Results for the Period Ending June 30, 2018

RNS Number : 9537Y
Jadestone Energy Inc.
28 August 2018
 


 

Jadestone Energy Results for the Period Ending June 30, 2018

 

August 28, 2018-Singapore: Jadestone Energy Inc. (AIM:JSE, TSXV:JSE) ("Jadestone" or the "Company"), an independent oil and gas production company focused on the Asia Pacific region, reported today its condensed consolidated unaudited financial results for the three and six months ended June 30, 2018. 

 

Second quarter highlights

 

·    Total liquids production of 299,601 bbls, and natural gas production of 157,799 mmbtu, for a total of 4,239 boe/d* for the quarter, an increase of over 4% the same quarter a year ago, and over 3% up from the prior March 2018 quarter. 

 

·    Production from Stag of 256,077 bbls for the quarter, an increase of more than 9% over the same quarter a year ago and more than 6% up from March 2018 quarter, reflecting improved uptime and notwithstanding planned maintenance activities which caused the deferral of approximately 38,000 bbls (or 417 bbls/d for the quarter);

 

·    Sales revenue of US$18.3 million, increased slightly from US$18.1 million in the same quarter a year ago, as increased benchmark prices more than offset the impact of lower aggregate production volumes given the expiry of the Ogan Komering license on May 19, 2018;

 

·    Production costs of US$10.7 million in the quarter, down 52% from US$22.2 million in the same period a year ago, due to lower operating costs at Stag including workover costs;

 

·    Positive cash from operations (before changes in working capital) of US$0.1 million, despite the lower production, and additional costs arising from the Stag turn-around, compared to cash used in operating activities of US$11.1 million in the same quarter a year ago;

 

·    The Stag Oilfield reached a safety milestone of six years without a lost-time incident, and conducted a major planned maintenance turn-around to ensure ongoing facilities integrity;

 

·    Jadestone obtained approval for the Nam Du and U Minh outline development plan from Vietnam's Ministry of Industry and Trade ("MOIT") on May 21, 2018, and work on front-end engineering design ("FEED"), field development plan studies, and the early phases of gas sales agreement negotiations have begun;

 

·    A new gross split PSC covering the Ogan Komering working area in Indonesia was awarded to Pertamina effective May 20, 2018, and the Company began direct business-to-business negotiations with Pertamina to formalise the Company's participation in the new licence.  Concurrently, Indonesia's Minister of State Owned Enterprises has established a principal agreement to govern the mechanism by which Pertamina can confer an interest in the new licence and Pertamina's corporate guidance for asset divestitures is being finalised.

 

* Net working interest and based on production at Ogan Komering averaged across the 49 days of Jadestone participation in the license during the quarter (April 1, 2018 through to May 19, 2018), plus the full quarter's average share of production at Stag

 

Material developments

 

Subsequent to the end of the quarter, the Company also announced several material developments:

 

·    A definitive sale and purchase agreement ("SPA") with certain subsidiaries of PTT Exploration and Production Public Company Limited ("PTTEP"), to acquire a 100% interest in the Montara oil project (the "Montara Oil Project" or the "Montara Assets"), offshore Australia via an asset acquisition;

 

·    Funded by a $110 million (gross) oversubscribed equity placing, upsized from an initial target of US$95 million;

 

·    An underwritten secured reserve-based loan facility of US$120 million from Commonwealth Bank of Australia and Société Générale and;

 

·    Admission and first day of dealings on the AIM Market of the London Stock Exchange on August 8, 2018.

 

Paul Blakeley, President and CEO, commented:

 

"Operations during the second quarter were executed safely, and according to plan.  I am pleased with the performance of our turn-around team in conducting major maintenance work at Stag in late April, which included planned production vessel repairs and integrity-focussed inspection work.  While the downtime resulted in deferring production of 38,000 bbls into Q3, the positive impact of our operating philosophy on facility uptime has more than offset the deferral, meaning we are still able to show quarter-on-quarter growth from Stag and generate positive cash from operations.  With the maintenance turnaround behind us, and the next one not expected until 2022, I am increasingly confident that Stag will remain a safe and predictable source of cash flow and value creation. 

 

"Also during the second quarter, we have made significant progress toward executing our Vietnam growth strategy in respect of our proposed Nam Du and U Minh gas field development, with the MOIT approvals, and with FEED, gas sales agreement negotiations, and engineering procurement construction discussions now fully underway. 

 

"In addition, the transactions we announced after the end of the quarter demonstrate our team's capacity to layer transformative inorganic opportunities into our portfolio.

 

"The Montara acquisition marks a step change in our business by adding 10.3 mbbls/d of production and 28.1 mmbbls of 2P reserves.  We are working with PTTEP toward closing the asset acquisition within September/October 2018, at which time, the economic benefits of the asset, dating back to the effective date of January 1, 2018, will be reflected in our financial statements by way of a closing adjustment to the purchase price.  Accordingly, we have started working within the Montara organisation to ensure a seamless transfer of operatorship to Jadestone, and ongoing safe production operations. 

 

"In addition, our new financing arrangements will not only fund the acquisition, but have allowed us to repay the convertible debt facility we had with Tyrus Capital Event S.à r.l., which had been drawn to US$15 million.  These steps simplify our balance sheet and establish the Company's self-funded growth platform, with the capacity to generate annual free cash flow for many years, whilst simultaneously growing production."

 

Operations update

 

Stag Oilfield (offshore Australia)

Crude oil production at Stag totalled 256,077 bbls during the quarter to June 30, 2018, an increase of approximately 9% from the same quarter a year ago, and up 6% from the prior quarter.  This primarily reflects increased uptime, which more than offset the impact of approximately 38,000 bbls of deferred production due to a planned 12-day maintenance turnaround in April, concluded 1 day ahead of schedule.  

 

Following the planned maintenance event, which was completed on May 3, 2018, production volumes have returned to approximately 3,300 bbls/d.  Average production for the quarter was 2,814 bbls/d.

 

The Company continues to pursue opportunities to enhance value at Stag, and is in advanced planning stages for its first infill well on the asset, expected to be drilled in the fourth quarter of 2018.

 

Ogan Komering (onshore Indonesia)

Production at the Ogan Komering PSC, under the terms of a temporary cooperation contract, totalled 68,823 boes, reduced by 47% compared to the prior quarter due to expiry of the cooperation contract on May 19, 2018, or 49 days into the quarter.

 

On a daily rate basis, average Ogan Komering production over the 49 days was 1,425 boe/d, decreased by just 2% from the prior quarter, as the partners continued their efforts to arrest natural declines of the producing fields.

 

Jadestone is engaged in direct business-to-business negotiations with Pertamina to formalise the Company's participation in the new licence for the Ogan Komering working area, which was granted to Pertamina on May 20, 2018.  The Company expects to reach satisfactory binding terms during the fourth quarter of 2018, with participation to be effective from the commencement of the new licence on May 20, 2018.

 

Financial overview

 

Jadestone generated adjusted EBITDAX of US$0.3 million for the quarter ended June 30, 2018, compared to a negative adjusted EBITDAX of US$11.5 million in the same period a year earlier.  On an unadjusted basis, the Company reported a net loss before tax of US$3.9 million, compared to a net loss before tax of US$14.0 million for the same period a year earlier. 

 

Both unadjusted earnings and adjusted EBITDAX were increased due to higher average realised prices, generating increased revenue despite lower overall production and sales.  In addition, operating costs at Stag have fallen substantially, down 52% as compared to Q2 2017, a period before the Company took over operatorship.  The Company continues to realise additional operating cost efficiencies throughout its operations at Stag.

 

The Company reported total book costs of production of US$10.7 million during the quarter, or just under US$32.70/boe production.

 

In connection with the Company's commodity hedges, during the three months ended June 30, 2018, total non-cash charges of US$1.1 million were booked to the income statement and US$2.8 million to other comprehensive income to reflect current market values at June 30, 2018.  In the same period a year earlier, the Company had no commodity hedges. 

 

Investing activities for the quarter amounted to a cash outflow of US$0.2 million, comprised mainly of payments for oil and gas properties.

 

At the end of the quarter, the Company had US$6.6 million cash, plus a further US$10.0 million of cash in support of a bank guarantee, and another US$13.0 million undrawn on the Company's convertible bond facility.

 

Selected financial information

 

The following table provides selected financial information of the Company, which was derived from, and should be read in conjunction with, the consolidated unaudited financial statements for the period ended June 30, 2018.

 

 

June 2018 Qtr

June 2017 Qtr

Change (%)

Production, mboe

325.9

369.4

(11.8%)

Sales, mboe

270.7

363.0

(25.4%)

Avg realised liquids price, US$/bbl

71.46

50.64

41.1%

Sales revenue, US$mm

18.3

18.1

1.1%

Capital expenditure1, US$mm

0.3

0.7

(61.9%)

 

June 2018 Qtr

Mar 2018 Qtr

Change (%)

Production, mboe

325.9

369.1

(11.7%)

Sales, mboe

270.7

333.0

(18.7%)

Avg realised liquids price, US$/bbl

71.46

67.34

6.1%

Sales revenue, US$mm

18.3

21.0

(12.7%)

Capital expenditure1, US$mm

0.3

0.5

(46.8%)

 

H1 2018

H1 2017

Change (%)

Production, mboe

695.0

629.4

10.4%

Sales, mboe

603.7

670.4

(9.9%)

Avg realised liquids price, US$/bbl

69.09

53.60

28.9%

Sales revenue, US$mm

39.3

35.3

11.3%

Capital expenditure1, US$mm

0.8

3.4

(77.6%)

1 Payment for oil and gas property, plant and equipment and intangible exploration assets.  Excludes acquisition related capital expenditure.

 

Conference call and webcast

 

The management team will host an investor and analyst conference call at 9:00 p.m. (Singapore), 2:00 p.m. (London), and 9:00 a.m. (Toronto) on Tuesday, August 28, 2018, including a question and answer session.  The live webcast of the presentation will be available at the below webcast link.  Dial-in details are provided below.  Please register approximately 15 minutes prior to the start of the call. 

 

Webcast link: https://event.on24.com/wcc/r/1821936/9FCEC286A9137A20C910628826C70497

Event conference title: Jadestone Energy Management Briefing

Start time: 9:00 p.m. (Singapore), 2:00 p.m. (London), 9:00 a.m. (Toronto)

Date: Tuesday, 28 August 2018

Confirmation ID: 81408196

 

Participant ITFS Dial-In Numbers:

 

Australia

1800076068

Canada

(+1) 888 390 0605

France

0800916834

Hong Kong

800962712

Indonesia

0018030208221

Japan

006633812569

Malaysia

1800817426

New Zealand

0800453421

Singapore

8001013217

United Kingdom

08006522435

United States

(+1) 888 390 0605

Other International (Canada toll)

(+1) 416 764 8609

 

 

Area access numbers are subject to carrier capacity and call volumes.

 

ends -

 

For further information, please contact:

 

Jadestone Energy Inc.

Paul Blakeley, President and CEO

Dan Young, CFO

 

Investor Relations Enquiries

 

+65 6342 0359

 

 

 

+1 403 975 6752

ir@jadestone-energy.com

 

 

Nomad and Joint Broker

 

Stifel Nicolaus Europe Limited:

+44 (0) 20 7710 7600

Callum Stewart

 

Nicholas Rhodes

 

Ashton Clanfield

 

 

 

Joint Broker

+44 (0) 20 7236 1010

BMO Capital Markets Limited:

 

Thomas Rider

 

Jeremy Low

 

Thomas Hughes

 

 

 

Public Relations Advisor

 

Camarco:

+ 44 (0) 203 757 4980

Georgia Edmonds

jadestone@camarco.co.uk

Billy Clegg

 

James Crothers

 

 

 

About Jadestone Energy Inc.
Jadestone Energy Inc. is an independent oil and gas company focused on the Asia Pacific region. It has a balanced, low risk, full cycle portfolio of development, production and exploration assets in Australia, Vietnam and the Philippines.

 

The Company has a 100% operated working interest in Stag, offshore Australia, and has announced a definitive Sale and Purchase Agreement to acquire a 100% operated working interest in the Montara project, offshore Australia, effective January 1, 2018.  Both the Stag and Montara assets include oil producing fields, with further development and exploration potential.  The Company has a 100% operated working interest (subject to registration of PVEP's withdrawal) in two gas development blocks in Southwest Vietnam and is partnered with Total in the Philippines where it holds a 25% working interest in the SC56 exploration block.

 

Led by an experienced management team with a track record of delivery, who were core to the successful growth of Talisman's business in Asia, the Company is pursuing an acquisition strategy focused on growth and creating value through identifying, acquiring, developing and operating assets throughout the Asia-Pacific region.

 

Jadestone Energy Inc. is currently listed on the TSXV and AIM. The Company is headquartered in Singapore.  For further information on Jadestone please visit http://www.jadestone-energy.com.

 

 

 

Cautionary statements

A barrel of oil equivalent ("boe") is determined by converting a volume of natural gas to barrels using the ratios of six thousand cubic feet ("mcf") to one barrel.  Boes may be misleading, particularly if used in isolation.  A boe conversion ratio of 6 mcf:1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilising a conversion on a 6:1 basis may be misleading as an indication of value.

 

Certain statements in this press release 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 securities laws.  The forward-looking statements contained in this press release are forward-looking and not historical facts.

 

Some of the forward-looking statements may be identified by statements that express, or involve discussions as to expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of phrases such as "will likely result", "are expected to", "will continue", "is anticipated", "is targeting", "estimated", "intend", "plan", "guidance", "objective", "projection", "aim", "goals", "target", "schedules", and "outlook").

 

In particular, forward-looking statements in this press release include, but are not limited to statements regarding the ODP revision for Nam Du/U Minh to reflect a standalone development and the early stages of FEED and related work, and Jadestone's continuing discussions with its partners and the regulators on a new contract for Ogan Komering.

 

Because actual results or outcomes could differ materially from those expressed in any forward-looking statements, investors should not place undue reliance on any such forward-looking statements.  By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, which contribute to the possibility that the predicted outcomes will not occur.  Some of these risks, uncertainties and other factors are similar to those faced by other oil and gas companies and some are unique to Jadestone.  The forward-looking information contained in this news release speaks only as of the date hereof.  The Company does not assume any obligation to publicly update the information, except as may be required pursuant to applicable laws.

 

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

 

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No. 596/2014, and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.

 

 

Glossary

 

bbls

Barrels

bbls/d

Barrels per day

boe

Barrels of oil equivalent

boe/d

Barrels of oil equivalent per day

EBITDAX

Earnings before interest, tax, depreciation, amortization and exploration expenses

FEED

Front-end engineering and design

mmbtu

Million British thermal units

MOIT

Ministry of Industry and Trade

PSC

Production sharing contract

 

 

 

 

 

 

 

 

 

 

Jadestone Energy Inc.

CONDENSED Consolidated INTERIM STATEMENT OF FINANCIAL POSITION

As at June 30, 2018

 

 

 

 

Notes

June 30,

2018

 

December 31,

2017

ASSETS

 

US$000

 

US$000

 

 

 

 

 

Non-current assets:

 

 

 

 

Intangible exploration assets

9

94,074

 

105,673

Oil and gas properties

10

53,976

 

62,238

Deferred tax assets

 

24,337

 

23,821

Plant and equipment

11

1,443

 

             648

Restricted cash

12

10,000

 

10,729

 

 

183,830

 

203,109

Current assets:

 

 

 

 

Inventories

 

13,617

 

9,610

Receivables and prepayments

 

4,203

 

4,719

Cash and cash equivalents

12

6,565

 

10,450

 

 

24,385

 

24,779

 

 

 

 

 

TOTAL ASSETS

 

208,215

 

227,888

 

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

Share capital

13

364,466

 

364,466

Share-based payment and warrants

14

22,128

 

21,855

Hedging reserve

 

(3,441)

 

-

Accumulated losses

 

(299,626)

 

(278,123)

 

 

83,527

 

108,198

Non-current liabilities:

 

 

 

 

Provision for asset restoration obligations

15

82,982

 

84,728

Other payables

 

6,712

 

7,259

Deferred tax liabilities

 

-

 

200

Secured convertible bonds

17

13,330

 

12,770

Derivative financial instruments

17

4,360

 

          3,067

 

 

107,384

 

108,024

Current liabilities:

 

 

 

 

Borrowings

 

184

 

829

Trade & other payables, accruals and provisions

 

12,533

 

10,837

Other financial liabilities

16

4,587

 

-

 

 

17,304

 

11,666

 

 

 

 

 

TOTAL EQUITY AND LIABILITIES

 

208,215

 

227,888

 

 

 

 

 

 

 

The accompanying notes are an integral part of the consolidated financial statements.

 

 

Jadestone Energy Inc.

CONDENSED Consolidated INTERIM PROFIT AND LOSS

AND OTHER COMPREHENSIVE INCOME

for the six months ended June 30, 2018

 

 

 

 

Notes

Three months ended

June 30,

 

Six months ended

June 30,

 

 

2018

 

2017

 

2018

 

2017

 

 

US$000

 

US$000

 

US$000

 

US$000

 

 

 

 

 

 

 

 

 

Gross revenue

 

18,333

 

18,134

 

39,332

 

35,344

Royalties

 

(837)

 

(2,432)

 

(3,549)

 

(3,157)

Cash flow hedges

 

(1,072)

 

-

 

(1,307)

 

-

Net revenue

 

16,424

 

15,702

 

34,476

 

32,187

 

 

 

 

 

 

 

 

 

Production costs

3

(10,657)

 

(22,188)

 

(23,465)

 

(40,200)

Depletion, depreciation and amortization

4

(2,264)

 

(2,476)

 

(5,064)

 

(4,899)

Staff costs

 

(3,780)

 

(3,259)

 

(6,805)

 

(6,232)

Other expenses

5

(1,645)

 

(1,784)

 

(4,090)

 

(3,754)

Impairment of assets

6

-

 

-

 

(11,902)

 

(7,667)

Other income

 

44

 

681

 

56

 

799

Purchase discount

 

-

 

-

 

-

 

789

 

 

(1,878)

 

(13,324)

 

(16,794)

 

(28,977)

 

 

 

 

 

 

 

 

 

Finance costs

7

(1,988)

 

(669)

 

(2,967)

 

(681)

 

 

 

 

 

 

 

 

 

LOSS BEFORE TAX

 

(3,866)

 

(13,993)

 

(19,761)

 

(29,658)

 

 

 

 

 

 

 

 

 

Taxation expense/(credit)

8

(1,046)

 

2,215

 

(1,742)

 

(1,605)

 

 

 

 

 

 

 

 

 

LOSS FOR THE PERIOD

 

(4,912)

 

(11,778)

 

(21,503)

 

(31,263)

 

 

 

 

 

 

 

 

 

Loss per ordinary share:

 

 

 

 

 

 

 

 

Basic and diluted (US$)

 

0.03

 

0.05

 

0.10

 

0.14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the period

 

(4,912)

 

(11,778)

 

(21,503)

 

(31,263)

 

 

 

 

 

 

 

 

 

Other comprehensive income, net of tax:

 

 

 

 

 

 

 

 

Items to be reclassified to profit or loss in subsequent periods

 

 

 

 

 

 

 

 

Loss on derivatives designated as cash flow hedges

 

 

(3,933)

 

 

-

 

 

(4,916)

 

 

-

Tax effect

 

1,180

 

-

 

1,475

 

-

 

 

 

 

 

 

 

 

 

Total comprehensive loss attributable to owners of the Company

 

 

(2,753)

 

 

-

 

 

(3,441)

 

 

-

 

 

 

 

 

 

 

 

 

 

 

(7,665)

 

(11,778)

 

(24,944)

 

(31,263)

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of the consolidated financial statements.

 

Jadestone Energy Inc.

CONDENSED Consolidated INTERIM STATEMENT OF EQUITY

for the six months ended June 30, 2018

 

 

 

 

Share

capital

US$000

 

 

Share-based

payment

reserves

US$000

 

 

 

 

 

Accumulated

losses

US$000

 

 

 

 

Total

US$000

 

Cash flow hedging reserve US$000

 

 

 

 

 

 

 

 

 

 

 

 

At January 1, 2017

364,466

 

21,357

 

-

 

(243,708)

 

142,115

 

 

 

 

 

 

 

 

 

 

Loss for the period

-

 

-

 

-

 

(31,263)

 

(31,263)

 

 

 

 

 

 

 

 

 

 

Transactions with owners,

recognized directly in equity:

 

 

 

 

 

 

 

 

 

Recognition of share-based compensation

-

 

211

 

-

 

-

 

211

 

 

 

 

 

 

 

 

 

 

Total transactions with owners

-

 

211

 

-

 

-

 

211

 

 

 

 

 

 

 

 

 

 

At June 30, 2017

364,466

 

21,568

 

-

 

(274,971)

 

(111,063)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At January 1, 2018

364,466

 

21,855

 

-

 

(278,123)

 

108,198

 

 

 

 

 

 

 

 

 

 

Loss for the period

-

 

-

 

-

 

(21,503)

 

(21,503)

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss for the period

-

 

-

 

(3,441)

 

-

 

(3,441)

 

 

 

 

 

 

 

 

 

 

Transactions with owners,

recognized directly in equity:

 

 

 

 

 

 

 

 

 

Recognition of share-based compensation

-

 

273

 

-

 

-

 

273

 

 

 

 

 

 

 

 

 

 

Total transactions with owners

-

 

273

 

-

 

-

 

273

 

 

 

 

 

 

 

 

 

 

At June 30, 2018

364,466

 

22,128

 

(3,441)

 

(299,626)

 

83,527

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of the consolidated financial statements.

 

 

Jadestone Energy Inc.

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS

for the six months ended June 30, 2018

 

 

 

Notes

Three months ended

June 30,

 

Six months ended

June 30,

 

 

2018

 

2017

 

2018

 

2017

 

 

US$000

 

US$000

 

US$000

 

US$000

 

 

 

 

 

 

 

 

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Loss before tax

 

(3,866)

 

(13,993)

 

(19,761)

 

(29,658)

 

 

 

 

 

 

 

 

 

Adjustments for:

 

 

 

 

 

 

 

 

Depletion, depreciation and amortization

4

2,264

 

 2,475

 

 5,064

 

 4,899

Finance costs

7

1,674

 

 744

 

 2,468

 

 1,186

Share-based payment

14

127

 

 149

 

 273

 

 211

Unrealized foreign exchange loss/(gain)

7

(73)

 

 (74)

 

 (175)

 

 (502)

Impairment of assets

6

-

 

 -

 

 11,902

 

 6,191

Interest income

7

(32)

 

 (1)

 

 (66)

 

 (3)

Purchase discount

 

-

 

 -

 

 -

 

 (789)

Inventories written down

 

-

 

 (429)

 

 -

 

 284

 

 

 

 

 

 

 

 

 

Operating cash flows before movements in working capital

 

 

94

 

 

(11,129)

 

 

(295)

 

 

(18,183)

 

 

 

 

 

 

 

 

 

Changes in working capital:

 

 

 

 

 

 

 

 

(Increase)/decrease in inventories

 

(2,288)

 

 746

 

 (4,007)

 

 4,740

Decrease/(increase) in receivables and prepayments

 

 

43

 

 

 (3,605)

 

 

1,181

 

 

 (3,148)

Increase/(decrease) in trade & other payables, accruals and provisions

 

 

99

 

 

 5,859

 

 

1,664

 

 

 1,942

 

 

 

 

 

 

 

 

 

Cash (used) in operations

 

(2,052)

 

(8,129)

 

(1,457)

 

(14,649)

 

 

 

 

 

 

 

 

 

Taxation paid

 

(531)

 

(286)

 

(1,049)

 

(286)

 

 

 

 

 

 

 

 

 

NET CASH (USED) IN OPERATING ACTIVITIES

 

 

(2,583)

 

 

(8,415)

 

 

(2,506)

 

 

(14,935)

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Acquisition of Ogan Komering, net of cash acquired

 

 

 

-

 

 

 -

 

 

-

 

 

 (1,641)

Payment for oil and gas properties

 

(182)

 

 (591)

 

(389)

 

 (879)

Payment for intangible exploration assets

 

(69)

 

 (47)

 

(358)

 

 (2,047)

Payment for plant and equipment

 

(14)

 

 (57)

 

(16)

 

 (481)

Proceeds from disposal of plant and equipment

 

 

27

 

 

400

 

 

27

 

 

400

Interest received

 

32

 

-

 

66

 

-

 

 

 

 

 

 

 

 

 

NET CASH (USED) IN INVESTING ACTIVITIES

 

 

(206)

 

 

(295)

 

 

(670)

 

 

(4,648)

 

 

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Payments for borrowings

 

(276)

 

(223)

 

(645)

 

(447)

Net drawdown on convertible bonds

 

-

 

9,700

 

-

 

9,700

Payments for bond facility standby fees

 

(32)

 

-

 

(64)

 

(115)

 

 

 

 

 

 

 

 

 

NET CASH GENERATED/(USED) FINANCING ACTIVITIES

 

 

(308)

 

 

9,477

 

 

(709)

 

 

9,138

 

 

 

 

 

 

 

 

 

Effect of translation on foreign currency cash and cash equivalents

 

 

-

 

 

(133)

 

 

-

 

 

(690)

 

 

 

 

 

 

 

 

 

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS

 

 

(3,097)

 

 

634

 

 

(3,885)

 

 

(11,131)

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

 

9,662

 

 

14,478

 

 

10,450

 

 

26,243

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

 

6,565

 

 

15,112

 

 

6,565

 

 

15,112

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of the consolidated financial statements.

 

Jadestone Energy Inc.

NOTES TO THE cONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

for the six months ended June 30, 2018

 

 

1.           CORPORATE INFORMATION

 

Jadestone Energy Inc. (the "Company" or "Jadestone") is an oil and gas company incorporated in Canada. The Company's common shares are listed on the TSX Ventures Exchange ("TSX-V") under the symbol JSE.

 

On August 8, 2018, the Company issued 239,711,474 new ordinary common shares raising gross proceeds of approximately £83.9 million, at a price of 35 pence per share and, listed on the London AIM Market.

 

The financial statements are expressed in United States Dollars ("US$").

 

The Company and its subsidiaries (the "Group") are engaged in production, development, and exploration and appraisal activities in Australia, Indonesia, Vietnam and the Philippines. The Company's current producing asset is in the Carnarvon Basin, offshore Western Australia.

 

The Company's head office is located at Keppel Towers, #15-05/06, 10 Hoe Chiang Road, Singapore 089315. The registered office of the Company is 10th Floor, 595 Howe Street, Vancouver, British Columbia V6C 2T5, Canada.

 

 

2.             Basis of preparation

 

Statement of compliance

 

These unaudited condensed interim financial statements (the "Financial Statements") are prepared in accordance with International Accounting Standard IAS 34, Interim Financial Reporting, on a going concern basis under the historical cost convention.  They do not contain all disclosures required by International Financial Reporting Standards for annual financial statements and accordingly, should be read in conjunction with Jadestone's audited consolidated financial statements for the period ended December 31, 2017.

 

These Financial Statements were approved for issuance by the Company's Board of Directors on August 28, 2018 on the recommendation of the Audit Committee.

 

Basis of measurement

 

These Financial Statements have been prepared on an historical cost basis, except for financial instruments classified as financial instruments at fair value, which are stated at their fair values.  In addition, these financials have been prepared using the accrual basis of accounting.

               

            Hedge accounting

 

For the purposes of hedge accounting, hedges are classified as either:

 

·      Fair value hedges where they hedge the exposure to changes in the fair value of a recognised asset or liability; or

·   Cash flow hedges where they hedge exposure to variability in cash flows that is either attributable to a particular risk associated with a recognised asset or liability, or a highly probable forecasted transaction.

 

At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which it wishes to apply hedge accounting, along with the risk management objective and strategy for undertaking the hedge.  The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged, and how the entity will assess the effectiveness of changes in the hedging instrument's fair value in offsetting the exposure to changes in the hedged item's fair value or cash flows attributable to the hedged risk.  To achieve hedge accounting, the relationships must be expected to be highly effective and are assessed on an ongoing basis, to determine that they continue to meet the risk management objective.

 

Hedge accounting is discontinued when the hedge instrument expires, is sold, terminates, is exercised, or no longer qualifies for hedge accounting.  At that point in time, any cumulative gain or loss on the hedging instrument recognised in Other Comprehensive Income (OCI) remains in hedge reserve until the forecasted transaction occurs.  If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in equity is transferred to profit or loss for the year.

 

Cash flow hedges

 

The effective portion of the gain or loss on hedging instruments that are classified as cash flow hedges, is recognised in OCI, while any ineffective portion is recognised immediately in the statement of profit or loss.  The ineffective portion relating to commodity contracts is recognised in other operating income or expenses.

 

Amounts recognised as OCI are transferred to profit or loss when the hedged transaction affects profit or loss, such as when the hedged financial income or financial expense is recognised or when a forecast sale occurs.

               

 

3.             PRODUCTION COST

 

 

Three months ended

June 30,

 

Six months ended

June 30,

 

2018

 

2017

 

2018

 

2017

 

US$000

 

US$000

 

US$000

 

US$000

 

 

 

 

 

 

 

 

Stag Oilfield:

 

 

 

 

 

 

 

FSO vessel expenses

4,255

 

6,592

 

8,219

 

13,652

Workovers

2,106

 

9,212

 

5,536

 

12,131

Repairs & maintenance

1,214

 

697

 

1,979

 

1,971

Air, marine and onshore support

1,090

 

(56)

 

2,345

 

(112)

Other operating expenses

989

 

3,250

 

2,624

 

9,368

 

9,654

 

19,695

 

20,703

 

37,010

Ogan Komering:

 

 

 

 

 

 

 

Operating expenses

1,003

 

2,493

 

2,762

 

3,190

 

10,657

 

22,188

 

23,465

 

40,200

 

                The Ogan Komering PSC expired on February 28, 2018 and a temporary co-operation contract was entered into, continuing the PSC terms pending the issue of the new PSC on May 20, 2018, at which time Jadestone ceased to hold an interest in Ogan Komering.

 

4.             DEPLETION, DEPRECIATION AND AMORTISATION           

 

 

Three months ended

June 30,

 

Six months ended

June 30,

 

2018

 

2017

 

2018

 

2017

 

US$000

 

US$000

 

US$000

 

US$000

 

 

 

 

 

 

 

 

Depletion and amortisation (Note 10):

 

 

 

 

 

 

 

Stag Oilfield

2,166

 

2,009

 

4,210

 

4,408

Ogan Komering

-

 

434

 

657

 

434

 

2,166

 

2,443

 

4,867

 

4,842

 

 

 

 

 

 

 

 

Depreciation for plant and equipment (Note 11)

 

98

 

 

33

 

 

197

 

 

57

 

2,264

 

2,476

 

5,064

 

4,899

 

 

The Ogan Komering PSC was fully depleted as at the end of the PSC on February 28, 2018.

 

 

5.             OTHER EXPENSES

 

Three months ended

June 30,

 

Six months ended

June 30,

 

2018

 

2017

 

2018

 

2017

 

US$000

 

US$000

 

US$000

 

US$000

 

 

 

 

 

 

 

 

Professional fees/consultancies

695

 

894

 

1,593

 

883

Office costs

992

 

837

 

1,606

 

 1,930

Cash flow hedges

27

 

-

 

652

 

-

Travel & subsistence

14

 

172

 

331

 

299

Time costs - recovery

(111)

 

(160)

 

(159)

 

(659)

Operator G&A

27

 

-

 

67

 

176

Other overhead

-

 

-

 

-

 

234

Others

-

 

41

 

-

 

558

Participating interest tax and branch profit tax

 

-

 

 

-

 

 

-

 

 

333

 

1,644

 

1,784

 

4,090

 

3,754

               

               

6.             IMPAIRMENT OF ASSETS

               

 

Three months ended

June 30,

 

Six months ended

June 30,

 

2018

 

2017

 

2018

 

2017

 

US$000

 

US$000

 

US$000

 

US$000

 

 

 

 

 

 

 

 

Impairment of intangible exploration assets

 

-

 

 

-

 

 

11,902

 

 

5,950

Impairment of material and spare parts

-

 

-

 

-

 

1,717

 

-

 

-

 

11,902

 

7,667

               

During Q1 2018, an impairment of US$11.9 million (six months to June 30, 2017: US$6.0 million) was incurred as the decision was taken not to perform any further exploration activities on MEVPK/127 in Vietnam. The Company has commenced relinquishment, to return the block back to the Vietnamese government. 

 

7.             FINANCE COSTS

 

 

Three months ended

June 30,

 

Six months ended

June 30,

 

2018

 

2017

 

2018

 

2017

 

US$000

 

US$000

 

US$000

 

US$000

 

 

 

 

 

 

 

 

Accretion expense (Note 15, 17)

630

 

613

 

1,084

 

979

Fair value loss on derivative liability

982

 

-

 

1,293

 

-

Interest on convertible bonds (Note 17)

280

 

8

 

558

 

8

Foreign exchange (gain)/loss

56

 

(74)

 

(43)

 

(502)

Interest income

(32)

 

(1)

 

(66)

 

(3)

Others

72

 

123

 

141

 

199

 

1,988

 

669

 

2,967

 

681

                        

 

8.             Taxation EXPENSE

 

 

Three months ended

June 30,

 

Six months ended

June 30,

 

2018

 

2017

 

2018

 

2017

 

US$000

 

US$000

 

US$000

 

US$000

 

 

 

 

 

 

 

 

Deferred tax (income)/expense relating to PRRT

 

190

 

 

(2,501)

 

 

461

 

 

591

Corporate income tax

1,185

 

286

 

2,068

 

1,014

Deferred tax on cash flow hedges

(329)

 

-

 

(587)

 

-

Deferred tax liabilities

-

 

-

 

(200)

 

-

Tax expense/(credit)

1,046

 

(2,215)

 

1,742

 

1,605

               

                The Australian corporate income tax rate is applied at 30%. Australian PRRT is applied at 40% of sales revenue less certain permitted deductions and is tax deductible for Australian corporate income tax purposes.  The above movement in deferred tax balances relates to temporary differences between the tax base of an asset or liability, and its carrying amount in the statement of financial position.

 

The Indonesian corporate income tax rate is applied at 35%. Branch profit tax is applied at 20%.

 

The Company is resident in the Province of British Columbia and pays no Canadian tax as it has no operating assets in Canada and is in a tax loss position.  The subsidiary companies are resident for tax purposes in the countries in which they operate.  No Canadian tax arises in the current period, or in the previous year, from any of the subsidiaries' operations.

                           

 

9.             INTANGIBLE EXPLORATION ASSETS     

 

 

Total

US$000

 

 

 

At January 1, 2018

 

105,673

Additions

 

303

Impairment

 

(11,902)

At June 30, 2018

 

94,074

 

 

 

At December 31, 2017

 

         105,673

 

 

 

 

                During the six months ended June 2018, the Company performed a review of its exploration assets and decided no further exploration activities would be performed on Vietnam PSC MEVPK/127, resulting in an impairment of US$11.9 million. The Company has commenced relinquishment, to return the block back to the Vietnamese government.

 

 

10.          OIL AND GAS PROPERTIES

 

 

Total

US$000

 

 

 

Cost:

 

 

At January 1, 2018

 

75,863

Changes in asset restoration obligation (Note 15)

 

(2,781)

Transfer to plant and equipment

 

(1,003)

Addition

`

389

 

 

 

At June 30, 2018

 

72,468

 

 

 

Accumulated depletion and amortisation:

 

 

At January 1, 2018

 

(13,625)

Depletion and amortisation for the period

 

(4,867)

 

 

 

At June 30, 2018

 

(18,492)

 

 

 

Net book value:

 

 

At June 30, 2018

 

53,976

 

 

 

At December 31, 2017

 

62,238

                                                                                                    

               

11.          PLANT AND EQUIPMENT

 

 

Computer

equipment

 

Fixtures and         equipment

 

 

 

Total

 

US$000

 

US$000

 

US$000

 

 

 

 

 

 

Cost:

 

 

 

 

 

At January 1, 2018

1,180

 

1,024

 

2,204

Transfer from oil and gas properties

1,003

 

-

 

1,003

Additions

16

 

-

 

16

Disposal

(26)

 

(1)

 

(27)

At June 30, 2018

2,173

 

1,023

 

3,196

 

 

 

 

 

 

Accumulated depreciation:

 

 

 

 

 

At January 1, 2018

(665)

 

(891)

 

(1,556)

Charge for the period

(172)

 

(25)

 

(197)

At June 30, 2018

(837)

 

(916)

 

(1,753)

 

 

 

 

 

 

Net book value:

 

 

 

 

 

At June 30, 2018

1,336

 

107

 

1,443

 

 

 

 

 

 

At December 31, 2017

515

 

133

 

648

 

 

12.          CASH AND CASH EQUIVALENTS

 

June 30,

2018

 

December 31,

2017

 

US$000

 

US$000

 

 

 

 

Current asset:

 

 

 

Cash at bank

6,565

 

10,450

 

 

 

 

Non-current asset:

 

 

 

Restricted cash: Stag 

10,000

 

10,000

Restricted cash: Ogan Komering

-

 

729

 

 

 

10,000

 

 

10,729

 

Restricted cash at June 30, 2018 comprises Stag's cash deposit of US$10.0 million, placed by the Company in support of a bank guarantee to a key contractor, with respect to the Company's obligations under a long term contract.

 

The Ogan Komering PSC temporary co-operation contract expired on May 20, 2018, at which time the company ceased to hold an interest in Ogan Komering. The decommissioning fund of US$0.7 million was transferred to Pertamina, as the new operator, to fulfil the decommissioning activities at the end of the new production sharing contract.

 

 

13.          share capital

 

                Authorised ordinary common shares:

 

                Unlimited number of common voting shares with no par value.

 

                Allotted and outstanding:

 

 

No. Shares

 

US$000

 

 

 

 

At December 31, 2017

221,298,004

 

364,466

 

 

 

 

At June 30, 2018

221,298,004

 

364,466

 

The holders of ordinary common shares are entitled to receive dividends as and when declared by the Company. Fully paid ordinary common shares carry one vote per share without restriction, and carry a right to dividends as and when declared by the Company.

 

On August 8, 2018, the Company issued 239,711,474 new ordinary common shares, raising gross proceeds of approximately £83.9 million, at a price of 35 pence per share and listed on the London AIM Market.

 

 

14.          SHARE-BASED PAYMENTS

               

The total expense arising from share-based payments recognized for the six month period ended June 30, 2018 was US$0.3 million (June 30, 2017: US$0.3 million).

 

On August 19, 2015, the Company adopted, as approved by shareholders, a stock incentive plan (the "Plan") which establishes a rolling number of shares issuable under the Plan in the amount of 10% of the Company's issued shares at the date of grant. Under the terms of the Plan, the exercise price of each option granted, cannot be less than the market price at the date of grant, or such other price as may be required by TSX-V. Options under the Plan can have a term of up to 10 years, with vesting provisions determined by the directors in accordance with TSX-V policies for Tier 2 Issuers.

 

The Black-Scholes option-pricing model, with the following assumptions, was used to estimate the fair value of the options at the date of grant:

 

 

Options granted on

 

March 29, 2018

December 10, 2017

March 28, 2017

June 8, 2016

Risk-free interest rate

1.99% to 2.04%

1.68% to 1.72%

1.11% to 1.21%

0.70% to 0.83%

Expected life

5.5 to 6.5 years

5.5 to 6.5 years

5.5 to 6.5 years

5.5 to 6.5 years

Expected volatility

43.1% to 44.1%

43.2% to 43.9%

41.6% to 42.8%

42.1% to 42.7%

Share price

C$0.43

C$0.42

C$0.45

C$0.49

Exercise price

C$0.50

C$0.45

C$0.47

C$0.49

Expected dividends

Nil

Nil

Nil

Nil

 

 

 

 

 

 

 

               

 

The following table summarizes the share options outstanding and exercisable as at June 30, 2018:

 

 

 

 

 

 

 

 

As at January 1, 2018

8,102,821

0.58

9.03

927,822

New share options issued

Cancelled during the quarter

 

As at June 30, 2018

 

15.          PROVISION FOR ASSET RESTORATION OBLIGATIONS

 

 

June 30,

2018

 

December 31,

2017

 

US$000

 

US$000

 

 

 

 

Non-Current:

 

 

 

Opening balance

84,728

 

77,186

Accretion expense (Note 7)

1,035

 

1,589

Changes in discount and forex rate assumptions (Note 10)

(2,781)

 

5,919

Others

-

 

34

 

82,982

 

84,728

 

The Group's asset restoration obligations ("ARO") result from the future costs of decommissioning the Stag Oilfield facilities, which are expected to be incurred after 2034.  The balance of the provision is the discounted present value of the estimated future costs.  The present value of the ARO has been calculated based on the blended estimated Australian and United States risk free rate of 2.73% after allowing for an inflation rate of 2.27%, both as at June 30, 2018 (blended risk free rate of 2.52% and inflation rate of 2.27% as at December 31, 2017). The adjustments to the present value of the ARO arising from changes in discount rate and other economic estimates and assumptions for the period are included in oil and gas properties (Note 10).    

               

16.          OTHER FINANCIAL LIABILITIES

 

               

 

June 30,

2018

 

December 31,

2017

 

US$000

 

US$000

 

 

 

 

Cash flow hedges

4,587

 

-

 

           

As at June 30, 2018, Jadestone has entered into two commodity hedges to hedge 350,000 bbls of crude oil production over the period January 2, 2018 to June 30, 2018 at Brent ICE crude fixed at US$64.60/bbl, and another 350,000 bbls over the period July 1, 2018 to December 31, 2018, at Brent ICE crude fixed at US$65.00/bbl, These have been designated as cash flow hedges and hence the fair value movements are recognised in other comprehensive income while the ineffective portion and the amount related to sales for the period are immediately recognised in the income statement.

 

 

17.          SECURED CONVERTIBLE BONDS

 

Pursuant to the establishment of the convertible bond facility (the "Facility") with Tyrus Capital Event S.à r.l. ("Tyrus") on November 8, 2016, Jadestone paid a structuring fee equal to 2% of the total amount of the Facility. Jadestone is also required to pay a standby fee equal to 1% per annum on all undrawn amounts until maturity.  The Facility will mature on October 31, 2019, at which time Tyrus will have the option to convert the full amount of any principal owing under the Facility into common shares of the Company at a conversion price of C$0.50.  

 

As at June 30, 2018, the drawn down amount of the convertible bond was US$15 million. The cost related to the convertible bonds is tabled below.

 

 

Six months ended

 

Six months ended

 

June 30,

2018

 

June 31,
2017

 

US$000

 

US$000

 

 

 

 

Interest expense

558

 

8

Standby fee

65

 

138

Bond accretion (Note 7)

560

 

6

Fair value of associated financial derivative

1,293

 

-

Amortisation of prepaid structuring fee

64

 

-

 

2,540

 

152

 

The fair value of the options as at June 30, 2018 amounting to US$4.4 million (December 31, 2017: US$3.0 million), embedded in the bonds as a derivative financial instrument, is included in the consolidated financial statement as a liability.

               

 

June 30,

2018

 

December 31,

2017

 

US$000

 

US$000

 

 

 

 

Nominal value of convertible bonds issued

15,000

 

15,000

Derivative financial instruments at date of issuance

(2,390)

 

(2,390)

 

 

 

 

Liability component at date of issuance

12,610

 

12,610

Less: Convertible bonds issuance cost

(378)

 

(378)

 

 

 

 

Liability recognized at inception, net of costs

12,232

 

12,232

Cumulative accretion expense

1,098

 

538

 

13,330

 

12,770

 

 

On July 16, 2018, the company entered into an Extension and Modification of Convertible Note Agreement with Tyrus, to agree the terms for an early redemption of the facility in exchange for US$17.5 million. The company repaid the Facility on August 15, 2018.

 

 

18.          Financial instruments, FINANCIAL RISKS AND CAPITAL MANAGEMENTS

 

                Categories of financial instruments

 

 

June 30,

2018

 

December 31,

2017

 

US$000

 

US$000

 

 

 

 

Financial assets:

 

 

 

Receivables

4,203

 

4,719

Cash and cash equivalents

6,565

 

10,450

 

10,768

 

15,169

 

 

 

 

Financial liabilities:

 

 

 

At amortised cost:

 

 

 

Borrowings

184

 

829

Provisions

82,982

 

84,728

Payables

6,712

 

7,259

At fair value:

 

 

 

Convertible bonds

13,330

 

12,770

Derivative financial instruments

4,360

 

3,067

 

107,568

 

108,653

               

                Commodity price risk

 

The Group's earnings are affected by changes in oil and gas prices. The Group manages this risk by monitoring oil and gas prices and entering into commodity hedges against fluctuations in oil prices if considered appropriate. As at June 30, 2018, Jadestone had entered into two commodity hedges to hedge 350,000 bbls of crude oil production over the period January 2, 2018 to June 30, 2018 at Brent ICE crude fixed at US$64.60/bbl, and another 350,000 bbls over the period July 1, 2018 to December 31, 2018, at Brent ICE crude fixed at US$65.00/bbl.

 

During the six-months ended June 30, 2018, the loss on cash flow hedges recognised in the statement of other comprehensive income amounted to US$3.4 million net of tax (June 30, 2017: nil), and the loss on cash flow hedges recognised in the income statement amounted to US$2.0 million net of tax (June 30, 2017: nil). As at June 30, 2018 the financial liability of the cash flow hedge amounted to US$4.6 million (Note 16) (June 30, 2017: nil). 

 

                Commodity price sensitivity

 

The results of operations and cash flows of oil and gas production can vary significantly with fluctuations in the market prices of oil and/or natural gas.  These are affected by factors outside the Group's control, including the market forces of supply and demand, regulatory and political actions of governments, and attempts of international cartels to control or influence prices, among a range of other factors.

 

The table below summarises the impact on profit/(loss) before tax, and on equity, from changes in commodity prices on the fair value of derivative financial instruments.  The analysis is based on the assumption that the crude oil price moves 10%, with all other variables held constant.  Reasonably possible movements in commodity prices were determined based on a review of recent historical prices and current economic forecasters' estimates.

 

 

 

Effect on other

 

Effect on other

 

Effect on loss

comprehensive

Effect on loss

comprehensive

 

before tax

income for

before tax

income for

 

for the period

the period

for the period

the period

 

ended

June 30,

ended

June 30,

ended

June 30,

ended

June 30,

 

2018

2018

 2017

 2017

Gain/(loss)

US$000

US$000

US$000

US$000

 

 

 

 

 

 

 

 

 

 

Increase by 10%

(1)

(2,709)

-

-

Decrease by 10%

1

2,709

-

-

 

 

Foreign currency risk

 

No sensitivity analysis has been prepared for carrying amounts of monetary assets and liabilities denominated in foreign currencies, as the Group does not expect any material effect arising from the effects of reasonably possible changes to the exchange rate for such foreign currencies.

 

                                Interest rate risk

 

The balance of short term borrowings as at June 30, 2018 amounts to US$0.2 million
(December 31, 2017: US$0.8 million). The 7.5% coupon on the Company's convertible bond facility, drawn down to US$15.0 million as at June 30, 2018, is a fixed rate coupon (Note 17).

 

                Liquidity risk

 

The Group has reduced the loss for the six-month period ended June 30, 2108 by US$9.8 million compared to the six-months ended June 30, 2017. Net cash used in operating activities for the six-month period ended June 30, 2018 is US$(1.5) million compared to net cash used of US$14.7 million in the six-months ended June 30, 2017. The Group's net current assets remain positive at US$7.1 million (December, 2017: US$13.1 million).  The reduction in the net current assets is due to the financial liability of US$4.6 million arising from accounting for the cash flow hedges and further cash consumed during the period of US$1.5 million

 

The table below analyses the Group's financial liabilities into relevant maturity groupings at the reporting date, based on the remaining period to the contractual maturity date.  The amounts disclosed in the table are the contractual undiscounted cash flows.  Balances due are equal to their carrying balances, as the impact of discounting is not significant.  The maturity profile is:

 

 

June 31,   2018

 

December 31, 2017

 

US$000

 

US$000

 

 

 

 

Less than 1 year:

 

 

 

Trade & other payables, accruals and provisions

12,533

 

10,837

Other financial liabilities

4,587

 

-

Borrowings

184

 

               829

 

17,304

 

11,666

               

Within 2 years:

 

 

 

Secured Convertible Bond (Note 17)

13,330

 

12,770

 

13,330

 

12,770

 

               

19.          SEGMENT INFORMATION

 

For management purposes, the Group operates in two business segments, namely exploration and production of oil and gas.  The geographic focus of the business is Southeast Asia ("SEA") and Australia.

 

Revenue and non-current assets information based on the geographical location of assets respectively are as follows:

 

 

Revenue

 

Non-current assets

 

Six months

ended

June 30,

2018

 

Six months

 ended

June 30,

2017

 

 

 

June 30,

2018

 

 

 

December 31,

2017

 

US$000

 

US$000

 

US$000

 

US$000

 

Producing Assets:

 

 

 

 

 

 

 

Australia

28,608

 

27,156

 

89,616

 

95,898

SEA - Indonesia

10,724

 

8,188

 

-

 

1,346

 

Exploration and Evaluation Assets:

 

 

 

 

 

 

 

SEA - Vietnam

-

 

-

 

 43,588

 

55,258

SEA - Philippines

-

 

-

 

 50,486

 

50,415

 

 

 

 

 

 

 

 

Others

-

 

-

 

139

 

192

 

 

 

 

 

 

 

 

 

39,332

 

35,344

 

183,829

 

203,109

                 

 

 

 

 

 

---------------- Six months ended June 30, 2018 ---------------

----------------Six months ended June 30, 2017 ---------------

 

 

Production Assets

Exploration Assets

 

Corporate

 

Total

 

Production Assets

Exploration Assets

 

Corporate

 

Total

 

 

 

 

 

 

 

 

 

Gross revenue

39,332

-

-

39,332

35,344

-

-

35,344

Effective portion of cash flow hedge

(1,307)

-

-

(1,307)

-

-

-

-

Royalties

(3,549)

-

-

(3,549)

(3,157)

-

-

(3,157)

Net revenue

34,476

-

-

34,476

32,187

-

-

32,187

Production cost

(23,465)

-

-

(23,465)

(40,200)

-

-

(40,200)

Depletion, depreciation and amortisation

(5,013)

-

(51)

(5,064)

(4,870)

-

(29)

(4,899)

Staff costs

(2,139)

(344)

(4,322)

(6,805)

(3,921)

39

(2,350)

(6,232)

Other expenses

(1,963)

(1,564)

(563)

(4,090)

(2,352)

(103)

(1,299)

(3,754)

Impairment of asset

-

 (11,902)

-

(11,902)

-

(7,667)

-

(7,667)

Purchase discount

-

-

-

-

-

-

789

789

Other income

-

-

56

56

-

-

799

799

Finance costs

(1,314)

(43)

(1,610)

(2,967)

94

(12)

(763)

(681)

 

 

 

 

 

 

 

 

 

LOSS BEFORE TAX

582

(13,853)

(6,490)

(19,761)

(19,062)

(7,743)

(2,853)

(29,658)

 

 

(1) As at June 30, 2018, revenue from one (June 30, 2017: one) customer, domiciled in Singapore, contributed to 73% (June 30, 2017: 77%) of the Group's total revenue.

 

 

20.          RELATED PARTY TRANSACTIONS

 

During the period, the Group entities did not enter into any transactions with related parties other than the following:

 

                Compensation of directors and key management personnel

 

                The remuneration of directors and other members of key management during the period were as follows:

 

 

 

Six months ended

June 30, 2018

 

Six months ended

June 30, 2017

 

US$000

 

US$000

 

 

 

 

Short-term benefits

1,796

 

2,002

Other benefits

255

 

805

Termination payments

-

 

125

Share-based payments

124

 

177

 

2,175

 

3,109

 

 

21.          EVENTS AFTER THE REPORTING PERIOD

 

Montara assets

 

On July 15, 2018, Jadestone Energy (Eagle) Pty Ltd, a wholly-owned subsidiary of the Company, as buyer, entered into an acquisition agreement with PTTEP Australasia, the seller.  Under the terms of the acquisition agreement, the seller has agreed to sell certain assets, comprising the key equipment, facilities and reserves necessary for the proper operation of the Montara oil site, for a purchase price of US$195.0 million, subject to working capital adjustments and additional contingent amounts.

 

The transaction is structured as an asset acquisition, thereby limiting Jadestone's exposure to any residual liabilities associated with the Seller's business in Australia, and has an economic effective date of January 1, 2018.

 

The assets are currently producing approximately 10.3mbbl/d and the transaction is expected to close in September/October 2018. 

               

                Convertible bond

 

On August 1, 2018, the Company and Tyrus Capital Event S.à r.l. agreed, conditional upon admission to AIM and receipt of the listing proceeds, that the Company would redeem the convertible bond facility (Note 17), by paying US$17.5 million to Tyrus.  The convertible would thereupon terminate, and all associated security would be released.  The convertible bond was redeemed on August 15, 2018.

 

Reserve based lending agreement

 

On August 2, 2018, Jadestone Energy (Eagle) Pty Ltd, as borrower, and the Company, as parent, entered into a secured reserve based lending agreement with Commonwealth Bank of Australia and Société Générale to borrow US$120.0 million, repayable over the period to March 31, 2021. The debt finance will be used to part fund the acquisition of the Montara assets.

 

AIM listing and equity raise

 

On August 8, 2018 the Company issued 239,711,474 new shares at 35 pence per share generating gross proceeds of approximately £83.9 million and listed on the Alternative Investment Market (AIM) a submarket of the London Stock Market.

 

 

 

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
IR LIFVRTDITFIT
UK 100

Latest directors dealings