Jadestone first half production slightly ahead of plan

Jadestone Energy reported first half production of 9,934 barrels per day, which was slightly ahead of plan but 18% lower than the first half of 2020.

The AIM-traded firm said that was in part due to natural field production decline, deferred workovers and an unplanned shutdown at Montara for critical valve repairs.

Its average realised oil price in the six months ended 30 June was $67.70 per barrel, which was 46% higher than the first half of last year.

Realised prices included an average premium over the benchmark of $3.12 per barrel, compared to $8.19 per barrel a year earlier.

Net revenue for the period totalled $138.2m, up 50% year-on-year before hedging income, due to the increase in oil prices since the beginning of 2021 and higher lifted volumes.

Unit operating costs came in at $28.16 per barrel, up 21% from the first half of 2020 of $23.27 per barrel, in part due to lower production, coupled with higher operational staff costs and repair and maintenance costs.

Net profit after tax totalled $2.5m, down from $5.4m in the first half of 2020, which included the impact of several one-off expenses of $3.4m arising from costs associated with the acquisition of SapuraOMV Upstream as well as other business development costs and costs associated with the corporate reorganisation, and a net hedging loss of $4.6m.

First half operating cash flows were positive at $54.4m, before movements in working capital, which was down 5% compared to the first half of 2020.

Capital expenditure totalled $16.2m, down 17% compared to the prior period, while capital expenditure incurred in the first half of 2021 was primarily related to the costs of drilling the H6 development well at Montara.

Development spend in the first half of 2020 was primarily on the Nam Du/U Minh field prior to the project activity being deferred during the early stages of the Covid-19 pandemic.

The 2018 reserves-based loan was fully repaid on 31 March, leaving the group now entirely free of any interest-bearing financial indebtedness/

Net cash at period end on 30 June totalled $48.3m, down from $78.3m, with zero outstanding debt.

The lower gross cash balance was partly due to timing differences in liftings, with proceeds of $46.1m from a Montara lifting received in July.

An interim dividend of 0.59 US cents per share was declared by the board.

“Today, we have reaffirmed production guidance for 2021 of 11,500 to 13,500 barrels of oil equivalent per day, key to which is the contribution of the H6 development well on Montara, which is currently in the completions phase before being tied in and brought onstream shortly,” said president and chief executive officer Paul Blakeley.

“This well, together with the Skua workovers and the contribution of the peninsular Malaysia assets, would give us a clear line of sight on a production rate of 20,000 boe/d towards the end of the year.”

At 1133 BST, shares in Jadestone Energy were down 2.4% at 76.13p.