Member Info for ZENGAS

Excellent 2pm Conference call.

Montara acqusition. Given the effective date is Jan 1 2018, payback on this should be acheived before end next year. There is about $77m cash due to JSE at end July 2018.

Ogan Komering PSC generated $5.2m free cash flow for 14 months under prior contract and currently being renewed with Pertamina. This is upside that was not included in the CPR. Also in addition to current production - it has 3 undeveloped gas discoveries that they wish to move them with Pertamina to the approvals process and bring them to market.

Over 45 mmboe P2 with another 30 mmboe P2 to be added in Q3 2019.

Montara/Stag fully funds Q3 2019 Vietnam gas project start up to production.
Almost $1b of current value in the company assets so huge upside from current m/cap of $165m. (Doesn't include SC56, Tho Chu or Ogan Komering).

Question asked about M&A activity - Answer from Micheal in Business Dev Team saying We will look at opportunities of greater scale. We are looking - A number are early stage.

http://www.jadestone-energy.com/wp-content/uploads/2018/08/Webcast-presentation-2Q-2018.pdf

Pijoe - "no ii is going to be buying (in my view) due to the risks outlined below as in effect it is possible …"

Well there's a 2nd institution disagreeing with you - TT again increasing in the space of under 4 weeks increasing from 24.569m shares to 33.454m shares = + 8.8885m shares on top of the the 6.6m Standard Life also increased by.

Pijoe - "no ii is going to be buying (in my view) due to the risks outlined below as in effect it is possible …"

How did you miss Standard Life announcing 2 days ago it had picked up a further 6.6m shares ?

What's Asma having an option to put $60m in over 2 years at 35p got to do with the effect on keeping the share price down ?.

Similar options were built in to Sound Energy and Echo Energy (and other companies beside), it didn't stop the share price going to multiples.

If they are a strategic investor the shares go to them meaning they aren't flipped - Hence 'strategic investor' (although no word yet even if the strategic investor deal goes ahead).

You have to take into account what effect new money could/will do for the comapny?

Diversify into additional ssets ? (in turn generating more value or cash if production)
Potential money from Asma of $30m + $60m = $90m.
Potential exercise of institutional warrants = $60m.
Possibility of $150m - $250m Niger farmout and whether they want or need it ? (but doesn't to any harm to derisk, ie take in some cash without all your eggs in one basket there, given there's a huge 2.8 billion bls risked number to go for. You could apply some of that cash to somewhere/something else.

All of the above is $300m - $450m potential new money not counting possible borrowing potential of perhaps up to $100m+ (possible cash availability up to $400-$500m).

Cash value alone could be worth the current share price.

That's why i think AK meant by having plenty of corpporate options or similar to that affect.
In turn if the transaction is signed off that will provide up to $100m/yr cash flow. That cash flow and early start up of production in Niger would more than likely finance all of Savps drilling in Niger.

Drilling another 25 wells in Niger is about $100m minimum to the sokor alternances without flow testing them all. Possibly another $20m+ on 3D and i would expect the EPS up and running from borrowing while it in turn generates revenue. That might eat up $150m minimum of the farm out if it happens. Cost of ongoing wells expensed on a 50-50 basis if it was 50% farmout.

45.3 mmboe P2 + 117.5 mmboe unrisked 2C .

30 mmboe moving to 2P in Q3 2019 with project sanction = 75 mmboe 2P

Just shy of 14,000 bopd Australia with ongoing infill drilling from Q3 2018 - Q3 2019 to lift production further.

Q4 2018 Ogan Komerang (OK) new PSC additional 1400 boepd net + new CPR with reserves/resources to come. Significant upside 1155 sq km PSC.

Montara NPV $479.5m (£355m).
Stag $84.2m (£62m).
Nam Du $226m (£167m).
U Minh $96m (£71m).

Total $885.7m (£655m). Excludes OK PSC. Using ex rate £1=$1.35.

http://www.jadestone-energy.com/wp-content/uploads/2018/08/Investor-Presentation-Aug-2018.pdf

461m shares @ 35p = £161m M/cap

Re AK in Lagos yesterday.

Well result in Niger was few days ago. He also was at the signing ceremony in Niger a week earlier on 9th August for the pipeline MOU.

If he was flying back to the UK then to Niamey in Niger maybe he would have flown direct to Abuja the capital of Nigeria which is a shorter flying time rather than to on down to Lagos ?.

The other pipeline signing in July between Niger and Nigeria was done in Abuja.

Lagos is the financial capital. Also Lagos to Port Harcourt is just over a 1 hour flight and roughly 2 hours by road to the 2 fields. Seven Energy headquarters were both in London and Lagos but all ops out of Lagos. Maybe something/maybe nothing but given the amount of work over there, you'd expect him to spend a lot of time out there at this time.

I'll give it a miss nen. Too many factors at play. I know all in fun but prefer to focus on reaching a specific target.

We know the average field size discovery on the Sokor Alternaces is 10 mmbls with none being greater than 60 mmbls (as of 2014).

Wells expected to deliver up to 2,000 bopd across 5 horizons on test relative to Chinese data.

Bushiya 2 horizons E1 & E3 in the Sokor Alternances = 10m.
Amdigh E1 & E2 = 22m which is beleived so far to be the best.
Kunama E1 & E5 = 9m.
Eridal E1 = 13.6m.

There will be a number of factors affecting the amount of reserves/resources.
Areral size of Eridal prospect is about half that of Amdigh and about one third size of Kunama. Zomo similar in size to Eridal.
Given the oil flow rates and the installation of an EPS, it wouldn't be too long or hard to drill 2-3 more wells on Amdigh to bear the bigger brunt of early production. 5 well options after Zomo.

If we have 50 mmbls oil here from these 4-5 prospects we could have created some $300m value at $6/b and be fit to ramp up to 5,000 bopd.

Another thing to consider is AK referring to 2 businesses (even as we wait for the transaction to sign off). Both have the opportunity for considerable growth.

With a pipeline MOU underway, 4 discoveries to date, i would think Savp would be evolving to a 50,000 bopd producer in Niger alone. 50,000 bopd peak would lend itself to 150 mmbls while other reserves are added. Bound to be those taking notice now. Don't know what AK meant when he was talking about Niger yesterday and opportunity for plenty of corporate activity but surely looking very attractive for access to oil found at under $1/b with an opportunity for significant low risk reserves and major production.

Another thing where did the 2 institutions increase their stock from. I doubt not all from private shareholders.
Standard life picked up 6.6m by the 14/8 and we don't know where TT International got theirs from or if an original holder. They only went over the 3% level 3 weeks ago.

Someone could hold below the 3% level yet have 24m shares to shift or there could be a number of combined sellers below that level ?

Re either the 7E transaction or flow data holding us back. It could be neither given who ever is behind the selling.

Even if the 7E deal had been announced who's to say there still wouldn't have been the same amount of selling if they want out regardless. Could be more to come when it does go through ?

They have a good expectation of what the flow data will be given logging, measuring tools, oil samples recovered etc and the wealth of info they have from all the data in the basin/discoveries to date. I think they are only going to flow test 2 wells anyway and sure some of these are a good few kilometres apart so whats that say about the ones they won't.

The biggest batch of non flow tested wells i recall was Cove Energy having 8 wells drilled and a huge discovery announced before the 1st well was ever flow tested and a bid for the company which went to £1.4b being made.

I was asked on the other board what I thought about the deal not happening and value. TT recently increased and became notifiable above 3%. Now S.Life with a further 6.6m shares this morning announced.

There's 817m shares in issue now.

I was allowing circa 1145m shares in total made up from -

Institutions etc who have 133m warrants exercisable at 35p by 7th Feb - ie 6 months can decide on back of Niger success to use them which would give Savp circa $60m if exercised. I would have thought they would do so in order to share in either the dividends or derisked Niger discoveries.

Asma were to put $30m in shortly after the placing (but no sign of it yet) at 35p so another 66m shares.

Asma could put in a further $60m over 24 months at the same money so another 132m shares.

Total possible new shares 331m roughly but would give $150m of new money. Either none, some or all in terms of new shares but with money to match but it won't be one without the other.

If 331m shares, that brings the shares in issue up to circa 1148m.

My £2 target for 500 mmbls in Niger using the lower $6 quoted in the interviews (ie $6-$8 per bl) gives $3 billion or £2.2b over those 1148m shares which is £2 per share ball park.

Given there's 6 billion bls potential unrisked recoverable in Niger (2.8 billion bls risked recoverable) and now 4 discoveries and moving very close to production and also an MOU on a major pipeline/refinery, it has to be very attractive for a farm in than ever before. No reason to doubt that Savp/Partner could not find 1 billion bls between them from the already risked 2.8 billion bls number.

Would a farm in bring in $100m-$250m to add to the $150m of potential new money ie $250m - $400m for Savp ? (£190m - £300m). Worth 17-26p/share ?

Also given the Niger discoveries it may be possible to borrow perhaps $50m-$100m+ ?

That's not including Nigeria but it was valued at $663m/£490m in the CPR once restructured and has plenty of upside beyond that. The £490m over 1145m shares is another 42p.

For some reason if the deal didn't happen well there'd have to be some compensation over the share issue to bond holders etc - how i don't know but monetary of some kind. I don't see the deal not happening but don't rule out some tweaks or changes possibly to the structure of it.

Nigers EPS up and running will provide useful cash flow as it gains momentum.

If all goes to plan and what was originally envisaged happens and we get our hands on $80m - $100m annual free cash flow and combine that to all or some of the above, then Savp will have a very, very strong hand and there could be a lot more than £2 to be had.

Previous 4.89% and 39.971m shares.

Today 5.7% and 46.5579m shares

Extract (pre Montara acquisition) from 8 months ago re Jadestone CEO

Head-to-Head interview with Amanda Battersby, Upstream
www.upstreamonline.com

Blakeley on hunt for an elusive gem with Jadestone

Ambitious boss of independent builds on extensive experience he gained with Talisman Energy in Asia-Pacific region and North Sea.

Jadestone Energy chief executive Paul Blakeley is clear about his mission — spearheading the Singapore-headquartered independent to become the same regional success story he achieved with Talisman Energy in the Asia-Pacific region, and earlier in the North Sea too.

Jadestone’s existing portfolio includes the wholly-owned producing Stag oilfield off Australia, a half share in the producing Ogan Komering onshore block in South Sumatra, Indonesia, two gas fields set for development in Vietnam, and exploration assets in Vietnam and the Philippines.

He notes that many players, including industry heavyweights, have started to rationalise their portfolios, while some US independents have retreated from South-East Asian E&P for reasons such as balance sheet pressure, wanting to focus on unconventionals and, in some cases, even pressure from activist investors.

“That leaves the field wide open,” Blakeley says.
“What we really want to do — and it’s not rocket science, or clever or new — is to fill that space that I think is increasingly left open for a mid-size capability… A company with the ability to operate large fields developed by the majors but bringing additional skills in mature field asset management — entrepreneurial, lean on process, low-cost and efficient — and excited by the small add-on things that create a lot of incremental value,” Blakeley says.
“The opportunity to pursue these sorts of things is what brought the team at Jadestone together"

Talisman’s rise
Blakeley left Arco in December 1994 to join Talisman Energy as a senior vice president, accountable for the company’s North Sea business.
Under his leadership, Talisman — via asset enhancement as well as mergers and acquisitions — became the UK North Sea’s second-largest operator, with production of 160,000 barrels of oil equivalent per day, generating more than US$1 billion in annual free cash flow.

About 12 years ago, Blakeley then came to Asia to run Talisman’s regional business and create the same value growth story.

In 2011, he moved to Singapore, which is also home to the youngest three of his five children, while the eldest two are at university in Australia.

Blakeley has been officially recognised for his services to the oil and gas industry. In 2002 he was conferred an Officer of the Order of the British Empire by Queen Elizabeth II.

http://www.jadestone-energy.com/blakeley-hunt-elusive-gem-jadestone/

They are far from 2nd rate (gas) assets Pijoe and well you know it given Nigerias demand for gas use and distribution. I wouldn't be so dismissive when you look at the bigger picture.

It may prove to be very rewarding just as we had to wait for Niger to get going. Regardless it's another great result at 4 out of 4.

Sokor Alternances basin wide and 80% low risk and was always stated the creaming curve was not reached with fantastic opportunity to replicate CNPCs success.

Over 1.7 billion bls unrisked recoverable in the Sokor Alternaces alone ( over 1 billion bls risked recoverable ) out of a 6 billion unrisked/2.8 billion risked recoverable for all formations on a mid case basis.

Last few interviews indicating $6-$8 used for each barrel given the pipeline news.

Toting up the numbers to reach 500 mmbls of discoveries using $4/b gives a value of $2/b or £1.5b in Niger (Use the company and analysts $6/b and there's $3/b£2.2b value). With time/patience each discovery keeps adding to the numbers. Meanwhile we go onto the next prospect.

Use the fully diluted share issue re the Seven Energy fields/Accugas purchase and that is over £2 using the analysts/company $6 per bl - just for Niger and the Sokor Alternaces alone - without the 7E assets included.

Regardless of the delay in 7E transaction, Niger upside can outweigh the issue and is my reason to firmly hold and my explanation for my £2 target.

Above leaves major room to still farmout and deliver huge upside.

Might have been slower than many hoped for, but their methodical discipline and rationale may yet prove to reward very handsomely.

Oversubscribed $110m placing at 35p. August 2018

Holdings declarable over 3% = 66% of stock -
Tyrus Capital 23.8%, Livermore Partners 6.92%, Ontario Teachers Pen Plan 4.2%, West Face L/T Global Opp 3.42%, Odey Asset Mngt 8.28%, Miton Asset Mngt 6.43%, Fidelity Intnl 3.25%, Baillie Gifford 3.21%, Capital World 3.18%, GLG Partners 3.04%. Directors .86% (one director is m/d of Livermore which has 6.92%)

461m shares @ 35p = £161m m/cap.
$120m debt drawdown being paid for acquisition of Montara - Effective date 1/1/18 so will be some adjustment from that date to price now. Term 3 years at 3% so about $43m/yr average.

Revenue should with Montara/Stag/Komering be close to 15,000 boepd (96% oil) and $350m+ revenue.
Potential 3k increase between Q4 and end Q2 next year at Montara & Stag - possible 18k boepd. (96% oil).
Strong cash flow to add further production asssets and cover drilling.
6 Ex Tailsman people. CEO took Tailsman Asia from 2 asset business/45k boepd to 500m P2/150k boepd and $6-$7b value. Ex Shell/Chevron/Maersk/Schlumberger/BP/Marathon.

Australia Montara (100%) 28.2 mmbo P2 reserves + 10,300 bopd.
$2/b premium to Brent. 9 producing wells (Montara 4, Skua 2 and Swift/Swallow 3 + 1 injection).
Increase production by c 1700 bopd in 2019. 2 infill wells included in 2P reserves Q2 + Q3 2019.
3 additional infill wells targetting 5.3 mmbls additional resource from 2020+.
Exploration upside - 8 leads identified.
Spare capacity in FPSO - Allows nearby discoveries to be quickly monetised.
Hub consolidation opportunities for tie-back of shut in fields and stranded discoveries.

Stag (100%) 17.1 mmbo P2 reserves + 3600 bopd. 11 producing wells + 3 injectors.
Infill well Q4 2018 targetting 1200 bopd. 2 wells planned Q2 + Q3 2019 and 2 in 2020.
2 near field exploration prospects identified.
---------------------------------------------
Ogan Komering PSC Indonesia to be 50% share on signing (early-mid Q4 possible).
Current 1400 boepd net (65% oil/34% gas) $5/b discount to Brent. Gas price $6/mcf.
*Independent reserves evaluation to be made when participation in psc confirmed*.
Early development of 3 gas fields. Exploration upside. Bolt on opportunities.
-------------------------------------
South West Vietnam
93.8 mmboe unrisked 2C - Project sanctioned for H2 2019 (2C to 2P)
First gas 2021
--------------------------------

Other assets Vietnam/Philippines details

Website http://www.jadestone-energy.com/
June Q1 presentation http://www.jadestone-energy.com/wp-content/uploads/2018/06/Investor-Pres-June-2018.pdf

$110m raised at 35p and oversubscribed.

461m shares in issue @ 35p = £161m m/cap.

13,900 bopd heading for 15k+ bopd.

Should be generating significant free cash flows (Revenues in the region of $380m/yr) and may add further acquisitions.

45 mmbo P2 and 75+ mmboe 2C.

Bit more news from Kosmos lately which I'm using as one yard stick for my £2 target for Savp with further cash coming in while proving up further discoveries from the low risk Sokor alternances in Niger and the acquisition in Nigeria.

Todays news from Niger shows Savp are moving faster towards production there. Broker thinks end of year could be possible but even if next year - this is in line with Savp getting to first production and a Broker valuation 66p this am.

With such a significant low risk exploration pool in the number of prospects in Niger, i'd expect that once in production the company could also add to it's portfolio like Kosmos which is making its 2nd significant acquisition in 9 months.

Kosmos Energy Q1 results out 2days ago.

Produced 2.9 mmbo (32,000 bopd) in the 1st quarter from Ghana & E.Guinea.
Cash of $116m.
Total liquidity available to them of $1.3b and $1.079b net debt.
M/cap £2.4b.

Now announced buying 25,000 boepd in G.O Mexico.

"Adds estimated 2P reserves of approx 80 mmboe increasing total 2P reserves from over 200 mmboe to approx 280 mmboe." and "Breakeven at $48/boe WTI". Planned exit of 70,000 boepd in 2018

Cost is $1.225b made up of $925m cash (from their credit/liquidity availability) and $300m in Kosmos shares.

https://www.investegate.co.uk/kosmos-energy-ltd--kos-/rns/acquisition-of-deep-gulf-energy/201808060700068533W/

Also have a stake in a substantial gas resource that has to be developed but this acquisition outside of Africa puts them on a m/cap of circa £2.7b and now over £1b of debt. What their ultimate valuation increases to is anyones guess, but imo this is a similar model that could be used by Savp as it evolves beyond this long awaited 7E transaction. Once completed, the building blocks are surely in place to create significant value imo .

nen they only reported once they went through 3%. They could have been at 2% a month or two ago, we don't know. It's only on this purchase that tipped them through 3%. There is some stock available but they are being bought. I picked a further 100k in 1 block this am shortly after 8am.

Thanks parislse re your link and as I said elsewhere, I think the more we learn and understand about the Nigerian assets particularly Accugas we begin to see the rationale for acquiring it and the potential value it may create for us.

To my mind that should read 50-80 mmcf/d spare processing capacity at Uqo (our Accugas facility) before upgrading.

We've got 400 mmcf/d or 66,000 boe/d spare pipeline capacity according to it. If NNPC put 200 mmcf/d through us ie 33,000 boepd that' represents just 6.6% of the 500,000 boepd worth of the requirement. That's in addition to our 186 mmcf/d (31,000 boepd) already going to our 3 main customers and we have signed heads of terms for an initial 5mmcf/d which i hope will rise to 30 mmcf/d as they have identified a strong pipeline of additional customers. This is where i see our revenue rocketing sharply and from the following.

" The Nigerian National Petroleum Corporation (NNPC) has signed an agreement with some International Oil Companies (IOCs) to bridge natural gas deficit in the domestic market.

Domestic gas demand is growing at an exponential rate and outpaces gas supply development plan. A gap of about 3bcfd by 2020 has been identified by NNPC, which will be bridged at the full completion of the Seven Critical Gas Projects. We, therefore, see this as the beginning of the end to the gap in domestic gas supply/demand of 3.5bscfd, as these projects at full implementation will be the final solution in resolving the foreseen domestic gas supply gap.

NNPC has engaged two world- class project management consultants, DeltaAfrik/Worley Parson & Crestech/Penspen, that will work with NPDC and NNPC JV partners and other stakeholders to achieve set project deliverables.

The projects include the use of Uquo Gas Plant (200mmscfd) – NPDC OML 13 Utapate gas (Phase 1 AG) – to be developed and processed at the Seven Energy Uquo Gas Plant, which has a capacity of 50mmscfd – 80mmscfd. The processed gas will be evacuated through Seven Energy spare pipeline capacity of 400mmscfd from Uquo Gas Plant to Trans Nigeria Gas Pipeline through Ukanafun-Obigbo Node to OB3. "

First mention of additional producer wells versus exploration drilling (after this current Eridal and next Zomo well).
Niger - Page 14 Forward drilling plans - Next targets are expected to be Eridal and Zomo which would target new resource adds to the R3 east hub.

Following this - drill either additional producer wells for EPS or move to drill on R3 Central. From the map some of those prospects/leads are substantially bigger in area than what has currently been drilled.

Page 15 Early Production System aiming to monetise 5,000 bopd (Worth about $50m/yr profit imo) . "Update expected to be made on this in Q3."

Nigeria - Accugas. We would hold an initial 20%. Another point i hadn't picked up on before is that for all new customers above $3.50/mcf we get a 50/50 split to Savp/Accugas while still benefitting from 20% ownership of Accugas and an option to buy 10% more. The split on income at $7.50/mcf from these new customers would see us making around $3.5m per 5,000 mcf/day (plus our ownership stake in Accugas) compared to about $1m previously.
Heads of terms signed for 5,000 mcf/d and strong pipeline of additional customers to tie in - Get this to 30 mmcf/d and this alone would see circa $20m+ going to Savp.

40 TCF gas undeveloped in surrounding area. Accugas is the only significant processing and infrastructure system in the area. Gas Processing facilities have 25% upside above current contracted rates and 160% additional throughput available in pipleline capacity v current contracted volumes. (See my previous posts on this re significant additional revenue potential at $3.50/mcf).

With the gas sales upside we have 31 mmboe 2C and a further 85 mmboe mid case exploration - potentially an additional 100 mmboe from existing fields so a big incentive to use as much of our own field gas sales from Savp into the Accugas system .

Post deal - Numerous revenue streams and Accugas looking extremely lucrative. Seperately to deal close -EPS in Niger being planned and decision after this and next well on whether to move to additional producer wells instead of continued exploration. Would bring revenue generation closer and may be attractive also for any farm in partner. AK said yesterday re Niger "Value equasion has changed very materially over the course of the last 4-5 months". They also want to start acquiring more seismic in Niger in Q4.

Honestly no idea.