Jadestone Energy, an independent upstream company and its subsidiaries, focused on the Asia-Pacific region, has reported its consolidated financial statements, as at and for the financial year ended 31 December 2023.
Key updates:
- Proven and Probable (“2P”) reserves at 31 December 2023 of 68.0 mmboe (31 December 2022: 64.8 mmboe), representing 164% 2P reserves replacement during the year. 2C contingent resources increased slightly to 105.6 mmboe (31 December 2022: 104.3 mmboe).
- Commercial gas sales from the Akatara gas field expected to commence before the end of the second quarter of 2024, consistent with previous guidance.
- March 2024 reserve-based lending (“RBL”) facility redetermination has set a borrowing base of US$200.0 million for the six- month period ending 30 September 2024.
- The 2024 production guidance range is narrowed from 20-23,000 boe/d to 20-22,000 boe/d. The change to the upper end of guidance reflects first quarter Group production performance, which was impacted by both planned and unplanned downtime across the portfolio. Current internal forecasts point to an outcome at the lower end of the updated guidance range, based on first commercial gas sales from Akatara in June 2024, albeit there remains a wide range of possible outcomes, principally based on the timing and nature of Akatara’s ramp up, as well as initiatives underway to optimise production at the Group’s current producing assets.
- 2024 operating cost guidance is unchanged at US$240.0-290.0 million (excluding forecast royalties and carbon taxes totalling c.US$30.0 million).
- 2024 capital expenditure guidance is unchanged at US$80.0 – 110.0 million.
- US$91.3 million loss after tax for 2023 (2022: US$9.2 million profit), principally driven by lower oil prices year-on-year, downtime at Montara for FPSO tank repairs, asset impairments and higher finance costs.
- Net debt of US$78.2 million at 31 March 2024 (31 December 2023: US$3.6 million) reflects c.US$121.8 million of consolidated Group cash balances and US$200.0 million of debt drawn under the Group’s RBL facility. The end March 2024 net debt figure excludes an estimated US$110.5 million of proceeds for March 2024 liftings which were received in April 2024.
Paul Blakeley, President and CEO commented:
'2023 was a pivotal year for Jadestone, as we continued the deliberate move away from our older legacy assets in Australia towards newer and higher-value, higher-margin assets across the Asia-Pacific region. During the year we achieved a number of operational and strategic milestones, including significant progress toward first gas at Akatara, a very successful infill drilling campaign offshore Malaysia and 164% replacement of 2P reserves. Closing the Sinphuhorm acquisition and doubling our interest in the CWLH fields offshore Australia were also key steps in the ongoing diversification strategy. Commercial progress on Nam Du/U Minh in early 2024 provides greater confidence in our medium-term outlook. We also delivered a strong HSE performance during the year, with no lost time injuries, and bolstered our pledge to deliver Net Zero Scope 1 and 2 GHGs from our operated assets by 2040 through establishing interim GHG reduction milestones.
While these positive developments were somewhat overshadowed by a disappointing performance at Montara in the first half of 2023, we have since seen steady progress in the asset’s reliability as the ongoing work to the FPSO has helped support improving uptime.
Partly as a result of the challenges at Montara and lower realised oil prices the business made a loss of US$91 million in 2023 (2022: US$9 million profit). With stronger oil prices so far this year and our production growing, we expect 2024 to deliver a much better outcome, with the recent March 2024 RBL redetermination setting a borrowing base of US$200 million for the next two quarters, more than double the predicted lending capacity for this period only a year ago and underpinning near-term liquidity. Akatara cashflows and the recent increase in our CWLH stake will further diversify and increase the robustness of our cash generation.
In recent months, the construction activity at the Akatara gas processing facility (“AGPF”) has been coming to a conclusion in preparation for first gas. The sales gas pipeline has been completed and successfully tested, with four out of the five planned production wells successfully worked over and the first three tested at a combined rate in excess of 30 mmcfd, well above the 25 mmcfd required to meet deliveries under the gas sales agreement. We currently anticipate that commissioning gas will be introduced into the AGPF followed by commercial gas sales before the end of the second quarter, consistent with our long-standing guidance. There is still significant activity to complete, but we are on the threshold of a significant milestone for Jadestone.
Average production for the Group in the first quarter of 2024 was 17,200 boe/d, which primarily reflects the impact on our Australian assets of a very active cyclone season at the start of this year. Accordingly, production guidance for 2024 has been narrowed to 20-22,000 boe/d. Both the 2024 opex and capex guidance ranges are reiterated today.
While the sale process for Woodside’s interests in the Pyrenees/Macedon fields did not proceed, bringing the related share trading suspension to an end, we had provided a competitive and fully funded proposal without any recourse to equity. The learnings from this process provide us with the financial framework to continue assessing the exciting set of inorganic opportunities across the Asia-Pacific region, through which we are well placed to create value from our operating platform and capability. Finally, I would like to take this opportunity to thank my colleagues at Jadestone for their hard work in 2023, and our shareholders for their patience and continued support.'
Click here for full announcement
Source: Jadestone Energy
