Trading update for year ended 31 December 2022

RNS Number : 7149O

Jadestone Energy PLC

02 February 2023

 

Trading update for year ended 31 December 2022

2 February 2023 - Singapore: Jadestone Energy plc ("Jadestone" or the "Company"), an independent oil and gas production company focused on the Asia-Pacific region, provides a trading update for the year ended 31 December 2022.  The financial information in this update has not been audited and may be subject to further review.

Paul Blakeley, President and CEO commented:

"As previously reported, 2022 was a year of two halves. Whereas in the first half, the Company delivered record financial results, the second half was impacted by the shut-down of our main producing field, Montara.  Despite this temporary setback, Jadestone achieved several notable successes during the year.

We completed the CWLH acquisition offshore Australia, which adds a strategic and value accretive asset to our portfolio, including funding 50% of the decommissioning liability upfront.  Additionally, the team on Stag successfully completed two infill wells, one of which was the longest well drilled by Jadestone to date.  Initial well delivery is ahead of expectations and provides increased confidence in a number of additional infill well locations for the future.  At the operated Peninsular Malaysia assets, we made solid progress in improving operating performance and production is up 10% within just twelve months from acquisition, and ahead of any new drilling activity, with the first wells here planned later in 2023.  The Akatara gas development is progressing well, both in line with cost estimates, and on schedule towards first gas in the first half of 2024.

Jadestone finished the year with a cash balance of US$122 million.  This is a good outcome given not only the impact of the Montara outage, but also the significant capital expenditure at both Akatara and Stag, as well as the acquisition of the CWLH interest and the ongoing share buy-back programme, all of which were managed within the cash generated during the year.

Finally, we are pleased to report a strong start to 2023, with the recent acquisition of an initial stake in Sinphuhorm field, and progress towards a restart of Montara, which remains on track for later this month.  We are engaged in several M&A processes at present, and I am optimistic that we will be successful in resuming our growth trajectory in 2023, while remaining very disciplined about the opportunities we pursue."

2022 Operating and Financial performance

l  2022 production averaged 11,487 boe/d (2021: 12,545 boe/d), in line with expectations¹, with the asset split as follows:

̶ Montara: 4,227 bbls/d, a 45% decrease on 2021 primarily due to the field being shut in from mid-August to year-end 2022

̶ Stag: 2,176 bbls/d;

̶ Peninsular Malaysia: 4,702 boe/d

̶ CWLH: 383 bbls/d, representing the annualised contribution based on average net production of 2,290 bbls/d since completion of the acquisition on 1 November 2022

l  2022 revenues estimated at US$421 million (2021: US$340 million), an annual record for the Company, as higher realisations offset lower production from Montara.

l  2022 liftings estimated at 4.0 mmbbls (2021: 4.6 mmbbls) of oil and 1.8 mmcf (2021: 0.6 mmcf) of gas. Oil liftings were lower than 2021, primarily due to the shut-in at Montara partially offset by a full-year contribution of the Peninsular Malaysia assets acquired in 2021 and the first lifting from the CWLH asset in November 2022.

l  The Company realised an average oil price of US$103.93/bbl (2021: US$74.34/bbl) during 2022, compared to an average lifted Brent price of US$96.05/bbl (2021: US$70.94/bbl).  The average premium to Brent in 2022 of US$7.88/bbl (2021: US$3.39/bbl) reflected strong pricing across Jadestone's portfolio, particularly at Stag, which averaged a US$22.78/bbl premium to Brent across the three liftings during the year.

l  Unaudited operating expenses² for 2022 are estimated at approximately US$37/boe, primarily impacted by the temporary shut-in production from Montara and therefore at the upper end of the guidance range after the customary adjustment for non-routine maintenance items and workover costs.

l  2022 capital expenditure was approximately US$87 million, just below the guidance range of US$90 - 105 million. The Stag infill drilling programme accounted for US$60 million of total capex, with US$21 million initial spend on the Akatara gas development, lower than anticipated due to phasing of procurement activity. Akatara project progress, and delivery of first gas, remain on track with original planning.

l  Cash balances at the end of the year are estimated at US$122 million, a slight increase on the opening 2022 figure of US$118 million.

l  To date, the Company has acquired 20.2 million shares under its buyback programme, at a total cost of US$17.9 million, representing an average repurchase price of 76p per share.  

l  The Company is currently debt free but continues to progress the proposed reserves based lending facility, which was always intended to fund the Akatara field development expenditure and for general corporate purposes.  

l  The Company's 2023 operational and financial guidance will be announced once production from Montara has resumed.

¹ Operational Update, 17 November 2022

² Unaudited operating expense is a non-GAAP financial measure which does not have a standardised meaning prescribed by IFRS.  This non-GAAP financial measure is included because management uses this information to analyse financial performance and efficiency and it may be useful to investors on the same basis.  Unaudited operating expense is a non-GAAP measure which should not be considered an alternative to, or more meaningful than, "production cost" as determined in accordance with IFRS, as an indicator of financial performance.  Unaudited operating expense equals production cost plus the net impact of opex related foreign exchange gains and losses and adjusted for certain non-routine maintenance items and workover costs.  Because non-GAAP financial measures do not have a standardised meaning prescribed by IFRS, they are unlikely to be comparable to similar measures presented by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.  Production cost will be disclosed along with the Company's full year financial and operating results, including audited consolidated group financial statements, in April 2022.

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, low risk, full cycle portfolio of development, production and exploration assets in Australia, Malaysia, Indonesia and Vietnam.

The Company has a 100% operated working interest in the Stag oilfield and in the Montara project, both offshore Australia. Both the Stag and Montara assets include oil producing fields, with further development and exploration potential. The Company also has a 16.67% non-operated interest in the North West Shelf Oil Project offshore Western Australia, comprising four oil fields containing significant upside potential through potential infill drilling and life extension activities.

The Company has interests in four oil producing licences offshore Peninsular Malaysia; two operated and two non-operated positions, and has signed an agreement to acquire a non-operated interest in the Sinphuhorm producing gas field onshore Thailand.

Further, the Company has a 100% operated working interest in two gas development blocks in Southwest Vietnam, and an operated 100% interest in the Lemang PSC, onshore Sumatra, Indonesia, which includes the Akatara gas field development, where first production is expected in the first half of 2024.

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

Jadestone Energy plc (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.

Cautionary Statements

This announcement may contain certain forward-looking statements with respect to the Company's expectations and plans, strategy, management's objectives, future performance, production, reserves, costs, revenues and other trend information.  These statements are made by the Company in good faith based on the information available at the time of this announcement, but such statements should be treated with caution due to inherent risks and uncertainties.  These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that may occur in the future.  There are a number of factors which could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts.  The statements have been made with reference to forecast price changes, economic conditions and the current regulatory environment.  Nothing in this announcement should be construed as a profit forecast.  Past share performance cannot be relied upon as a guide to future performance.  The Company does not assume any obligation to publicly update the information, except as may be required pursuant to applicable laws.

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

Glossary

bbl	barrel of oil
boe	barrel of oil equivalent
CWLH	Cossack, Wanaea, Lambert, and Hermes
mmbbls	million barrels
mmcf	million cubic feet of gas
PSC	production sharing contract

 

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