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Jadestone Energy keen for more growth

Chief executive flags Woodside Energy/BHP deal as chance to pick up Asia-Pacific assets
June 6, 2022
  • Asia-Pacific-focused oil and gas producer will hand back up to $100mn to shareholders
  • It is focused on growth and will continue strategy of buying mature assets in the region

The management of Jadestone Energy (JSE) is not "out of ideas" and just deciding to hand excess cash back to shareholders, says chief executive Paul Blakeley. "We are a growth business," he told Investors' Chronicle. "We are just sharing some of the upside."

Jadestone has been a major beneficiary of the higher oil and gas prices, seeing its average realised price per barrel of oil equivalent going from $45 (£36) in 2020 to $74 in 2021. This saw its cash profits hit $103mn for the year, up from $13mn in 2020.

Already in a net cash position at the mid-point of 2020, as of 31 May Jadestone had a cash balance of $180mn. Peel Hunt forecasts that cash profits will surge again this year, to $379mn. 

This explains the confidence in announcing up to $100mn in dividends and buybacks in the coming 12 months while also targeting further mergers and acquisitions. Blakeley pointed to the Woodside Energy (WDS) and BHP (BHP) deal, which should see asset sales on the way, with Jadestone as a "logical buyer" given its existing presence in the region and mature asset expertise. 

Looking at Jadestone's existing portfolio, one mature asset purchase – Maari in New Zealand – is still providing headaches as regulatory approval still looks some way off. But announced alongside the 2021 numbers was the final investment decision for the Akatara gas field in Indonesia, which will hit production in 2024. 

The shareholder returns may not hit $100mn if the company is successful in making some deals this year, but growth looks assured given earnings potential in this price environment. We moved Jadestone from hold to buy in September, and will stick with that call. 

Last IC View: Buy, 78p, 8 Sept 2021

JADESTONE ENERGY (JSE)   
ORD PRICE:101pMARKET VALUE:£470mn
TOUCH:101-103p12-MONTH HIGH:110pLOW: 67p
DIVIDEND YIELD:1.5%PE RATIO:NA
NET ASSET VALUE:30¢NET CASH:$113mn
Year to 31 DecTurnover ($mn)Pre-tax profit ($mn)Earnings per share (¢)Dividend per share (¢)
2017 *52.0-20.4-7.00nil
2018113-21.5-10.0nil
201932573.39.00nil
2020218-57.2-13.01.62
20213401.08-3.001.93
% change+56--+19
Ex-div:TBC   
Payment:TBC   
£1=$1.25 * Nine months to 31 Dec, restated for change to financial year