Jadestone Energy meets 2021 production guidance

Asia-Pacific oil and gas production company Jadestone Energy reported average 2021 production of 12,545 barrels of oil equivalent per day in a trading update on Thursday, in line with expectations and its guidance range.

The AIM-traded firm said Montara production averaged 7,647 barrels per day, Stag averaged 2,359 barrels per day, and an annualised contribution of 2,539 barrels equivalent per day was made from its peninsular Malaysia assets.

Revenues for the year ended 31 December were estimated to be $340.3m - an annual record - which the board said had benefited from strong benchmark pricing for liftings in October at Montara, and December at Montara and Stag.

Crude premiums also remained strong through the year, averaging $3.39 per barrel.

The company realised an average oil price of $74.34 per barrel, during the year, compared to an average Brent price of $70.94.

More recently, premiums had risen sharply, with the December liftings achieving $12.70 per barrel at Stag, $2.94 at Montara and $3.46 at PM323 and PM329 in Malaysia.

Unaudited operating expenses for the full year totalled around $27.60 per barrel of oil equivalent, after the customary adjustment for workover activities, which was within guidance.

Major spending was around $113.2m for the year, with capital expenditure accounting for $57m - primarily the drilling of the Montara H6 well - and the remainder spent on the Skua workover programme.

As it had previously advised, the company said that it was towards the top end of the guidance range due to a sidetrack on the H6 well, and delays experienced during the Skua programme.

Cash balances at year-end were $117.4m, representing an increase of 30% year-on-year, even after the largest spending programme in the company's history.

Jadestone said cash generation was “particularly strong” in the final quarter due to the liftings from Montara and Stag.

The firm remained debt-free, following the final scheduled repayment of its reserves-based loan in March.

“Jadestone ended 2021 with considerable momentum, delivering on our commitment to increase production to around 20,000 barrels of oil equivalent per day by year-end,” said chief executive officer Paul Blakeley.

“Increasing production, robust realisations at Montara and Stag and no hedging has resulted in strong cash generation in the final quarter, with a group cash balance of $117m at year-end and no debt.

“We were also very pleased to announce a gas sales agreement for the Akatara gas development in Indonesia - a key milestone for this project ahead of a planned final investment decision in the first half of 2022.”

Blakeley said the company was seeing an “active asset market” in its core Asia-Pacific region.

“We are working hard to take advantage of this, but will only do deals where we are sure of delivering accretive value to shareholders.

“We are hopeful that 2022 will finally see accelerated progress on the Maari acquisition following recent changes to New Zealand's hydrocarbon legislation, specifically around decommissioning.

“Similarly, we anticipate that the positive fundamentals of the Vietnam gas project will lead to renewed momentum this year.”

Jadestone said it would issue its 2022 operational and financial guidance on 10 Februar, while its audited 2021 financial results would be published in April along with its annual reserves disclosures.

At 1517 GMT, shares in Jadestone Energy were up 4.4% at 95p.