Jadestone Energy’s Akatara project reaches 70% completion

The bi-annual redetermination process for Jadestone’s US$200 million RBL facility has concluded and the Company is pleased to report the following increases in borrowing capacity over the next 12 months: Effective 1 October 2023 to the next redetermination date on 31 March 2024, the borrowing capacity exceeds the maximum facility amount. As such, the borrowing capacity for the upcoming 6-month period will be US$200 million (previously forecasted at US$190 million).

For the subsequent 6-month period the borrowing capacity will be the lower of the approved banking model as of 31 March 2024 or US$150 million (previously forecasted at US$99 million). The current model projects a borrowing capacity for this period of c.US$150 million, excluding capex add-back and subject to changes in model assumptions. The increases in borrowing capacity result from the approval of the Company’s waiver request to raise the Akatara development cap from 40% to 60%, effective from 1 October 2023 to the September 2024 redetermination date. The development cap represents Akatara’s maximum percentage contribution to the total borrowing base prior to the asset’s completion test, after which the Company’s borrowing base is expected to return to US$200 million.

The increase in borrowing capacity over the period means that the Company’s liquidity position during this period is currently projected to be in excess of US$100 million, which includes the Company’s undrawn US$31.9 million working capital facility.

Since resuming production on 2 September 2023, Montara has averaged c.7000 bpd, benefitting from some ongoing flush production and active management of the Montara H2, H3 and H4 wells to optimise the oil to gas ratio. It is expected that, over time, average oil production rates will normalise back towards previous guidance in the 6000 – 6,500 bpd range. The Akatara development project is now 70% complete, delivering on the end-September 2023 progress target of 65%. Long-lead time items continue to arrive at site on schedule and the project remains on track for commissioning in 1Q24 and first gas before mid 2024.

The first well in the East Belumut infill campaign is maintaining higher than expected production levels as the drilling campaign continues.

Paul Blakeley, President and CEO, commented: “We always believed that, with time, we could resolve the temporary dip in the RBL borrowing base availability in mid-2024. The waiver approval shows the constructive working relationship we have with our RBL banks and demonstrates the banks’ confidence in Jadestone’s ability to deliver. I would like to thank the RBL banks and the wider Jadestone team for working together to deliver this successful outcome. As a result, Jadestone is projected to have significant liquidity prior to the Akatara field commencing production, after which our borrowing base availability is expected to increase further, as we move into a period of high cash generation, in turn supporting our growth ambitions. Recent operational performance across the business has been encouraging, with total production averaging 17 000 boe/d during the month of September, and also continued progress at Akatara, where we remain on budget and schedule while meeting all key milestones. We are focused on sustaining this momentum over the remainder of 2023 and into 2024, underpinning our aim of significant production and cash flow growth in the near-term."

Read the article online at: https://www.oilfieldtechnology.com/special-reports/09102023/jadestone-energys-akatara-project-reaches-70-completion/