Trading update for half-year ending 30 June 2023

Jadestone Energy PLC

20 July 2023

 

Trading update for the half-year ending 30 June 2023

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

Highlights

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

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

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

Paul Blakeley, President and CEO commented:

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

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

H1 2023 Operating Performance

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

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

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

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

H1 2023 Financial Performance[3]

		H1 2023	H1 2022
Average oil price realisation	US$/bbl	86.2	109.5
- Brent	US$/bbl	77.3	102.5
- Premium	US$/bbl	8.9	7.0
Revenues	US$ million	86.7	225.6
Underlying operating expenses[4]	US$ million	87.1	69.8
Capital expenditure	US$ million	25.9	13.6
Net cash/(debt) at 30 June	US$ million	7.1	161.6

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

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

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

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

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

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

l  Underlying operating costs⁴: US$180-210 million

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

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

-ends-

For further information, please contact:

Jadestone Energy plc
Paul Blakeley, President and CEO	[phone] (Singapore)
Bert-Jaap Dijkstra, CFO 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 Elfie Kent

About Jadestone Energy

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

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

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

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

This announcement does not contain inside information.

Glossary

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

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

[2] Totals may not add due to rounding.

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

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

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

 

END