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Jadestone Energy plc (AIM:JSE) ("Jadestone" or the "Company"), an independent oil and gas production company and its subsidiaries (the "Group"), focused on the Asia-Pacific region, reports its unaudited condensed consolidated interim financial statements, as at and for the six-month period ended 30 June 2024 (the "financial statements").
Management will host a webcast at 9:00 a.m. UK time today, details of which can be found in the announcement below.
Key updates:
l Akatara development project achieved mechanical completion in June 2024, with sales gas production commencing in July 2024 and reaching c.14mmscf/d. Production has been recently curtailed by a small mechanical issue in the gas processing facilitys refrigeration compressors, with repairs underway. These repairs and their associated cost remain the responsibility of the EPCI contractor.
l Positive progress on the Montara oil storage tank repair and maintenance programme, which has allowed for the permanent stationing of shuttle tanker at the field to be discontinued in late-August, earlier than expected.
l Year-to date 2024 production (to end August 2024) has averaged c.17,500 boe/d, a c.42% increase year-on-year due to the success of both organic and acquisition driven growth over the period. Annual 2024 production guidance is reiterated at 18,500 - 21,000 boe/d, with an expected outcome towards the lower end of the range, given year-to-date production and ongoing Akatara activities.
l Operating expenditure guidance for 2024 is reiterated at US$240-280 million (excluding forecast royalties and carbon taxes of c.US$30 million),
l Capital expenditure and other cash expenditure guidance is unchanged at US$80-110 million and US$62 million respectively,
l US$31.1 million loss after tax for the first half of 2024, which includes a US$45.8 million non-cash charge to production costs related to the CWLH 2 acquisition, which closed in February 2024.
l Net debt of US$69.1 million at 30 June 2024 reflects c.US$130.9 million of consolidated Group cash balances and US$200.0 million of debt drawn under the Groups reserves-based lending ("RBL") facility. As at 31 August 2024, net debt was US$94.6 million, based on consolidated Group cash balances of US$105.4 million and US$200.0 million of debt drawn under the RBL facility. The Group expects to receive c.US$57 million of proceeds in September relating to August liftings. The Groups US$31.9 million working capital facility was undrawn at the end of the period.
Paul Blakeley, President and CEO commented:
"Increased production, coupled with robust price realisations and flat underlying operating costs, resulted in an improving financial performance in the first half of 2024, with adjusted EBITDAX and operating cash flows significantly higher year-on-year.
Our first half performance also benefited from the increasing diversification of the portfolio as we build greater reliability and resilience. The adverse weather which impacted our Australia production early in the year was offset by higher production from Malaysia, an increase in our CWLH interest and strong output from Sinphuhorm. Montara performance continues to improve with greater facility reliability year-to-date, and good progress on the FPSO tank and repair programme, which allowed us to release the temporary storage tanker at Montara a few months earlier than planned. We also added a medium-term growth option by signing the SFA Cluster PSC offshore Malaysia, and we continue to work hard on a gas sales agreement for our Vietnam resource.
Jadestones primary focus so far in 2024 has been the completion and commissioning of the Akatara development project onshore Indonesia. The construction phase was completed on schedule at the end of the second quarter, followed by the start of both gas and condensate sales. Notwithstanding the current curtailment of production for a repair to the plants refrigeration compressors, the progress at Akatara, including an excellent safety record, is a major step forward for the Group, and will diversify our cash flow generation with more low cost and high value production."
Operational and financial summary
l Zero lost time injuries in operated and non-operated assets. This involved working 3.85 million manhours in operated assets (H1 2023: 1.45 million manhours), an increase of 165% from H1 2023.
l Zero Tier 1 or Tier 2 process safety events, with a focus on pre commissioning activities at Akatara and ongoing asset integrity programs at operated assets.
l Production increased by 37% in H1 2024, reaching 16,867 boe/d, up from 12,339 boe/d in H1 2023. The increase was due to higher production from PenMal following the successful drilling campaign in late 2023, a higher working interest in the CWLH following completion of the acquisition of an additional 16.67% working interest in February 2024, full production from Sinphuhorm, acquired in February 2023, and a full period of production from Montara, compared to H1 2023 when production was shut in for much of the first quarter. These increases were partially offset by lower production at Stag compared to the prior period, impacted by extensive weather-related downtime in Q1 2024, a planned maintenance shutdown and underperformance of downhole pumps, which have required more frequent workovers than planned.
l Oil liftings totaled 2.2 mmbbls in H1 2024, more than double H1 2023 of 1.1 mmbbls, primarily driven by increased production described above and the addition of an underlift position at CWLH as part of the February 2024 acquisition, which subsequently formed part of a lifting in March 2024.
l The average oil price realisation, excluding the effect of hedging for H1 2024, was US$88.73/bbl, a 3.0% increase from US$86.15/bbl in H1 2023. This increase was driven by a higher realised Brent price, which rose by 8.9%, to US$84.14/bbl from US$77.28/bbl in H1 2023. The higher realised Brent price was offset by a reduction in the premium to US$4.59/bbl in H1 2024, from US$8.87/bbl in H1 2023. This decrease was due to the composition of liftings, with lower liftings at Stag (which attracts the highest premium of Jadestones production), and higher lifted volumes at CWLH, which has a lower premium.
l H1 2024 revenue totalled US$185.1 million, a 113% increase on H1 2023, reflecting the increase in lifted volumes and price realisations described above. H1 2024 revenue reflects a hedging charge of US$15.4 million from commodity swap contracts entered in support of the execution of reserves-based lending ("RBL") facility;
l The CWLH 2 acquisition impacted revenues and production costs in H1 2024 by US$45.8 million (2023: Nil), reflecting the market value of the under-lift obtained after acquiring an additional 16.67% interest in the CWLH assets (combined interest 33.34%) in February 2024. The US$45.8 million in production costs is a non-cash item arising from the purchase price allocation required under acquisition accounting standards. The underlift was sold as part of the March 2024 lifting realising US$45.8 million.
l Production costs, excluding the movement in inventory and the under-lift impacts, decreased by 0.7%, from US$116.4 million in H1 2023 to US$115.5 million in H1 2024.
l As at 30 June 2024, closing crude inventories totalled 442,781 bbls, and the Group had an underlift position of 270,449 bbls. After the H1 2024 reporting period, the Group generated US$53.0 million in revenues from three liftings of 0.59 mmbbls in July from Montara, Stag and PenMal;
l Adjusted EBITDAX increased to US$60.2 million from a loss of US$3.2 million in H1 2023, mostly due to higher revenue;
l Net loss after tax in H1 2024 of US$31.1 million (H1 2023: US$59.9 million net loss);
l Operating cash flow before movements in working capital significantly improved in H1 2024 to US$27.9 million from an outflow of US$24.2 million in H1 2023, reflecting the trends described above;
l Capital expenditure in H1 2024 of US$47.6 million, an increase of 100% compared to H1 2023 (at US$23.8 million) primarily due to higher expenditure for the Akatara development project onshore Indonesia as it entered the final phase of commission and completion; and
l Net debt balance of US$69.1 million as at 30 June 2024 (H1 2023: US$7.8 million net cash), reflecting a drawdown of US$200.0 million from the RBL facility and total cash and cash equivalents of US$130.9 million. |
