Jadestone promises growth and payout

That deal came together while oil fell from over $80 per barrel, a mark it has only crossed once since. The extractives world has also shifted since then, as investor pressure over climate change has seen the supermajors looking to stop contributing so disproportionately to the issue.

Jadestone has not ticked any climate change boxes by taking over the Montara oil field in the Timor Sea, but its development plans for its Nam Du field in Vietnam would see it providing gas to a country that is heavily reliant on electricity from coal – a much worse greenhouse gas emitter than gas. The company, which will make a final investment decision on the Nam Du project by the end of the year, says there is already demand in southern Vietnam for gas at a power complex and fertiliser plant. 

On top of the existing gas needs, earlier this year the government of Ninh Thuan province signed a memorandum of understanding with Novatek, Siemens and Total on building LNG infrastructure, including a “regasification terminal and new gas-fired power plants”. 

Bad weather and maintenance work contributed to a fall in production at Montara between March and June this year. But the project is comfortably generating cash, and now Jadestone has moved to full operatorship and ownership memories of the days Thai state-owned oil company PTTEP ran the show should soon fade. Montara’s former owner will be remembered for overseeing one of Australia’s worst oil spills, in 2009, and for a rig closure at the end of last year over safety concerns. Since then, Jadestone has been cleared by Australia’s oil and gas safety regulator as operator. 

Despite only just reaching producer status, Jadestone's balance sheet is in good shape. Its net debt at the end of June stood at just $7m. This will effectively move to zero once the first full year of Montara operation is accounted for, and investors will see the rewards through a dividend from next year, although the forecasts used in the accompanying table are yet to officially pencil in a forecast level for the payout. The company itself has been more forthcoming, though. Announcing dividend plans well before a payment is set to arrive is a gamble by chief executive Paul Blakeley, as conditions can change quickly, especially during a trade war and a tense time in the Middle East. Nevertheless, Jadestone forecasts handing over $7.5-$12.5m in 2020, giving a prospective yield of 2.4 to 4.0 per cent.