Jadestone Energy Results for the Six Months Ending September 30, 2017
Jadestone Energy Results for the Six Months Ending September 30, 2017
Reports Positive Gross Profit, Positive Cash Flow from Operations, and
Announces Intention to Pursue Listing on the London Stock Exchange
November 28, 2017 – Singapore: Jadestone Energy Inc. (TSXV:“JSE”) (“Jadestone” or the “Company”), formerly Mitra Energy Inc., reported today its condensed consolidated interim unaudited financial results for the six months ended September 30, 2017.
- Positive gross profit for the September quarter, a first for the Company, of US$2.9 million, increased from nil in the same quarter a year ago, when the Company was without any production;
- Positive cash flow generated from operations, a first for the Company: US$1.2 million prior to changes in working capital, or US$1.9 million after changes in working capital, a turnaround of US$5.4 million from the net cash outflow of US$3.5 million in the same quarter a year ago;
- Total liquids production of 348,220 bbls for the quarter from the Stag Oilfield and from the Ogan Komering PSC, and natural gas production of 276,736 mmbtu from Ogan Komering, for a total average production of 4,286 boe/d (net working interest) for the quarter;
- Revenue of US$21.4 million arising from one crude oil lifting of 274,349 bbls from Stag on September 17, plus ongoing liquids and natural gas sales from Ogan Komering PSC;
- 20% reduction in the unit cost of operations at Stag compared to the prior quarter, excluding workovers, due to the absence of non-recurring items associated with handover of operatorship to Jadestone, a focus on efficient operations, and the increase in production;
- Solid financial liquidity including US$19.6 million cash at bank, positive free cash flow generating production at Stag and Ogan Komering, even at low oil prices, and the US$28.0 million convertible bond of which US$13.0 million remains undrawn.
“The September 2017 quarter results illustrate an inflection point for Jadestone Energy; confirmation that our strategy is bearing fruit. Today we report our first ever quarter of positive cash flow generation from operations, and before changes in working capital. This is a year into the transformation of Jadestone, from a portfolio of long-dated exploration acreage into a Company with a balanced portfolio of assets, and an emphasis on production and near-term development with positive organic free cash flow generation”.
“We have rebuilt the Company into a fit-for-purpose portfolio and a high-performing team with complementary skills. We continue to realise operational efficiencies and to unlock opportunities in our existing assets. Finally, with a continuous commitment and focus on safety, we have also accrued two significant safety milestones during the quarter,” said Chairman and CEO Paul Blakeley.
In addition, the Company has announced its intention to explore an additional listing on the London Stock Exchange’s AIM market. This follows an extensive review by the Company of its existing TSX-V listing and alternative options for raising additional equity capital. The Company has concluded that an additional listing in London, while retaining the existing TSX-V listing, provides the optimal solution for the business bearing in mind the Company’s strategic direction as well as current and future organic and inorganic value accretive growth options.
“The existing shareholder base has been instrumental in enabling our Company’s transformation thus far, and remains supportive of the management team and strategy. Jadestone’s evolution continues apace, and we can foresee four major catalysts: commercialising our Vietnamese gas resources, capitalising upon Indonesian development opportunities in the Ogan Komering PSC following the ongoing new licensing process, further development of the Stag asset, and pursuing select M&A opportunities in our core focus areas within the greater Asia Pacific region.”
“These next steps will require us to access additional pools of capital, and I’ve instructed the team to explore the possibility of a London listing on AIM and concurrent capital raise. The listing on a Europe-based market provides a logical and complementary platform to the TSX-V, to fund the ongoing development of Jadestone’s value accretive growth options, both organic and inorganic.”
The Company believes having its shares publicly traded on a market based in Europe will provide an opportunity for more specialist investors and funds to become shareholders of the Company. In addition, it places Jadestone alongside its peer group of international E&P companies, and within close proximity to more investment research analysts who provide independent research on both the industry sector and its key players.
Jadestone has retained BMO Capital Markets and Stifel Nicolaus Europe as joint global co-ordinators, joint bookrunners. Preparations are well underway and the Company intends to publish an AIM admission document, in respect of the proposed listing, upon further progress of its organic and inorganic growth options.
Production at Stag averaged 2,847 bbls/d during the quarter, an improvement of 277 bbls/d or 11%, compared to the 2,570 bbls/d in the preceding quarter ended June 30, 2017. Production during the September quarter was impacted by downtime associated with two workovers, one being a repeat of the workover carried out on the 36H well in the previous quarter (by the previous operator), and a selective ESP replacement workover on the 12H well as a performance opportunity. In addition, production was affected by a marine breakaway coupling activation by the FSO operator Teekay, which occurred late in the quarter.
Despite the unplanned downtime, Stag’s production levels have continued to improve post quarter end, resulting in the field achieving a production milestone of ten days average production of more than 3,600 bbls/d by mid-October, 14 weeks after the change in operatorship to Jadestone.
Production at Ogan Komering PSC averaged 938 bbls/d and 3,008 mmbtu/d of natural gas (net working interest). The Company remains focussed on maintaining safe operations and sustaining production levels, and is continuing discussions with the Indonesian National Oil Company Pertamina, and the Government of Indonesia, with the aim of participating in the new Ogan Komering PSC.
For the month of November, Jadestone’s total production is tracking at 5,160 boe/d, significantly above the Company guidance for H2 2017 of 4,300—4,800 boe/d.
Operations at Stag recently celebrated a major safety milestone; five years without a lost time incident. Similarly, Ogan Komering has accumulated over 2.8 million man hours without a lost time incident.
During the quarter, the Company made good progress toward commercialising its Vietnam assets. The process for amending its two PSC licences in the Malay-Tho Chu Basin, namely Block 46/07 and Block 51, is well underway. These amendments will formalise Jadestone holding a 100% working interest in the blocks, thereby creating an excellent position to control the future development schedule.
Jadestone is working closely with Vietnam Oil and Gas Group (“PVN”), the Vietnamese National Oil Company, to bring the U Minh and Nam Du fields to production with a view to selling domestic gas into Southwest Vietnam. Jadestone has revised and resubmitted the Outline Development Plans (“ODP’s”) in November 2017 to PVN and Vietnam’s Ministry of Industry and Trade for government approval.
Closing of the Company’s purchase of a 30% working interest in Vietnam Block 05-1b&c PSC from Inpex Corporation remains subject to the statutory pre-emption right held by PVN, along with Vietnamese government approvals. The Company remains engaged with Inpex and the Government of Vietnam to satisfy the outstanding conditions precedent under the purchase agreement, but there is no certainty the Company can close the transaction.
The Company reported an operating loss before interest, tax and other income for the quarter of US$2.4 million compared to an operating loss of US$3.1 million for the same three-month period to September 30, 2016. The Company reported total book costs of operations of US$18.5 million during the quarter including non-cash depletion and amortization costs of US$3.3 million; $15.2 million on a net basis or US$38.59 per barrel of oil equivalent production.
Investing activities for the quarter amounted to a cash outflow of US$1.9 million, including investment in the Stag platform and Indonesian income taxes paid. Exploration spend continues to contract, with US$399,000 spent in the quarter, reflecting the Company’s ongoing shift toward prioritising production and near-term development assets. Financing activities for the quarter totalled US$4.6 million cash inflow, arising from US$5.0 million drawdown from the convertible bond in early July.
The Company has US$19.6 million cash, plus the US$28.0 million convertible bond facility of
which US$13.0 million remains undrawn.
“Stag is now performing at a major step change from earlier in the year, with production above 3,500 bbls/d and costs dramatically improved, reinforcing our original investment case. We continue to make strides to reduce opex and can see the benefits, now that non-recurring items are largely behind us. Meanwhile, Ogan Komering continues steady, reliable production with the near-term promise from participation in the new PSC. I’m also pleased with progress toward monetising our Southwest Vietnam gas resource and we’ve taken steps to protect value in our Philippines asset. The strategy is working, the transformation has passed an inflection point and there is much more to come”, said Paul Blakeley.
Selected Financial Information
The following table provides selected financial information of the Company, which was derived from, and should be read in conjunction with, the condensed consolidated interim unaudited financial statements for the quarter ended September 30, 2017:
|Quarterly comparison||Sep 2017 Qtr||Sep 2016 Qtr||Change (%)|
|Avg realised liquids price, US$/bbl||54.28||–||–|
|Sales revenue, US$ million||21.4||–||–|
|Capital expenditure1, US$ million||1.2||0.3||368.6%|
|Quarterly comparison||Sep 2017 Qtr||Jun 2017 Qtr||Change (%)|
|Avg realised liquids price, US$/bbl||54.28||50.64||7.2%|
|Sales revenue, US$ million||21.4||18.1||17.9%|
|Capital expenditure1, US$ million||1.2||0.7||78.0%|
|Yearly comparison||Year to Sep 2017||Year to Sep 2016||Change (%)|
|Avg realised liquids price, US$/bbl||52.58||–||–|
|Sales revenue, US$ million||39.5||–||–|
|Capital expenditure1, US$ million||1.9||1.1||70.8%|
1 Payment for oil and gas property, plant and equipment and intangible exploration assets. Excludes acquisition related capital expenditure.
The management team will host an investor and analyst conference call at 10:00 p.m. (Singapore), 2:00 p.m. (London), and 9:00 a.m. (Toronto) on Tuesday November 28, 2017, 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 quarterly results for the period ended September 30, 2017 will be available on the Company’s website at: http://www.jadestone-energy.com/investor-relations/
Webcast link: https://edge.media-server.com/m6/p/cxwk9don
Event conference title: Jadestone Energy Results Briefing (Quarter ended September 30, 2017)
Start time/date: 9:00 a.m. Toronto time, Tuesday November 28, 2017
Confirmation code: 2226402
|Location||Phone Type||Phone Number|
|Australia||Tollfree/Freephone||1 800 573 793|
|Australia, Sydney||Local||+61 (0)2 9193 3706|
|Canada, Toronto||Local||+1 416-640-5944|
|France||Tollfree/Freephone||0805 101 219|
|France, Paris||Local||+33 (0)1 76 77 22 74|
|Hong Kong||Tollfree/Freephone||800 961 105|
|Hong Kong, Hong Kong||Local||+852 3008 1527|
|Japan||Mobile Tollfree||0120 230 784|
|Japan||Tollfree/Freephone||0120 001 836|
|Japan, Tokyo||Local||+81 (0)3 6897 0211|
|Korea, Republic of||Tollfree/Freephone||007 9814 2032 546|
|Korea, Republic of, Seoul||Local||+82 (0)2 3483 5431|
|Malaysia||Tollfree/Freephone||1800 806 802|
|Malaysia, Kuala Lumpur||Local||+60 (0)3 7724 0453|
|New Zealand||Tollfree/Freephone||0800 423 970|
|New Zealand, Auckland||Local||+64 (0) 9 9133 622|
|Singapore||Tollfree/Freephone||800 186 5107|
|Singapore, Singapore||Local||+65 6320 9025|
|United Kingdom||Tollfree/Freephone||0800 358 6377|
|United Kingdom, Local||Local||+44 (0)330 336 9105|
|United States, Los Angeles||Local||+1 323-794-2093|
Area access numbers are subject to carrier capacity and call volumes.
For further information, please contact:
Media and General Enquiries
Phone: +65 6342 0359
Phone: +1 (403) 975-6752
About Jadestone Energy Inc.
Jadestone Energy Inc. is a TSX-V listed oil and gas company headquartered in Singapore. The Company is currently engaged in production, development and exploration and appraisal activities in Australia, Indonesia, Vietnam and the Philippines. Following a recent strategic review, the Company is focusing on acquiring assets with production in the near term, and where significant follow-on reinvestment opportunities exist to enhance value, as well as undeveloped discoveries which may be rapidly brought to production.
A barrel of oil equivalent (“boe”) is determined by converting a volume of natural gas to barrels using the ratios of six thousand cubic feet (“mcf”) to one barrel. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilising a conversion on a 6:1 basis may be misleading as an indication of value.
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: a secondary listing on the London AIM market; commercialization of the Company’s Vietnamese gas resources; growth in the Ogan Komering PSC; development of the Stag asset; M&A activities; capital raising opportunities; exploration, production and financial results; amendments to certain licenses held by the Company; on-going and future transactions; and investing practices.
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.
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.