Jadestone swings to profit in 'extremely frustrating' year

Asia-Pacific focussed oil and gas producer Jadestone Energy reported 2022 revenue of $421.6m in its preliminary results on Tuesday, up from $340.19m in 2021.

The AIM-traded firm’s production, however, decreased to 11,487 barrels of oil equivalent per day in the 12 months ended 31 December, from 12,545 equivalent daily barrels year-on-year.

Its realised oil price per equivalent barrel increased to $103.85 from $74.34 in 2021, while the realised gas price per million standard cubic feet increased slightly to $1.63 in 2022, from $1.61 a year earlier.

Production costs increased to $250.7m from $211.9m, and operating costs per barrel of oil equivalent increased to $37.49 from $26.22.

Jadestone Energy's adjusted EBITDAX came in at $161.93m for the year, up from $142.24m in 2021.

The company also reported a profit after tax of $8.52m for 2022, swinging from a loss after tax of $17.07m in 2021.

Basic and diluted earnings per share came in at two US cents, compared to a loss per share of four cents in 2021.

Operating cash flows before movements in working capital improved to $151.15m from $91.25m, while capital expenditure increased to $82.88m from $56m.

Net cash at year-end totalled $123.33m, up from $117.87m at the end of 2021.

Looking ahead, Jadestone said it expected production for the nine months to 31 December to average between 13,500 and 17,000 barrels of oil equivalent per day, after production for the three months averaged “just over” 10,000 equivalent daily barrels.

Its board put that first-quarter performance down to tank repair and scheduled maintenance at Montara.

The company said it expected underlying operating costs to total between $180m and $210m in 2023, with capital expenditure to come in at $110m to $140m,

It noted that it would be the largest investment programme in its history, allocated primarily to the Akatara gas development project.

“2022 was an extremely frustrating year operationally - one which largely overshadowed the underlying progress made in a number of key strategic areas,” said president and chief executive officer Paul Blakeley.

“The first half of the year validated our strategy at work, as we generated significant operating cash flow, building our cash balance to a record high of $162m by mid-year.

“The second half, however, highlighted the over-reliance on Montara for operational and financial performance, highlighting that we are vulnerable to single events on this asset.”

Blakeley said strong growth in the business was emphasised by the 45% increase in 2P reserves at the end of the year - around six times production replacement.

He added that it was “worth recognising” that Jadestone had maintained asset reserves at Montara, reinforcing the principle that despite the shut-down, reserves and cash flows had been deferred, and not lost.

“This provides a lot of encouragement for the future; our company has been proven to be resilient through the challenges we have faced and we have strengthened the business through both product and portfolio diversification, a strategy we will continue to pursue.

“2023 should be a promising year for Jadestone with the Akatara project in the Lemang PSC on schedule and within budget, an exciting four well programme at East Belumut, closing of Sinphuhorm and the potential to add to the portfolio through further acquisitions.”

At 1343 BST, shares in Jadestone Energy were down 6.35% at 59p.

Reporting by Josh White for Sharecast.com.