Jadestone Energy, an independent oil and gas production company focused on the Asia-Pacific region, today announced the completion of the acquisition of a non-operated 16.67% working interest in the Cossack, Wanaea, Lambert, and Hermes (“CWLH”) oil fields development (the “North West Shelf Oil Project”), offshore Western Australia, from BP Developments Australia Pty Ltd, following the satisfaction of all conditions precedent as per the terms of the sale and purchase agreement dated 28 July 2022.

The headline acquisition cost to Jadestone is US$20 million[1], as originally announced. Inclusive of agreed adjustments, which results from the accumulated economic benefits of the CWLH assets for the period from the effective date of 1 January 2020 to completion, Jadestone will receive from the Seller a cash amount of US$5.75 million. In line with the original acquisition announcement, Jadestone has paid an initial US$41 million into the North West Shelf Oil Project’s Abandonment Trust Fund.[2]

The acquired interest includes the Seller’s entire 16.67% working interest in the CWLH oil fields, subsea infrastructure, Okha FPSO, and full abandonment liabilities estimated at US$82 million, and represents 10.4 mmbbls of acquired reserves and resources as of the effective date of 1 January 2020. According to the operator, production from the CWLH fields averaged 14,196 bopd for the three months ended September 2022, or 2,366 bopd net to Jadestone’s acquired interest.

Liftings of crude oil from the CWLH fields are implemented on an equity basis, with the next lifting attributable to Jadestone’s acquired interest of approximately 650,000 barrels scheduled for mid-November 2022, with receipt of the cash proceeds by Jadestone expected in December 2022.

Jadestone will now apply to the National Offshore Petroleum Titles Administrator for approval of the dealing and registration on the petroleum titles relating to the acquired interest.

Paul Blakeley, President and CEO commented:
“We are very pleased to have gained access to this material asset, particularly as we see very significant upside through further investment in the future.  Our transaction is benefiting from the effective date, which was nearly two years ago, and the strengthening of the oil price in that same period. We will also see a positive impact from the next equity lifting, which is likely to generate significant cash proceeds for Jadestone before the end of 2022.  This transaction is typical of the natural transfer of interests in maturing assets from large IOCs, where materiality thresholds do not compete within their portfolios, to smaller companies willing to invest for incremental reserves and production.

We firmly believe that the CWLH fields will be a key asset and a strategic stepping-stone for Jadestone going forward. Over time we hope to work with the existing North West Shelf Oil Project Operator and joint venture partners to add value through sharing our expertise in the management of mature oil assets.”

[1] Further consideration of up to US$4 million in aggregate is payable to the Seller contingent upon occurrence of certain upside scenarios, which are tied to realised average oil prices in 2022 and 2023.
[2] Jadestone will make further payments to the North West Shelf Oil Project’s Abandonment Trust Fund via two equal instalments of US$20.5 million payable on or about 31 December 2022 and 31 December 2023.

KeyFacts Energy: Jadestone Energy Australia country profile