Jadestone Energy 2019 Guidance Outlook
March 6, 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, is pleased to provide guidance for 2019. The Company has posted an updated corporate presentation to its website www.jadestone-energy.com/presentations.
• Average crude oil production expected to be between 13,500—15,500 bbls/d
• Average production for February 2019 of 15,369 bbls/d following some flush production from Montara restart and continued natural flow from wells Skua-11 and Swift-2
• Average unit production costs of US$21—24/bbl
• Capital and other major offshore spending of US$116—131mm
• Regulatory acceptance of Jadestone’s safety case for the Montara asset and change of operatorship expected in Q2 2019
• Infill wells on both Stag and Montara in Australia, as well as a riserless light well intervention campaign at Montara
• Development sanction for the Nam Du and U Minh fields in Vietnam
• Over 5,500 bbls/d of 2019 production covered by swaps at an average price of approximately US$72/bbl
Paul Blakeley, President and CEO commented:
“Jadestone is a dramatically different company compared to this time last year. Following our acquisition of the Montara asset, offshore Australia, we have tripled production, all of it high quality premium-priced oil from offshore Australia, and are making good progress on a significant development project in Vietnam, which we expect to sanction this year.
“At the same time, we have changed the character of the Company’s finances, such that we are well-positioned to deploy significant cash generated from operations to pursuing attractive reinvestment opportunities, while comfortably servicing our debt obligations and further strengthening our balance sheet.
“As we increase our influence and control over the Montara asset, in preparation for taking over operatorship, we are identifying more opportunities to generate value for shareholders, including innovative ways to add reserves and resources, while optimising both production rates and operating costs.
“Stag continues to improve in operating performance and the infill well we will shortly spud, the first at Stag in six years, will add material production and significantly reduce unit operating costs.
“Meanwhile, we continue to make excellent progress toward development sanction of the Nam Du and U Minh gas fields offshore Vietnam, providing strong growth, further value crystallisation from within the portfolio and a diversification of product mix towards fixed price, long-term gas contracts. We are forecasting completion of FEED, gas sales agreement negotiations, and major contract tendering, leading to formal FID, all within the year.
“Collectively, the catalysts we are forecasting for 2019 put us well on our way toward achieving our longer-term goal of growing to a circa 30,000 boe/d producer by 2023, with our existing asset base.”
All of Jadestone’s forecast 2019 production is crude oil from its two producing offshore assets offshore Australia, Montara and Stag, expected to be in the range 13,500—15,500 bbls/d. The Company is implementing measures to streamline operations on both assets, resulting in both lower gross operating costs and higher production rates in 2019. In addition to the impact of adding new production volumes through infill wells and well interventions, the Company anticipates increasing facility uptime towards a target of 84% at Montara this year.
Jadestone intends to start its infill drilling campaign on the Stag field with the Stag 49-H well in March 2019, and with a Montara infill well towards year end. In addition, planning is well under way on an innovative light well intervention programme at Montara focused on three wells, including a high potential operation within the Skua-11 wellbore, which will target bypassed crestal oil pay in the Skua field. This activity, which is planned to commence in Q2 2019, will access substantially the same new resource as a new well, but at a fraction of the capital cost.
Capped swap programme
The Company’s existing capped swap programme provides substantial downside oil price protection with over 5,500 bbls/d in 2019 swapped at around US$72/bbl. Additionally, 76% of these 2019 swapped barrels retain full oil price upside above US$80/bbl via purchased calls.
At the Nam Du and U Minh fields, offshore Vietnam, FEED, gas sale and purchase agreement negotiations, offshore surveys, and tendering for major contracts are progressing smoothly, and are forecast to be finalised in Q3 2019 along with financing arrangements. The Company anticipates completion of these steps to culminate in field development sanction and a final investment decision later in the year.
In the meantime, Jadestone has built a highly experienced project management organisation at its Ho Chi Minh City office, in preparation for the detailed engineering, design, and construction phase, leading to forecast first gas production from U Minh and Nam Du in 2021.
Jadestone is maintaining an ongoing dialogue with Pertamina and the Indonesian authorities, with the expectation of confirming its interest in the Ogan Komering asset in Indonesia.
The Company continues to evaluate inorganic opportunities to grow its presence in the Asia Pacific region, adhering always to its strict acquisition screening criteria.
Jadestone will release its 2018 operating results and consolidated audited financial statements, as at and for the 12-month period ended December 31, 2018 on April 18, 2019.
— Ends —
|Jadestone Energy Inc.||+65 6324 0359 (Singapore)|
|Paul Blakeley, President and CEO||+1 403 975 6752 (Canada)|
|Dan Young, CFOfirstname.lastname@example.org|
|Robin Martin, Investor Relations Manager|
|Stifel Nicolaus Europe Limited (Nomad, Joint Broker)||+44 (0) 20 7710 7600 (UK)|
|BMO Capital Markets Limited (Joint Broker)||+44 (0) 20 7236 1010 (UK)|
|Camarco (Public Relations Advisor)||+ 44 (0) 203 757 4980 (UK)|
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% working interest in the Montara project, offshore Australia, effective January 1, 2018. 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 http://www.jadestone-energy.com.
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 production forecasts, cost projections, timing for change of operatorship of Montara, spud date for the infill wells on Stag and Montara, expected well production results, timing and results of the Montara light well intervention programme, and timing of a final investment decision and first gas production 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 exploration and appraisal disclosure in this regulatory announcement.
|bbl||barrel of oil|
|bbls/d||barrels of oil per day|
|boe/d||barrels of oil equivalent per day|
|FEED||front end engineering and design|
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