of the Montara identifiable assets and liabilities, acquired as at the date of acquisition, have been reviewed in accordance with IFRS 3 Business Combinations. The provisional fair value of the identifiable assets and liabilities of Montara, as at the acquisition date, were:
|
|
June 30, 2019 USD'000 |
|
Restatement USD'000 |
|
December 31, 2018 USD'000 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
Oil & gas properties |
354,625 |
|
819 |
|
353,806 |
|
Current assets |
|
|
|
|
|
|
Inventory - oil |
17,195 |
|
- |
|
17,195 |
|
Inventory - materials |
18,178 |
|
- |
|
18,178 |
|
Prepayments |
4,917 |
|
- |
|
4,917 |
|
Total assets |
394,915 |
|
819 |
|
394,096 |
|
|
|
|
|
|
|
|
|
June 30, 2019 USD'000 |
|
Restatement
USD'000 |
|
December 31, 2018 USD'000 |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Trade and other payables |
(4,314) |
|
- |
|
(4,314) |
|
|
Non-current liabilities |
|
|
|
|
|
|
|
Provision for asset restoration obligations |
(183,020) |
|
- |
|
(183,020) |
|
|
Deferred tax liabilities |
(78,437) |
|
- |
|
(78,437) |
|
|
Other provisions |
(431) |
|
|
|
(431) |
|
|
Total liabilities |
(266,202) |
|
- |
|
(266,202) |
|
|
|
|
|
|
|
|
|
|
Net identifiable assets acquired |
128,713 |
|
819 |
|
127,894 |
|
The provisional values continue to be assessed and as a result, their final values and associated calculations, which include the tax effects, may be different from the provisional determination. Pursuant to IFRS 3, the review of the fair values as at September 28, 2018 of the assets and liabilities acquired, will be completed within 12 months of the acquisition date.
7. DEPLETION, DEPRECIATION AND AMORTISATION ("DD&A")
|
|
Three months ended June 30, 2019 USD'000 |
|
Three months ended June 30, 2018 USD'000 |
|
Six months ended June 30, 2019 USD'000 |
|
Six months ended June 30, 2018 USD'000 |
|
|
|
|
|
|
|
|
|
|
Depletion, depreciation and amortisation |
|
|
|
|
|
|
|
|
Montara |
18,097 |
|
- |
|
36,136 |
|
- |
|
Stag |
2,248 |
|
2,166 |
|
3,778 |
|
4,210 |
|
Ogan Komering |
- |
|
- |
|
- |
|
657 |
|
|
20,345 |
|
2,166 |
|
39,914 |
|
4,867 |
|
Depreciation of plant and equipment (Note 17) |
100 |
|
98 |
|
195 |
|
197 |
|
Right of use assets (Note 18) |
4,368 |
|
- |
|
6,382 |
|
- |
|
Movement in inventory |
8,409 |
|
- |
|
(1,377) |
|
- |
|
|
33,222 |
|
2,264 |
|
45,114 |
|
5,064 |
|
|
|
|
|
|
|
|
|
The Ogan Komering DD&A charge is based on a units of production basis, during the comparable period. The PSC expired on May 19, 2018, and the Group no longer holds an interest in the PSC.
The right of use assets relate predominately to operating leases previously included in production costs. Since the implementation of IFRS 16 Leases, these expenses are now recognised as right of use assets, and are capitalised and depreciated over the life of the lease.
8. OTHER EXPENSES
|
|
Three months ended June 30, 2019 USD'000 |
|
Three months ended June 30, 2018 USD'000 |
|
Six months ended June 30, 2019 USD'000 |
|
Six months ended June 30, 2018 USD'000 |
|
|
|
|
|
|
|
|
|
|
Professional fees/consultancies |
1,148 |
|
1,110 |
|
2,615 |
|
2,009 |
|
Office costs |
462 |
|
269 |
|
959 |
|
882 |
|
Travel and entertainment |
134 |
|
14 |
|
271 |
|
331 |
|
Other expenses |
427 |
|
1,559 |
|
1,192 |
|
2,175 |
|
|
2,171 |
|
2,952 |
|
5,037 |
|
5,397 |
|
|
|
|
|
|
|
|
|
9. IMPAIRMENT OF ASSETS
|
|
Three months ended June 30, 2019 USD'000 |
|
Three months ended June 30, 2018 USD'000 |
|
Six months ended June 30, 2019 USD'000 |
|
Six months ended June 30, 2018 USD'000 |
|
|
|
|
|
|
|
|
|
|
Impairment of intangible exploration assets |
- |
|
- |
|
- |
|
11,902 |
The impairment booked in the comparable period relates to the relinquishment of deepwater Block 127 in Vietnam.
10. OTHER INCOME
|
|
Three months ended June 30, 2019 USD'000 |
|
Three months ended June 30, 2018 USD'000 |
|
Six months ended June 30, 2019 USD'000 |
|
Six months ended June 30, 2018 USD'000 |
|
|
|
|
|
|
|
|
|
|
Interest income |
275 |
|
66 |
|
578 |
|
66 |
|
Net foreign exchange gain |
219 |
|
44 |
|
75 |
|
44 |
|
Miscellaneous income (Note 26) |
1,445 |
|
44 |
|
1,445 |
|
56 |
|
|
1,939 |
|
154 |
|
2,098 |
|
166 |
Miscellaneous income for the six and three months ended June 30, 2019 of US$1.4 million arises from a reduction in estimated Stag FSO redundancy payments.
11. FINANCE COSTS
|
|
Three months ended June 30, 2019 USD'000 |
|
Three months ended June 30, 2018 USD'000 |
|
Six months ended June 30, 2019 USD'000 |
|
Six months ended June 30, 2018 USD'000 |
|
|
|
|
|
|
|
|
|
|
Interest |
1,285 |
|
280 |
|
2,747 |
|
558 |
|
Accretion - asset retirement obligations (Note 25) |
1,516 |
|
346 |
|
3,286 |
|
524 |
|
Accretion - lease payments (Note 27) |
1,277 |
|
- |
|
2,046 |
|
- |
|
Accretion - RBL (Note 28) |
448 |
|
- |
|
994 |
|
- |
|
Fair value loss on derivative liability - convertible bond |
- |
|
982 |
|
- |
|
1,293 |
|
Accretion - convertible bond |
- |
|
285 |
|
- |
|
560 |
|
Facility fees - convertible bond |
- |
|
- |
|
- |
|
64 |
|
Other finance costs |
418 |
|
(30) |
|
943 |
|
78 |
|
|
4,944 |
|
1,863 |
|
10,016 |
|
3,077 |
During the current reporting period, the Company paid interest of US$1.3 million (2018: US$0.3 million) related to the reserve based loan ("RBL"), which was drawn down in Q3 2018. The comparable quarter interest paid relates to the convertible bond, which was repaid in August 2018.
The lease accretion reflects the finance charge on operating leases due to the adoption of IFRS 16; previously lease payments were treated as a production cost.
12. OTHER FINANCIAL GAINS/(LOSS)
|
|
Three months ended June 30, 2019 USD'000 |
|
Three months ended June 30, 2018 USD'000 |
|
Six months ended June 30, 2019 USD'000 |
|
Six months ended June 30, 2018 USD'000 |
|
|
|
|
|
|
|
|
|
|
Change in provisions - contingent payments (Note 6) |
(1,458) |
|
- |
|
(1,936) |
|
- |
13. INCOME TAX (EXPENSE)/CREDIT
|
|
Three months ended June 30, 2019 USD'000 |
|
Three months ended June 30, 2018 USD'000 |
|
Six months ended June 30, 2019 USD'000 |
|
Six months ended June 30, 2018 USD'000 |
|
|
|
|
|
|
|
|
|
|
Current tax |
|
|
|
|
|
|
|
|
Corporate tax |
18,143 |
|
468 |
|
28,214 |
|
784 |
|
Petroleum resource rent tax (PRRT) |
(2,442) |
|
- |
|
(5,536) |
|
- |
|
|
15,701 |
|
468 |
|
22,678 |
|
784 |
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, 2019 USD'000 |
|
Three months ended June 30, 2018 USD'000 |
|
Six months ended June 30, 2019 USD'000 |
|
Six months ended June 30, 2018 USD'000 |
|
|
|
|
|
|
|
|
|
|
Deferred tax |
|
|
|
|
|
|
|
|
Corporate tax |
(4,182) |
|
389 |
|
(9,409) |
|
497 |
|
Petroleum resource rent tax (PRRT) |
(151) |
|
189 |
|
414 |
|
461 |
|
|
(4,333) |
|
578 |
|
(8,995) |
|
958 |
|
Total tax charge for the period |
11,368 |
|
1,046 |
|
13,683 |
|
1,742 |
The Company is a resident in the Province of British Columbia and pays no Canadian tax; the Group has no operating business in Canada. Subsidiary companies are resident for tax purposes in the territories in which they operate.
The Australian corporate income tax rate is applied at 30%. PRRT is calculated at 40% of sales revenue less certain permitted deductions and is tax deductible for Australian corporate income tax purposes. The Indonesian corporate income tax rate is applied at 35%, and branch profits tax is applied at 20%.
The tax (expense)/credit on Group profit/(loss) differs from the amount that would arise using the standard rate of income tax applicable in the countries of operation as explained below.
INCOME TAX RECONCILIATION
|
|
Three months ended June 30, 2019 USD'000 |
|
Three months ended June 30, 2018 USD'000 |
|
Six months ended June 30, 2019 USD'000 |
|
Six months ended June 30, 2018 USD'000 |
|
|
|
|
|
|
|
|
|
|
Profit/(loss) before tax on continuing operations |
33,952 |
|
(3,865) |
|
44,627 |
|
(19,761) |
|
|
|
|
|
|
|
|
|
|
Tax expense/(credit) calculated at the domestic tax rates applicable to the profit/(loss) in the respective countries (Canada 27%, Australia 30%, Indonesia 48% and Singapore 17%) |
10,731 |
|
(407) |
|
14,113 |
|
(2,856) |
|
Effect of non-deductible tax expense |
2,577 |
|
1,813 |
|
4,646 |
|
4,135 |
|
Others |
653 |
|
(552) |
|
46 |
|
- |
|
Tax expense for the period |
13,961 |
|
854 |
|
18,805 |
|
1,279 |
PRRT TAX RECONCILIATION
|
|
Three months ended June 30, 2019 USD'000 |
|
Three months ended June 30, 2018 USD'000 |
|
Six months ended June 30, 2019 USD'000 |
|
Six months ended June 30, 2018 USD'000 |
|
|
|
|
|
|
|
|
|
|
Profit/(loss) before tax on continuing operations |
33,952 |
|
(3,864) |
|
44,627 |
|
(19,761) |
|
|
|
|
|
|
|
|
|
|
Add back losses from operations before tax for activities outside of Australia |
1,818 |
|
3,165 |
|
6,391 |
|
17,576 |
|
Non PRRT assessable profits |
(11,976) |
|
2,057 |
|
(16,673) |
|
5,477 |
|
Profit before taxation for activities in Australia |
23,794 |
|
1,358 |
|
34,345 |
|
3,292 |
|
|
|
|
|
|
|
|
|
|
PRRT expense calculated at 28% |
6,662 |
|
380 |
|
9,616 |
|
922 |
|
Utilisation of PRRT credits |
(9,120) |
|
(411) |
|
(14,846) |
|
(856) |
|
Other |
(135) |
|
220 |
|
107 |
|
395 |
|
Tax expense/(credit) for the period |
(2,593) |
|
189 |
|
(5,123) |
|
461 |
|
|
|
|
|
|
|
|
|
DEFERRED TAX INCOME STATEMENT RECONCILIATION
|
|
Three months ended June 30, 2019 USD'000 |
|
Three months ended June 30, 2018 USD'000 |
|
Six months ended June 30, 2019 USD'000 |
|
Six months ended June 30, 2018 USD'000 |
|
|
|
|
|
|
|
|
|
|
Income tax |
|
|
|
|
|
|
|
|
Timing differences |
(3,621) |
|
(360) |
|
(14,674) |
|
(422) |
|
Hedging - unrealised loss |
(386) |
|
258 |
|
(154) |
|
- |
|
Prepayments |
(220) |
|
- |
|
(439) |
|
- |
|
Losses |
- |
|
490 |
|
5,812 |
|
919 |
|
Other |
45 |
|
- |
|
46 |
|
- |
|
|
(4,182) |
|
389 |
|
(9,409) |
|
496 |
|
|
|
|
|
|
|
|
|
|
PRRT |
|
|
|
|
|
|
|
|
Unused tax credits |
(286) |
|
411 |
|
521 |
|
856 |
|
Provisions |
135 |
|
(221) |
|
(107) |
|
(395) |
|
|
(150) |
|
190 |
|
414 |
|
461 |
|
|
(4,332) |
|
578 |
|
(8,995) |
|
958 |
The above movement in deferred PRRT credits relates to Stag. The Group has unused PRRT tax credits of approximately US$2.9 billion available for offset against future PRRT taxable profits generated from the Montara field. No deferred tax asset is recognised, in respect of the Montara PRRT credits, pursuant to IAS12 and LIFO principles, as future augmentation of existing PRRT credits is expected to more than offset any future PRRT tax otherwise due.
DEFERRED TAX BALANCE SHEET RECONCILIATION
|
|
|
June 30, 2019 USD'000 |
|
December 31, 2018 USD'000 |
|
|
|
|
|
|
|
Current tax |
|
|
|
|
|
Corporation tax on fixed asset timing differences |
|
(66,065) |
|
(75,473) |
|
PRRT tax on fixed asset timing differences |
|
19,084 |
|
19,498 |
|
|
|
(46,981) |
|
(55,975) |
|
Other comprehensive income - deferred tax |
|
|
|
|
|
Income tax related to carrying amount of hedged item |
|
(4,160) |
|
(15,206) |
|
|
|
(51,141) |
|
(71,181) |
|
|
|
|
|
|
The deferred tax balances in the statement of financial position are based on the following split.
|
|
|
June 30, 2019 USD'000 |
|
December 31, 2018 USD'000 |
|
|
|
|
|
|
|
Deferred tax liabilities |
|
(72,339) |
|
(92,468) |
|
Deferred tax assets |
|
21,198 |
|
21,287 |
|
|
|
(51,141) |
|
(71,181) |
|
|
|
|||
14. PROFIT/(LOSS) PER ORDINARY SHARE
The calculation of the basic and diluted profit/(loss) per share is based on the following data
|
|
Three months ended June 30, 2019 USD'000 |
|
Three months ended June 30, 2018 USD'000 |
|
Six months ended June 30, 2019 USD'000 |
|
Six months ended June 30, 2018 USD'000 |
|
|
|
|
|
|
|
|
|
|
Profit/(loss) for the purposes of basic and diluted per share, being the net profit/(loss) for the quarter attributable to equity holders of the Company |
22,584 |
|
(4,912) |
|
30,944 |
|
(21,503) |
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, 2019 USD'000 |
|
Three months ended June 30, 2018 USD'000 |
|
Six months ended June 30, 2019 USD'000 |
|
Six months ended June 30, 2018 USD'000 |
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares for the purposes of basic earnings per share |
461,042,811 |
|
221,298,004 |
|
461,038,759 |
|
221,298,004 |
|
Effect of dilutive potential ordinary shares |
|
|
|
|
|
|
|
|
- Share options |
2,531,524 |
|
- |
|
1,763,991 |
|
- |
|
Weighted average number of ordinary shares for the purposes of diluted earnings per share |
461,045,343 |
|
221,298,004 |
|
462,802,750 |
|
221,298,004 |
|
Earnings per share (US$)
|
Three months ended June 30, 2019 USD'000 |
|
Three months ended June 30, 2018 USD'000 |
|
Six months ended June 30, 2019 USD'000 |
|
Six months ended June 30, 2018 USD'000 |
|
|
|
|
|
|
|
|
|
|
- Basic |
0.05 |
|
(0.02) |
|
0.07 |
|
(0.10) |
|
|
|
|
|
|
|
|
|
|
- Diluted |
0.05 |
|
(0.02) |
|
0.07 |
|
(0.10) |
The calculation of diluted earnings per share for the six months ended June 30, 2019 includes 1,763,991 of weighted average dilutive ordinary shares available for exercise from in-the-money vested options (six months ended June 30, 2018: 119,137 of weighted average potential ordinary shares available for exercise from in-the-money vested options are excluded as they are non-dilutive given the Group's loss from operations). Additionally, 607,821 of weighted average potential ordinary shares available for exercise are excluded as they are out-of-the-money (six months ended June 30, 2018: 485,116).
The calculation of diluted earnings per share for the three months ended June 30, 2019 includes 2,531,524 of weighted average dilutive ordinary shares available for exercise from in-the-money vested options (three months ended June 30, 2018: 239,737 of weighted average potential ordinary shares available for exercise from in-the-money vested options are excluded as they are non-dilutive given the Group's loss from operations). Additionally, 607,821 of weighted average potential ordinary shares available for exercise are excluded as they are out-of-the-money (three months ended June 30, 2018: 561,065).
Additionally, the calculation of diluted earnings per share for the six months ended June 30, 2018 excludes 65,074,378 and for the three months ended June 30, 2018 excludes 61,865,100 respectively, of weighted average potential ordinary shares eligible for conversion under the secured convertible bond as they are non-dilutive, given the interest and other costs on the bond per share exceed basic loss per share in each respective reporting period. The secured convertible bond was fully repaid on August 15, 2018.
15. INTANGIBLE EXPLORATION ASSETS
|
|
Total |
|
|
|
|
Cost |
|
|
At January 1, 2019 |
95,607 |
|
Additions |
4,287 |
|
Disposal of exploration assets |
- |
|
At June 30, 2019 |
99,894 |
|
|
|
|
Net book value |
|
|
At December 31, 2018 |
95,607 |
|
|
|
|
At June 30, 2019 |
99,894 |
|
|
|
Exploration additions for the period were US$4.3 million (December 31, 2018: US$1.8 million), predominantly related to activities on the Nam Du and U Minh assets in Vietnam.
16. OIL AND GAS PROPERTIES
|
|
|
|
|
Total |
|
|
|
|
|
USD'000 |
|
|
|
|
|
|
|
Cost |
|
|
|
|
|
At January 1, 2019 |
|
|
|
442,990 |
|
Changes in asset restoration obligations (Note 25) |
|
|
|
18,086 |
|
Additions |
|
|
|
26,078 |
|
At June 30, 2019 |
|
|
|
487,154 |
|
|
|
|
|
|
|
Accumulated depletion and amortisation |
|
|
|
|
|
At January 1, 2019 |
|
|
|
(27,625) |
|
Depletion and amortisation for the quarter (Note 7) |
|
|
|
(39,913) |
|
At June 30, 2019 |
|
|
|
(67,538) |
|
|
|
|
|
|
|
Net book value |
|
|
|
|
|
At December 31, 2018 |
|
|
|
415,365 |
|
|
|
|
|
|
|
At June 30, 2019 |
|
|
|
419,616 |
17. PLANT AND EQUIPMENT
|
|
|
At January 1, 2019 |
|
Additions |
|
Impairment & disposals |
|
At June 30, 2019 |
|
|
|
USD'000 |
|
USD'000 |
|
USD'000 |
|
USD'000 |
|
|
|
|
|
|
|
|
|
|
|
Cost |
|
|
|
|
|
|
|
|
|
Computer equipment |
|
2,372 |
|
362 |
|
- |
|
2,734 |
|
Fixtures and fittings |
|
1,269 |
|
12 |
|
(4) |
|
1,277 |
|
Total |
|
3,641 |
|
374 |
|
(4) |
|
4,012 |
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation |
|
|
|
|
|
|
|
|
|
Computer equipment |
|
991 |
|
163 |
|
- |
|
1,154 |
|
Fixtures and fittings |
|
941 |
|
32 |
|
- |
|
973 |
|
Total |
|
1,932 |
|
195 |
|
- |
|
2,127 |
|
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
1,709 |
|
|
|
|
|
1,884 |
|
|
|
|
|
|
|
|
|
|
18. RIGHT OF USE ASSETS
The Group leases several assets including an FSO, helicopters, and buildings, among others. The leases are under fixed terms of between 12 months to 6 years.
|
|
|
Production assets |
|
Transportation and logistics |
|
Other |
|
Total |
|
|
|
USD'000 |
|
USD'000 |
|
USD'000 |
|
USD'000 |
|
|
|
|
|
|
|
|
|
|
|
January 1, 2019 |
|
|
|
|
|
|
|
|
|
Initial recognition |
|
30,226 |
|
4,893 |
|
2,901 |
|
38,020 |
|
Total |
|
30,226 |
|
4,893 |
|
2,901 |
|
38,020 |
|
|
|
|
|
|
|
|
|
|
|
Additions |
|
- |
|
37,664 |
|
- |
|
37,664 |
|
Depreciation |
|
(3,058) |
|
(3,126) |
|
(199) |
|
(6,382) |
|
|
|
|
|
|
|
|
|
|
|
June 30, 2019 |
|
27,168 |
|
39,432 |
|
2,702 |
|
69,303 |
Right of use additions predominately relates to a helicopter transportation contract that has been recognised as a lease. The contract has an undiscounted commitment of US$42.4 million over four years, and results in a discounted right of use asset and lease liability (Note 27) of $37.7 million upon initial recognition.
19. INVENTORIES
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
|
|
2019 |
|
2018 |
|
|
|
|
|
USD'000 |
|
USD'000 |
|
|
|
|
|
|
|
|
|
Materials and spares |
|
|
|
23,886 |
|
22,964 |
|
Crude oil inventory |
|
|
|
8,371 |
|
6,867 |
|
|
|
|
|
32,257 |
|
29,831 |
20. TRADE AND OTHER RECEIVABLES
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
|
|
2019 |
|
2018 |
|
|
|
|
|
USD'000 |
|
USD'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade receivables |
|
|
|
50,222 |
|
57 |
|
Prepayments |
|
|
|
14,093 |
|
26,831 |
|
Other receivables and deposits |
|
|
|
2,513 |
|
4,857 |
|
PRRT receivables (Note 13) |
|
|
|
- |
|
700 |
|
GST/VAT receivables |
|
|
|
1,284 |
|
355 |
|
|
|
|
|
68,113 |
|
32,800 |
Trade receivables increased to US$50.2 million due to the latest Montara lifting being finalised on June 30, 2019. The receivable was settled on July 31, 2019. Prepayments includes US$12.4 million of cash held by PTTEP under the transitional operational arrangements for Montara until transfer of operatorship which subsequently occurred on August 6, 2019.
21. CASH AND BANK BALANCES
|
|
June 30, |
|
December 31, |
|
|
2019 |
|
2018 |
|
|
USD'000 |
|
USD'000 |
|
|
|
|
|
|
Current assets |
|
|
|
|
Cash and bank balances |
57,886 |
|
58,064 |
|
Less: restricted cash |
(6,006) |
|
(5,083) |
|
Cash and cash equivalents |
51,880 |
|
52,981 |
|
|
|
|
|
|
Non-current assets |
|
|
|
|
Cash and bank balances |
18,493 |
|
23,561 |
|
Less: restricted cash |
(18,493) |
|
(23,561) |
|
Cash and cash equivalents |
- |
|
- |
|
|
|
|
|
|
Cash and cash equivalents in the statement of cash flows |
51,880 |
|
52,981 |
The restricted cash balance includes US$14.5 million of cash held in a debt service reserve account related to the RBL facility. The current balance of restricted cash of US$6.0 million represents principal and interest that will be released over the next 12 months, with the remainder included in the non-current balance and to be released later in 2020 and in 2021.
The Group retains US$10.0 million (December 31, 2018: US$10.0 million) in support of a bank guarantee to a key supplier in respect of Stag's FSO vessel. This deposit is kept in a specific bank account that has in place certain restrictions that does not allow for the cash to be used for normal operations.
22. SHARE CAPITAL
Authorised share capital
Unlimited number of ordinary voting shares with no par value.
|
|
|
|
|
No. of shares |
|
USD'000 |
|
|
|
|
|
|
|
|
|
Issued and fully paid |
|
|
|
|
|
|
|
As at January 1, 2019 |
|
|
|
461,009,478 |
|
466,562 |
|
Issued during the period |
|
|
|
33,333 |
|
11 |
|
As at June 30, 2019 |
|
|
|
461,042,811 |
|
466,573 |
The Company has one class of ordinary share. Fully paid ordinary shares carry one vote per share without restriction, and carry a right to dividends as and when declared by the Company.
During the six months ended June 30, 2019, employee share options of 33,333 were exercised and issued at a price of CAD 0.47 per share.
23. HEDGING RESERVES
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
USD'000 |
|
|
|
|
|
|
|
|
|
As at January 1, 2019 |
|
|
|
|
|
(35,480) |
|
Loss arising on changes in fair value of hedging instruments during the quarter |
|
29,691 |
||||
|
Income tax related to gain recognised in other comprehensive income |
|
(11,046) |
||||
|
Gain reclassified to profit or loss |
|
|
|
|
|
7,128 |
|
Income tax related to amounts reclassified to profit or loss |
|
|
|
- |
||
|
As at June 30, 2019 |
|
|
|
|
|
(9,707) |
There was no hedging reserve, or movement, in the comparative period ended June 30, 2018.
24. SHARE BASED PAYMENTS RESERVE
The total expense arising from share based payments recognised for the six months ended June 30, 2019 was US$0.7 million (June 30, 2018: US$0.3 million) .
The Black-Scholes option-pricing model, with the following assumptions, was used to estimate the fair value of the options at the date of grant.
|
|
Options granted on |
||||||
|
|
March 29, 2019 |
|
July 29, |
|
March 29, 2018 |
|
December 10, 2017 |
|
|
|
|
|
|
|
|
|
|
Risk-free rate |
1.46% to 1.47% |
|
2.23% to 2.26% |
|
1.99% to 2.04% |
|
1.68% to 1.72% |
|
Expected life |
5.5 to 6.5 years |
|
5.5 to 6.5 years |
|
5.5 to 6.5 years |
|
5.5 to 6.5 years |
|
Expected volatility |
42.3% to 39.9% |
|
44.7% to 43.2% |
|
43.1% to 44.1% |
|
43.2% to 43.9% |
|
Share price |
C$0.85 |
|
C$0.61 |
|
C$0.43 |
|
C$0.42 |
|
Exercise price |
C$0.85 |
|
C$0.61 |
|
C$0.50 |
|
C$0.45 |
|
Expected dividends |
Nil |
|
Nil |
|
Nil |
|
Nil |
The following table summarises the share options outstanding and exercisable as at June 30, 2019:
|
|
Share options |
||||||
|
|
|
|
Weighted |
|
Weighted |
|
|
|
|
|
|
average |
|
average |
|
Number of |
|
|
Number of |
|
exercise |
|
remaining |
|
options |
|
|
options |
|
price, C$ |
|
contract life |
|
exercisable |
|
|
|
|
|
|
|
|
|
|
As at January 1, 2019 |
12,132,821 |
|
0.56 |
|
8.52 |
|
3,232,809 |
|
Vested during the period |
|
|
0.48 |
|
7.97 |
|
3,216,652 |
|
Exercised during the period |
(33,333) |
|
0.47 |
|
- |
|
(33,333) |
|
Cancelled during the period |
(306,667) |
|
0.48 |
|
- |
|
(113,333) |
|
New options granted |
8,000,000 |
|
0.85 |
|
9.75 |
|
- |
|
As at June 30, 2019 |
19,792,821 |
|
0.68 |
|
8.71 |
|
6,302,795 |
|
|
|
|
|
|
|
|
|
25. PROVISION FOR ASSET RESTORATION OBLIGATIONS
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
|
|
2019 |
|
2018 |
|
|
|
|
|
USD'000 |
|
USD'000 |
|
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
January 1, |
|
|
|
277,697 |
|
84,728 |
|
Acquisition of Montara |
|
|
|
- |
|
183,020 |
|
Accretion expense |
|
|
|
3,286 |
|
3,632 |
|
Changes in discount rate and FX assumptions |
|
18,086 |
|
6,353 |
||
|
Other |
|
|
|
- |
|
(36) |
|
June 30, and December 31, |
|
|
|
299,069 |
|
277,697 |
The Group's asset restoration obligations ("ARO") result from the future estimated costs to decommission each of the Stag and Montara assets.
In accordance with IAS37, the carrying value of the ARO provision comprises the discounted present value of the estimated future costs. The present value of the future estimated ARO costs for each of the Stag and Montara assets, has been calculated based on blended risk free rates of 1.65% and 1.80% respectively (December 31, 2018: Stag - 2.49%, Montara - 2.58%).
Management expects decommissioning expenditures to be incurred from 2032 onwards.
26. OTHER PAYABLES
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
|
|
2019 |
|
2018 |
|
|
|
|
|
USD'000 |
|
USD'000 |
|
|
|
|
|
|
|
|
|
Stag FSO redundancy payments (Note 10) |
|
|
|
5,233 |
|
6,603 |
|
Montara contingent payments (Notes 6, 29 & 34) |
|
|
|
1,470 |
|
3,748 |
|
|
|
|
|
6,703 |
|
10,351 |
27. LEASE LIABILITIES
|
|
June 30, |
|
Statement of financial position |
2019 |
|
|
|
|
Current lease liabilities |
19,430 |
|
Non-current lease liabilities |
50,929 |
|
|
70,359 |
|
Reconciliation to operating lease commitments |
|
|
|
|
|
Operating leases included in commitments as at December 31, 2018 |
44,447 |
|
Discounting |
(6,427) |
|
Additional lease liabilities recognised on January 1, 2019 due to the adoption of IFRS 16 |
38,020 |
|
|
|
|
|
|
|
|
|
Six months ended |
|
Statement of profit or loss |
|
|
|
|
|
|
|
June 30, 2019 |
|
|
|
|
|
|
|
|
|
|
|
Interest expense on lease liabilities |
|
|
|
|
|
|
|
722 |
|
Expense relating to short term leases |
|
|
|
|
|
|
|
1,324 |
|
Accretion lease payment (Note 11) |
|
|
|
|
|
|
|
2,046 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended |
|
Statement of cashflows |
|
|
|
|
|
|
|
June 30, 2019 |
|
|
|
|
|
|
|
|
|
|
|
Total cash flow used for leases |
|
|
|
|
|
|
|
7,372 |
28. BORROWINGS
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
|
|
2019 |
|
2018 |
|
|
|
|
|
USD'000 |
|
USD'000 |
|
|
|
|
|
|
|
|
|
Non-current secured borrowings |
|
|
|
|
|
|
|
Reserve based lending facility |
|
|
|
25,277 |
|
49,420 |
|
|
|
|
|
25,277 |
|
49,420 |
|
|
|
|
|
|
|
|
|
Current secured borrowings |
|
|
|
|
|
|
|
Reserve based lending facility |
|
|
|
48,124 |
|
51,114 |
|
Current unsecured borrowings |
|
|
|
|
|
|
|
Other |
|
|
|
- |
|
1,279 |
|
|
|
|
|
48,124 |
|
52,393 |
On August 2, 2018, the Company entered into an RBL agreement to borrow US$120.0 million to partly fund the Montara acquisition (Note 6). The loan is secured against the Montara Assets, and is repayable in quarterly tranches from December 31, 2018 until March 31, 2021. The loan incurs interest at 3% above LIBOR.
29. TRADE AND OTHER PAYABLES
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
|
|
2019 |
|
2018 |
|
|
|
|
|
USD'000 |
|
USD'000 |
|
|
|
|
|
|
|
|
|
Trade payables |
|
|
|
6,156 |
|
7,178 |
|
Other payables |
|
|
|
12,230 |
|
8,173 |
|
Accruals |
|
|
|
6,702 |
|
5,484 |
|
Provision for long service leave |
|
|
|
769 |
|
722 |
|
Other provisions |
|
|
|
4,273 |
|
9,117 |
|
|
|
|
|
30,130 |
|
30,674 |
These amounts are non-interest bearing. The Group believes that the carrying amount of trade payables approximates their fair value. Included in the other payables is the current balance of the Montara contingent payment of US$0.3 million.
30. DERIVATIVE FINANCIAL INSTRUMENTS
The Group uses derivatives to manage its exposure to oil price fluctuations. Oil price hedges are undertaken using swaps and call options using fixed price sales contracts. All contracts are hedged using Dated Brent oil price benchmarks. The Group has designated the Montara capped swap as a cash flow hedge of highly probable sales.
|
|
|
|
|
June 30, |
|
December 31, |
||||||
|
|
|
|
|
2019 |
|
2018 |
||||||
|
|
|
|
|
USD'000 |
|
USD'000 |
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Designated as cash flow hedges |
|
|
|
|
|
|
||||||
|
Commodity capped swap |
|
|
|
13,989 |
|
51,324 |
||||||
|
|
|
|
|
|
|
|
||||||
|
Analysed as: |
|
|
|
|
|
|
||||||
|
Current |
|
|
|
11,251 |
|
35,985 |
||||||
|
Non-current |
|
|
|
2,738 |
|
15,339 |
||||||
|
|
|
|
|
13,989 |
|
51,324 |
||||||
|
|
|
|
|
|
|
|
||||||
|
Contract quantity |
|
Type of contract |
|
Term |
|
Contract price |
Hedge classification |
|||||
|
|
|
|
|
|
|
|
|
|
||||
|
Swaps cover 50% of Montara's planned 2PD production
Calls cover 66% of swapped volumes |
|
Commodity capped swap |
|
Oct 2018 - Sep 2020 |
|
Swap component: US$74.22/bbl in January 2019 through to US$66.62/bbl in September 2020
Call component: US$80.00/bbl from January 2019 to September 2019, US$85/bbl from October 2019 to September 2020 |
|
Cash flow |
||||
|
|
|
|
|
|
|
|
|
|
||||
During the six month period ended June 30, 2019, the fair value of the capped swap declined by US$37.3 million. This decline was largely due to the decrease in future Dated Brent oil prices, over the term of the swap. US$29.7 million of the decline was directly due to the revaluation of hedge contracts and was recorded in other comprehensive income (Note 23). US$0.5 million was due to the ineffective portion of the capped swap and was recorded in finance cost (Note 11). US$7.1 million of the decline was related to hedge contracts settled in the period, and included in revenue (Note 4).
31. BUSINESS RISKS AND UNCERTAINTIES
The Company has processes and systems in place designed to identify the principal risks of the business and has established what is considers reasonable mitigation strategies wherever possible.
For detailed analysis of how the Company manages its business risks and uncertainties see the Company financial statements for the year ended December 31, 2018.
The operational and environmental risks have not materially changed since December 31, 2018.
32. FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL MANAGEMENTS
For a detailed analysis on how the Company manages its financial instruments, financial risks and capital management, see the annual financial statements for the year ended December 31, 2018.
The financial risks, instruments and capital market strategies have not materially changed since December 31, 2018.
Capital management
The Group manages its capital structure and makes adjustments to it, based on the funds available to the Group, in order to support the acquisition, exploration and development of resource properties and the ongoing operations of its producing assets.
Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Group, is reasonable. There were no changes in the Group's approach to capital management during the six month period ended June 30, 2019.
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
|
|
2019 |
|
2018 |
|
Gearing ratio |
|
|
|
USD'000 |
|
USD'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt (Note 28) |
|
|
|
73,401 |
|
101,813 |
|
Cash and cash equivalents (Note 21) |
|
|
|
(51,880) |
|
(52,981) |
|
Restricted cash |
|
|
|
(14,499) |
|
(18,644) |
|
Net debt |
|
|
|
7,022 |
|
30,188 |
|
Equity |
|
|
|
221,134 |
|
215,261 |
|
Net debt to equity ratio |
|
|
|
3% |
|
14% |
Debt is defined as long and short-term borrowings (excluding derivatives) as defined in Note 28. Cash and cash equivalents includes the Montara Assets' minimum working capital cash balance of US$15.0 million required under the RBL, while restricted cash comprises the US$14.5 million in the RBL debt service reserve account as at June 30, 2019. Restricted cash, as shown here, excludes the US$10.0 million deposited in support of a bank guarantee to a key supplier in respect of the Stag FSO. Equity includes all capital and reserves of the Group that are managed as capital.
33. SEGMENT INFORMATION
Revenue and balance sheet information is based on the geographical location of assets as follows:
|
|
Six months ended June 30, 2019 |
||||||||
|
|
Producing assets |
|
Exploration |
|
|
|
|
||
|
|
Australia |
|
SEA |
|
SEA |
|
Corporate |
|
Total |
|
|
USD'000 |
|
USD'000 |
|
USD'000 |
|
USD'000 |
|
USD'000 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
171,707 |
|
- |
|
- |
|
- |
|
171,707 |
|
|
|
|
|
|
|
|
|
|
|
|
Production cost |
(62,057) |
|
- |
|
- |
|
- |
|
(62,057) |
|
DD&A |
(44,885) |
|
- |
|
- |
|
(229) |
|
(45,114) |
|
Staff costs |
(3,775) |
|
(670) |
|
(517) |
|
(3,928) |
|
(8,890) |
|
Other expenses |
(4,404) |
|
(79) |
|
(150) |
|
(404) |
|
(5,037) |
|
Other income |
2,134 |
|
- |
|
- |
|
(36) |
|
2,098 |
|
Finance costs |
(9,987) |
|
- |
|
- |
|
(29) |
|
(10,016) |
|
Other financial gain |
1,936 |
|
- |
|
- |
|
- |
|
1,936 |
|
Profit/(loss) before tax |
50,669 |
|
(749) |
|
(667) |
|
(4,626) |
|
44,627 |
|
|
June 30, 2019 |
||||||||||
|
|
Producing assets |
|
Exploration |
|
|
|
|
||||
|
|
Australia |
|
SEA |
|
SEA |
|
Corporate |
|
Total |
||
|
|
USD'000 |
|
USD'000 |
|
USD'000 |
|
USD'000 |
|
USD'000 |
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Additions to non-current assets |
26,181 |
|
- |
|
4,287 |
|
23 |
|
30,491 |
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Total assets & liabilities |
|
|
|
|
|
|
|
|
|
||
|
Current assets |
167,983 |
|
72 |
|
- |
|
1,452 |
|
169,507 |
||
|
Non-current assets |
532,094 |
|
- |
|
99,894 |
|
1,138 |
|
633,126 |
||
|
Current liabilities |
(122,401) |
|
(73) |
|
- |
|
(4,708) |
|
(127,182) |
||
|
Non-current liabilities |
(453,480) |
|
- |
|
- |
|
(837) |
|
(454,317) |
||
|
Net assets |
124,196 |
|
(1) |
|
99,894 |
|
(2,955) |
|
221,134 |
||
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Six months ended June 30, 2018 |
||||||||||
|
|
Producing assets |
|
Exploration |
|
|
|
|
||||
|
|
Australia |
|
SEA |
|
SEA |
|
Corporate |
|
Total |
||
|
|
USD'000 |
|
USD'000 |
|
USD'000 |
|
USD'000 |
|
USD'000 |
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Revenue |
28,608 |
|
7,175 |
|
- |
|
- |
|
35,783 |
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Production cost |
(20,704) |
|
(2,761) |
|
- |
|
- |
|
(23,465) |
||
|
DD&A |
(4,356) |
|
(657) |
|
- |
|
(51) |
|
(5,064) |
||
|
Staff costs |
(1,978) |
|
(1,143) |
|
(344) |
|
(3,340) |
|
(6,805) |
||
|
Other expenses |
(2,853) |
|
- |
|
- |
|
(2,544) |
|
(5,397) |
||
|
Other income |
114 |
|
- |
|
- |
|
52 |
|
166 |
||
|
Impairment of asset |
- |
|
- |
|
(11,902) |
|
- |
|
(11,902) |
||
|
Finance costs |
(1,467) |
|
- |
|
- |
|
(1,610) |
|
(3,077) |
||
|
Profit/(loss) before tax |
(2,636) |
|
2,614 |
|
(12,246) |
|
(7,493) |
|
(19,761) |
||
|
|
|
|
|
|
|
|
|
|
|
||
|
|
December 31, 2018 |
||||||||||
|
|
Producing assets |
|
Exploration |
|
|
|
|
||||
|
|
Australia |
|
SEA |
|
SEA |
|
Corporate |
|
Total |
||
|
|
USD'000 |
|
USD'000 |
|
USD'000 |
|
USD'000 |
|
USD'000 |
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Additions to non-current assets |
360,774 |
|
- |
|
1,835 |
|
1 |
|
362,610 |
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Total assets & liabilities |
|
|
|
|
|
|
|
|
|
||
|
Current assets |
147,358 |
|
345 |
|
417 |
|
8,560 |
|
156,680 |
||
|
Non-current assets |
476,981 |
|
- |
|
95,607 |
|
280 |
|
572,868 |
||
|
Current liabilities |
(79,867) |
|
(93) |
|
(737) |
|
(3,654) |
|
(84,351) |
||
|
Non-current liabilities |
(429,936) |
|
- |
|
- |
|
- |
|
(429,936) |
||
|
Net assets |
114,536 |
|
252 |
|
95,287 |
|
5,186 |
|
215,261 |
||
|
|
|
|
|
|
|
|
|
|
|
||
Non-current assets include oil and gas properties, intangible exploration assets and property plant and equipment used in corporate offices.
34. CONTINGENT LIABILITIES
Stag
The Group may be responsible for certain contingent payments of up to US$10 million linked to future expansion of the Stag Oilfield. At this time, Jadestone's management does not consider it probable that the conditions necessary to trigger the contingent payments will occur. Accordingly, as at June 30, 2019, no provision has been recognised in the financial statements.
Montara
The Group may be responsible for certain contingent payments of up to US$130 million linked to oil price appreciation, and/or volumes of production from the first infill well in its first year, and/or future expansion of the Montara Assets (see also Note 6). At this time, Jadestone's management only considers the contingent payments of up to US$30.0 million linked to oil price appreciation above US$80/bbl in 2019 and/or in 2020 as probable, while also noting the uncertain nature of future changes in oil prices; in this case future prices of Dated Brent. Accordingly, the fair value of the two oil price linked contingent payments of up to US$30.0 million is recognised as a payable, and the remaining US$100.0 million of contingent payments has not been recognised in the financial statements.
35. RELATED PARTY TRANSACTIONS
During the period, the Group entities did not enter into transactions with related parties, other than the following:
Compensation of key management personnel
|
|
Six months ended |
|
Six months ended |
|
|
June 30, |
|
June 30, |
|
|
2019 |
|
2018 |
|
|
USD'000 |
|
USD'000 |
|
|
|
|
|
|
Short-term benefits |
2,159 |
|
1,796 |
|
Other benefits |
503 |
|
255 |
|
Share based payments |
369 |
|
124 |
|
|
3,032 |
|
2,175 |
|
|
|
|
|
The total remuneration of members of key management for six months ended June 30, 2019 (including salaries and benefits) was US$3.0 million (June 30, 2018: US$2.2 million).
36. EVENT AFTER THE REPORTING PERIOD
Transfer of Montara Operatorship
The transfer of operatorship at Montara was completed on August 6, 2019, following the acceptance by NOPSEMA, the safety regulator in Australia, of the Company's safety case. The Company has now requested that NOPTA, the Australian title administrator, approve transfer of the final 1% interest in the Montara titles. The Company received 99% interest in the Montara titles on May 30, 2019. The Company is in the process of closing out the Operator and Transitional Services Agreement with the previous Montara operator.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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