Dear shareholder;
2024, and in particular the second
half of the year, has been a pivotal time in Jadestone's evolution.
Our production has grown strongly to record levels, primarily
driven by the start up of the key Akatara gas development in
Indonesia. We achieved a major milestone in early December,
when Akatara successfully completed the formal performance test,
concluding the commissioning phase at Akatara and transitioning
day-to-day operations to Jadestone.
While it is still early in the
asset's life, Akatara's initial performance has been encouraging,
with high facility uptime and consistent gas demand from the buyer
resulting in gross production rates of c.6,000 boe/d, including
LPGs and condensate. It is right that we should recognize the
significant commitment and hard work of the Jadestone team and
other key stakeholders, including the Indonesian government, in
bringing Akatara onstream. Our focus is now on safely
maintaining high uptime levels at Akatara, which in turn will
generate significant cashflow for Jadestone and benefit both the
local and national economies in Sumatra and Indonesia.
Beyond Akatara, the performance of
Jadestone's producing portfolio in 2024 has demonstrated the
benefits of the company's diversification initiatives in recent
years. We are now much more resilient as a result. The
CWLH asset offshore Australia continues to outperform our
expectations, confirming the acquisition of a 33.33% interest since
2022 was the right growth path for our Australia portfolio.
Production in Malaysia continues to benefit from the
successful PM323 drilling program completed in late 2023.
Recently, Sinphuhorm production has been elevated due to the
successful completion of a booster compression project earlier this
year coupled with a period of high gas demand in northern Thailand.
Montara's facilities uptime and production have been much improved
in 2024, due to the significant spend on the integrity of the
Montara Venture FPSO's tanks since the middle of 2022.
Following this work, I am confident that Montara's
performance will be much improved as we prepare to sidetrack the
Skua-11 well next year, the main activity in our 2025 capital
program.
I am also very proud to report on an
excellent HSE performance during the year, with zero incidents of
major environmental harm and our Indonesia and Malaysia operations
achieving c.8 million and c.2 million manhours respectively without
a lost time injury.
Group production has been growing
throughout the year, and we have seen production in excess of
25,000 boe/d when Akatara has been delivering sales gas at
contractual levels. We are on track to meet our annual production
guidance for 2024, with an outcome of c.18,500 boe/d, which would
represent a 30% increase over 2023 and an annual record for
Jadestone.
During the year we continued to
advance both organic and inorganic growth initiatives. We
progressed the commercialization of our Vietnam gas discoveries
through the signature of a heads of agreement for gas sales from
the Nam Du and U Minh gas discoveries. Converting this into a
full-term gas sales agreement is proving to take longer than we
would have hoped, but this is a strategically important resource
for both Jadestone and Vietnam, and so it remains within
shareholders' interests to continue negotiations with the
Vietnamese government. We also secured a potentially material
near-term growth opportunity offshore Malaysia through the award of
the PNLP Cluster PSC, a collection of existing fields which we know
well and where production is currently shut in pending
reactivation. The license award is in close proximity to our
existing assets, and so will benefit from our regional subsurface
knowledge. Bespoke fiscal terms more suitable for mature
fields and synergy benefits from our existing operations enhance
the potential attractiveness of a redevelopment plan for these
fields. Combined with the potential for further infill
drilling on our existing assets after the successful 2023 campaign,
our Malaysia portfolio is increasing in strategic importance for
Jadestone.
There have been significant changes
to the Board and management structure throughout 2024 as we
position Jadestone to capitalize on and continue the growth of
recent years. I was appointed as Non-Executive Chairman in
March and recently moved to Executive Chairman. Together with
our recently appointed Chief Financial Officer, Andrew Fairclough,
and Chief Operating Officer, Joanne Williams, we now have a settled
and focused management team in place to drive forward the next
phase of growth. Linda Beal also joined the Board as a
Non-Executive Director earlier this year, bringing significant
financial experience, and she was recently appointed as Senior
Independent Director. We will continue to monitor the Board's
composition to ensure that Jadestone has the appropriate blend of
experience and expertise to guide the executive management and
provide effective governance over the wider business.
After a period of significant
investment in recent years, the near-term focus of the business
will be operational excellence and financial discipline.
Operational excellence will safely maximize production and
revenue, while keeping operating costs under control.
Financial discipline will ensure capital is allocated only to
projects with the highest return and lowest risk, that we act
within a financial framework appropriate for our size and scale,
and that we control overheads. All of these efforts are aimed
at driving the free cash flow generation our shareholders deserve,
a strengthening of our balance sheet and a resumption of
shareholder returns, which remains a priority for the
Board.
A robust operational and financial
platform will also facilitate the next phase of growth for
Jadestone. Our strategic aim of being the leading regional
independent upstream company in Asia-Pacific is unchanged, with
inorganic growth remaining a key element of delivering on this
objective, as we have the operating presence, the people and the
skills to seek out and realize value from assets no longer retained
by larger companies.
Jadestone's recent share price
performance does not reflect the successful strategic delivery of
recent years and the positive outlook for the company.
Challenges at Montara and the extended commissioning of
Akatara undermined confidence in the company and its financial
strength. However, these challenges are now behind us and
with a refreshed and reinvigorated management team and board, my
focus is on driving discipline and high performance across the
business, in turn demonstrating Jadestone's cash generating
potential. When we achieve this, I am confident that our
share price will rise to a level more representative of the value
we see in the asset base. In early 2025, we will set out our
plans for the coming year. We will look to communicate our
progress clearly, setting targets and delivering on
them.
Thank you for your continued
shareholding and support for the company, and on behalf of everyone
at Jadestone I wish you, your families and friends a happy holiday
period and a peaceful and prosperous 2025.
Adel Chaouch, Ph.D., P.E.
Executive Chairman
