Page 11 - AsianOil Week 16

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Image: Jadestone Energy
feature in our ability to generate positive free cash even at today’s depressed prices down to $20 per barrel.”
The swap will provide a floor price of $68.45 per barrel until September 30.
What next
The company has been quick to rethink its budget commitments, announcing on March 19 that it would defer its Nam Du and U Minh development project in Vietnam’s offshore Block 51 and then revealing on April 22 that it would delay its Australia infill drilling campaign until next year.
Blakeley said: “Whilst we remain operating cash flow positive, we see no point in eroding value in these investments and prefer to protect our balance sheet throughout this market tur- moil, and come out the other side as one of the strongestsurvivors.”
Around $15.5mn has already been invested in the first quarter, with the spend including the completion of the Montara seismic campaign.
Jadestone estimates that it has reduced its operating cash flow break-even oil price to $20 per barrel for the remainder of 2020.
The company hopes that oil prices will be more robust when it revisits its infill drilling plans in 2021 and that it can secure attractive terms on its service contracts. In the meantime, the delay has forced the company to revise down its production guidance for 2020 to 12,000- 14,000 bpd.
Blakeley said: “[W]hile we balance prudence at this challenging time, with deferred drilling and a resulting downward guidance of 10% to production volumes this year, this is balanced by closing the Maari acquisition, which will provide a 25% production increase next year.”
The company announced its planned acqui- sition of an 69% operated interest in the Maari project offshore New Zealand last year and hopestoclosethedealinthesecondhalfofthis year. Moreover, Blake said the company’s strong financial position meant it would remain on the lookout for inorganic growth “should the right opportunities emerge”.™
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