SINGAPORE / ACCESSWIRE / April 22, 2020 / Jadestone Energy Inc. (AIM:JSE) ("Jadestone" or the "Company"), an independent oil and gas production company focused on the Asia Pacific region, notes the collapse of global crude oil benchmarks, with oil Press release Distribution Service UK demand significantly impacted by the extended COVID-19 pandemic and the potential for prolonged oversupply. Against this backdrop, the Company believes it is prudent to implement stringent capital reductions across its portfolio and is therefore further reducing its 2020 capital expenditure guidance.
Jadestone's 2020 capital programme is almost entirely discretionary, and on March 19, 2020 the Company announced that it would defer the Nam Du and U Minh development project. Further, the Company today announces that is has opted to defer its Australia infill drilling campaign into 2021. This delay aims to best align capital spending with a strengthening oil price environment, maximising potential future returns, while preserving the Company's balance sheet and net cash position.
Collectively, these measures represent a reduction of 80% of the Company's originally planned 2020 spending, resulting in anticipated total capex of US$30-35 million Press release Distribution Service in 2020, of which approximately US$15.5 million has already been spent in Q1 2020, including completing the Montara seismic campaign.
These measures further add to Jadestone's resiliency in the current environment, with a total cash balance of US$109.4 million (excluding restricted cash of US$10.0 million) as at March 31, 2020, or a net cash position of US$72.1 million, and about a third of the Company's production hedged at US$68.45/bbl through to September 30, 2020, and excluding incremental oil price premia.
Notwithstanding these changes, production is still expected to grow by circa 25% in 2021 with the addition of the Maari project, offshore New Zealand, which remains
Press release Distribution Service Australia accretive to the portfolio and which continues through the transition process. With the delay in the Australian infill wells, the Company is now targeting a 2020 average production range of 12,000-14,000 bbls/d.
The Company also remains committed to returning capital to shareholders and, even in this extreme environment, is on track to deliver its maiden dividend in 2020.
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