Jadestone releases 2024 guidance after mixed year

Jadestone Energy released its 2024 operational and financial guidance on Monday, along with a corporate update.

The AIM-traded firm said it anticipated production in 2024 to average between 20,000 and 23,000 barrels of oil equivalent per day, making for a significant increase of 55% compared to 2023.

In 2023, production was estimated to have averaged around 13,800 equivalent daily barrels, slightly exceeding the top end of the implied annual guidance range of 12,600 13,700 barrels per day.

The board put the increase down to strong performance from PM323 in Malaysia, as well as Montara, towards the end of the year.

Jadestone said it expected its operating costs for 2024 to fall in the range of $240m to $290m.

That range excluded forecast royalties and carbon taxes, which were expected to total $30m.

The operating costs were relatively flat compared to the prior year on a comparable basis, with a notable decrease of about 30% on a unit cost basis due to increased production of lower-cost barrels.

Jadestone said it planned to allocate $80m to $110m for capital expenditure in 2024.

The primary components of the budget included around $40m for Montara, primarily for FPSO mooring chain replacement and planning for the Skua well, approximately $20m for the completion of the Akatara development project, and the remaining balance for preparations and long-lead items for infill drilling on the operated Malaysia assets and the Stag field in 2025.

As of 31 December, Jadestone estimated its net debt to be $5m, based on estimated year-end cash balances of around $152m and debt drawn of $157m.

The company said it benefited from timing related to liftings and working capital optimisation towards the end of 2023.

It said the Akatara development project was progressing well, with the gas processing plant around 92% complete and the sales gas pipeline about 91% complete.

Furthermore, the results of the 2023 PM323 infill drilling campaign in Malaysia were expected to lead to strong production growth and reserve additions.

The acquisition of a 16.67% stake in the CWLH fields remained on track to close during the first quarter, with field production continuing to perform strongly.

At Montara and Stag, recent work revealed that life-of-field costs would be higher than previously expected.

Jadestone said that was mainly due to increased repair and maintenance costs required to keep both facilities in appropriate condition.

As a result, Jadestone expected the potential for a non-cash impairment of Montara and Stag at the end of 2023.

The updated end-2023 production and cost profiles for all of Jadestone's assets would be incorporated into a revised borrowing base resulting from the March redetermination of its reserve-based lending facility.

“We have had a strong start to 2024, with average production over the last four weeks close to 20,000 barrels of oil equivalent per day,” said president and chief executive officer Paul Blakeley.

“With the upcoming start of production at Akatara, combined with strong growth from the successful Malaysia infill drilling campaign late last year, stabilised production at Montara and the additional CWLH acquisition, we anticipate significant production growth during 2024, adding further scale, diversification and resilience to our business.”

Blakeley said that, while the firm would continue to manage the older producing assets in the portfolio, its drive to acquire newer, higher margin and higher reliability assets was paying off, improving key business metrics and creating value.

“This is the template for Jadestone's future, with more emphasis on longer-term value and investment, creating room for further growth and improved shareholder returns.”

At 1541 GMT, shares in Jadestone Energy were down 17.15% at 30.49p.

Reporting by Josh White for Sharecast.com.