Jadestone achieves revised 2020 production guidance

(Sharecast News) - Asia Pacific-focussed oil and gas production company Jadestone Energy updated the market on its trading in 2020 on Monday, reporting that it achieved its revised production guidance target for the year, with full-year production averaging 11,438 barrels per day.
The AIM-traded firm said it realised an average oil price of $44.75 per barrel, excluding hedging, and generated net revenue of $217.9m.

Unaudited cash operating expenses for the year were around $23.24 per barrel, after the customary adjustment for workover activities and for abnormal costs associated with damage from Cyclone Damien in the first quarter.

Cash flow savings relating to Project Clover amounted to a $33.8m reduction from plan, with over 25% of the realised savings reflecting structural changes in the company's operations, and thus would be reflected in its outlook targets for 2021.

Unaudited capital spending for the full year was about $26m.

Jadestone said it more-than-doubled its net cash balance in 2020, reporting that as at 31 December, it had a net cash balance of $82m, comprising cash and bank balances of $89.4m and gross debt outstanding of $7.4m.

Its remaining gross debt comprised the final repayment of its reserves-based loan, drawn to part-fund the Montara acquisition in September 2018.

The final reserves-based loan redetermination exercise was undertaken in December, and was assessed at a level above the remaining drawn portion.

Jadestone said its drawn portion facility had remained "comfortably below" each half-yearly redetermination throughout the life of the loan, despite the 71 day shutdown in the fourth quarter of 2018, the heavy offshore spending programme in 2019, and the oil price collapse in 2020.

The board said the final scheduled repayment would be made at the end of the first quarter of 2021.

Looking at its hedging, Jadestone said it had entered into an agreement to hedge around 30% of its production in the first quarter of 2021, consisting of crude oil swaps covering about 265,000 barrels of crude oil between 1 January and 31 March at a dated Brent price of $49 per barrel, and before any sales premiums.

Jadestone said it was constantly monitoring the level of crude oil swaps, and could add to the hedging programme in the lead-up to its capital programme in 2021.

The company said it remained committed to its acquisition of a 69% operated working interest in the Maari asset, offshore New Zealand, which was pending final government approval.

It said the acquisition effective date remained 1 January 2019, meaning the company will ultimately receive all economic benefits relating to its 69% interest accruing from that date onwards.

Jadestone also completed its acquisition of the Lemang asset, onshore Indonesia, in December, with work now underway to integrate the asset into its portfolio, including development planning.

"All in, our 2020 performance has met our revised guidance targets, and we have emerged from the year as a stronger company that will be debt free by the end of the first quarter of 2021, $89.4m of cash on hand, and an exciting suite of investment projects ahead," said chief executive officer Paul Blakeley.

"Importantly, we have done so without compromising our commitment to sustainable operations, and have recorded no material deviations from our safe operating parameters.

"We are continuing to progress our growth ambitions too, with integration of the Indonesia Lemang asset now underway, the New Zealand Maari asset acquisition expected to complete in the first half of this year, and several additional opportunities in the Asia Pacific region under evaluation."

Jadestone said it would provide its 2021 market guidance outlook in February, and would publish its audited 2020 financial results in April, along with its annual 51-101 reserves reporting.

At 0843 GMT, shares in Jadestone Energy were flat at 69p.