Results of companies

Jadestone 1H22 Results – LON:JSE

Jadestone reported its best 1H results ever. It achieved $225MM revenue, $138MM EBITDAX and $0.11 EPS. The production was 15008 boepd and it finished the quarter with a net cash position of$161MM (plus an underlift equivalent to $20-25MM net). Nevertheless, the problems detected in Montara in August (its main asset) that caused the production to stop, have overshadowed the figures. Consequently, Jadestone reduced the initial guidance for 2022 from 17000boepd to 12000boepd.

Let’s go through the situation of the different assets and our views of Jadestone in the current situation.

Jadestone main assets


The average production on 1H22 was 7500 bbl/d (even with a problem in a turbine in March). Now all production from this field is stopped and there is no clear guidance about when it will be restored. The issue is that an internal defect was identified in a ballast water tank on the Montara Venture FPSO. They need an external agency to verify that everything is correct after doing the repairs. Our thoughts are that solving this issue is going to take 2-4 months (based on our interpretation of the information published)


Production was around 2000 bbls/d because of maintenance. We expect 2H22 production to be around 2800 bbls. There is a rig from August to November to do the infill drilling. We expect 1300-1500 bbls/d extra production in the first months due to the infill drilling. We remind you that the premium Jadestone obtains for the oil in Stag is currently Brent + $22.


The operated assets performed better than expected (4900 boe/d). However, the production of the non-operated assets was suspended in February. As the licence expires in 2024, it is possible that these assets will not produce more. In 2023, Jadestone will start its infill drilling campaign in East Belamut (4 wells). It will cost around $30MM and it will increase production by around 1300 boepd. These assets have a lower unit opex than the Australian assets.


Jadestone expects to close the transaction of its latest acquired assets in the 4Q22. Its 16% ownership will bring around 2000 bbls/d. Economic interest starts on 1st January 2020. The lifting works differently than usual. Jadestone will use one entire lifting every 6 there are (16%ownership of the asset). The next one will be this November.

Akatara / Lemang

In June, Jadestone announced its FID and it is currently under development. It remains on track to produce its first gas in 1H24. This project is quite interesting as it takes advantage of existing infrastructure and has the full support of the government. Jadestone has signed a fixed price for natural gas and a variable for liquids, the NPV10 is north of $200MM. Furthermore, there is a potential upside in reserves of around 40%.


Early-stage negotiations in recent months with the end-user of gas from Nam Du and U Minh. Currently targeting final investment decision in 2H23


Jadestone is buying back shares (it has bought around $6MM and the mandate is $25MM).

The Reserve Base Loan that is negotiating to finance Akatara is not tied to that project. It will go against the entire company (after re-starting Montara to obtain better conditions). Consequently, if Jadestone is doing this. We expect an important (size) M&A in the coming months.

Maari’s deal is still in a stalemate and there is no news. Furthermore, OMV can break the deal without sanctions. Consequently, we believe there will be a renegotiation of the initial terms after 3 years of waiting for government approval.

Capex guidance is between $90 and $105MM. They have spent $15 in the 1H22, consequently, the vast majority of the expense will come in the 2H22 because of Stag.

Our thoughts about Jadestone

Jadestone’s share price has declined considerably due to the problems in Montara as this asset represents half of the production. Nevertheless, Jadestone is advancing on its other fronts (Akatara, buybacks, NWSO,…) and we believe that they will sign something before the end of the year.

If we consider that Montara will be offline for 2-4 months. We believe that around December, with Montara, the augmented production in Stag (current infill drilling), PenMal assets plus the NWSO field, Jadestone will produce close to >17000 boepd.

We hope that they take advantage of this share price to finish the buyback program and reduce at maximum the number of shares as we believe that there is a brighter future around the corner.

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Last week, we published an analysis of Vermilion Energy. Soon, we will publish the article about the Offshore Drilling industry and the 3Q22 Portfolio review