WTI (June) $62.69 +20c, Brent (July) $65.54 +13c, Diff -$2.85 -7c
USNG (June) $3.11 -22c, UKNG (June) 84.4p +0.93p, TTF (June) €35.685 +€0.265

Oil price

Oil markets are flat right now, the US/Iran talks are at an impasse, as I said yesterday it seems that Iran have baulked at a ban on enrichment as the Deputy Foreign Minister said yesterday that is a red line for them. 

Moodys has downgraded the US sovereign debt, its made a bit of a splash in specialist markets but to be honest as I have said many times before, these agencies are a total waste of time and so up themselves on their own alleged power that they think when they shout the world jumps, it doesn’t. 

Jadestone Energy

Jadestone has reported its consolidated audited financial statements, as at and for the financial year ended 31 December 2024.  

2024 operational performance demonstrates benefit of diversified portfolio

• Over 10 million manhours worked without a lost-time injury (LTI) across the Group’s Indonesia and Malaysia operations.
• Delivered record annual production of 18,696 boe/d in 2024 (+35% year-on-year).
• Successful completion and start-up of the Akatara field, further diversifying the Group’s production base, with gas sales commencing in July 2024 and the contractual performance test completing in December 2024.
• 10% reduction in adjusted unit operating costs in 2024 to US$33.68/boe (2023: US$37.24/boe)
• Independently audited 1P reserves by ERCE of 48.6 mmboe at year-end 2024, 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 2024, resulting in a 2P reserves replacement ratio of 104% and a 10-year 2P reserve life, based on 2024 production
• Year-end 2024 2C resources increased by 19% year-on-year to 125.7 mmboe, or 18 years resource life based on 2024 production. Approximately 75% of the 2C resource base relates to the significant resource contained in the Group’s gas discoveries offshore Vietnam.

Stable and resilient financial position

• 2024 revenues increased by 28% year-on-year to US$395.0 million (2023: US$309.2 million)
• Adjusted EBITDAX for 2024 of US$127.9 million, a 41% increase year-on-year, driven primarily the increase in revenues.
• Operating cash flow pre working capital for 2024 of US$70.5 million, a 93% increase on 2023 (US$36.5 million)
• Net debt of US$104.8 million at 31 December 2024 (31 December 2023: US$3.6 million net debt) has reduced to US$54.2 million at 30 April 2025, reflecting c.US$112.5 million of consolidated Group cash balances and US$167.0 million of debt drawn under the Group’s reserve-based lending facility (RBL Facility).
• Signed a US$30 million working capital facility with a 31 December 2026 maturity. The working capital facility will be used for general corporate purposes, providing additional liquidity to the Group, if required.
• Available liquidity of US$142.5 million at 30 April 2025, including the undrawn working capital facility referenced above.
• Approximately 1.7 mmbbls of hedges in place covering the nine months ending 30 September 2025 at a weighted average hedge price of US$69.07/bbl.
• Certain of Jadestone’s shareholders have requested that the Company seek authority to repurchase shares at the 2025 AGM on 20 June 2025.

Current trading and outlook – a strong start to 2025

• Strong portfolio performance year-to-date 2025, with production for the first four months of 2025 averaging 20,830 boe/d, a 22% increase year-on-year and an annual record for this period.
  • Akatara has delivered robust performance year-to-date in 2025, with gross production averaging approximately 6,200 boe/d and 96% facilities uptime, both ahead of plan.
• All guidance metrics unchanged:
  • 2025 average production of 18-21,000 boe/d (post Sinphuhorm sale).
  • 2025 operating costs of US$250-300 million.
  • 2025 capital expenditure of US$75-95 million.
  • 2025-2027 free cash flow (pre debt servicing) guidance of US$270-360 million.
• Active portfolio management with the sale of the Group’s non-operated Thailand assets in April 2025 for an upfront consideration of US$39.4 million and contingent payments of US$3.5 million.
• Submission of the field development plan for the commercialization of the Nam Du/U Minh (NDUM) discoveries offshore southwest Vietnam to Petrovietnam, commencing the regulatory approval process.
• Skua-11ST well operations ongoing, to accelerate recovery of reserves from the Skua structure and extending the economic life of the Montara field by one year. Results expected in June 2025.
• Debottlenecking project at Akatara progressing, accelerating the commercialization of up 3.5 mmboe of reserves.
• In line with previous announcements, Jadestone has been reviewing its organizational and cost structure, with the aim of ensuring that the Group is run as efficiently as possible and enhancing its resilience to oil price cycles, while maintaining the highest safety standards. As part of this review, the Group will reduce the headcount of its Australian onshore office in Perth by approximately 25%. The targeted headcount reductions do not impact the Group’s offshore Australia workforce. Jadestone’s Australian asset portfolio remains a core focus for the Group and its growth ambitions.
• The Group continues to explore strategic acquisition opportunities to drive value and deliver scalable growth.

Dr. Adel Chaouch, Executive Chairman, commented:
“We closed 2024 on a very positive note, with the notable achievements of safely bringing Akatara onstream and doubling our interest in CWLH both contributing to our record production for the year, reducing unit opex and enhancing the resilience of the Group.

Jadestone’s refreshed and reinvigorated management team is delivering on its promises.  We have seen a strong performance from our diverse portfolio so far in 2025, delivering record production for the first four months of the year and importantly, in line with guidance.  Our focus on operational excellence and maintaining high uptime levels across the portfolio is paying off, providing confidence for our shareholders in our full year guidance and targets, which are reiterated today.  In particular, we are very pleased at the initial performance of the Akatara field, where uptime and production early in 2025 has been ahead of plan, and we are confident that the cash flows and value from this asset will be the foundation of Jadestone’s success for years to come.

Our operational progress is being delivered against a backdrop of enhanced macroeconomic uncertainty. Greater asset diversification due to successful growth, the onset of fixed price gas production from Akatara, our near-term oil price hedges and the premium to Brent for our oil sales means we are well-placed to weather oil price volatility.  We are also taking action to make Jadestone a more resilient business to oil price cycles, by targeting reductions in both operating costs and overheads.  We have strengthened the balance sheet with net debt reduced by approximately half in the first four months of 2025 and we have put in place a new working capital facility, resulting in liquidity at the end of April of US$142.5 million – a strong position from which to continue executing our 2025 activity program.

Jadestone has a rare and compelling investment proposition.  We have the skillset that covers both mid-life oil assets and greenfield gas developments, and a significant presence and platform to operate in three of the top five upstream producing countries in the Asia-Pacific region.  We continue to actively look for opportunities to achieve the scale which is increasingly important in the oil and gas sector, but we will only allocate capital in a way that will be accretive to shareholders.”

There isn’t much to add to the markets knowledge about JSE right now, since the period end production has been in line with guidance and Akatara is performing ahead of plans. The sale last month of the Sinphuhorm gas field stake for $39.4m plus options was a very efficient deal and reduced debt and has enabled the company to focus more.

Jadestone has a new-ish management team who are keen to impress and with this set of assets who is to say that they can’t do that. The asset sale was a good example of the strategy, low risk and work the high quality asset base not being afraid to capitalise on something if the price is right. Regaining trust of the market is not a straightforward task and they have yet to meet the market, that will be the next important step if it works there is a great deal of upside.

2024 SUMMARY

Operational and financial summary

• Proven and Probable (2P) reserves at 31 December 2024 increased slightly year-on-year to 68.3 mmboe (2023: 68.0 mmboe),  driven by 6.7 mmboe of new reserves associated with the acquisition of a further 16.67% stake in the CWLH fields and minor upward revisions at Akatara and Sinphuhorm offsetting production in the year of 6.8 mmboe. Total 2P reserve additions of 7.1 mmboe during 2024 resulted in a 104% 2P reserve replacement ratio for the year.
• Production rose 35% year-on-year to a record 18,696 boe/d (2023: 13,813 boe/d), primarily due to the CWLH 2 acquisition (+1,816 bbls/d), a full year of Montara production (+1,607 bbls/d) and commencement of production at Akatara (+977 boe/d).
• Total sales volume of oil, gas, LPG and condensate in 2024 increased by 36% to 5.3 mmboe (2023: 3.9 mmboe), reflecting the increase in production.
• Total revenue increased by 28% to US$395.0 million (2023: US$309.2 million) due to higher sales volumes, slightly offset by a lower realized oil price. Total 2024 revenue includes a hedging loss of US$27.4 million (2023: US$10.3 million) from commodity swap contracts associated with the RBL Facility.
• The average realized oil price for the year before hedging was US$85.21/bbl in 2024 (2022: US$87.34/bbl). The average realized price premium for 2024 was US$3.76/bbl (2023: US$5.58/bbl). The lower premium year-on-year reflects a shift in the weighting of sales, with a greater proportion of CWLH crude and lower proportion of Stag crude in 2024 compared to 2023.
• Reported production costs totalled US$277.0 million in 2024, a 19% increase from US$232.8 million in 2022. The majority (US$30.7 million) of the increase is explained by the (non-cash) change in lifting and inventory movements year-on-year.
• 2024 adjusted unit operating costs3 of US$33.68/boe represented a 10% decrease over the prior year (2023: US$37.24/boe) primarily due to lower operating cost production at CWLH and Akatara added to the production mix during the year.
• Impairment of oil and gas properties was nil in 2024, compared to US$29.7 million in 2023 due to impairments at Stag and non-producing assets offshore Malaysia.
• Adjusted EBITDAX for 2024 increased by 41.2% to US$127.9 million, up from US$90.6 million in 2023, driven by the factors set out above.
• 2024 loss after tax of US$44.1 million (2023: US$91.3 million loss after tax), driven by the factors set out above
• 2024 operating cash flow before movements in working capital of US$70.5 million, a increase of 93% compared to 2023 (US$36.5 million).
• 2024 capital expenditure of US$74.5 million reduced 36% year-on-year (2023: US$115.9 million), primarily due to the completion of the Akatara development project.
• Net debt of US$105.0 million at 2024 year-end (2023 year-end: US$3.6 million), reflected a full drawdown of US$200.0 million from the RBL Facility and total cash and cash equivalents of US$95.0 million.
• The scheduled RBL March 2025 redetermination concluded on 2 April 2025, resulting in a borrowing base of US$167.0 million for the six month period ending 30 September 2025, which is currently fully drawn.

1 2024 Production includes Sinphuhorm gas and condensate production in accordance with Petroleum Resource Management Systems guidelines, however in accordance with IAS 28 the investment is accounted for as an associated undertaking and only recognizes dividends received.  Accordingly, the revenue and production costs associated with Sinphuhorm are excluded from the Group’s financial results.
2  Realized oil price represents the actual selling price inclusive of premiums or discounts to Brent.
3 Revenue in 2024 of US$395.0 million (2023: US$309.2million) includes a hedging loss of US$27.4 million (2023: US$10.3 million) from the commodity swap contracts associated with the RBL Facility.
4 Adjusted unit operating costs per boe, adjusted EBITDAX and net debt/cash are non-IFRS measures and are explained in further detail in the Non-IFRS Measures section of this document.

Petrofac

Petrofac announces that it has received formal approval from the High Court of England and Wales to implement its Restructuring Plan.

With the overwhelming support of shareholders and the majority of creditor classes, the hearing to sanction the Restructuring Plan took place from 30 April to 2 May 2025. The judgement handed down by the High Court today authorises the implementation of the Restructuring Plan which, when effected, will unlock US$355 million of new funding and significantly reduce the Group’s indebtedness, materially strengthening its financial position.

The Court of Appeal has reserved 2 to 4 June 2025 to review an existing appeal of the convening order, brought by certain creditors connected with the Thai Oil project. Any appeal of the sanction order is expected to be heard at the same time.

Chair of the Board René Medori said:
“This is a very positive step forward for Petrofac. Together with the support displayed by shareholders, lenders, investors and key clients, the High Court’s sanctioning of the Restructuring Plan confirms it is the best path forward, and follows enormous efforts to develop and implement it over the last 18 months.

“The wider Board and I are conscious of the demands this process has placed on all the Group’s stakeholders. I would once again like to thank everyone connected with Petrofac for coming together to deliver these stronger foundations for the future.

“Having joined Petrofac for a limited period to support engagement with stakeholders during this process, Aidan de Brunner will leave the Board with our gratitude on 31 May 2025.”

Group Chief Executive, Tareq Kawash said:
“The sanctioning of the Restructuring Plan marks a significant milestone for our Group. Implementation of the Plan will allow our talented team, clients, suppliers, shareholders and investors, to move forward with renewed confidence, bolstered by a sustainable financial platform, a robust backlog of existing contracts, and a healthy pipeline of future opportunities.”

With various appeals still to take place nothing can be taken for granted but if it goes ahead as the board want it to this would be a satisfactory settlement although whether or not this is in the best interests of all stakeholders, has yet to be confirmed. They see it as a good deal to keep Petrofac going and if that can happen with all stakeholders still intact then fair enough, we might have to wait and see though…

Original article   l   KeyFacts Energy Industry Directory: Malcy's Blog