Gas Sales Heads of Agreement Signed for Nam Du & U Minh Fields Offshore Vietnam
De-risking a significant and valuable strategic gas resource
26 January 2024 – Singapore: Jadestone Energy plc (“Jadestone”, the “Group” or the “Company”), an independent upstream company focused on the Asia-Pacific region, is pleased to announce that it has signed a Heads of Agreement (“HoA”) with PetroVietnam Gas Joint Stock Corporation (“PV Gas”) for the Gas Sales and Purchase Agreement (“GSPA”) relating to the Nam Du and U Minh (“NDUM”) gas fields development offshore Vietnam.
- A signed HoA is the first step in the commercialisation of the NDUM fields, located in the Block 46/07 and Block 51 Production Sharing Contracts in shallow water offshore southwest Vietnam.
- The HoA stipulates a daily contract quantity of 80 mmscfd under a take-or-pay arrangement over a targeted minimum plateau period of 55 months, with an earliest possible first gas date in late 2026.
- Initial wellhead gas price in the HoA is comparable to the price of recent Vietnam pipeline gas imports, and subject to annual escalation.
- The NDUM fields, in which Jadestone currently has 100% working interests, contain gross aggregate 2C resources of 171.3 bscf of gas and 1.6 mmbbls of liquids, as evaluated by ERCE as of December 2017.
- Jadestone estimates significant upside potential surrounding the existing discoveries, with any future resource additions likely to represent straightforward tie-backs to the NDUM core facilities.
This HoA forms the basis for detailed negotiations over a fully-termed GSPA. It is also the precursor which allows the submission of an updated Field Development Plan (“FDP”) for the Nam Du and U Minh fields, the approval of which is key for progressing to a Final Investment Decision of this material project for Jadestone. The Company is preparing to submit an updated FDP in the near future, which will specify the development concept for the ND/UM fields, associated capital and operating cost estimates, and a schedule to first gas.
The Company has uploaded a short presentation to its website at www.jadestone-energy.com summarising its Vietnam assets and the proposed NDUM development concept.
Paul Blakeley, President and CEO commented:
“Securing a signed Heads of Agreement is a crucial step which helps to restart the commercialisation of our Vietnam discoveries, and regain momentum for the development of this very important asset within our portfolio. While there remains significant work ahead to deliver a GSPA and a detailed project plan and development schedule to first gas, this is a clear signal of intent from the Government to see this resource developed. The Nam Du and U Minh gas fields would deliver significant medium-term production growth for Jadestone, further diversifying our asset base and increasing our gas volumes while decreasing our GHG emissions intensity – all key elements of our strategic aim to be a leading Asia-Pacific upstream company.
The likely timing of FID at Nam Du/U Minh would result in capital expenditure occurring no earlier than mid-2025, thereby supporting an organic funding solution through Jadestone’s cash flow generation, available debt and the added potential of bringing in partners during the development phase.
Nam Du/U Minh production will also help reduce Vietnam’s reliance on expensive gas imports, which have a higher GHG emissions intensity than domestic gas. It would also contribute to the country’s energy transition and stated goal of Net Zero greenhouse gas emissions by 2050, as well as creating local jobs and economic benefits. I would like to thank PV Gas, PetroVietnam and our team in Vietnam for their efforts to bring us to this point, and we will now focus on preparation of the FDP.”
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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 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 technical information contained in this announcement has been prepared in accordance with the June 2018 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.
Shahbaz Sikandar of Jadestone Energy plc, Group Subsurface Manager with a Masters degree in Petroleum Engineering, and who is a member of the Society of Petroleum Engineers and has worked in the energy industry for more than 25 years, has read and approved the technical disclosure in this regulatory announcement.
This release does not contain inside information.
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