Jadestone Energy, an independent oil and gas production company focused on the Asia-Pacific region, provides the following operational update.

Montara Project

Since the Company’s H1 2022 results announcement on 20 September 2022, a comprehensive programme of hull and tank inspection, repairs and maintenance has been underway on the Montara Venture FPSO.  In particular, the following activities have been carried out in recent weeks:

• Oil cargo tank 2C: the site of the original hull defect which resulted in the small release of oil in June 2022 has been removed and a permanent repair has now been completed. Initial visual inspection of the tank confirms the overall condition to be good, with a small number of minor defects to be addressed.
• Ballast water tank 4S: the bulkhead location of the defect identified in August 2022 has been repaired. Several smaller defects identified as part of a wider inspection of tank 4S are currently being repaired.

While the Company remains unable to advise on a restart date for Montara, based on the tank inspection activity to date it reaffirms an intent to remain within the lower end of the production guidance range announced on 12 September 2022, which would see Jadestone’s 2022 production average at least 11,000 boe/d.

Separately, the independent reviewer described in NOPSEMA’s general direction dated 12 September 2022 was appointed in October, with the contract awarded to DNV, the world’s leading maritime classification society and an independent expert in risk management and assurance.  The gap recognition review, which has the intent of assuring Jadestone’s remediation plans and operational readiness prior to the restart of production operations, is progressing well. DNV’s report on this will be considered by NOPSEMA prior to the restart of production through the FPSO.

The Company currently estimates the cost incurred in 2022 in respect of the additional inspection and repair activities on the FPSO to be US$4 million, consistent with the initial US$2-4 million estimate published on 12 August 2022.

Stag Infill Drilling Programme

At the Stag field, the two infill wells Stag-50H and 51H have been drilled successfully and initial results from well data are in line with pre-drill expectations. The final completions are currently being run on both wells by the Valaris-107 rig, prior to it moving off location later this month.  A further update will be provided once the wells are brought into production.

Liftings Schedule

The Company will lift over one million barrels of crude in November and December 2022, with a lifting of ~160,000 barrels recently from Montara, removing all remaining oil onboard the FPSO to help accelerate the inspection process.  A lifting of approximately 620,000 barrels, attributable to Jadestone’s recently acquired interest in the North West Shelf Oil Project, is expected imminently.  Additionally, the next Stag lifting of ~190,000 barrels is provisionally timed for early December at a US$21.88/bbl premium to Brent, while a further two liftings from the Peninsular Malaysia assets are also expected prior to year-end 2022.

Paul Blakeley, President and CEO commented:
“Significant work has been undertaken at Montara in recent weeks, with completion of repairs in tank 2C and the 4S ballast tank being key milestones.  The ongoing inspection and repair programme will underpin operational readiness and a safe restart of production.

We are building a solid baseline survey on the FPSO’s remaining tanks – a fundamental step towards a risk-based inspection regime going forward.  This survey, and the physical work underway on the FPSO, should help to ensure the highest levels of safety, integrity and vessel uptime in future, and maximise the life and value of the Montara fields for all our stakeholders.”