Jadestone Energy, an independent oil and gas production company focused on the Asia-Pacific region, today provides its guidance outlook for 2022.

Paul Blakeley, President and CEO commented:
"Our strong balance sheet and unhedged exposure to rising oil prices will comfortably underpin our activity levels in 2022, which incorporates two infill wells at Stag and initial development activity at the Akatara gas project in Indonesia. We expect production to increase 36% in 2022 at the midpoint of the 15,500-18,500 boe/d guidance range, which excludes any contribution from Maari.  

We welcome the greater clarity that the revised New Zealand hydrocarbon legislation provides, and with Jadestone and OMV both committed to the Maari transaction, we are ready to work with the government to expedite the completion of this deal.  However, given that the exact schedule to completion is dependent on the New Zealand upstream regulator’s implementation of the recent legislative changes, it feels prudent to exclude Maari from our production guidance at this point.  In the meantime, Jadestone continues to benefit from the project’s strong cash generation.

In Indonesia, we have continued to advance the Akatara project with pre-project activity moving ahead on schedule, while in Vietnam, we are continuing to engage with the government on the Nam Du/U Minh project.  We are also encouraged by the M&A pipeline in the Asia-Pacific region, and are currently assessing several opportunities, all subject to our strict investment criteria.

Maintaining a conservative balance sheet remains a priority, in order that we comfortably meet our capital commitments and retain funding flexibility for accretive growth opportunities. However, based on our spending forecasts, we expect to generate material incremental cash in 2022 at current oil prices and premiums, and as a result, an increase in shareholder returns, either through increased dividends and/or share buy-backs, may be considered later in the year."

2022 operating and financial guidance

• 2022 production is expected to average 15,500-18,500 boe/d, a 36% increase on 2021, with the majority (c.95%) oil. The range reflects planned maintenance shutdowns at Montara, Stag and the operated Peninsular Malaysia assets during the year. It also includes reduced production from the Montara field over a three to four-week period in early 2022, due to an engine failure in the gas reinjection compressor and the necessary works to restore production to full capacity.
• The Maari field is expected to average 4,500-4,700 bbls/d (gross) in 2022 but has been excluded from production guidance pending further clarity on the timing of closing the acquisition.
• The strength in crude premiums seen in late 2021 has continued into early 2022. The most recent liftings from Stag (December 2021) and Montara (January 2022) achieved premiums of US$12.70/bbl and US$3.80/bbl respectively.
• Unit operating costs are expected to average US$23.00-28.00/boe in 2022, representing an c.10% reduction on 2021 levels, primarily due to higher average production expected in the year, partially offset by the planned major three-year maintenance programmes.
• Capital expenditure guidance is set at US$90-105 million, comprising mainly the Stag infill programme, which develops two million barrels of reserves, and the first phase of the Akatara gas project, which is expected to be sanctioned during H1 2022.
• The cost of the Stag infill programme is immediately deductible under the current Australia tax incentive for qualifying investment, and is expected to reduce overall Australia corporate income tax paid in 2022.
• The Company is currently unhedged, although hedging will be contemplated in line with any debt funding arranged for the Akatara gas development.
• The Company is committed to pay a 2022 cash dividend, in keeping with the dividend policy, to maintain and grow dividends in line with underlying cashflow generation.

Net zero GHG target update

As previously announced, the Company plans to convert its 2021 net zero ambition into a clear net zero greenhouse gas commitment later in the first half of 2022. This will include interim milestones and associated workstreams which are well advanced. Jadestone’s corporate strategy of maximising recovery from existing fields while minimising their emissions, and a move towards more gas in the portfolio over time, is both responsible and appropriate in the context of managing climate change. This also strikes the right balance in delivering secure and affordable energy in parts of Southeast Asia where either an energy shortage exists or where coal may be used as an alternative. Jadestone believes it can play an important role during this period of energy transition, while also demonstrating resilience and longevity to its business.

Gas developments

Following signature of the gas sales agreement for the Akatara field in December 2021, the Company has been progressing the FEED optimisation and preparing for the EPC contract tender, which will commence shortly.  A final investment decision is still expected in the first half of 2022, which would maintain the project schedule for first gas in H1 2024.

Jadestone remains committed to commercialising its offshore Vietnam gas resources and continues to collaborate with the government regarding the proposed Nam Du/U Minh field development. The Company is pursuing a strategy of agreeing a production profile for the fields as a precursor to a gas sales contract and ultimately attaining government sanction for the development.  Jadestone believes that development of the Nam Du/U Minh gas fields will increase Vietnam’s energy independence, support the country’s growing economy, and assist in the country’s energy transition following Vietnam’s recent commitment to carbon neutrality by 2050.