Jadestone completes Western Australia acquisition from BP

The AIM-traded firm said the acquisition, from BP Developments Australia, followed the satisfaction of all conditions under the terms of the sale and purchase agreement signed on 28 July.

It said its headline acquisition cost was $20m, as originally announced.

Including agreed adjustments, which resulted from the accumulated economic benefits of the CWLH assets for the period from the effective date of 1 January 2020 to completion, Jadestone said it would receive $5.75m in cash from the seller.

In line with the original acquisition announcement, Jadestone said it had paid an initial $41m into the North West Shelf Oil Project's abandonment trust fund.

The board said the acquired interest included the seller's entire 16.67% working interest in the CWLH oil fields, subsea infrastructure, Okha FPSO, and full abandonment liabilities estimated at $82m, and represented 10.4 million barrels of acquired reserves and resources as of the effective date of 1 January 2020.

According to the operator, production from the CWLH fields averaged 14,196 barrels of oil per day for the three months through September, or 2,366 barrels per day net to Jadestone's acquired interest.

Liftings of crude oil from the CWLH fields are implemented on an equity basis, with the next lifting attributable to Jadestone's acquired interest of approximately 650,000 barrels scheduled for mid-November, with receipt of cash by Jadestone expected in December.

Jadestone said it would now apply to the National Offshore Petroleum Titles Administrator for approval of the dealing and registration on the petroleum titles relating to the acquired interest.

“We are very pleased to have gained access to this material asset, particularly as we see very significant upside through further investment in the future,” said president and chief executive officer Paul Blakeley.

“Our transaction is benefiting from the effective date, which was nearly two years ago, and the strengthening of the oil price in that same period.

“We will also see a positive impact from the next equity lifting, which is likely to generate significant cash proceeds for Jadestone before the end of 2022.”

Blakeley said the transaction was “typical” of the natural transfer of interests in maturing assets from large IOCs, where materiality thresholds did not compete within their portfolios, to smaller companies willing to invest for incremental reserves and production.

“We firmly believe that the CWLH fields will be a key asset and a strategic stepping-stone for Jadestone going forward.

“Over time we hope to work with the existing North West Shelf Oil project operator and joint venture partners to add value through sharing our expertise in the management of mature oil assets.”

At 1222 GMT, shares in Jadestone Energy were up 5.46% at 71.5p.

Reporting by Josh White for Sharecast.com.