The headline acquisition cost to Jadestone was US$9 million, as originally announced on 14 November 2023. Agreed adjustments, reflecting the accumulated economic benefits of the CWLH assets for the period from the effective date of 1 July 2022 to completion, resulted in a net receipt to Jadestone from the Seller of US$6.3 million.
The US$6.3 million net receipt from the Seller and US$35.7 million from Jadestone have been paid into the CWLH Abandonment Trust Fund, in aggregate satisfying the initial US$42 million abandonment funding and in line with the original acquisition announcement. The second US$23 million instalment into the CWLH Abandonment Trust Fund is payable on NOPTA[1] approval of the accession documents, which is expected in April 2024. The final instalment into the CWLH Abandonment Trust Fund is payable by 31 December 2024.
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. The CWLH fields continue to perform ahead of the Company’s expectations, averaging c.13,700 bbls/d year to date in 2024, equivalent to c.2,300 bbls/d for the 16.67% interest being acquired or c.4,600 bbls/d to the Company’s total 33.33% interest following completion.
Liftings of crude oil from the CWLH fields are implemented on an equity basis. Jadestone’s next cargo, attributable to the 16.67% interest just acquired, is estimated at c.650,000 barrels and has been sold at a small premium to Brent with the lifting scheduled for early March 2024. Receipt of proceeds for this lifting are expected in early April 2024. Two further liftings of similar size are expected within the next 12 months – one attributable to the original 16.67% interest (estimated timing in the fourth quarter of 2024) and the other attributable to the 16.67% just acquired (estimated timing in early 2025).
Paul Blakeley, President and CEO commented:
We are pleased to increase our interest in the CWLH fields in line with the originally announced terms. 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 instalments.
CWLH is fast becoming a key asset for Jadestone. Our increasing ownership and influence will help to realise the full potential of the fields through a life extension beyond 2031 and additional drilling.
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.