Malcy comments15 Jan 2024 15:16
So, the skeletons in the cupboard continue to come back to haunt Jadestone, AKA Montara and Stag where, however hard the management tries to diminish their drag on the rest of the company, they remain key albeit slowing assets and the only way to lessen their effect is to grow the rest of the business. But that is what is happening, at long last.
But as they say in this statement ‘life of field costs at Montara and Stag will be higher than expected due to increases in repair and maintenance costs to maintain both facilities in an appropriate condition’. This is therefore going to lead to a likely non-cash impairment when the 2023 year end numbers are cranked and that was all that was needed for the market to send the shares down some 15%.
But there are plenty of pluses in the statement, even taking Stag out of the RBL redetermination will leave plenty of headroom going forward. Guidance one way or another was exceeded last year and the target for this year is 20-23 boe/d which could and should be a bit conservative but nothing wrong with that after what the company has been through. It is worth remembering that Montara which once stood for 80% of company production will be 20% by the end of this year.
Akatara is being completed and will start on time and the CWLH-2 is going to be a huge contributor and that’s on target as well for 1Q ’24. As Paul Blakely says Jadestone will be newer, higher margin and higher reliability assets in the future, I really believe that the company is on the verge of that change, indeed we are in that quarter now, let’s hope so, after the last couple of years this is no time to lose confidence…
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