WTI $69.30 +95c, Brent $72.60 +91c, Diff -$3.30 -4c, NG $4.91 +35c, UKNG 140.71p +3.51p
By Malcolm Graham-Wood
Oil rallied during the day as loading problems in Libya surfaced. Elsewhere it was as described here, better economic news from China dominating. Worth noting continued strength in natural gas prices across the board.
Jadestone has reported today its unaudited condensed consolidated interim financial statements, as at and for the six-month period ended 30 June 2021. H1 2021 production of 9,934 bbls/d, was slightly ahead of plan but 18% lower than H1 2020, in part due to natural field production decline, deferred workovers and an unplanned shutdown at Montara for critical valve repairs.
Average realised oil prices in H1 2021 were US$67.70/bbl, 46% higher than H1 2020. Realised prices included an average premium over the benchmark of US$3.12/bbl5 (H1 2020: US$8.19/bbl). Net revenue for H1 2021 of US$138.2 million, up 50% from H1 2020 before hedging income2, due to the increase in oil prices since the beginning of 2021 and higher lifted volumes.
Unit operating costs of US$28.16/bbl, up 21% from H1 2020 of US$23.27/bbl, in part due to lower production, coupled with higher operational staff costs and repair & maintenance costs. Net profit after tax of US$2.5 million, down from US$5.4 million in H1 2020, which includes the impact of several one-off expenses of US$3.4 million arising from costs associated with the acquisition of SapuraOMV Upstream (PM) Inc. as well as other business development costs and costs associated with the corporate reorganisation, and a net hedging loss of US$4.6 million.
H1 2021 positive operating cash flows of US$54.4 million, before movements in working capital, down 5% compared to H1 2020. Capital expenditure of US$16.2 million, down 17% compared to the prior period. Capital expenditure incurred in H1 2021 is primarily related to costs of the drilling of the H6 development well at Montara. H1 2020 development spend 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 2021, leaving the Group now entirely free of any interest bearing financial indebtedness.
Net cash as at 30 June 2021 of US$48.3 million (H1 2020: US$78.3 million) and zero outstanding debt (H1 2020: US$25.6 million). The lower gross cash balance is partly due to timing differences in liftings, with proceeds of US$46.1 million from a Montara June 2021 lifting received in July 2021; and
A 2021 interim dividend of 0.59 US cents/share has been declared, up 9.3%.
Paul Blakeley, President and CEO commented:
“I am pleased to report a solid 2021 first half across the business, with production from our Australian assets slightly better than expected, ahead of implementing the activity plan on Montara and Stag that was deferred from last year due to low oil prices. I am also pleased to report safe operational performance through the year to date, while we remain vigilant on the well-being of our workforce given the continued significant impact of the COVID-19 pandemic.
“During the period, global demand for hydrocarbons has been recovering, creating strong market fundamentals including an increase in benchmark oil prices. Jadestone’s average oil price realisations in the first half were 45% higher than the same period last year. This translated into positive operating cash flows of US$54.4 million in H1 2021. Adding the proceeds of a June Montara lifting which were received in early July, pro-forma cash balances at mid-year were just short of US$100 million.
“With no debt, our financial position at the end of the first half was very strong, allowing us to increase the interim dividend by 10%. Going forward, we will continue to balance dividend growth against the significant organic and inorganic growth opportunities, and associated capital needs, across the business.
“I am particularly pleased with the Peninsular Malaysia acquisition announced during H1 2021. Due to the concerted efforts of our team, we closed the transaction just three months after announcing, with net cash due to Jadestone of US$9.2 million. Further, we remain committed to our acquisition of a 69% operated interest in the Maari project, shallow water offshore New Zealand, and remain confident that the transaction will be completed, though timing of government approvals is beyond our control.
“Our gas developments have also seen positive progress during the first half. At Lemang, in Indonesia, the regulator has allocated future gas sales from the project, which provides certainty as we work toward both formalising gas sales contracts and progressing the various workstreams leading toward a final investment decision. In Vietnam, we have re-engaged with regulators to press toward a target for both the production profile and first gas date, as a key precursor to establishing gas sales agreement details.
“Today, we have reaffirmed production guidance for 2021 of 11,500 – 13,500 boe/d, 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. This well, together with the Skua workovers and the contribution of the Peninsular Malaysia assets, would give us clear line of sight on a production rate of 20,000 boe/d towards the end of the year.”
I’m in London today and the conference call is at 0900 hours, if anything comes from that I will add further comment tomorrow. In the meantime Jadestone remains one of the strongest, well managed companies in the sector and as they move from a low oil price scenario into what can only be described as the sunlit uplands of $70 oil. Until I get a one to one meeting with the management there isn’t much to add and whilst the Aussies remain so paranoid and unwilling for its business leaders to travel that may be some time, in that time Paul Blakely is running a tight ship.
A very quiet period for finances but new CEO has moved to give Coro a more dynamic profile going forward. The company acquired Global Energy Partnership Ltd, an originator and developer of renewable energy projects in South East Asia with a portfolio of early stage, utility scale projects and an initial focus on the Philippines. Operating infrastructure established in the Philippines; planning and permitting activities for priority 100 MW solar and 100 MW onshore wind projects underway.
Continued progress toward commercialising the Mako gas field (Duyung PSC, Coro 15% interest), with the operator focused on key commercial workstreams including preparation of an updated Plan of Development and continuing Gas Sales Agreement negotiations.
Appointed Mark Hood, an experienced clean energy executive and co-founder of GEPL, as Coro’s Chief Executive Officer. Announced execution of binding, conditional Sale and Purchase Agreement with Dubai Energy Partners Inc to dispose of the Group’s Italian portfolio for cash consideration of €0.3 million Raised net proceeds of approximately $5.5m through a placing and open offer to fund the Group’s low carbon energy investments.
Always a backward facing item these half year results are even less important as Afentra starts its journey into The Company’s strategy is to building an oil and gas business of scale through the acquisition of both operated and non-operated production assets and discovered resources in Africa, where its management team have extensive operational experience. ‘Afentra is well positioned to take advantage of the energy transition and associated market dynamics which is creating opportunities for experienced operators with a strong track record to acquire quality producing assets’.
So, financially, cash resources as at 30 June 2021 of $40.8 million (30 June 2020 of $43.8 million), an adjusted EBITDAX loss of $1.5 million (1H 2020: loss $289k). Loss after tax of $2.4million (1H 2020: loss $866k) The Group remains debt free and fully carried for Odewayne operations (Third and the Fourth Period).
Odewayne Licence – new Afentra team continue its technical assessment and outlook on block prospectivity in discussion with the operator, looking at the operations and structure are as follows.
Business Development – experienced team now in place and actively pursuing potential deals in Africa, primarily focused on operated and non-operated production assets. On 18 February 2021: Several institutional and high net worth investors purchased shares sold by existing shareholders including Waterford Finance and Investment Limited (equating to its entire 29.23% shareholding in the Company) and Mistyvale Limited (equating to its entire 15.66% shareholding in the Company).
On 16 March 2021 Paul McDade and Ian Cloke join the Board of Directors as CEO and COO respectively and on 30 March 2021 Jeffrey MacDonald and Gavin Wilson joined the Board of Directors as Independent non-executive Chairman and Independent non-executive Director respectively.
Following that on 13 April 2021 The Company announced its intention to change its name from Sterling Energy plc to Afentra plc and adopt new articles of association. The proposed changes were approved at the General Meeting held on 30 April 2021. On 5 May 2021 Afentra plc launched and Anastasia Deulina is appointed as Chief Financial Officer.
Paul McDade, Chief Executive Officer, Afentra plc commented:
“2021 has been an eventful period during which we have established Afentra plc and set the company on an exciting strategic path. The market drivers for the energy transition across Africa are presenting a wide range of compelling opportunities and we believe that our proven operating track record, focused ESG agenda, strong balance sheet and supportive shareholder base put us in a unique position to capitalise on these opportunities.”
With his experience and deep knowledge of Africa, Afentra should be prepared for an exciting ride as I know that he has a number of most interesting prospects on the radar screen. The situation could not be set better than current market conditions offer and I expect Paul and his team to have an exciting year ahead.
Emma Raducanu won her QF in New York and tonight plays against Greek 17th seed Maria Sakkari.
In the football all the UK sides got draws in the World Cup qualifying, Northern Ireland 0-0 with Switzerland, Wales 0-0 with Estonia and England 1-1 in Poland.
The opinions expressed here are those of the author
Malcolm Graham-WoodRead More
Disclaimer: Malcy’s Blog is provided for general information about the international oil and gas industry and the companies that operate within it. It does not constitute investment advice and Malcy does not buy or sell shares, warrants or bonds in any company written about within the blog. Information is taken from publicly available sources and any comment is that of the author who does not take any third party comment in the blog
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