Jadestone Energy today provides an update on the Company’s proposed internal reorganisation, and on its reserves estimates for the year ended 31 December 2020.

Internal reorganisation update

As announced on 1 February 2021, Jadestone is proposing an internal reorganisation (the “Reorganisation”) of its corporate structure, such that the ultimate parent holding company of the Jadestone Group will be a new company, incorporated in England and Wales.  The Reorganisation will not result in a change in control in the ultimate holding company of the Jadestone Group and, accordingly, it will also not result in a change in the ultimate shareholding in any of the Company’s assets, nor will it result in a change in the management of any of its assets.

The Reorganisation is expected to reduce regulatory compliance burdens, resulting in estimated annual cost savings of between US$0.5 million and US$1.0 million, when taken in connection with savings from last year’s delisting from Canada’s TSX Venture Exchange.  In addition, Jadestone’s board believes the Reorganisation will further raise the Company’s profile and status amongst UK and European investors who are unable to invest in non-UK domiciled companies. Given that its peer group of companies are predominantly London listed and domiciled in the UK, this move should facilitate incremental access to equity from the international capital market.  It is also expected to allow Jadestone to further optimise its tax structure.

The Company filed certain court documents on Monday 15 March in relation to the proposed Reorganisation, including a plan of arrangement, which will require court approval. Subject to court approval, the Reorganisation will be proposed to shareholders for voting at a Special Meeting (the “Meeting”) of shareholders, to be held on or about 20 April 2021. Jadestone intends to post documents to shareholders on or about 22 March 2021, including a formal notice of the Meeting and a management information circular which will provide instructions on how shareholders can vote their shares at the Meeting, as well as detailed instructions for the eventual conversion of existing Jadestone Energy Inc. shares to shares in the new parent company Jadestone Energy Plc, assuming the Arrangement is approved by shareholders and the Court.

Jadestone’s two largest shareholders, in addition to all directors, collectively representing 33.5% of Jadestone’s total outstanding shares, have entered into agreements with the Company indicating their voting support for the Arrangement.

Reserves update

As part of the Reorganisation, the Company commissioned ERC Equipoise Pty Ltd (“ERCE”) to produce competent person’s reports (“CPRs”) covering the Lemang asset acquired in December 2020 and the Maari asset, which is to be acquired by the Company pending satisfaction of regulatory consents.  The Company also commissioned its annual statement of reserves and resources comprising its producing Stag and Montara assets, offshore Western Australia, and which was prepared in accordance with Canada’s national instrument 51-101.  

As of 31 December 2020, the Company had proved plus probable oil reserves (“2P reserves”) of 37.1 mm bbls at 31 December 2020, decreased by 4.7 mm bbls from 31 December 2019.  The decrease primarily reflects the impact of oil production during the year.

Reserves and resources estimates for both Lemang and Maari are substantially unchanged from the Company’s previous disclosures.

Summary of reserves for Stag and Montara

Source: ERCE 2021

Summary of contingent resources for Lemang

Source: ERCE 2021

Summary of reserves for Maari

Source: ERCE 2021

[1] Operatorship will transfer to Jadestone upon satisfaction of regulatory consents.

Paul Blakeley, President and CEO commented:
“The internal reorganisation was a logical next step for the Company and I look forward to closing this in April.  In keeping with our spirit of driving further efficiency across our business, the reorganisation will streamline the corporate structure, and along with our decision to delist from the TSXV early last year, will provide tangible financial benefits as we continue working to deliver enhanced returns for our shareholders.

 “I’m also happy to provide an update to our reserve and resource statements, prepared by our third-party reserves evaluator ERCE.  Following a year marked by low oil prices, and one in which we prioritised protecting the balance sheet and managing the cost base over investing into short-term growth, the results are very much in line with our expectations.”