Jadestone Energy Plc · LSE:JSE
Jadestone Energy — Q4 2017 Earnings Presentation
32 slides from Jadestone Energy's earnings presentation, Apr 24, 2018
Slide 1: Results for Quarter Ending Dec 31, 2017
Results for Quarter Ending Dec 31, 2017 Apr 24, 2018
Slide 2: Disclaimer & advisories
Disclaimer & advisories Disclaimer You must read the following before continuing. The following applies to this document, the presentation of the information in this document, and any question‐and‐answer session that may follow (collectively, the "Presentation"). In viewing the Presentation, you agr
Slide 3: Advisories
Advisories Forward Looking Statements Information Certain statements in this presentation are forward looking statements and information (collectively “forward looking statements”), within the meaning of the applicable Canadian securities legislation, as well as other applicable international securi
Slide 4: Advisories
Advisories ⚫ "Sustaining capital" is the additional development capital that is required by the business to maintain production and operations at existing levels. Development capital includes the cost to drill, complete, equip and tie-in wells to existing infrastructure. Sustaining capital does not
Slide 5: Agenda
Agenda Webcast presentation: quarter ended December 31, 2017 1 Paul 1 Blakeley ⚫ Quarter highlights, corporate update, developments 2 Dan Young ⚫ Financial review Paul 3 Blakeley ⚫ Outlook, conclusions 4 Team ⚫ Q&A Session 5
Slide 6: Jadestone Energy
Jadestone Energy The right assets, the right people, the right opportunities ⚫ Strong balance sheet and fully funded business ⚫ Gas at fixed prices ~US$6/mmbtu Generating free ⚫ ~40% of Jadestone’s production hedged at ~US$65/bbl for 2018 cashflow today Resilient cash generating business today with
Slide 7: Jadestone Energy, corporate overview
Jadestone Energy, corporate overview Overview and Snapshot Highlights Financial Statement extract As at, US$mm Dec-17 Sep-17 ⚫ Upstream oil & gas in Asia Pacific Cash1 21.2 20.3 ⚫ 4,300—4,800 boe/d production from Stag Total assets 227.9 221.5 & Ogan Komering, circa 90% liquids Book equity 108.2 107
Slide 8: Financial review—key headlines
Financial review—key headlines Jadestone reports profit, positive net cash flow and further operating efficiency Overview Average production (net WI) and hydrocarbon prices ⚫ Net profit of US$0.8mm, a first ever for Jadestone Dec 31, Sep 30, Quarter ending 2017 2017 ⚫ 1.9% increase in production qtr
Slide 9: Financial results—quarterly cash bridge
Financial results—quarterly cash bridge Second consecutive quarter of positive free cash flow generation from operations Stag/Australia: US$5.2mm positive operating cash Cash balance US$mm generation Qtly ordinary cashflow 40 Qtly non-recurring cashflow1 35 14.8 5.8 30 9.4 25 0.1 0.1 5.5 0.4 1.8 20.
Slide 10: Financial results—EBITDAX
Financial results—EBITDAX Jadestone reports positive EBITDAX for the December quarter 3 months ended Dec 31, 2017 3 months Depletion, ended Adjusted for depreciation, Adjusted Dec 31, US$’000s Reported non-recurring exploration EBITDAX 2016 Revenue 20,926 - - 20,926 17,932 Royalties (3,151) - - (3,1
Slide 11: Stag update
Stag update Growing high-value production Stag quarterly production and operating costs Pricing bbl/d Prior Operator US$mm ⚫ 2017 prices averaged ~US$1/bbl premium 3,500 20 to Brent ⚫ 2018E premium to Brent likely to continue 15 to be ~US$1/bbl 3,000 ⚫ ~60% of 2018 Stag production hedged 10 — 350,00
Slide 12: Stag development and exploration potential
Stag development and exploration potential Significant further investment opportunities exist Infill producer Infill injector Stag South Prospect Hart Prospect A number of infill drilling targets have been identified at Stag The first one is planned to be drilled in Q3 2018 12
Slide 13: Stag margin analysis
Stag margin analysis Further investment improves unit opex, G&A, and margins Margin outlook1 US$/bbl bbls/d 100 4,000 3,500 80 3,000 60 2,500 40 2,000 20 1,500 0 H1 2017 H2 2017 2018 NFA 2018 Well 2019 Well 1,000 -20 500 Improving margins -40 0 Opex G&A Margin Production An infill well drilled in Q3
Slide 14: Ogan Komering PSC update
Ogan Komering PSC update Stable and resilient production and reduced operating costs Ogan Komering quarterly production and operating costs Progress/participation beyond Feb 28, 2018 bbl/d Oil Gas Opex US$mm ⚫ Temporary extension of PSC (TCC) granted 1,600 3.0 from Mar 1, 2018, valid until 1 month a
Slide 15: Jadestone's Southwest Vietnam gas
Jadestone’s Southwest Vietnam gas UM/ND gas will be commercialised via the same route as TLM’s PM-03 Malay Basin detail of Jadestone’s Southwest Vietnam gas Select comments ⚫ Nam Du and U Minh discoveries are ~23km apart in adjacent Jadestone blocks Planned pipeline ⚫ Immediately to the north of Tal
Slide 16: Efforts to commercialise Nam Du and U Minh continue
Efforts to commercialise Nam Du and U Minh continue Jadestone is accelerating our preferred standalone development solution Field development plan (FDP) Outline Reserve EPC, development FEED, assessment drilling, plan EPCI bid conditioning report (RAR) installation (ODP) Gas sale agreement (GSA), ti
Slide 17: Future Asia-Pacific opportunities
Future Asia-Pacific opportunities Focus on basins where we can deploy our skills to unlock trapped value Jadestone Energy core focus area Select comments ⚫ Potential M&A opportunities must meet Near sanction project providing Jadestone’s strict threshold acquisition infrastructure hub combined crite
Slide 18: Reserves & production
Reserves & production Even after 18 months of production, Stag 2P reserves are 2.5 million barrels higher than at acquisition Select comments 2P Reserves1 and 2C Resources2 net to Jadestone, mmboe mmbbls ⚫ Stag’s 2P reserves at acquisition estimated at 14.6mm bbls (GCA) 100% oil 20.000 2P Reserves1,
Slide 19: 2018 event guidance
2018 event guidance Major near term catalysts to unlock shareholder value Events Impact First Stag ⚫ Significant increase in production, cash flow, value and reserves infill well Ogan Komering ⚫ Participation in a new 20-year contract, with immediate value and reserves add new contract U Minh/Nam Du
Slide 20: Jadestone Energy demonstrated value creation
Jadestone Energy demonstrated value creation Jadestone’s management team has transformed Mitra Energy into a profitable and positive cash generating business within 18 months Mitra Energy case study Stag case study Ogan Komering case study Mitra Jadestone bbls/d Prod'n Costs $/bbl bbl/d Oil Gas Opex
Slide 21: Jadestone Energy investment case
Jadestone Energy investment case A strategy that works, a high value portfolio, and a plan for value accretive growth ⚫ Management team with proven abilities to add value and world class second phase specialisation A strategy that ⚫ Objectives aligned with shareholders works ⚫ A focus on efficiency,
Slide 22: Appendix
Appendix Backup Slides
Slide 23: Southeast Asia is a highly compelling energy market
Southeast Asia is a highly compelling energy market High GDP growth rates, growing gas deficits, rising gas prices, and leading global E&P margins High growth outlook, GDP CAGR 2017—2019 % Significant growth of natural gas demand, bcf/d GDP growth US$/boe 2017—2019E, % 15 8 Confirmed domestic supply
Slide 24: Jadestone Energy portfolio overview
Jadestone Energy portfolio overview Snapshot Select blocks, ordered by expected commercialisation1 Target W.I. 2P 2C production (net Block (%) (mm boe) (mm boe) Operator WI) / status SC57 Australia 17.1 100% N/A Jadestone 3,000-3,500bbl/d 127 - Stag (100%) 1 05-1b&c2 Indonesia Reserves estimated JOB
Slide 25: Stag subsurface overview
Stag subsurface overview Excellent reservoir characteristics Overview Stag Log ● Stag Oilfield is a combination structural/stratigraphic trap ● Producing from early cretaceous ‘M. Australis’ sandstone ● Excellent reservoir quality in upper flow unit — High porosity and permeability at shallow reserv
Slide 26: Ogan Komering outlook
Ogan Komering outlook Value delivery under the new PSC Existing discoveries ready to be developed Value delivery under new Gross Split PSC1 ⚫ Progress early development of existing gas discoveries — Jantung Baru, North Meraksa, Bandar Agung ~100 bcf (gross) ⚫ Exploration upside N Meraksa — P50 prosp
Slide 27: The evolution of Vietnam's domestic gas market
The evolution of Vietnam’s domestic gas market Established market price US$7-9+/mmBTU Vietnam wellhead gas pricing, US$/mmBTU Gas Sales Contracts Heads of Agreement US$/mmBTU 14 10-12 12 10 9-10 8 Established market price US$7-9+/mmBTU 6 4 2 0 Lan Tay/ Lan HT/MT (2009) Thai Binh Thien Ung CRD SV-DN
Slide 28: New leadership
New leadership Paul Blakeley brings a wealth of knowledge and experience to Jadestone with a very impressive track record running Talisman’s APAC business Talisman Asia Pacific production ⚫ Jadestone Energy is led by Paul Blakeley, who ran Talisman’s Asia Pacific business from 2005 and spent the pri
Slide 29: Core management team
Core management team Paul Blakeley’s leadership is augmented by a management team with significant operational and technical experience Experience Core management Previous employers Experience (years) Paul Blakeley 36 CEO Michael Horn 26 EVP Corporate and Business Development Dan Young 22 CFO David
Slide 30: Management's track record of value creation
Management’s track record of value creation Asia-Pacific focused strategy with a proven business model to create exceptional value History of value creation 1,200 2.3x Value creation levers Step-out exploration 4.8x 2.7x Commercial 1,000 Improved recovery Appraisal 800 Project execution NPV10 (US$mm
Slide 31: Jadestone Energy strategic focus
Jadestone Energy strategic focus APAC strategic focus with a proven business model and resilient Balance Sheet Value creation Balanced portfolio Focused approach Prioritise margin Balanced portfolio of Focus on select core areas in improvement and accretive production and APAC, a region with growing
Slide 32: Attractive value vs peers
Attractive value vs peers Valuation compares favourably on reserves, production and cash flow metrics. The development projects should provide further superior long-term growth Firm Value/2P Reserves, US$/boe Firm Value/EBITDA 2018E 15 10.0x 8.0x 10 6.0x 4.0x 5 2.0x 0 0.0x Peer 2 Peer 1 Peer 3 Peer