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REG - Jadestone Energy PLC - 2024 Trading Update, Reserves and 2025 Guidance

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RNS Number : 3504Y  Jadestone Energy PLC  25 February 2025

Year-End 2024 Trading Statement, Reserves Update and 2025 Guidance

 

Delivering stable operations, growing free cash generation and shareholder
value

 

25 February 2025 - Singapore: Jadestone Energy plc (AIM:JSE) (the "Company"
and together with its subsidiaries, "Jadestone" or the "Group") announces a
trading update for the year ended 31 December 2024, the results of its
independent year-end 2024 reserves evaluation and 2025 guidance.

 

2024 Highlights

 

·      2024 average production of 18,696 boe/d, a year-on-year increase
of 35% (2023: 13,813 boe/d).

·      Successful commissioning of the Akatara gas processing facility,
with year to date 2025 production in line with expectations.

·     Independently audited 1P reserves by ERCE of 48.6 mmboe at
year-end, with a 1P reserves replacement ratio of more than 200%, greatly
increasing the Group's resilience.

·   Independently audited 2P reserves by ERCE of 68.3 mmboe at year-end,
resulting in a 2P reserves replacement ratio of 104%.

·    The 2P reserves are valued by ERCE at US$799 million, or an implied
per share value of 102 GBp 1  after deducting the Group's year-end 2024 net
debt position of US$104.8 million.

·      2C contingent resources of 125.7 mmboe at year-end 2024.

·      No material safety events in 2024 and a lost time injury ("LTI")
rate lower than the industry IOGP average, with Malaysia and Indonesia
operations achieving a combined 10 million manhours without an LTI.

 

2025 Guidance Highlights

 

·      Production: 19,000 - 22,500 boe/d.

·      Operating costs: US$250-300 million.

·      Capital expenditures: US$75-95 million.

·      Unlevered free cash generation 2 : US$270-360 million (2025 -
2027).

 

Adel Chaouch, Executive Chairman of Jadestone, commented:

 

"We have entered 2025 as a re-energized business, boosted by the onset of
stable production from Akatara, driving overall Group production significantly
higher and setting a new monthly record and annual exit rate in December 2024.
 Our primary focus in 2025 is to deliver operational excellence in the form
of safe, stable and efficient operations, and setting realistic targets and
delivering on them. Our 2025 production guidance of 19,000-22,500 boe/d
reflects this mindset and would represent another year of record production
for Jadestone.  Our expectations for 2025, supported by a disciplined
approach to capital allocation across the business, will pave the way for
Jadestone to start generating meaningful levels of free cash flow.

 

Jadestone's current share price does not reflect the value of our portfolio.
 This is clear from the results of our year-end 2024 independent reserves
evaluation, which shows that we fully replaced production on both a 1P and 2P
basis in 2024, but more importantly, calculates a 2P NPV10 of US$799 million
for our producing assets as at 31 December 2024.  After taking into account
our year-end 2024 net debt position, the resulting value of our producing
assets is a multiple of our current share price.  Furthermore, this does not
attribute any value to the growth options of the Group, particularly our
significant gas resources in Vietnam, which we are progressing closer towards
commercialization.  We also continue to see opportunities to create value
from our existing platform through acquisitions, but we will be financially
disciplined in the pursuit of growth."

 

2024 Trading Update 3 

 

 

                                              FY 2024  FY 2023
 Group Production                boe/d        18,696   13,813

 Liftings
 - Oil and liquids               mmbbls       4.9      3.6
 - Gas                           mmcf         2.2      1.4

 Average oil price realisation   US$/bbl      85.2     87.3
 - Brent                         US$/bbl      81.5     81.8
 - Premium                       US$/bbl      3.8      5.6
 Average gas price               US$/mmcf     3.63     1.53

 Revenues (post hedging)         US$ million  395.0    309.2
 Total production costs(3)       US$ million  261.1    243.9
 Capital expenditure             US$ million  69.7     117.0
 Net cash/(debt) at 31 December  US$ million  (104.8)  (4.2)

 

 

·    2024 production averaged 18,696 boe/d, in line with guidance and an
annual record for Jadestone, representing 35% production growth year-on-year.
 The 2024 exit rate (December 2024 average) was c.24,000 boe/d, a monthly
record for the Group and an increase of c.40% compared to January 2024.

·      The average realised price for the Company's oil sales was
US$85.2/bbl in 2024 (2023:US$87.3/bbl), with the underlying Brent price
comparable with the prior year, while the average premium to Brent for the
Group's oil sales decreased, primarily due to the greater weighting of CWLH
liftings in sales. Initial Akatara LPG and condensate sales totalled c.150,000
barrels and sold for a weighted average price of US$56.7/bbl. The average gas
price increased to US$3.63/mmcf, year-on-year, reflecting the initial impact
of gas sales from Akatara.

·     Revenues for 2024 increased by 28% to US$395.0 million, primarily
reflecting the increase in liftings during the year, partially offset by a
US$27.4 million loss from hedges originally entered into during 2023 to
support the Group's reserves-based lending facility. 4 

·    Total estimated production costs for the year of US$261.1 million.
 Excluding royalties and carbon taxes of US$17.7 million, the net figure of
US$243.4 million came in at the lower end of the US$240-280 million guidance
range, exhibiting good cost control throughout the year. The increase in
production costs compared to 2023 primarily reflects the increased interest in
the CWLH fields and the onset of production from Akatara.

·    Capital expenditure for 2024 is estimated at US$69.7 million, below
the lower end of the guidance range of US$80-110 million. This was due to the
timing and deferral of several capital projects originally included in 2024
guidance. Capex declined year-on-year, primarily reflecting the completion of
development activity at Akatara.

·   Net debt of US$104.8 million at 31 December 2024 reflects US$95.2
million of consolidated Group cash balances (restricted and unrestricted cash)
and US$200 million of debt drawn at the year end.

 

 

 

2024 Reserves Update

 

·    Group 1P reserves as at 31 December 2024 have been independently
assessed by ERCE at 48.6 mmboe, representing 202% 1P reserves replacement in
2024. 1P reserves replacement was driven by inclusion of the 1P reserves
associated with the CWLH 2 acquisition, which completed in February 2024, as
well as improved well performance and uptime at Montara and the PM 323 asset
in Malaysia.

·   Group 2P reserves as at 31 December 2024 have been independently
assessed by ERCE at 68.3 mmboe, representing 104% 2P reserves replacement in
2024. 2P reserves replacement was primarily driven by inclusion of the 2P
reserves associated with the CWLH 2 acquisition.

·      ERCE has assessed the remaining 2P NPV10 of Jadestone's producing
assets at US$799 million(1).

·     After deducting the Company's year end 2024 net debt of US$104.8
million, this implies a per share for the Company's reserves, net of debt, at
102 GBp(1).

·    Group 2C resources as at 31 December 2024 are estimated at 125.7
mmboe, an increase of c.19% year-on-year, mainly reflecting the addition of 2C
resources associated with the Puteri Cluster and the CWLH 2 acquisition.
 Approximately 75%, or 93.9 mmboe, of the Group 2C resources at 31 December
2024 relates to the significant resource contained in the Company's gas
discoveries offshore Vietnam.

·    Following the year-end reserves evaluation, the Group expects to
record a modest impairment to the carrying value of the Stag asset in the
Group's accounts for the year ended 31 December 2024.

 

2025 Guidance

 

·     2025 production is expected to average 19,000-22,500 boe/d, an 11%
increase on 2024 at the midpoint, which would represent an annual record for
Jadestone.  2025 production is expected to be split approximately 80:20
oil:gas.

·    2025 Group operating costs are expected to be in the range of
US$250-300 million.  On a like-for-like basis compared to the preliminary
estimate of 2024 operating costs 5 , 2025 guidance at the midpoint would see
operating costs broadly flat year-on-year.

·      2025 Group capital expenditure is expected to be US$75-95
million.  The majority of 2025 capex is the drilling of the Skua-11
sidetrack, which is currently expected during the second quarter of 2025,
subject to arrival of the rig on schedule, and which is expected to increase
Montara production when brought onstream.

·    Based on an US$70-80/bbl Brent oil price range, the Group expects to
deliver c.US$270-360 million of free cash flow (pre debt servicing) over the
2025-2027 period(2).

·    A key focus for 2025 is the operating model and cost structure of the
Group, and to ensure an appropriate capital structure to support the ongoing
growth and future strategy of the Group.

 

The financial information in this update is unaudited and may be subject to
further review and change.

 

An updated investor presentation has been uploaded to the Company's website at
www.jadestone-energy.com (http://www.jadestone-energy.com) .

 

 

-ends-

 

For further information, please contact:

 

 

 Jadestone Energy plc
 Phil Corbett, Head of Investor Relations              +44 (0) 7713 687467 (UK)
                                                       ir@jadestone-energy.com (mailto:ir@jadestone-energy.com)

 Stifel Nicolaus Europe Limited (Nomad, Joint Broker)  +44 (0) 20 7710 7600 (UK)
 Callum Stewart
 Jason Grossman
 Ashton Clanfield

 Peel Hunt LLP (Joint Broker)                          +44 (0) 20 7418 8900 (UK)
 Richard Crichton
 David McKeown
 Georgia Langoulant

 Camarco (Public Relations Advisor)                    +44 (0) 203 757 4980 (UK)
 Billy Clegg                                           jse@camarco.co.uk (mailto:jse@camarco.co.uk)
 Georgia Edmonds
 Poppy Hawkins

 

About Jadestone Energy

 

Jadestone Energy plc is an independent upstream company focused on the
Asia-Pacific region. It has a balanced and increasingly diversified portfolio
of production and development assets in Australia, Malaysia, Indonesia,
Thailand and Vietnam, all stable jurisdictions with a positive upstream
investment climate.

 

The Company is pursuing a strategy to grow and diversify the Company's
production base both organically, through developments such as at Akatara in
Indonesia, Nam Du/U Minh in Vietnam and the Puteri Cluster offshore Malaysia,
as well as through acquisitions that fit within Jadestone's financial
framework and play to the Company's strengths in managing maturing oil assets.
Jadestone delivers value in its acquisition strategy by enhancing returns
through operating efficiencies, cost reductions and increased production
through further investment.

 

Jadestone is a responsible operator and well positioned for the energy
transition through its increasing gas production, by maximising recovery from
existing brownfield developments and through its Net Zero pledge on Scope 1
& 2 GHG emissions from operated assets by 2040. This strategy is aligned
with the IEA Net Zero by 2050 scenario, which stresses the necessity of
continued investment in existing upstream assets to avoid an energy crisis and
meet demand for oil and gas through the energy transition.

 

Jadestone Energy plc (LEI: 21380076GWJ8XDYKVQ37) is listed on the AIM market
of the London Stock Exchange (AIM: JSE).  The Company is headquartered in
Singapore.  For further information on the Company please visit
www.jadestone-energy.com (http://www.jadestone-energy.com) .

 

This release does not contain inside information.

 

The technical information contained in this announcement has been prepared in
accordance with the June 2018 guidelines endorsed by the Society of
Petroleum Engineers, World Petroleum Congress, American Association of
Petroleum Geologists and Society of Petroleum Evaluation Engineers Petroleum
Resource Management System.

 

A. Shahbaz Sikandar of Jadestone Energy plc, Group Subsurface Manager with a
Masters degree in Petroleum Engineering, and who is a member of the Society of
Petroleum Engineers and has worked in the energy industry for more than 25
years, has read and approved the technical disclosure in this presentation.

 

Glossary

 

 1P Reserves           Proved Reserves. Those quantities of petroleum that, by analysis of geoscience
                       and engineering data, can be estimated with reasonable certainty to be
                       commercially recoverable from a given date forward from known reservoirs and
                       under defined economic conditions, operating methods, and government
                       regulations.
 2C Resources          Denotes best estimate of Contingent Resources
 2P Reserves           Proved and Probable Reserves. Those additional reserves which analysis of
                       geoscience and engineering data indicate are less likely to be recovered than
                       Proved Reserves but more certain to be recovered than Possible Reserves. It is
                       equally likely that actual remaining quantities recovered will be greater than
                       or less than the sum of the estimated Proved plus 2P. In this context, when
                       probabilistic methods are used, there should be at least a 50% probability
                       that the actual quantities recovered will equal or exceed the 2P estimate
 bbl                   barrel
 bbls/d                barrels per day
 boe/d                 barrels of oil equivalent per day
 mmbbls                million barrels of oil
 Bscf                  billion standard cubic feet
 Contingent Resources  Those quantities of petroleum estimated, as of a given date, to be potentially
                       recoverable from known accumulations by application of development projects,
                       but which are not currently considered to be commercially recoverable owing to
                       one or more contingencies.
 GHG                   greenhouse gas
 IOGP                  International Association of Oil & Gas Producers
 mmboe                 million barrels of oil equivalent
 mmcf                  million standard cubic feet
 NPV10                 net present value at a 10% discount rate

 

 

 1  Based on ERCE Brent oil price assumptions in 2025 real terms, 2025:
US$76/bbl, 2026: US$74/bbl, 2027: US$75/bbl flat thereafter, a US$:GBP rate of
1.26 and ordinary shares currently in issue of 541,110,799. The post-tax 2P
NPV10 reflects the latest estimates of operating costs, capital expenditures
and decommissioning costs required to produce the Group's 2P reserves. The
Group's estimate of 2P NPV10 after deducting year-end 2024 net debt does not
incorporate other costs and liabilities, such as overheads not charged to
individual assets, hedging associated with the Group's reserves based lending
facility, and decommissioning costs associated with non-producing assets.

 2  Based on a Brent oil price range of US$70-80/bbl (real terms from 2025).
Assumes midpoint of internal production expectations and that all barrels
produced during 2025-27 are sold in the period. Does not reflect any capital
expenditure or abandonment spend outside the Group's producing assets.

 3  Totals may not add due to rounding. The Group's liftings do not include
any contribution from the Sinphuhorm asset, which is treated as an investment
in associate and hence equity accounted in the Group's consolidated financial
statements. Estimated 2024 total production costs are unaudited. 2023 and 2024
production costs in the table above do not include any impact from inventory
and/or lifting adjustments, allocation of lease payments between operating
costs and financing costs and accruals for decommissioning payments.

 4  The remaining oil price hedges originally entered into during 2023 extend
through to the third quarter of 2025.

 5  Based on a preliminary unaudited estimate of 2024 operating costs,
excluding inventory and lifting movements and including G&A allocation

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