Independent upstream firm Jadestone Energy plc has completed the acquisition of a non-operated 16.67 percent working interest in the Cossack, Wanaea, Lambert, and Hermes (CWLH) oil fields development offshore Western Australia, from Japan Australia LNG (MIMI) Pty Ltd.
As a result of the $9 million transaction, Jadestone has doubled its non-operated working interest in the CWLH fields to 33.33 percent. The agreed adjustments, reflecting the accumulated economic benefits of the CWLH assets from the effective date of July 2022 to completion, resulted in a net receipt of $6.3 million to Jadestone from the seller, according to a Wednesday news release from Jadestone.
The acquired interest includes the seller’s entire working interest in the CWLH oil fields, subsea infrastructure, the Okha floating production, storage, and offloading unit (FPSO), and full abandonment liabilities. Jadestone noted that the CWLH fields continue to perform ahead of its expectations, averaging around 13,700 barrels per day (bpd) year-to-date in 2024, equivalent to approximately 2,300 bpd for the 16.67 percent interest being acquired or 4,600 bpd for the company’s total 33.33 percent interest after completion of the acquisition.
The $6.3 million net receipt from the seller and $35.7 million from Jadestone have been paid into the CWLH Abandonment Trust Fund, in aggregate satisfying the initial $42 million abandonment funding and in line with the original acquisition announcement, according to the release. The second $23 million installment into the CWLH Abandonment Trust Fund is payable on National Offshore Petroleum Titles Authority (NOPTA) approval of the accession documents, which is expected in April. The final installment into the CWLH Abandonment Trust Fund is payable by December 31.
Jadestone’s next cargo, attributable to the 16.67 percent interest acquired, is estimated at around 650,000 barrels and has been sold at a small premium to Brent with the lifting scheduled for early March 2024. The receipt of proceeds for the lifting is expected in early April 2024, according to the release.
“We are pleased to increase our interest in the CWLH fields in line with the originally announced terms”, Jadestone President and CEO Paul Blakeley said. “The asset continues to outperform our expectations, with the imminent early March 2024 lifting proceeds expected to substantially offset the net cost of the first two abandonment funding installments.
“CWLH is fast becoming a key asset for Jadestone. Our increasing ownership and influence will help to realize the full potential of the fields through a life extension beyond 2031 and additional drilling”, Blakely continued.
“Elsewhere, we continue to make good progress on commissioning activities at Akatara, with the project remaining on schedule for first gas in the second quarter of this year. The scheduled redetermination of our reserves-based lending facility is also progressing well. The near-term momentum and growth in our business is complemented by exciting longer-term opportunities, providing encouragement for the future as we look to generate significant value for our shareholders”, he concluded.
Asia Pacific-focused Jadestone Energy in January signed a heads of agreement (HoA) with PetroVietnam Gas Joint Stock Corporation (PV Gas) for the Nam Du and U Minh (NDUM) gas fields development in shallow water offshore southwest Vietnam. The HoA is the first step in the commercialization of the assets and could potentially lead to a gas sales and purchase agreement (GSPA) for the NDUM fields under the Block 46/07 and Block 51 production sharing contracts (PSCs), the company said in an earlier news release.
The HoA stipulates a daily contract quantity of 80 million standard cubic feet per day (MMscfpd) under a take-or-pay arrangement over a targeted minimum plateau period of 55 months, with an earliest possible first gas date of late 2026. The initial wellhead gas price in the HoA is comparable to the price of recent Vietnam pipeline gas imports, and is subject to annual escalation.
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