Jadestone Energy to conduct $85mn financing
Asia Pacific-focused Jadestone Energy on June 6 announced its plan to conduct a minimum of $85mn financing. The proposed financing includes a $50mn equity fundraise and a $35mn standby working capital facility, both provided by Tyrus Capital, which is Jadestone's largest shareholder.
The equity fundraise will be structured through a placing, a subscription, and an open offer. The placing involves the issuance of new ordinary shares to existing and new institutional shareholders. The subscription entails the issuance of new ordinary shares to certain directors and affiliated entities, as well as certain other parties. The open offer allows existing shareholders who did not participate in the placing to acquire shares at the offer price.
Jadestone said it aims to achieve “significant near-term production growth” from existing assets and new developments, as well as pursue additional mergers and acquisitions. The company expects to have a diversified production portfolio of over 20,000 barrels of oil equivalent/day from seven assets in different geographies by mid-2024.
The proposed financing aims to provide Jadestone with balance sheet resilience, financial flexibility, and protection in a reasonable downside scenario, as it progresses its growth plans. The CEO of Jadestone Energy, Paul Blakeley, expressed the company's confidence in its future growth prospects and its commitment to improving governance and communication with shareholders.
The financing is necessary due to the impact of the Montara Venture FPSO shutdown, elevated capital spending, and the expected evolution of the reserve-based lending facility, the company said. Jadestone recently secured a $200mn reserve-based lending facility, but the borrowing base is expected to be constrained until the Akatara gas project offshore Indonesia starts production. The company expects the financing to underpin its future liquidity needs and provide flexibility.
Jadestone has a 100% operated interest in the Lemang PSC, which includes the undeveloped Akatara gas field. The company reached the final investment decision on the project in June last year. Japan's JGC has been contracted to build a plant that will process gas from the Akatara gas field.
Once onstream, the Akatara development will broaden Jadestone’s production base, as well as increase the proportion of gas in the production mix.
Tyrus has committed to taking up its pro rata interest in the placing and has provided the equity underwrite facility and the standby working capital facility. In return for its support, Tyrus will receive warrants representing 6.7% of Jadestone's current issued share capital.