Jadestone Goes for Further Capex Cuts

Southeast Asia-focused Jadestone Energy will make a further cut to its 2020 capital expenditure guidance in response to the oil price collapse, it said April 22 in a statement.

The company last month delayed plans to develop a pair of gas fields off the coast of southwest Vietnam, while cutting its 2020 capital expenditure by around 50% to $80-95mn.  It has now 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,” it said.

Collectively, these measures represent a reduction of 80% of the company’s originally planned 2020 spending, resulting in anticipated total capex of $30–35mn in 2020, of which approximately $15.5mn has already been spent in the first quarter, including completing the Montara seismic campaign, Jadestone said.

Notwithstanding these changes, the company expects production to grow by 25% in 2021 with the addition of the Maari project, offshore New Zealand.  With the delay in the Australian infill wells, the company is now targeting a 2020 average production range of 12,000–14,000 barrels/day.