Jadestone Energy Inc., an independent oil and gas production company focused on the Asia Pacific region, provides guidance for 2019.

2019 Outlook

• Average crude oil production expected to be between 13,500 - 15,500 bbls/d
• Average production for February 2019 of 15,369 bbls/d following some flush production from Montara restart and continued natural flow from wells Skua-11 and Swift-2
• Average unit production costs of US$21 - 24/bbl
• Capital and other major offshore spending of US$116 - 131mm
• Regulatory acceptance of Jadestone’s safety case for the Montara asset and change of operatorship expected in Q2 2019
• Infill wells on both Stag and Montara in Australia, as well as a riserless light well intervention campaign at Montara
• Development sanction for the Nam Du and U Minh fields in Vietnam
• Over 5,500 bbls/d of 2019 production covered by swaps at an average price of approximately US$72/bbl

Paul Blakeley, President and CEO commented:
“Jadestone is a dramatically different company compared to this time last year.  Following our acquisition of the Montara asset, offshore Australia, we have tripled production, all of it high quality premium-priced oil from offshore Australia, and are making good progress on a significant development project in Vietnam, which we expect to sanction this year.  

“At the same time, we have changed the character of the Company’s finances, such that we are well-positioned to deploy significant cash generated from operations to pursuing attractive reinvestment opportunities, while comfortably servicing our debt obligations and further strengthening our balance sheet.

“As we increase our influence and control over the Montara asset, in preparation for taking over operatorship, we are identifying more opportunities to generate value for shareholders, including innovative ways to add reserves and resources, while optimising both production rates and operating costs.

“Stag continues to improve in operating performance and the infill well we will shortly spud, the first at Stag in six years, will add material production and significantly reduce unit operating costs.  

“Meanwhile, we continue to make excellent progress toward development sanction of the Nam Du and U Minh gas fields offshore Vietnam, providing strong growth, further value crystallisation from within the portfolio and a diversification of product mix towards fixed price, long-term gas contracts. We are forecasting completion of FEED, gas sales agreement negotiations, and major contract tendering, leading to formal FID, all within the year.

“Collectively, the catalysts we are forecasting for 2019 put us well on our way toward achieving our longer-term goal of growing to a circa 30,000 boe/d producer by 2023, with our existing asset base.”

Australia

All of Jadestone’s forecast 2019 production is crude oil from its two producing offshore assets offshore Australia, Montara and Stag, expected to be in the range 13,500 - 15,500 bbls/d. The Company is implementing measures to streamline operations on both assets, resulting in both lower gross operating costs and higher production rates in 2019.  In addition to the impact of adding new production volumes through infill wells and well interventions, the Company anticipates increasing facility uptime towards a target of 84% at Montara this year.

Jadestone intends to start its infill drilling campaign on the Stag field with the Stag 49-H well in March 2019, and with a Montara infill well towards year end. In addition, planning is well under way on an innovative light well intervention programme at Montara focused on three wells, including a high potential operation within the Skua-11 wellbore, which will target bypassed crestal oil pay in the Skua field. This activity, which is planned to commence in Q2 2019, will access substantially the same new resource as a new well, but at a fraction of the capital cost.

Capped swap programme

The Company’s existing capped swap programme provides substantial downside oil price protection with over 5,500 bbls/d in 2019 swapped at around US$72/bbl.  Additionally, 76% of these 2019 swapped barrels retain full oil price upside above US$80/bbl via purchased calls.

Vietnam

At the Nam Du and U Minh fields, offshore Vietnam, FEED, gas sale and purchase agreement negotiations, offshore surveys, and tendering for major contracts are progressing smoothly, and are forecast to be finalised in Q3 2019 along with financing arrangements. The Company anticipates completion of these steps to culminate in field development sanction and a final investment decision later in the year.

In the meantime, Jadestone has built a highly experienced project management organisation at its Ho Chi Minh City office, in preparation for the detailed engineering, design, and construction phase, leading to forecast first gas production from U Minh and Nam Du in 2021.

Additional assets

Jadestone is maintaining an ongoing dialogue with Pertamina and the Indonesian authorities, with the expectation of confirming its interest in the Ogan Komering asset in Indonesia.

The Company continues to evaluate inorganic opportunities to grow its presence in the Asia Pacific region, adhering always to its strict acquisition screening criteria.