Jadestone Energy Plc · LSE:JSE
Jadestone Energy — Q3 2018 Earnings Presentation
28 slides from Jadestone Energy's earnings presentation, Nov 28, 2018
Slide 1: Results for Quarter Ending Sep 30, 2018
Click to add Slide Title Click to add sub head • Edit Master text styles • Second level • Third level • Fourth level Results for Quarter • Fifth level Ending Sep 30, 2018 Nov 28, 2018 www.jadestone-energy.com 1
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 agre
Slide 3: Advisories
Advisories Because actual results or outcomes could differ materially from those expressed in any forward looking statements, investors should not place any reliance on any such forward looking statements. By their nature, forward looking statements involve numerous assumptions, inherent risks and u
Slide 4: Agenda
Agenda Webcast presentation: quarter ended September 30, 2018 Paul 1 Blakeley ⚫ Quarter highlights, corporate update, developments 2 Dan Young ⚫ Financial review Paul 3 Blakeley ⚫ Outlook, conclusions 4 Team ⚫ Q&A Session 4
Slide 5: Jadestone Energy, corporate overview
Jadestone Energy, corporate overview Overview Quarter highlights Financial Statement extract ⚫ Transformational quarter As at, US$mm Sep-18 Jun-18 ⚫ Improvements at Stag continue Cash1 74.3 16.6 — 100% uptime; 159 days without a process trip Total assets 722.7 208.2 — 9% production growth, q-on-q Bo
Slide 6: Financial review—key headlines
Financial review—key headlines Jadestone reports its maiden profit before tax Overview Average production (net WI) and hydrocarbon prices ⚫ Quarterly revenue of US$32.7mm, up 79% q-on-q Sep 30, Jun 30, Quarter ending 2018 2018 — Stag production up 9%, q-on-q — Two liftings, for a total of 422,267 bb
Slide 7: Montara net cash consideration was US$133.1mm
Montara net cash consideration was US$133.1mm Use of proceeds from summer equity and debt raise Montara net consideration and use of summer equity and debt proceeds, US$mm US$mm 250 Montara net consideration, US$mm 120.0 218.8 195.0 13.6 3.4 133.1 200 75.5 150 Headline Crude & other Cash at Net pric
Slide 8: Financial results—quarterly cash bridge
Financial results—quarterly cash bridge Transitional quarter with Montara/London raise & listing costs US$mm Cash balance 300 Qtly ordinary cashflow US$61.3mm net cash after Montara Qtly non-recurring cashflow consideration, Tyrus bond repayment, PTTEP cash call, and fees 230.0 250 11.2 200 150 Stag
Slide 9: Financial results—EBITDAX
Financial results—EBITDAX Jadestone reports record US$11.9mm EBITDAX for Sep 2018 quarter 3 months ended September 30, 2018 3 months Depletion, ended depreciation, September 30, US$mm Reported Non-recurring exploration Adjusted 2017 Revenue 32.7 - - 32.7 21.4 Royalties - - - - (2.8) Cash flow hedges
Slide 10: Montara capped swap summary
Montara capped swap summary Overview Capped swap summary Vol, bbls Dated Brent US$/bbl ⚫ Swaps cover 600,000 90.00 approximately 50% of planned 2PD production for first 24 months of Jadestone ownership 500,000 ⚫ Average swap prices — US$78.26/bbl for Q4 400,000 75.00 2018 — US$71.72/bbl for 2019 — U
Slide 11: Treatment of Montara PRRT credits
Treatment of Montara PRRT credits Jadestone has adopted “LIFO” principles for the Montara PRRT credits Baseline—Sep 2018 Balance Sheet application of IAS12, plus IFRS3 ⚫ As part of the Montara Deferred PRRT tax asset Oil & gas properties acquisition, Jadestone inherits c. US$3bn of PRRT ⚫ Very large
Slide 12: Compelling investment opportunity
Compelling investment opportunity Jadestone currently trades at a deep discount to core NAV CPR reserves value1, US$mm Total tangible asset value, US$mm Stag Montara Stag 2P Montara 2P 2C resource4 Management estimates5 SC56 Tho Chu Ogan 974 Komering 915 88 76 793 246 564 480 317 480 US$213mm 0.38x
Slide 13: Jadestone Energy demonstrated value creation
Jadestone Energy demonstrated value creation Two year turnaround of Mitra Energy Strategic reset1 JSE operatorship of Stag Montara FPSO class reinstatement Mitra Jadestone bbls/d Prod'n Costs $/bbl Time to re-instate FPSO class from 100 signing 5,000 80 Current 4,000 60 operator 50 Jadestone 3,000 4
Slide 14: Stag achievements
Stag achievements Optimising operations to grow reserves, reduce costs and add value Jadestone value drivers Operating cost reductions, US$/bbl Production & operations optimisation Prior operator Jadestone operator ⚫ Stable operations over last quarter, averaging over 3,000 bbl/d, without a single u
Slide 15: Recap of the Montara value opportunity
Recap of the Montara value opportunity Attractive acquisition price with potential to generate significant additional value Levers to unlock value Illustrative Montara value potential, US$mm Increased production ● Gas lift installation and optimisation Improve facilities uptime ● Improve uptime from
Slide 16: Montara transition to Jadestone
Montara transition to Jadestone Influencing Operations to provide a long-term reliable operating platform Key objectives during transition period Early activities and outcomes ⚫ Instil a culture of safety and accountability ⚫ Seconded key Jadestone employees in leadership roles Safe ⚫ Eliminate regu
Slide 17: Montara Shutdown & Recovery Plan
Montara Shutdown & Recovery Plan Fixing maintenance & inspection backlog now will enhance asset performance ⚫ Identified a major backlog of maintenance and inspection routines across the assets Rationale for ⚫ NOPSEMA, the regulator, was increasingly focused on a failure of compliance with the Monta
Slide 18: Nam Du / U Minh development progress
Nam Du / U Minh development progress Status update Clear line of sight to project sanction ⚫ On schedule for FDP approval and FID H2 2019 ⚫ Jadestone’s legacy Talisman staff have a deep understanding of ODP Vietnam’s project delivery requirements and substantial knowledge of FID H2 Approval the area
Slide 19: Jadestone portfolio work programme
Jadestone portfolio work programme Fully funded programme of material near-term catalysts 2018 2019 2020+ Asset Country Activity Q3 Q4 Q1 Q2 Q3 Q4 Implement Jadestone Operations Montara operating philosophy Montara production Montara optimisation Infill drilling campaign Stag (up to 5 wells) Product
Slide 20: Significant production growth…
Significant production growth… Existing portfolio delivers sustained growth 40 U Minh on stream Nam Du S/ OK gas Channel fields on 30 Nam Du on stream stream Further Production1, mboe/d First two infills Infills 20 Montara acquisition 10 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 Post Acquisitio
Slide 21: Jadestone Energy investment highlights
Jadestone Energy investment highlights A strategy that works, a high value portfolio, and a plan for value accretive growth ⚫ Proven in-region management team with a track record of value creation and generating returns for shareholders Proven regional management ⚫ End-to-end capabilities through th
Slide 22: Appendix
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Slide 23: Jadestone Energy
Jadestone Energy Right team, right place, right time ⚫ Primarily the ex-Talisman Asia Pacific team led by Paul Blakeley ⚫ Delivered 11% CAGR production growth over 10 years in Asia Pacific creating US$6bn Deep experience NAV business, with deep knowledge of key hydrocarbon basins ⚫ Differentiated ex
Slide 24: Asia Pacific region
Asia Pacific region Maturing hydrocarbon region with significant running room; ideal for Jadestone Asia Pacific reserve breakdown Development type Company Maturity 3% 4% 8% 12% 13% 20% 15% 35% 26% 53% 42% 69% Onshore Shallow water Majors & large IOCs NOCs Late life Mature Deepwater Ultra-deepwater I
Slide 25: Southeast Asia gas fundamentals
Southeast Asia gas fundamentals Growing supply shortfall driving attractive pricing dynamics for producers Southeast Asia gas investment highlights Significant growth of natural gas demand, bcf/d 15 bcf/d ⚫ Region characterised by high-growth, energy- Confirmed domestic supply Demand hungry economie
Slide 26: Jadestone Energy strategic focus
Jadestone Energy strategic focus Leverage technical & commercial capabilities to maximise value creation for shareholders Key strategic principles Jadestone core capabilities Differentiated approach to subsurface interpretation and reservoir management Acquire assets with production and/or discovere
Slide 27: Stag has moved into a PRRT cash pay phase
Stag has moved into a PRRT cash pay phase PRRT overview and Stag short term PRRT outlook Petroleum resource rent tax (PRRT) re-cap Stag PRRT at an inflection point Cummulative PRRT profit ⚫ 40% of “PRRT profits”, being assessable receipts US$mm PRRT payable/refundable less 20 PRRT paid/refunded — Op
Slide 28: Nam Du and U Minh development concept
Nam Du and U Minh development concept Commercialised via the existing route utilised by Talisman’s PM3 field3 Project development outline ODP illustration of Nam Du/U Minh development concept ⚫ Simple design with a conductor supported well head platform for each field, tied back to an FPSO at Nam Du