TIDMJSE

RNS Number : 2436L

Jadestone Energy PLC

09 September 2021

2021 Half Year Results and Interim Dividend Declaration

9 September 2021-Singapore: Jadestone Energy plc (AIM:JSE) ("Jadestone" or the "Company"), an independent oil and gas production company and its subsidiaries (the "Group"), focused on the Asia Pacific region, reports today its unaudited condensed consolidated interim financial statements, as at and for the six-month period ended 30 June 2021 (the "Financial Statements").

Management will host a conference call today at 9:00 a.m. UK time, details of which can be found in the release below.

Paul Blakeley, President and CEO commented:

" I am pleased to report a solid 2021 first half across the business, with production from our Australian assets slightly better than expected, ahead of implementing the activity plan on Montara and Stag that was deferred from last year due to low oil prices. I am also pleased to report safe operational performance through the year to date, while we remain vigilant on the well-being of our workforce given the continued significant impact of the COVID-19 pandemic.

"During the period, global demand for hydrocarbons has been recovering, creating strong market fundamentals including an increase in benchmark oil prices. Jadestone's average oil price realisations in the first half were 45% higher than the same period last year. This translated into positive operating cash flows of US$54.4 million in H1 2021. Adding the proceeds of a June Montara lifting which were received in early July, pro-forma cash balances at mid-year were just short of US$100 million.

"With no debt, our financial position at the end of the first half was very strong, allowing us to increase the interim dividend by 10%. Going forward, we will continue to balance dividend growth against the significant organic and inorganic growth opportunities, and associated capital needs, across the business.

"I am particularly pleased with the Peninsular Malaysia acquisition announced during H1 2021. Due to the concerted efforts of our team, we closed the transaction just three months after announcing, with net cash due to Jadestone of US$9.2 million. Further, we remain committed to our acquisition of a 69% operated interest in the Maari project, shallow water offshore New Zealand, and remain confident that the transaction will be completed, though timing of government approvals is beyond our control.

"Our gas developments have also seen positive progress during the first half. At Lemang, in Indonesia, the regulator has allocated future gas sales from the project, which provides certainty as we work toward both formalising gas sales contracts and progressing the various workstreams leading toward a final investment decision. In Vietnam, we have re-engaged with regulators to press toward a target for both the production profile and first gas date, as a key precursor to establishing gas sales agreement details.

"Today, we have reaffirmed production guidance for 2021 of 11,500 - 13,500 boe/d, key to which is the contribution of the H6 development well on Montara, which is currently in the completions phase before being tied in and brought onstream shortly. This well, together with the Skua workovers and the contribution of the Peninsular Malaysia assets, would give us clear line of sight on a production rate of 20,000 boe/d towards the end of the year."

Paul Blakeley

EXECUTIVE DIRECTOR,

PRESIDENT AND CHIEF EXECUTIVE OFFICER

2021 FIRST HALF RESULTS SUMMARY

 
 USD'000 except where indicated                H1 2021   H1 2020       FY 2020 
--------------------------------------------  --------  --------  ------------ 
 
 Production, bbls/day                            9,934    12,116        11,438 
 Realised oil price per barrel (US$/bbl)(1)      67.70     46.47         44.79 
 Revenue(2)                                    138,158   115,669       217,938 
 Operating costs per barrel (US$/bbl)(3)         28.16     23.27         23.10 
 Adjusted EBITDAX(3)                            65,179    36,606        62,582 
 Profit/(Loss) after tax                         2,495     5,360   (60,178)(4) 
 Earnings/(Loss) per ordinary share: 
  basic & diluted (US$)                           0.01      0.01        (0.13) 
 Dividend per ordinary share (US 
  )                                               0.59      0.54          1.62 
 Operating cash flows before movement 
  in working capital                            54,376    57,054        86,883 
 Capital expenditure                            16,221    19,521        24,065 
 Outstanding debt(3)                                 -    25,574         7,386 
 Net cash(3)                                    48,291    78,281        82,055 
 

Financial

l H1 2021 production of 9,934 bbls/d, slightly ahead of plan but 18% lower than H1 2020, in part due to natural field production decline, deferred workovers and an unplanned shutdown at Montara for critical valve repairs;

l Average realised oil prices(1) in H1 2021 were US$67.70/bbl, 46% higher than H1 2020. Realised prices included an average premium over the benchmark of US$3.12/bbl(5) (H1 2020: US$8.19/bbl);

l Net revenue for H1 2021 of US$138.2 million, up 50% from H1 2020 before hedging income(2) , due to the increase in oil prices since the beginning of 2021 and higher lifted volumes;

l Unit operating costs(6) of US$28.16/bbl, up 21% from H1 2020 of US$23.27/bbl, in part due to lower production, coupled with higher operational staff costs and repair & maintenance costs;

l Net profit after tax of US$2.5 million, down from US$5.4 million in H1 2020, which includes the impact of several one-off expenses of US$3.4 million arising from costs associated with the acquisition of SapuraOMV Upstream (PM) Inc. as well as other business development costs and costs associated with the corporate reorganisation , and a net hedging loss of US$4.6 million;

l H1 2021 positive operating cash flows of US$54.4 million, before movements in working capital, down 5% compared to H1 2020 ;

l Capital expenditure of US$16.2 million, down 17% compared to the prior period. Capital expenditure incurred in H1 2021 is primarily related to costs of the drilling of the H6 development well at Montara. H1 2020 development spend was primarily on the Nam Du/U Minh field prior to the project activity being deferred during the early stages of the COVID-19 pandemic;

l The 2018 reserves based loan was fully repaid on 31 March 2021, leaving the Group now entirely free of any interest bearing financial indebtedness;

l Net cash as at 30 June 2021 of US$48.3 million (H1 2020: US$78.3 million) and zero outstanding debt (H1 2020: US$ 25.6 million). The lower gross cash balance is partly due to timing differences in liftings, with proceeds of US$46.1 million from a Montara June 2021 lifting received in July 2021; and

   l  A 2021 interim dividend of 0.59   US cents/share has been declared. 

(1) Realised oil price represents the actual selling price and before any impact from hedging. The H1 2020 realised price is net of marketing fees of US$0.08/bbl, whereas full year 2020 and H1 2021 realised oil prices are before marketing fees which are recorded in production costs pursuant to IFRS 15 Revenue from Contracts with Customers.

(2) Revenue in H1 2020 and FY 2020 includes hedging income of US$23.7 million and US$31.4 million, respectively, pursuant to the characterisation of the two-year capped swap programme as cashflow hedges under IFRS9 Financial Instruments. Losses realised on the H1 2021 swaps of US$4.6 million have been recognised in other expenses, pursuant to the characterisation of the ad hoc H1 2021 six-month swap programme as derivative instruments measured at fair value through profit or loss. The H1 2021 swap programme covered a short time span (not exceeding a half yearly reporting period), whereas the capped swap programme crossed three annual reporting periods.

(3) Operating costs per bbl, adjusted EBITDAX, outstanding debt and net cash are non-IFRS measures and are explained below.

(4) Loss after tax for the year ended 31 December 2020 included an impairment of US$50.5 million associated with the capitalised intangible exploration costs at SC56.

(5) With the change to the shuttle tanker model at Stag, the premium negotiated for each Stag lifting is now typically based on a CIF (cost, insurance and freight) basis rather than a FOB (free on board) basis. Care needs to be taken in making comparisons with 2020 premia for the period up until September 2020 when the switch to the tanker model occurred.

(6) Unit operating costs per barrel before workovers, but including net lease payments and certain other adjustments (see non-IFRS measures below).

Business development

l Announced the acquisition of SapuraOMV's interests in Peninsular Malaysia for an initial headline cash consideration of US$9.0 million, plus customary adjustments and certain subsequent contingent payments. The acquisition was completed on 1 August 2021, resulting in a net cash receipt of US$9.2 million after adjustments; and

l Both Jadestone and the Maari seller continue to work to satisfy the remaining outstanding conditions to complete the Maari acquisition .

Guidance

l Full year guidance unchanged from 18 August 2021 update:

o Production : 11,500 - 13,500 boe/d;

o Unit opex: US$25.50 - 29.50/boe; and

o Capex: US$105 - 115 million.

Enquiries

 
 Jadestone Energy plc                       +65 6324 0359 (Singapore) 
 Paul Blakeley, President and CEO 
 Dan Young, CFO                             + 44 7713 687 467 (UK) 
 Phil Corbett, Investor Relations Manager   ir@jadestone-energy.com 
 
 Stifel Nicolaus Europe Limited (Nomad,     +44 (0) 20 7710 7600 
  Joint Broker)                              (UK) 
 Callum Stewart / Jason Grossman / Ashton 
  Clanfield 
 
 Jefferies International Limited (Joint     +44 (0) 20 7029 8000 
  Broker)                                    (UK) 
 Tony White / Will Soutar 
 
 Camarco (Public Relations Advisor)         +44 (0) 203 757 4980 
                                             (UK) 
 Billy Clegg / James Crothers               jadestone@camarco.co.uk 
 

Conference call and webcast

The management team will host an investor and analyst conference call at 9:00 a.m. (London)/4:00 p.m. (Singapore) today, Thursday, 9 September 2021, including a question-and-answer session.

The live webcast of the presentation will be available at the below webcast link. Dial-in details are provided below. Please register approximately 15 minutes prior to the start of the call.

The results for the financial period ended 30 June 2021 will be available on the Company's website at: www.jadestone-energy.com/investor-relations/

Webcast link: https://produceredition.webcasts.com/starthere.jsp?ei=1485258&tp_key=efaeb2a81e

Event conference title: Jadestone Energy plc - Half Year Results

Start time: 9:00 a.m. (London)/4:00 p.m. (Singapore)

Date: Thursday, 9 September 2021

Conference ID: 24719928

Dial-in number details:

 
  Country                     Dial-In Numbers 
  United Kingdom                  08006522435 
                              --------------- 
  Australia                        1800076068 
                              --------------- 
  Canada (Toronto)               416-764-8688 
                              --------------- 
  Canada (Toll free)             888-390-0546 
                              --------------- 
  New Zealand                      0800453421 
                              --------------- 
  Singapore                        8001013217 
                              --------------- 
  United States (Toll free)      888-390-0546 
                              --------------- 
  France                           0800916834 
                              --------------- 
  Germany                         08007240293 
                              --------------- 
  Germany (Mobile)                08007240293 
                              --------------- 
  Hong Kong                         800962712 
                              --------------- 
  Indonesia                     0078030208221 
                              --------------- 
  Ireland                          1800939111 
                              --------------- 
  Ireland (Mobile)                 1800939111 
                              --------------- 
  Japan                          006633812569 
                              --------------- 
  Malaysia                         1800817426 
                              --------------- 
  Switzerland                      0800312635 
                              --------------- 
  Switzerland (Mobile)             0800312635 
                              --------------- 
 

DIVID DECLARATION

On 9 September 2021, the directors have declared a 2021 interim dividend of 0.59 US cents/share (or equivalent to 0.43 GB pence/share based on the current spot exchange rate of 0.7257 ), equivalent to a total distribution of US$ 2.8 million. The dividend will be paid on a gross basis, in US dollars. The timetable for the dividend payment is as follows:

l Ex-dividend date: 16 September 2021

l Record date: 17 September 2021

l Payment date: 1 October 2021

The Company's growth-oriented strategy remains unchanged; the business model is highly cash-generative, and, as a result, is fundamentally pre-disposed to providing cash returns, after allowing for organic reinvestment needs, whilst maintaining a conservative capital structure, and not unduly limiting options for further inorganic growth. The Company intends to maintain and grow the dividend over time, in line with underlying cash flow generation. The Company does not offer a dividend reinvestment plan, and does not offer dividends in the form of ordinary shares.

ENVIRONMENT, SOCIAL AND GOVERNANCE ("ESG")

As a leading oil and gas development and production company in the Asia Pacific region, Jadestone strives to deliver sustainable value for all of its stakeholders in a safe, secure, environmentally and socially responsible manner. Jadestone published its second Sustainability Report in June this year, which covered the Group's approach to ESG and performance across key focus areas for the 2020 calendar year, as well as commitments to further improvements in 2021.

ESG Performance

Through H1 2021, the Group maintained safe operations and had no significant recordable personnel or environmental incidents, and no disruptions to offshore operations due to the COVID-19 pandemic. Jadestone has committed to 2021 ESG targets across all of its material matters, which form a part of annual executive key performance indicators, translating directly to performance pay.

Jadestone has continued its focus on reducing the carbon footprint of its operations, through the work of the Operational and Executive subgroups of the Climate Change Working Group ("CCWG"). In 2021, the Company is targeting a 5% reduction in both flared volumes and diesel use compared to 2020 levels.

Initiatives to reduce GHG emissions in 2021 include:

l continuing to increase the uptime of the reinjection compressor at the Montara asset;

l prioritising usage of produced gas over diesel to run Montara operations; and

l enhancing internal GHG emissions reporting to support improved operational practices.

The Operational CCWG is currently reviewing the recently acquired Peninsular Malaysia assets to identify sources of emissions, opportunities to reduce emissions, as well as integrating asset-level GHG reporting.

The Company has also been rolling out its community engagement programmes in all countries of operations, to further enhance its positive contribution to the local communities. Throughout 2021, the focus in the regions has been on identifying most pressing community needs and looking for optimal channels of delivery, that prioritise employee safety. Jadestone has also continued its employee-facing programmes, including running the Plastic Free July campaign, where feasible.

UN Sustainable Development Goals

Jadestone's ESG framework continues to align with the wider societal challenges addressed by the UN's Sustainable Development Goals ("SDGs"). Whilst its business activities touch directly or indirectly on many of the SDGs, Jadestone has selected the goals that most closely align with its current business strategy, activities, values and purpose. These are set out in the Company's Sustainability Report, contained within the 2020 Annual Report.

Task Force on Climate-Related Financial Disclosures

In 2020, Jadestone commenced its alignment with the Task Force on Climate-Related Financial Disclosures ("TCFD"), utilising it as a practical tool for navigating the transition to a low-carbon economy and increasing business resiliency.

In H1 2021 the Company has continued to implement the TCFD recommendations in its reporting and programmes, with a particular focus on climate risk integration and strategy considerations. Jadestone will disclose its progress in TCFD adoption in its 2021 Sustainability Report, to be published in H1 2022.

Governance

The Group adopted the Quoted Companies Alliance corporate governance code ("QCA code") at the end of 2020. The resultant changes that arise from the adoption of the QCA code have been implemented and are a testament to the Company's commitment to further strengthening transparent and effective corporate governance practices.

Further details and enhanced disclosures of ESG can be found in the Company's 2020 Sustainability Report, as part of the 2020 Annual Report, from pages 36 to 81.

OPERATIONAL REVIEW

Producing assets

Australia

Montara project

The Montara assets, in production licences AC/L7 and AC/L8, are located 254km offshore Western Australia, in a water depth of approximately 77 metres. The Montara assets, comprising the three separate fields being Montara, Skua and Swift/Swallow, are produced through an owned FPSO, the Montara Venture. As at 31 December 2020, the Montara assets had proven plus probable reserves of 23.4mm barrels of oil, 100% net to Jadestone.

The fields produce light sweet crude ( 42(o) API, 0.067% mass sulphur), which typically sells at a premium to Dated Brent. The premium in H1 2021 ranged between US$0.39/bbl to US$0.66/bbl. The most recent lifting was agreed at a premium of US$1.17/bbl.

During H1 2021, there was an unplanned shutdown to replace a significant number of critical valves on the FPSO. The shutdown was for 16 days resulting in around 102,000 bbls of deferred production. The original valves were installed during the FPSO's construction and the replacements should last for the remaining life of the field.

The Montara assets produced an average of 7,269 bbls/d in the first half of 2021 (H1 2020: 9,440 bbls/d). This was lower than H1 2020 in part due to natural field production decline and the unplanned shutdown to replace the defective critical valves.

The Group took the Valaris 107 drilling rig on hire on 14 June 2021 and commenced drilling the H6 development well on 28 June 2021. During the initial attempt to drill the horizontal section in the well, mechanical issues with downhole equipment resulted in a deviation from the planned well path, which necessitated a sidetrack. The sidetrack was successful, resulting in a circa 1,200 metre horizontal section in the reservoir, encountering good quality oil-bearing sands. The well is currently in the completions phase before being tied in to the Montara infrastructure, after which the rig will proceed with the Skua 11 and 10 workovers.

There were three liftings during H1 2021, resulting in total sales of 1,536,307 bbls, compared to 1,461,096 bbls in H1 2020 from the same number of liftings.

Stag oilfield

The Stag oilfield, in block WA-15-L, is located 60km offshore Western Australia, in a water depth of approximately 47 metres. As at 31 December 2020, the field contained total proved plus probable reserves of 13.7mm barrels of oil, 100% net to Jadestone.

The Stag oilfield produces heavier sweet crude ( 18(o) API, 0.14% mass sulphur), which historically sells at a premium to Dated Brent. The premium in 2021 ranged between US$8.30/bbl to US$13.88/bbl(1) . The most recent lifting was agreed at a premium of US$10.15/bbl.

During H1 2021, the Group continued its workover and maintenance programme. As a result of COVID-19 constraints, production continues to be impacted by a backlog of workovers that are scheduled to be complete by the end of 2021.

Production was 2,665 bbls/d during H1 2021, compared to 2,676 bbls/d in H1 2020.

There were two liftings during H1 2021, generating total sales of 504,485 bbls, compared to 518,193 bbls in H1 2020 from the same number of liftings.

Malaysia

PM 323 and PM 329 PSCs (operated), PM 318 and AAKBNLP PSCs (non-operated)

On 30 April 2021, the Group announced the execution of a sale and purchase agreement ("SPA") with SapuraOMV Upstream Sdn. Bhd. ("SapuraOMV") to acquire SapuraOMV's Peninsular Malaysia assets (the "PenMal Assets"), for an initial cash consideration of US$9.0 million, plus customary adjustments. Further contingent payments of up to US$6.0 million are payable to SapuraOMV, which are tied to potential full year oil price outcomes in 2021 and 2022(2) .

The acquisition completed on 1 August 2021, following the satisfaction of all conditions precedent, resulting in a total final cash consideration of US$20.0 million, comprising the headline cash consideration of US$9.0 million plus adjustments of US$11.0 million. The economic effective date of the acquisition was 1 January 2021, meaning the Group was entitled to all net cash generated since 1 January 2021 up to the completion date. As a result, at completion the Group obtained cash held by SapuraOMV Upsteam (PM) Inc. of US$29.2 million, resulting in a net cash receipt of US$9.2 million from the acquisition.

The PenMal Assets consist of four licences, two of which are operated by the Group. The two operated licences comprise a 70% operated interest in the PM329 PSC, containing the East Piatu field, and a 60% operated interest in the PM323 PSC, which contains the East Belumut, West Belumut and Chermingat fields. Both PSCs are located approximately 230km northeast of Terengganu. All fields are in production, and have been developed by way of fixed wellhead and central processing platforms. The two non-operated licences consist of 50% working interests in each of the PM318 PSC and in the Abu, Abu Kecil, Bubu, North Lukut, and Penara oilfields ("AAKBNLP") PSC.

The PenMal Assets add immediate cash flow from around 6,000 barrels of oil equivalent per day of low operating cost production, on a net working interest basis, of which over 90% is oil. The Group's Malaysian operated assets produce a very light sweet crude that is blended to Tapis grade (43 API, 0.04% mass sulphur). The PenMal Assets also increase the Group's 2P reserves by 34%, adding 12.5mm boe, representing the net working interest 2P reserves as at 31 December 2020, based on Jadestone's best estimate 2P reserves production profile.

(1) With the change to the shuttle tanker model at Stag, the premium negotiated for each Stag lifting is now typically based on a CIF basis rather than a FOB basis. Care needs to be taken in making comparisons with 2020 premia for the period up until September 2020 when the switch to the tanker model occurred.

(2) If the average daily price of Dated Brent crude oil in calendar 2021 (calendar 2022) exceeds US$65/bbl (US$70/bbl), then Jadestone pays SapuraOMV an additional US$3.0 million (US$3.0 million).

The Group believes there is scope to add incremental value in the near term through both reservoir optimisation and production enhancement activities across both operated licences. Gas re-injection is expected to be a key part of reservoir optimisation, while production enhancement will initially be focused on restoring idle wells to production.

There is also significant potential for further development activity on the PenMal Assets. The focus will initially be on infill drilling in the East Belumut field within the PM 323 PSC, where the Group sees the potential for several infill campaigns over the next few years. East Belumut has a medium heavy oil, which is similar to the Stag field offshore Australia, where we have experience of increasing recovery factors through tightening of the well pattern. There are also some targeted opportunities on the East Piatu and West Belumut fields, which will be evaluated in parallel with the East Belumut infill potential.

In H1 2021, average production from the PenMal assets was 12,560 boe/d, equivalent to 7,492 boe/d, net to Jadestone's working interest. The net average realised prices incorporated into the liftings was US$ 65.90 /bbl.

Pending acquisition

New Zealand

Maari oilfield

On 16 November 2019, the Group executed an SPA with OMV New Zealand Limited ("OMV New Zealand"), to acquire an operated 69% interest in the Maari project, located 120km offshore New Zealand, in a water depth of 100 metres, for a total headline cash consideration of US$50.0 million and subject to customary closing adjustments.

The transaction has achieved several key milestones with regard to regulatory approvals, and the Group continues to focus on securing the remaining ministerial consents from the New Zealand Government, including the approval for transfer of operatorship. Jadestone and OMV New Zealand continue to work towards completion of the transaction, including extending the long stop date under the SPA from 31 August 2021 to 31 December 2021, as announced on 8 September 2021.

The Group would assume the operatorship of the Maari project upon completion of the transaction. The economic benefits from 1 January 2019 until the closing date will be adjusted in the final consideration price. This is now anticipated to be a net receipt to the Group.

As at 31 December 2020, the Maari project holds net 2P audited reserves of 10.6mm barrels of oil.

Pre-production assets

Vietnam

Block 51 PSC and Block 46/07 PSC

Jadestone holds a 100% operated working interest in Block 46/07 PSC and Block 51 PSC, both in shallow waters in the Malay Basin, offshore Southwest Vietnam.

The two contiguous blocks hold three discoveries: the Nam Du gas field in Block 46/07 and the U Minh and Tho Chu gas/condensate fields in Block 51, with 2C resources of 93.9mm boe.

The formal field development plan ("FDP") in respect of the Nam Du/U Minh development was submitted to the Vietnam regulatory authorities in late 2019. The Group deferred the project in mid-March 2020, amid delays in Vietnamese Government approvals and the drop in global oil prices due to COVID-19.

Discussions are continuing with Petrovietnam to agree a gas production profile for the development, as a precursor to a gas sales contract, and ultimately attaining government sanction for the field development.

Indonesia

Lemang PSC

The Lemang PSC is located onshore Sumatra, Indonesia. The block includes the Akatara gas field, with a net to Jadestone 2C resource of 16.8mm boe.

The asset has been substantially de-risked with 11 wells drilled into the structure, plus three years of oil production history, up until the field ceased production of oil in December 2019.

On 30 June 2021, the Minister of Mines and Energy of Indonesia issued a Ministerial decree, allocating gas sales from the Akatara gas field in the Lemang PSC to a subsidiary of the national electricity utility, PT Perusahaan Listrik Negara ("PLN").

The Ministerial decree facilitates the development and commercialisation of the Akatara gas field and also the associated production and sales of liquefied petroleum gas to the local domestic market in Jambi, together with condensate sales to a local buyer.

A heads of agreement ("HoA") in relation to gas sales from Jadestone's planned development has also been executed with the PLN subsidiary, PT Pelayanan Listrik Nasional Batam ("PLN Batam"), as buyer. A fully termed gas sales agreement is currently under negotiation with PLN Batam.

The Ministerial decree and HoA specify a gross sales volume of 20 BBtu/d starting in Q1 2024, and a plant gate sales price of US$5.60/mmBtu, at a delivery point approximately 17 kilometres from the field.

Indonesia's upstream regulator, SKK Migas, has approved the HoA which is fully aligned with the Ministerial decree.

Exploration assets

Philippines

Service Contract 56 ("SC56")

Jadestone held a 25% interest in SC56 in partnership with operator Total E&P Philippines B.V. ("Total").

On 18 November 2020, Total and Jadestone expressed their intention to the Philippines Department of Energy ("DOE") to voluntarily surrender the entire interest in SC56 and accordingly, to terminate the contract. The effective date of termination was 21 December 2020.

Following the termination, the Group is liable for 25% of the unfulfilled minimum work programme as at the termination date. At the end of June 2021, the Group received the finalised unfulfilled commitment amount from the DOE and is required to pay US$1.5 million, net 25% to Jadestone. The payment of this unfulfilled commitment amount will be funded from the net arbitration proceeds of US$2.2 million received from Total in 2020.

Service Contract 57 ("SC57")

The Group holds a 21% working interest in SC57, but it has been under force majeure since 2011, and these conditions are expected to continue for the foreseeable future.

FINANCIAL REVIEW

The following table provides selected financial information of the Group, which was derived from, and should be read in conjunction with, the unaudited condensed consolidated interim financial statements for the period ended 30 June 2021.

 
                                                                               Twelve 
                                               Six months   Six months         months 
                                                    ended        ended          ended 
                                                  30 June      30 June    31 December 
 USD'000 except where indicated                      2021         2020           2020 
--------------------------------------------  -----------  -----------  ------------- 
 
 Sales volume, barrels (bbls)                   2,040,792    1,979,289      4,165,612 
 Production, bbls/day                               9,934       12,116         11,438 
 Realised oil price per barrel (US$/bbl)(1)         67.70        46.47          44.79 
 Revenue(2)                                       138,158      115,669        217,938 
 Production costs                                (62,492)     (44,466)      (105,338) 
 Operating costs per barrel (US$/bbl)(3)            28.16        23.27          23.10 
 Adjusted EBITDAX(3)                               65,179       36,606         62,582 
 Unit depletion, depreciation & 
  amortisation (US$/bbl)                            15.70        16.14          16.24 
 Impairment                                             -            -         50,455 
 Profit/(Loss) before tax                          11,148       12,787       (57,238) 
 Profit/(Loss) after tax                            2,495        5,360       (60,178) 
 Earnings/(Loss) per ordinary share: 
  basic & diluted (US$)                              0.01         0.01         (0.13) 
 Dividend per ordinary share (US 
  )                                                  0.59         0.54           1.62 
 Operating cash flows before movement 
  in working capital                               54,376       57,054         86,883 
 Capital expenditure                               16,221       19,521         24,065 
 Outstanding debt(3)                                    -       25,574          7,386 
 Net cash(3)                                       48,291       78,281         82,055 
 

Benchmark commodity price and realised price

The average benchmark Dated Brent crude oil price increased 62% to US$64.98/bbl in the first half of 2021, compared to US$40.07/bbl in H1 2020. The average benchmark Dated Brent oil price incorporated into the Group's liftings was US$64.58/bbl in H1 2021, a 68% increase compared to US$38.36/bbl in H1 2020.

(1) Realised oil price represents the actual selling price and before any impact from hedging. The H1 2020 realised price is net of marketing fees of US$0.08/bbl, whereas full year 2020 and H1 2021 realised oil prices are before marketing fees which are recorded in production costs pursuant to IFRS 15 Revenue from Contracts with Customers . With the change to the shuttle tanker model at Stag, the premium negotiated for each Stag lifting is now typically based on a CIF basis rather than a FOB basis. Care needs to be taken in making comparisons with 2020 premia for the period up until September 2020 when the switch to the tanker model occurred.

(2) Revenue in H1 2020 and FY 2020 includes hedging income of US$23.7 million and US$31.4 million, respectively, pursuant to the characterisation of the two-year capped swap programme as cashflow hedges under IFRS9 Financial Instruments. Losses realised on the H1 2021 swaps of US$4.6 million have been recognised in other expenses, pursuant to the characterisation of the ad hoc H1 2021 six-month swap programme as derivative instruments measured at fair value through profit or loss. The H1 2021 swap programme covered a short time span (not exceeding a half yearly reporting period), whereas the capped swap programme crossed three annual reporting periods.

(3) Net cash at June 2021 excludes a Montara June lifting of US$46.1 million, the proceeds of which were received in July 2021 (by comparison, there were no Montara or Stag liftings in December 2020 or June 2020). Operating costs per bbl, adjusted EBITDAX, outstanding debt and net cash are non-IFRS measures and are explained below.

The actual average realised price in H1 2021 increased by 4 6 % to US$67.70/bbl, compared to US$46.47/bbl in H1 2020. The average premium during the period was US$3.12/bbl, compared to US$8.19/bbl in H1 2020. Premiums continue to improve with the latest liftings achieving US$10.15/bbl and US$ 1.17/bbl at Stag and Montara, respectively. With the change to the shuttle tanker model at Stag, the premium negotiated for each Stag lifting is now typically based on a CIF basis rather than a FOB basis. Care needs to be taken in making comparisons with 2020 premia for the period up until September 2020 when the switch to the tanker model occurred.

Production and liftings

The Group generated average production in H1 2021 of 9,934 bbls/d (H1 2020: 12,116 bbls/d). Production at Montara was lower compared to H1 2020, primarily the result of natural field production decline and an unplanned shutdown at Montara for 16 days resulting in around 102,000 bbls of deferred production.

The Group had five liftings during the period, resulting in sales of 2,040,792 bbls (H1 2020: 1,979,289 bbls, five liftings).

Revenue

The Group generated US$138.2 million of revenue in H1 2021, compared to US$115.7 million for the same period in 2020, an increase of 19%. The increase in revenue was predominately due to:

-- Higher average realised prices in H1 2021, compared to H1 2020 (US$67.70/bbl vs US$46.47/bbl), contributing an additional US$41.8 million;

-- A 3% increase in lifted volumes in H1 2021, compared to H1 2020, generating additional revenue of US$4.2 million; and

-- Hedging income was nil(1) in H1 2021, a decline of US$23.7 million compared to H1 2020. The Group's two-year capped swap cashflow hedge programme ran through to 30 September 2020.

Production costs

Production costs in H1 2021 were US$62.5 million (H1 2020: US$44.5 million), an increase of US$18.0 million compared to H1 2020, predominately due to:

-- An additional US$8.8 million of net movement in closing crude inventories of 448kbbls, due to liftings exceeding production between the comparable periods;

-- Operational staff costs were higher by US$2.0 million, due to additional contractors recruited to support repair and maintenance activities and unfavorable foreign exchange movements in non-US$ salaries;

-- Repair and maintenance ("R&M") costs increased by US$2.2 million compared to H1 2020, due to additional spending on fabrication and inspection activities on both Stag and Montara;

-- Workover costs were higher by US$4.4 million, due to limited activity in 2020 in response to COVID-19 impacts on oil prices and restrictions in crew movements. The Group resumed its workover campaigns at Stag during H2 2020, with more workovers and well interventions activities in the first half of 2021 compared to H1 2020; and

-- Transportation costs of US$0.5 million (H1 2020: nil) following the change in offtake arrangements at Stag.

The termination of the Dampier Spirit FSO lease resulted in estimated cash savings of US$3.7 million during H1 2021.

(1) The hedging loss in H1 2021 of US$4.6 million was recognised as other expenses, as opposed to offsetting against revenue, due to the adoption of a different accounting treatment for the H1 2021 commodity swap contracts. The two-year capped swap programme was characterised as cashflow hedges under IFRS9 Financial Instruments and realised gains recognised as part of revenue. Losses realised on the H1 2021 swaps have been recognised in other expenses, pursuant to the characterisation of the ad hoc H1 2021 six-month swap programme as derivative instruments measured at fair value through profit or loss. The H1 2021 programme covered a short time span (not exceeding a half yearly reporting period), whereas the capped swap programme crossed three annual reporting periods.

Unit operating costs per barrel were US$28.16 (H1 2020: US$23.27/bbl) before workovers, an increase on H1 2020, predominately due to lower production as a result of natural field decline production, coupled with higher operational staff costs and R&M costs as explained above.

DD&A, other operating expenses and income

DD&A charges in H1 2021 were US$39.7 million, versus H1 2020 of US$39.2 million, reflecting the slightly higher lifted volumes. The DD&A on a unit basis for oil and gas properties remained consistent with prior periods, while depreciation for right-of-use assets reduced primarily as a result of the September 2020 termination of the Dampier Spirit leased FSO at Stag.

Other expenses in H1 2021 were US$12.5 million (H1 2020: US$16.6 million), including the fair value loss on commodity swaps of US$4.6 million, and several one-off expenses including costs associated with the acquisition of SapuraOMV's interests in Peninsular Malaysia of US$0.8 million, business development related expenses of US$1.3 million, COVID-19 related expenses of US$0.7 million, and costs associated with the corporate reorganisation of US$ 1.1 million . In comparison, other expenses in H1 2020 mainly comprised litigation expenses of US$8.8 million in relation to the SC56 arbitration with Total, rig contract deferral costs in Australia of US$3.0 million, and seismic acquisition costs incurred at Montara of US$1.0 million.

H1 2021 other income totalled US$3.7 million (H1 2020: US$15.4 million), arising from rebate income of US$2.7 million, generated from the sublease of right-of-use assets under the Group's helicopter lease contract, and foreign exchange gains of US$1.0 million. In comparison, other income in H1 2020 included US$11.1 million awarded to the Group, for the breach of the SC56 farm out agreement by Total, and fair value gain on capped swaps of US$2.1 million.

Taxation

The overall net tax expense of US$8.7 million (H1 2020: US$7.4 million) comprises current income tax expense of US$8.9 million (H1 2020: US$10.5 million), reduced by a deferred tax credit of US$0.2 million (H1 2020: US$3.1 million).

Current income tax expense of US$8.9 million (H1 2020: US$10.5 million) consists of corporate income tax of US$11.4 million, offset by a PRRT tax credit of US$2.5 million, with a PRRT refund received in August, as annual deductible cash payments exceeded assessable cash receipts.

The deferred tax credit of US$0.2 million (H1 2020: US$3.1 million) has arisen from timing differences between the tax and accounting treatment of depreciation for oil and gas properties.

H1 2021 RECONCILIATION OF CASH

 
                                                 USD'000       USD'000 
---------------------------------------------  ---------  ------------ 
 
 Cash and cash equivalents, 31 December 2020                    80,996 
 Restricted cash, 31 December 2020                               8,445 
                                                          ------------ 
 Total cash and cash equivalent, 31 December 
  2020                                                          89,441 
 Revenue                                         138,158 
 Other operating income                            2,908 
 Operating costs                                (62,492) 
 Staff costs                                    (11,427) 
 General and administrative expenses            (12,771) 
 Cash flows from operations                                     54,376 
 Movement in working capital                               (53,254)(1) 
 Tax paid                                                      (8,004) 
 Interest paid                                                   (768) 
 Purchases of intangible exploration assets, 
  oil and gas properties, and 
  plant and equipment(2)                                      (15,865) 
 Other investing activities                                         38 
 Financing activities                                         (17,673) 
                                                          ------------ 
 
 Total cash and cash equivalent, 30 June 
  2021                                                       48,291(1) 
                                                          ============ 
 

NON-IFRS MEASURES

The Group uses certain performance measures that are not specifically defined under IFRS, or other generally accepted accounting principles. These non-IFRS measures comprise operating cost per barrel (opex/bbl), adjusted EBITDAX, outstanding debt, and net cash.

The following notes describe why the Group has selected these non-IFRS measures.

(1) Total cash does not include a June lifting at Montara for US$46.1 million, the proceeds of which were received in July 2021. There were no December 2020 liftings/no outstanding trade receivable from a lifting at the December 2020 year end. The receivable from the June lifting is reflected in trade receivables as at 30 June 2021.

(2) Total capital expenditure was US$16.2 million, comprising total capital expenditure paid of US$15.9 million, plus accrued capital expenditure of US$0.3 million.

Operating costs per barrel (Opex/bbl)

Opex/bbl is a non-IFRS measure used to monitor the Group's operating cost efficiency, as it measures operating costs to extract hydrocarbons from the Group's producing reservoirs on a unit basis. Opex/bbl is defined as total production costs excluding oil inventories movement, write down of inventories, workovers (to facilitate better comparability period to period) and non-recurring repair and maintenance. It also includes lease payments related to operational activities, net of any income earned from right-of-use assets involved in production, and foreign exchange gains arising from foreign exchange forwards in respect of local currency operating expenditure, and excludes depletion, depreciation and amortisation and short term COVID-19 subsidies. Adjusted aggregate production cost is then divided by total produced barrels for the prevailing period, to determine the unit cost per barrel.

 
                                            Six months   Six months  Twelve months 
                                                 ended        ended          ended 
                                               30 June      30 June    31 December 
  USD'000 except where indicated                  2021         2020           2020 
----------------------------------------   -----------  -----------  ------------- 
 
Production costs (reported)                     62,492       44,466        105,338 
Adjustments 
Lease payments related to 
 operating activities(1)                         6,444       10,005         17,548 
Movement in oil inventories(2)                 (5,642)        3,204          2,806 
Workover costs(3)                             (10,027)      (5,675)       (21,686) 
Write down of oil inventories(4)                     -        (695)              - 
Impact from foreign exchange 
 derivatives 
 apportioned to production 
 costs(5)                                            -            -        (2,649) 
Other income(6)                                (2,286)            -        (3,634) 
Non-recurring repair and maintenance(7)              -            -        (1,619) 
Transportation costs                             (541)            -              - 
Australian Government JobKeeper 
 scheme                                            196            -            600 
 
Adjusted production costs                       50,636       51,305         96,704 
                                           -----------  -----------  ------------- 
 
Total production, barrels                    1,797,989    2,205,042      4,186,478 
 
Operating costs per barrel                       28.16        23.27          23.10 
                                           ===========  ===========  ============= 
 

(1) Lease payments related to operating activities are lease payments considered to be operating costs in nature, including leased helicopters for transporting offshore crews, and the Dampier Spirit FSO rental fees prior to the lease termination in September 2020. The lease payments are added back to reflect the true cost of production.

(2) Movement in oil inventories are added back to the calculation to match the full cost of production with the associated production volumes.

(3) Workover costs are excluded from opex/bbl so as to enhance comparability. The frequency of workovers can vary significantly, across reporting periods, particularly at Stag.

(4) Write down of oil inventories in H1 2020 is a non-cash adjustment based on the requirements of IAS 2 Inventories to reflect the closing inventories being recorded at the lower of cost or net realisable value. It is not considered a production cost.

(5) A portion of the net impact from foreign exchange hedging instruments in 2020 was apportioned to production costs, based on the Group's actual local currency expenditure during the hedging period.

(6) Other income represents the rental income from a helicopter rental contract (a right-of-use asset) to a third party.

(7) Non-recurring repair and maintenance costs in 2020 relates to costs associated with Cyclone Damien.

Adjusted EBITDAX

Adjusted EBITDAX is a non-IFRS measure which does not have a standardised meaning prescribed by IFRS. This non-IFRS measure is included because management uses the information to analyse cash generation and financial performance of the Group.

Adjusted EBITDAX is defined as profit from continuing activities before income tax, finance costs, interest income, DD&A, other financial gains and exploration.

The calculations of adjusted EBITDAX are as follow:

 
                                     Six months   Six months   Twelve months 
                                          ended        ended           ended 
                                        30 June      30 June     31 December 
   USD'000                                 2021         2020            2020 
 
 Revenue                                138,158      115,669         217,938 
 Production costs                      (62,492)     (44,466)       (105,338) 
 Staff costs                           (12,067)     (11,425)        (21,903) 
 Impairment of assets                         -            -        (50,455) 
 Other expenses                        (12,501)     (16,642)        (26,918) 
 Other income, excluding interest 
  income                                  3,643       11,075          26,119 
 Other financial gains                        -          359             359 
                                    -----------  -----------  -------------- 
 
 Unadjusted EBITDAX                      54,741       54,570          39,802 
 
 Non-recurring 
 Net loss/(gain) from oil 
  price derivatives                       4,633     (23,695)        (30,889) 
 Impairment of assets                         -            -          50,455 
 Non-recurring opex(1)                    1,574        3,311           8,270 
 Net litigation income                        -      (2,295)         (3,005) 
 Rig contract deferred costs                  -        3,000           3,000 
 Gain on contingent consideration             -        (359)           (359) 
 Gain from termination of 
  FSO lease                                   -            -         (6,429) 
 Others(2)                                4,231        2,074           1,737 
                                    -----------  -----------  -------------- 
 
                                         10,438     (17,964)          22,780 
                                    -----------  -----------  -------------- 
 
 Adjusted EBITDAX                        65,179       36,606          62,582 
                                    ===========  ===========  ============== 
 

(1) Includes one-off major maintenance/well intervention activities, in particular the workover campaigns at Skua 10, Skua 11 during H1 2021 and H3 in 2020, as well as other non-recurring production expenditures such as the repair and maintenance costs associated with weather downtime in 2020.

(2) Includes Maari transition team costs, Australian Government JobKeeper scheme, business development and corporate re-organisation costs, as well as Montara seismic acquisition costs associated with the non-licence area and gain on contingent consideration in 2020.

Outstanding debt

Total borrowings, as recorded in the Group's consolidated statement of financial position, represents the carrying amount of the Group's interest bearing financial indebtedness, measured at amortised cost pursuant to IFRS 9 Financial Instruments.

Outstanding debt is a non-IFRS measure which does not have a standardised meaning prescribed by IFRS. Management uses this measure to manage the capital structure, and make adjustments to it, based on the funds available to the Group. Outstanding debt is defined as long and short-term interest bearing debt, with effective interest method financing costs added back (i.e. excluded), and excluding derivatives.

As at 30 June 2021, the Group has no outstanding interest bearing financial indebtedness of any kind, following the final scheduled repayment of the 2018 reserves based loan at the end of Q1 2021.

 
                                 30 June    30 June  31 December 
    USD'000                         2021       2020         2020 
-----------------------------   --------   --------  ----------- 
 
Short term borrowing                     -    25,053        7,296 
Add back: effective interest 
 method financing costs                 -       521           90 
                                ---------  --------  ----------- 
 
Outstanding debt                         -    25,574        7,386 
                                 =========  ========  =========== 
 

Net cash

Net cash is a non-IFRS measure which does not have a standardised meaning prescribed by IFRS. Management uses this measure to analyse the financial strength of the Group. The measure is used to ensure capital is managed effectively in order to support its ongoing operations, and to raise additional funds, if required.

 
                              30 June     30 June  31 December 
    USD'000                      2021        2020         2020 
--------------------------   --------  ----------  ----------- 
 
Outstanding debt                    -    (25,574)      (7,386) 
Cash and cash equivalents      47,291      95,457       80,996 
Restricted cash                 1,000       8,398        8,445 
                             --------  ----------  ----------- 
 
Net cash                       48,291      78,281       82,055 
                             ========  ==========  =========== 
 

Net cash is defined as the sum of cash and cash equivalents less outstanding debt. Net cash as at 30 June 2021 excludes a Montara June lifting of US$46.1 million, the proceeds of which were received in July 2021 (by comparison, there were no Montara or Stag liftings in December 2020 or June 2020). The net cash as at 30 June 2020 included the minimum working capital balance of US$15.0 million required under the Group's RBL, and restricted cash of US$8.4 million in the RBL debt service reserve account, less outstanding debt. The restricted cash of US$1.0 million as at 30 June 2021 represents a cash collateralised bank guarantee placed with the Indonesian regulator with respect to a joint study agreement entered into by the Group in Indonesia. The bank guarantee was released in August 2021.

2021 PRINCIPAL FINANCIAL RISKS AND UNCERTAINTIES

The Group manages principal risks and uncertainties via its risk management framework. The Group is exposed to a variety of political, technological, environmental, operational and financial risks which are monitored and/or mitigated to acceptable levels.

The Group's risk management framework provides a systematic process for the identification of the principal risks which have the possibility of impacting the Group's strategic objectives. The board regularly reviews the principal risks and defines corporate targets based on acceptable levels of risk. The board assesses material risks quarterly with a full review of the risk matrix at least twice per year.

Details of the principal risks and uncertainties facing the Group as at 30 June 2021 remain unchanged from the risks disclosed in the 2020 Annual Report pages 32 to 34. The Group's risk mitigation activities also remain unchanged.

GOING CONCERN

The directors have adopted the going concern basis in preparing these unaudited condensed consolidated interim financial statements, having considered the principal financial risks and uncertainties of the Group.

The directors believe that the Group is well placed to manage its financing and other business risks satisfactorily. The directors have a reasonable expectation that the Group will have adequate resources to continue in operation for at least 12 months from the date of these unaudited condensed consolidated interim financial statements. They therefore consider it appropriate to adopt the going concern basis of accounting in preparing these financial statements.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors confirm that to the best of their knowledge:

a. the condensed consolidated interim set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting ;

b. the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

c. the interim management report includes a true and fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

By order of the Board,

Paul Blakeley Dan Young

Executive Director Executive Director

President & Chief Executive Officer Chief Financial Officer

9 September 2021 9 September 2021

Cautionary statements

This announcement may contain certain forward-looking statements with respect to the Company's expectations and plans, strategy, management's objectives, future performance, production, reserves, costs, revenues and other trend information. These statements are made by the Company in good faith based on the information available at the time of this announcement, but such statements should be treated with caution due to inherent risks and uncertainties. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that may occur in the future. There are a number of factors which could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. The statements have been made with reference to forecast price changes, economic conditions and the current regulatory environment. Nothing in this announcement should be construed as a profit forecast. Past share performance cannot be relied upon as a guide to future performance. The Company does not assume any obligation to publicly update the information, except as may be required pursuant to applicable laws.

The oil, natural gas and natural gas liquids information in this announcement has been prepared in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities and the Canadian Oil and Gas Evaluation Handbook.

A barrel of oil equivalent ("boe") is determined by converting a volume of natural gas to barrels using the ratio of six thousand cubic feet ("mcf") to one barrel. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilising a conversion on a 6:1 basis may be misleading as an indication of value.

The technical information contained in this announcement has been prepared in accordance with the June 2018 guidelines endorsed by the Society of Petroleum Engineers, World Petroleum Congress, American Association of Petroleum Geologists and Society of Petroleum Evaluation Engineers Petroleum Resource Management System.

Henning Hoeyland of Jadestone Energy plc, Group Subsurface Manager with a Masters degree in Petroleum Engineering, and who is a member of the Society of Petroleum Engineers and has been involved in the energy industry for more than 19 years, has read and approved the technical disclosure in this regulatory announcement.

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No. 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

for the six months ended 30 June 2021

 
                                               Six months   Six months   Twelve months 
                                                    ended        ended        ended 31 
                                                  30 June      30 June        December 
                                                     2021         2020            2020 
                                                Unaudited    Unaudited         Audited 
                                       Notes      USD'000      USD'000         USD'000 
------------------------------------  ------  -----------  -----------  -------------- 
 
 Consolidated statement 
  of profit or loss 
 Revenue                                          138,158      115,669         217,938 
 Production costs                        6       (62,492)     (44,466)       (105,338) 
 Depletion, depreciation 
  and amortisation                       6       (39,697)     (39,230)        (84,642) 
 Staff costs                                     (12,067)     (11,425)        (21,903) 
 Other expenses                          6       (12,501)     (16,642)        (26,918) 
 Impairment of assets                    7              -            -        (50,455) 
 Other income                                       3,681       15,356          26,376 
 Finance costs                           8        (3,934)      (6,834)        (12,655) 
 Other financial gains                                  -          359             359 
                                              -----------  -----------  -------------- 
 
 Profit/(Loss) before tax                          11,148       12,787        (57,238) 
 Income tax expense                      9        (8,653)      (7,427)         (2,940) 
                                              -----------  -----------  -------------- 
 
 Profit/(Loss) for the period/year                  2,495        5,360        (60,178) 
                                              ===========  ===========  ============== 
 
 Earnings/(Loss) per ordinary 
  share 
 Basic and diluted (US$)                10           0.01         0.01          (0.13) 
                                              ===========  ===========  ============== 
 
 Consolidated statement 
  of comprehensive 
  Income 
 Profit/(Loss) for the period/year                  2,495        5,360        (60,178) 
 
 Other comprehensive income/(loss) 
 Items that may be reclassified 
  subsequently 
  to profit or loss: 
  Gain on unrealised cash 
   flow hedges                                          -       26,765          26,093 
  Hedging gain reclassified 
   to profit or loss                                    -     (23,697)        (31,364) 
                                              -----------  -----------  -------------- 
 
                                                        -        3,068         (5,271) 
 Tax (expense)/credit relating 
  to 
  components of other comprehensive 
  income/(loss)                                         -        (921)           1,583 
                                              -----------  -----------  -------------- 
 
 Other comprehensive income/(loss)                      -        2,147         (3,688) 
                                              -----------  -----------  -------------- 
 
 Total comprehensive income/(loss) 
  for the 
  period/year                                       2,495        7,507        (63,866) 
                                              ===========  ===========  ============== 
 

Condensed Consolidated Statement of Financial Position as at 30 June 2021

 
                                               30 June         30 June        31 December 
                                                  2021            2020               2020 
                                             Unaudited       Unaudited            Audited 
                                     Notes     USD'000         USD'000            USD'000 
----------------------------------  ------  ----------  --------------  ----------------- 
 
 Assets 
 
 Non-current assets 
 Intangible exploration 
  assets                              11        96,443         135,105            100,670 
 Oil and gas properties               12       303,625         347,829            317,676 
 Plant and equipment                  12         1,584           1,680              1,652 
 Right-of-use assets                  12        18,358          51,070             23,673 
 Other receivables                    13         4,451               -              4,404 
 Restricted cash                                     -          10,000                  - 
 Deferred tax assets                            16,318          16,535             19,727 
                                            ----------  --------------  ----------------- 
 
 Total non-current assets                      440,779         562,219            467,802 
                                            ----------  --------------  ----------------- 
 
 Current assets 
 Inventories                                    34,812          46,399             45,361 
 Trade and other receivables          13        63,135          12,637              7,110 
 Derivative financial instruments     19             -          10,417                  - 
 Restricted cash                                 1,000           8,398              8,445 
 Cash and cash equivalents                      47,291          95,457             80,996 
                                            ----------  --------------  ----------------- 
 
 Total current assets                          146,238         173,308            141,912 
                                            ----------  --------------  ----------------- 
 
 Total assets                                  587,017         735,527            609,714 
                                            ==========  ==============  ================= 
 
 Equity and liabilities 
 
 Equity 
 
 Capital and reserves 
 Share capital                        14           392         466,573            466,979 
 Merger reserve                       15       146,269               -                  - 
 Share based payments reserve                   25,625          24,492             24,985 
 Hedging reserve                                     -           5,835                  - 
 Accumulated losses                           (12,710)       (263,291)          (331,322) 
                                            ----------  --------------  ----------------- 
 
 Total equity                                  159,576         233,609            160,642 
                                            ----------  --------------  ----------------- 
 
 Non-current liabilities 
 Provisions                           16       290,693         283,194            288,224 
 Lease liabilities                               9,086          33,881             13,305 
 Tax liabilities                                     -               -             26,896 
 Deferred tax liabilities                       54,564          63,155             58,229 
                                            ----------  --------------  ----------------- 
 
 Total non-current liabilities                 354,343         380,230            386,654 
                                            ----------  --------------  ----------------- 
 
 
 
                                               30 June         30 June        31 December 
                                                  2021            2020               2020 
                                             Unaudited       Unaudited            Audited 
                                     Notes     USD'000         USD'000            USD'000 
----------------------------------  ------  ----------  --------------  ----------------- 
 
 Current liabilities 
 Borrowings                           17             -          25,053              7,296 
 Lease liabilities                              11,625          20,420             12,478 
 Trade and other payables             18        22,760          22,574             32,192 
 Provisions                           16         3,091           1,705              4,558 
 Derivative financial instruments     19             -               -                471 
 Tax liabilities                                35,622          51,936              5,423 
                                            ----------  --------------  ----------------- 
 
 Total current liabilities                      73,098         121,688             62,418 
                                            ----------  --------------  ----------------- 
 
 Total liabilities                             427,441         501,918            449,072 
                                            ----------  --------------  ----------------- 
 
 Total equity and liabilities                  587,017         735,527            609,714 
                                            ==========  ==============  ================= 
 
 

Condensed Consolidated Statement of Changes in Equity as at 30 June 2021

 
                                                 Share 
                                                 based 
                            Share    Merger   payments    Hedging   Accumulated 
                          capital   reserve    reserve    reserve        losses      Total 
                          USD'000   USD'000    USD'000    USD'000       USD'000    USD'000 
---------------------  ----------  --------  ---------  ---------  ------------  --------- 
 
 As at 1 January 
  2020                    466,573         -     23,857      3,688     (268,651)    225,467 
 
 Profit for 
  the period                    -         -          -          -         5,360      5,360 
 Other 
  comprehensive 
  income for 
  the 
  period                        -         -          -      2,147             -      2,147 
                       ----------            ---------  ---------  ------------  --------- 
 
 Total 
  comprehensive 
  income for 
  the 
  period                        -         -          -      2,147         5,360      7,507 
                       ----------  --------  ---------  ---------  ------------  --------- 
 
 Share-based 
  compensation                  -         -        635          -             -        635 
                                   -------- 
 
 As at 30 
  June 2020               466,573         -     24,492      5,835     (263,291)    233,609 
                       ==========  ========  =========  =========  ============  ========= 
 
 As at 1 January 
  2020                    466,573         -     23,857      3,688     (268,651)    225,467 
 
 Loss for 
  the year                      -         -          -          -      (60,178)   (60,178) 
 Other 
  comprehensive 
  loss for 
  the year                      -         -          -    (3,688)             -    (3,688) 
                       ----------            ---------  ---------  ------------  --------- 
 
 Total 
  comprehensive 
  loss for 
  the year                      -         -          -    (3,688)      (60,178)   (63,866) 
                       ----------  --------  ---------  ---------  ------------  --------- 
 
 Dividend 
  paid                          -         -          -          -       (2,493)    (2,493) 
 Share-based 
  compensation                  -         -      1,128          -             -      1,128 
 Shares issued, 
  net of 
  transaction 
  costs                       406         -          -          -             -        406 
                       ----------  --------  ---------  ---------  ------------  --------- 
 
 Total transactions 
  with owners, 
  recognised 
  directly 
  in equity                   406         -      1,128          -       (2,493)      (959) 
                       ----------            ---------  ---------  ------------  --------- 
 
 As at 31 
  December 
  2020                    466,979         -     24,985          -     (331,322)    160,642 
                       ==========  ========  =========  =========  ============  ========= 
 
 
 
 
 
 
                                                 Share 
                                                 based 
                            Share    Merger   payments    Hedging   Accumulated 
                          capital   reserve    reserve   reserves        losses      Total 
                          USD'000   USD'000    USD'000    USD'000       USD'000    USD'000 
---------------------  ----------  --------  ---------  ---------  ------------  --------- 
 
 As at 1 January 
  2021                    466,979         -     24,985          -     (331,322)    160,642 
 
 Profit for 
  the period, 
  representing 
  total 
  comprehensive 
  income for 
  the 
  period                        -         -          -          -         2,495      2,495 
                       ----------  --------  ---------  ---------  ------------  --------- 
 
 Dividend 
  paid                          -         -          -          -       (5,000)    (5,000) 
 Share-based 
  compensation                  -         -        640          -             -        640 
 Shares issued, 
  net of transaction 
  costs                       799         -          -          -             -        799 
 Capital reduction      (467,386)   146,269          -          -       321,117          - 
                       ----------  --------  ---------  ---------  ------------  --------- 
 
 Total transactions 
  with owners, 
  recognised 
  directly 
  in equity             (466,587)   146,269        640          -       316,117    (3,561) 
                       ----------  --------  ---------  ---------  ------------  --------- 
 
 As at 30 
  June 2021                   392   146,269     25,625          -      (12,710)    159,576 
                       ==========  ========  =========  =========  ============  ========= 
 

Condensed Consolidated Statement of Cash Flows for the six months ended 30 June 2021

 
                                               Six months   Six months         Twelve 
                                                    ended        ended   months ended 
                                                  30 June      30 June    31 December 
                                                     2021         2020           2020 
                                                Unaudited    Unaudited        Audited 
                                       Notes      USD'000      USD'000        USD'000 
------------------------------------  ------  -----------  -----------  ------------- 
 
 Operating activities 
 Profit/(Loss) before tax                          11,148       12,787       (57,238) 
 Adjustments for: 
  Depletion, depreciation 
   and amortisation                      6         33,338       30,352         68,414 
  Depreciation of right-of-use          6 / 
   assets                                12         6,359        8,878         16,228 
  Other finance costs                    7          3,784        5,260         10,289 
  Share based payments                                640          635          1,128 
  Provision for doubtful                              201            -              - 
   debts 
  Interest expense                       7            150        1,574          2,366 
  Unrealised foreign exchange 
   (gain)/loss                                      (735)            -          1,495 
  Reversal of fair value                            (471)            -              - 
   loss on oil derivatives 
  Interest income                                    (38)        (251)          (257) 
  Write down of inventories                             -          695              - 
  Loss on ineffective hedge 
   recycled to profit 
   or loss                                              -            2              4 
  Fair value gain on foreign 
   exchange forward 
   Contracts                                            -      (2,076)              - 
  Change in Stag FSO provision                          -        (443)        (5,047) 
  Decrease in fair value 
   of Montara contingent 
   Payments                                             -        (359)          (359) 
  Impairment of intangible 
   exploration assets                    7              -            -         50,455 
  Fair value loss on oil 
   derivatives                                          -            -            471 
  Inventories written off                               -            -            173 
  Provision of slow moving 
   inventories                                          -            -            143 
  Gain from termination of 
   right-of-use asset                                   -            -        (1,382) 
 
 Operating cash flows before 
  movements in 
  working capital                                  54,376       57,054         86,883 
 
 (Increase)/Decrease in trade 
  and other 
  receivables                                    (53,777)       29,646         35,560 
 Decrease/(Increase) in inventories                 5,719     (10,234)       (14,071) 
 (Decrease)/Increase in trade 
  and other 
  payables                                        (5,196)     (10,163)          3,736 
                                              -----------  -----------  ------------- 
 
 Cash generated from operations                     1,122       66,303        112,108 
 
 Interest paid                                      (768)      (1,110)        (1,542) 
 Tax paid                                         (8,004)      (3,260)       (25,969) 
                                              -----------  -----------  ------------- 
 
 Net cash (used in)/generated 
  from operating 
  activities                                      (7,650)       61,933         84,597 
                                              -----------  -----------  ------------- 
 
 
 
 
                                               Six months   Six months         Twelve 
                                                    ended        ended   months ended 
                                                  30 June      30 June    31 December 
                                                     2021         2020           2020 
                                                Unaudited    Unaudited        Audited 
                                       Notes      USD'000      USD'000        USD'000 
------------------------------------  ------  -----------  -----------  ------------- 
 
 Investing activities 
 Net cash outflows on acquisition 
  of Lemang 
  PSC                                                   -            -       (11,959) 
 Payment for oil and gas 
  properties                            12       (14,173)      (1,750)        (4,732) 
 Payment for plant and equipment        12          (216)        (106)          (473) 
 Payment for intangible exploration 
  assets                                11        (1,476)     (11,129)       (14,253) 
 Transfer from debt service 
  reserve account                                   7,445        5,087          5,040 
 Interest received                                     38          251            257 
                                              -----------  -----------  ------------- 
 
 Net cash used in investing 
  activities                                      (8,382)      (7,647)       (26,120) 
                                              -----------  -----------  ------------- 
 
 Financing activities 
 Net proceeds from issuance 
  of shares                                           799            -            406 
 Release of deposit for bank 
  guarantee                                             -            -         10,000 
 Dividends paid                                   (5,000)            -        (2,493) 
 Repayment of borrowings                          (7,356)     (24,570)       (42,766) 
 Repayment of lease liabilities                   (6,116)     (10,193)       (18,562) 
 
 Net cash used in financing 
  activities                                     (17,673)     (34,763)       (53,415) 
                                              -----------  -----------  ------------- 
 
 Net (decrease)/increase 
  in cash and cash 
  equivalents                                    (33,705)       19,523          5,062 
 
 Cash and cash equivalents 
  at beginning of the 
  period/year                                      80,996       75,934         75,934 
                                              -----------  -----------  ------------- 
 
 Cash and cash equivalents 
  at end of the 
  period/year                                      47,291       95,457         80,996 
                                              ===========  ===========  ============= 
 

Explanation Notes to the Condensed Consolidated Interim Financial Statements

for the six months ended 30 June 2021

   1.    GENERAL INFORMATION 

Jadestone Energy plc (the "Company" or "Jadestone") is an oil and gas company incorporated in England and Wales. The Company was incorporated on 22 January 2021, company registration number 13152520. The Company became the ultimate parent company on 23 April 2021, following the completion of a corporate reorganisation (see below).

The Company's shares are traded on AIM under the symbol "JSE".

The financial statements are expressed in United States Dollars.

The Company and its subsidiaries (the "Group") are engaged in production, development, exploration and appraisal activities in Australia, Malaysia, Vietnam, Indonesia and the Philippines. The Group's producing assets during H1 2021 were in the Vulcan (Montara) and Carnarvon (Stag) basins, offshore Western Australia.

The Company's head office is located at 3 Anson Road, #13-01 Springleaf Tower, Singapore 079909. The registered office of the Company is Suite 1, 3rd Floor, 11 - 12 St James's Square, London SW1Y 4LB.

These financial statements were authorised for issue and release by the Company's board of directors on 9 September 2021, on the recommendation of the audit committee.

   2.    DIVIDS 

On 11 June 2021, the directors declared a second interim 2020 dividend of 1.08 US cents/share, equivalent to 0.77 GB pence/share, based on an exchange rate of 0.7087, equivalent to a total distribution of US$5.0 million, or US$7.5 million in respect of total 2020 dividends. The dividend was paid on 30 June 2021.

On 9 September 2021, the directors declared a 2021 interim dividend of 0.59 US cents/share (or equivalent to 0.43 GB pence/share based on the current spot exchange rate of 0.7257 ), equivalent to a total distribution of US$ 2.8 million. The dividend will be paid on a gross basis, in US dollars.

   3.    SIGNIFICANT EVENTS DURING THE PERIOD 

Corporate reorganisation

The Company completed an internal reorganisation on 23 April 2021, with Jadestone Energy plc becoming the ultimate holding company of the Jadestone group of companies. The shares of Jadestone Energy Inc., the former ultimate holding company, have been replaced on a one-for-one basis with shares of Jadestone Energy plc. Following the completion of the internal reorganisation, Jadestone Energy plc was admitted to AIM for trading on 26 April 2021 (Jadestone Energy Inc. shares ceased trading on 23 April 2021).

The internal reorganisation has not resulted in a change in control in the ultimate holding company of the Group and, accordingly, has not resulted in a change in control in the ultimate shareholding in any of the companies or assets of the Group. Further, the internal reorganisation has not resulted in a change in the management of any of the Group's companies or assets.

Acquisition of SapuraOMV Peninsular Malaysia assets

On 30 April 2021, the Group executed a sale and purchase agreement with SapuraOMV Upstream Sdn. Bhd. ("SapuraOMV") to acquire SapuraOMV's Peninsular Malaysia assets (the "PenMal Assets"), for a total cash consideration of US$20.0 million, which included a headline price of US$9.0 million plus further working capital adjustments of US$11.0 million, and subject to certain subsequent contingent payments related to the price of average annual Dated Brent throughout 2021 and 2022. The acquisition was completed on 1 August 2021.

The economic effective date of the acquisition was 1 January 2021, meaning the Group is entitled to all net cash generated from the PenMal Assets from 1 January 2021 to 31 July 2021. As a result, at completion the Group obtained cash held by SapuraOMV Upstream (PM) Inc. of US$29.2 million, resulting in a net cash receipt of US$9.2 million for the acquisition.

The PenMal Assets comprise four licences, two of which are operated by the Group. These consist of a 70% operated interest in the PM329 PSC, containing the East Piatu field, and a 60% operated interest in the PM323 PSC, which contains the East Belumut, West Belumut and Chermingat fields. The other two licences consist of 50% non-operated working interests in the PM318 and AAKBNLP PSCs.

Oil price commodity contracts

On 16 February 2021, the Group entered into commodity swap contracts to hedge 31% of its planned production volumes from April to June 2021, to provide downside oil price protection during the period leading into the 2021 offshore Australia capital programme. The average swap price, referenced to Dated Brent, was set at US$61.40/bbl.

   4.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

BASIS OF PREPARATION

These unaudited condensed consolidated interim financial statements (the "financial statements") are prepared in accordance with International Accounting Standard IAS 34 Interim Financial Reporting, as adopted by the European Union, on a going concern basis under the historical cost convention.

These unaudited condensed consolidated interim financial statements do not comprise statutory accounts within the meaning of section 435 of the Companies Act 2006 ("the Act"). They do not contain all disclosures required by IFRS for annual financial statements and should be read in conjunction with Jadestone's audited consolidated financial statements for the year ended 31 December 2020. Jadestone's auditors reported on those accounts; their report was unqualified and did not draw attention to any matters by way of emphasis.

These financial statements have been prepared on an historical cost basis, except for financial instruments classified as financial instruments at fair value, which are stated at their fair values, and operating leases which are stated at the present value of future cash payments.

In addition, these financial statements have been prepared using the accrual basis of accounting.

Common control transaction

As disclosed in Note 3, the Company has completed an internal reorganisation, with the shares of Jadestone Energy Inc. having been replaced on a one-for-one basis with shares of Jadestone Energy plc. Accordingly, Jadestone Energy plc was admitted to AIM for trading on 26 April 2021. There is no change in control in the ultimate holding company of the Group arising from the completion of the internal reorganisation.

IFRS 3 Business Combinations does not prescribe the presentation and disclosure requirements under common control transaction. The Group has chosen to issue these unaudited condensed consolidated interim financial statements under the name of Jadestone Energy plc , as if they are a continuation of the financial statements of Jadestone Energy Inc. and Jadestone Energy plc had been in existence throughout the reported financial period. The following have been reflected in these unaudited condensed consolidated interim financial statements in relation to the common control transaction:

a) the asset and liabilities of Jadestone Energy plc and Jadestone Energy Inc. ("JEI") Group have been recognised at their book values immediately prior to the internal reorganisation;

b) the pre-internal reorganisation accumulated losses recognised in these consolidated financial statements are those of JEI Group;

c) the amount recognised as issued equity instruments in these consolidated financial statements is the issued and paid-up share capital share capital of JEI immediately before the internal reorganisation;

d) the equity structure appearing in these consolidated financial statements (i.e. the number and type of equity instruments issued) reflects the equity structure of the Company; and

e) the comparative information presented in these consolidated financial statements is that of JEI Group.

GOING CONCERN

The directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the condensed consolidated interim financial statements.

RECLASSIFICATION OF COMPARATIVE FIGURES

Certain comparative figures in the unaudited financial statements of the Group for the period ended 30 June 2020 have been reclassified to conform with the audited consolidated financial statements for the year ended 31 December 2020, along with the presentation in the current period.

The reclassifications made in the statement of profit or loss are mainly related to the litigation income and expenses in relation to SC56, which are now present on a gross basis under other income and other expenses, respectively. These reclassifications were made to better reflect the nature of the respective items in the Group's financial statements.

Adoption of new and revised standards

New and amended IFRS standards that are effective for the current period

The Group has applied the following amendment that is relevant to the Group for the first time with effect from 1 January 2021.

   -          IFRS 16 COVID-19 Related Rent Concessions amendments 

The amendment is effective for annual periods beginning on 1 June 2020 and generally requires prospective application.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group's accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.

The key judgements and sources of estimation uncertainty remain the same as disclosed in Jadestone's audited consolidated financial statements for the year ended 31 December 2020 .

6. OPERATING COSTS

 
                                   Six months   Six months   Twelve months 
                                        ended        ended           ended 
                                      30 June      30 June     31 December 
                                         2021         2020            2020 
                                    Unaudited    Unaudited         Audited 
                                      USD'000      USD'000         USD'000 
-------------------------------   -----------  -----------  -------------- 
 
 Production costs                      61,951       44,466         105,338 
 Transportation costs                     541            -               - 
                                  -----------  -----------  -------------- 
 
 Total production costs                62,492       44,466         105,338 
                                  ===========  ===========  ============== 
 
 Depletion and amortisation 
  of oil and 
  gas properties                       33,054       30,146          67,813 
 Depreciation of plant 
  equipment and 
  right-of-use assets                   6,643        9,084          16,829 
                                  -----------  -----------  -------------- 
 
 Total depletion, depreciation 
  and 
  amoritisation                        39,697       39,230          84,642 
                                  ===========  ===========  ============== 
 
 Corporate costs                       12,230       15,506          25,471 
 Exploration expenses                       -          972             972 
 Other operating expenses                 271          164             475 
                                  -----------  -----------  -------------- 
 
 Total other expenses                  12,501       16,642          26,918 
                                  ===========  ===========  ============== 
 
   7.    IMPAIRMENT OF ASSETS 
 
                               Six months     Six months           Twelve 
                                    ended          ended     months ended 
                                  30 June        30 June      31 December 
                                     2021           2020             2020 
                                Unaudited      Unaudited          Audited 
                                  USD'000        USD'000          USD'000 
--------------------------   ------------   ------------   -------------- 
 
 Impairment of intangible 
  exploration 
  assets                                  -             -           50,455 
                              =============   ===========   ============== 
 
   8.    FINANCE COSTS 
 
                          Six months   Six months          Twelve 
                               ended        ended    months ended 
                             30 June      30 June     31 December 
                                2021         2020            2020 
                           Unaudited    Unaudited         Audited 
                             USD'000      USD'000         USD'000 
----------------------   -----------  -----------  -------------- 
 
 Interest expense and 
  others                       1,465        3,671           6,292 
 Accretion expense             2,469        3,163           6,363 
 
                               3,934        6,834          12,655 
                         ===========  ===========  ============== 
 
   9.    INCOME TAX EXPENSE 

The Company is tax resident in Singapore and therefore is subjected to Singapore's domestic corporate tax rate of 17%. The subsidiaries are resident for tax purposes in the territories in which they operate.

The current period tax charge of US$8.7 million (H1 2020: US$ 7.4 million) was generated through operations in Australia, including PRRT at 40% and a corporate tax rate of 30%. No other locations generated taxable profits.

Current income tax expense of US$8.9 million (H1 2020: US$10.5 million) consists of corporate income tax expense of US$11.4 million, offset by a PRRT tax credit of US$2.5 million, with a PRRT refund received in August, as annual deductible cash payments exceeded assessable cash receipts.

A deferred tax credit of US$0.2 million (H1 2020: US$3.1 million) has arisen from timing differences between the tax and accounting treatment of depreciation of oil and gas properties.

10. PROFIT PER ORDINARY SHARE

The calculation of the basic and diluted profit per share is based on the following data:

 
                                  Six months   Six months          Twelve 
                                       ended        ended    months ended 
                                     30 June      30 June     31 December 
                                        2021         2020            2020 
                                   Unaudited    Unaudited         Audited 
                                     USD'000      USD'000         USD'000 
------------------------------   -----------  -----------  -------------- 
 
 Profit for the purposes 
  of basic and 
  diluted per share, being 
  the net profit 
  for the period attributable 
  to equity 
  holders of the Company               2,495        5,360        (60,178) 
                                 ===========  ===========  ============== 
 
 
                                   Six months    Six months          Twelve 
                                        ended         ended    months ended 
                                      30 June       30 June     31 December 
                                         2021          2020            2020 
                                    Unaudited     Unaudited         Audited 
                                       Number        Number          Number 
------------------------------   ------------  ------------  -------------- 
 
 Weighted average number 
  of ordinary 
  shares for the purposes 
  of basic EPS                    462,894,872   461,042,811     463,553,521 
 Effect of dilutive potential 
  ordinary 
  shares - share options            6,100,692     3,990,155               - 
                                 ------------  ------------  -------------- 
 
 Weighted average number 
  of ordinary 
  shares for the purposes 
  of diluted EPS                  468,995,564   465,032,966     463,553,521 
                                 ============  ============  ============== 
 

The calculation of diluted EPS for the six months ended 30 June 2021 includes 6,100,692 of weighted average dilutive ordinary shares available for exercise from in-the-money vested options (six months ended 30 June 2020: 3,990,155). Additionally, 407,842 of weighted average potential ordinary shares available for exercise, are excluded as they are out-of-the-money (six months ended 30 June 2020: 607,821).

For the full year ended 31 December 2020, there were 4,679,402 of potential ordinary shares associated with share options which were anti-dilutive.

 
                             Six months  Six months         Twelve 
                                  ended       ended   months ended 
                                30 June     30 June    31 December 
                                   2021        2020           2020 
Earnings/(Loss) per share     Unaudited   Unaudited        Audited 
 (US$) 
 
 
  *    Basic                       0.01        0.01         (0.13) 
                             ==========  ==========  ============= 
 
 
  *    Diluted                     0.01        0.01         (0.13) 
                             ==========  ==========  ============= 
 

11. INTANGIBLE EXPLORATION ASSETS

 
                                             Total 
                                           USD'000 
---------------------------------------  --------- 
 
 Cost 
 As at 1 January 2020                      117,440 
 Additions                                  17,665 
                                         --------- 
 
 As at 30 June 2020                        135,105 
 Acquisition of Lemang PSC                  14,825 
 Additions                                   1,195 
 
 As at 31 December 2020/1 January 2021     151,125 
 Additions                                   1,832 
 Reversal                                  (6,059) 
 Written off                              (50,455) 
                                         --------- 
 
 As at 30 June 2021                         96,443 
                                         ========= 
 
 Impairment 
 As at 1 January 2020/30 June 2020               - 
 Additions                                  50,455 
                                         --------- 
 
 As at 31 December 2020/1 January 2021      50,455 
 Written off                              (50,455) 
                                         --------- 
 
 As at 30 June 2021                              - 
                                         ========= 
 
 Net book value 
 As at 30 June 2020 (unaudited)            135,105 
                                         ========= 
 
 As at 31 December 2020 (audited)          100,670 
                                         ========= 
 
 As at 30 June 2021 (unaudited)             96,443 
                                         ========= 
 

In November 2020, Jadestone and Total voluntarily surrendered their entire combined 100% interest in SC56 to the Philippines Department of Energy ("DOE"). As a result, the SC56 carrying value of US$50.4 million was impaired in Q4 2020. The DOE acknowledged the relinquishment in February 2021 and the exit obligation terms were agreed in June 2021. Accordingly, the carrying value was formally written off in Q2 2021.

The US$6.0 million reversal in H1 2021 relates to an overprovision of costs owed to a third party contractor joint venture. The overprovision was identified following an assessment of actual costs incurred by the third party contractor.

   12.          PROPERTY, PLANT AND EQUIPMENT 
 
                                          Oil and            Plant   Right-of-use 
                                   gas properties    and equipment         assets       Total 
                                          USD'000          USD'000        USD'000     USD'000 
------------------------------   ----------------  ---------------  -------------  ---------- 
 
 Cost 
 As at 1 January 2020                     492,985            4,139         74,663     571,787 
 Additions                                  1,750              106            760       2,616 
 Termination                                    -                -          (307)       (307) 
 Adjustment                                     -                -          (394)       (394) 
                                 ----------------  ---------------  -------------  ---------- 
 
 As at 30 June 2020                       494,735            4,245         74,722     573,702 
 Changes in asset restoration 
  obligations                               (725)                -              -       (725) 
 Additions                                  2,982              367            131       3,480 
 Termination                                    -                -       (29,339)    (29,339) 
 
 As at 31 December 
  2020/ 
  1 January 2021                          496,992            4,612         45,514     547,118 
 Additions                                 14,173              216          1,044      15,433 
 
 As at 30 June 2021                       511,165            4,828         46,558     562,551 
                                 ================  ===============  =============  ========== 
 
 Accumulated depletion, 
  depreciation and 
  amortisation 
 As at 1 January 2020                     111,311            2,359         14,876     128,546 
 Charge for the period                     35,595              206          8,878      44,679 
 Termination                                    -                -          (102)       (102) 
                                 ----------------  ---------------  -------------  ---------- 
 
 As at 30 June 2020                       146,906            2,565         23,652     173,123 
 Charge for the period                     32,410              395          7,350      40,155 
 Termination                                    -                -        (9,161)     (9,161) 
 
 As at 31 December 
  2020/ 
  1 January 2021                          179,316            2,960         21,841     204,117 
 Charge for the period                     28,224              284          6,359      34,867 
 
 As at 30 June 2021                       207,540            3,244         28,200     238,984 
 
 Net book value 
 As at 30 June 2020 
  (unaudited)                             347,829            1,680         51,070     400,579 
 
 As at 31 December 
  2020 (audited)                          317,676            1,652         23,673     343,001 
 
 As at 30 June 2021 
  (unaudited)                             303,625            1,584         18,358     323,567 
 
   13.          TRADE AND OTHER RECEIVABLES 
 
                                    30 June    30 June  31 December 
                                       2021       2020         2020 
                                  Unaudited  Unaudited      Audited 
                                    USD'000    USD'000      USD'000 
 
Non-current 
VAT receivables                       4,451          -        4,404 
 
Current 
Trade receivables                    46,291          1          106 
Prepayments                           6,093      2,208        2,012 
Other receivables and deposits        6,621      5,759        4,273 
PRRT receivables                      2,496      3,883            - 
GST/VAT receivables                   1,634        786          719 
 
                                     63,135     12,637        7,110 
 
                                     67,586     12,637       11,514 
 
Provision for doubtful debts 
At beginning of period/year               -          -            - 
Addition                                201          -            - 
 
At end of period/year                   201          -            - 
 

A trade receivable of US$46.1 million arising from a June 2021 Montara lifting was received in July 2021.

   14.          SHARE CAPITAL 

Authorised ordinary shares

Unlimited number of ordinary voting shares with par value of at GBP0.001.

 
                                         No. of shares      USD'000 
 
Issued and fully paid 
As at 1 January 2020/30 June 2020          461,042,811      466,573 
Issued during the period                       800,000          406 
                                                        ----------- 
 
As at 31 December 2020/1 January 2021      461,842,811      466,979 
Issued during the period                     1,856,666          799 
Capital reduction, at GBP0.499 each                  -    (467,386) 
 
As at 30 June 2021                         463,699,477          392 
                                                        =========== 
 

On 4 May 2021, the High Court of Justice, Business and Property Court, Companies Court in England and Wales approved the reduction of share capital of the Company pursuant to section 648 of the Act by cancelling the paid up capital of the Company to the extent of 49.9 pence on each ordinary share of GBP0.50 in the issued share capital of the Company. The effective date of the capital reduction was 6 May 2021.

In the six months ended 30 June 2021, the Group granted to its employees 2.9 million of share options, 1.1 million of performance shares and 0.1 million of restricted share units (H1 2020: 6.5 million of share options; 0.6 million of performance shares and 0.1 million of restricted share units) in respect of achievement of 2020 performance objectives.

   15.          MERGER RESERVE 

The merger reserve arose from the difference between the carrying value and the nominal value of the shares of the Company, following completion of the internal reorganisation (Note 3 and 4).

   16.          PROVISIONS 
 
                                  30 June    30 June  31 December 
                                     2021       2020         2020 
                                Unaudited  Unaudited      Audited 
                                  USD'000    USD'000      USD'000 
 
Non-current 
Asset restoration obligations     286,219    278,543      283,750 
Others                              4,474      4,651        4,474 
 
                                  290,693    283,194      288,224 
 
Current 
Others                              3,091      1,705        4,558 
 
                                  293,784    284,899      292,782 
 
   17.          BORROWINGS 
 
                                       30 June      30 June  31 December 
                                          2021         2020         2020 
                                     Unaudited    Unaudited      Audited 
                                       USD'000      USD'000      USD'000 
 
Current secured borrowings 
Reserves based lending facility                -      25,053        7,296 
 
   18.          TRADE AND OTHER PAYABLES 
 
                       30 June     30 June  31 December 
                          2021        2020         2020 
                     Unaudited   Unaudited      Audited 
                       USD'000     USD'000      USD'000 
 
 
Trade payables           3,377       6,325       10,131 
Other payables           1,662          84        2,004 
Accruals                17,714      16,126       20,047 
GST/VAT payables             7          39           10 
 
                        22,760      22,574       32,192 
 
   19.          DERIVATIVE FINANCIAL INSTRUMENTS 
 
                                                 30 June      30 June  31 December 
                                                    2021         2020         2020 
                                               Unaudited    Unaudited      Audited 
                                                 USD'000      USD'000      USD'000 
                                                                       ----------- 
 
Derivative financial assets/(liabilities) 
Designated as cash flow hedges 
Commodity capped swap                                  -        8,341            - 
                                                                       =========== 
 
Carried at fair value though 
 profit or loss 
Commodity swap                                           -       2,076        (471) 
                                                                        =========== 
 

The fair values of the commodity swap were classified as Level 2 and calculated using market prices that the Group would pay or receive to settle those swap contracts.

   20.          SEGMENT INFORMATION 

Information reported to the Group's Chief Executive Officer (the chief operating decision maker) for the purposes of resource allocation is focused on two reportable/business segments driven by different types of activities within the upstream oil and gas value chain, namely producing assets and secondly development and exploration assets. The geographic focus of the business is on SEA and Australia.

Revenue and non-current assets information based on the geographical location of assets respectively are as follows:

 
                                  Producing    Exploration/ 
                                    assets     Development 
                                  Australia        SEA        Corporate     Total 
                                   USD'000        USD'000      USD'000      USD'000 
 
Six months ended 30 June 2021 (unaudited) 
 
Revenue 
 Liquids revenue                     138,158              -            -    138,158 
 Hedging income                            -              -            -          - 
 
                                     138,158              -            -    138,158 
 
Production costs                    (62,492)              -            -   (62,492) 
DD&A                                (39,261)          (139)        (297)   (39,697) 
Staff costs                          (5,137)        (1,397)      (5,533)   (12,067) 
Other expenses                       (8,807)          (897)      (2,797)   (12,501) 
Other income                           3,257             36          388      3,681 
Finance costs                        (3,907)           (26)          (1)    (3,934) 
 
Profit/(Loss) before tax              21,811        (2,423)      (8,240)     11,148 
 
Additions to non-current 
 assets                               14,971          2,145          196     17,312 
 
Non-current assets                   329,830         93,789          842    424,461 
 
Six months ended 30 June 2020 (unaudited) 
 
Revenue 
 Liquids revenue                      91,970              -            -     91,970 
 Hedging income                       23,699              -            -     23,699 
 
                                     115,669              -            -    115,669 
 
Production costs                    (44,466)              -            -   (44,466) 
DD&A                                (39,036)           (56)        (138)   (39,230) 
Staff costs                          (5,965)          (907)      (4,553)   (11,425) 
Other expenses                       (5,055)        (8,895)      (2,692)   (16,642) 
Other income                           4,269         11,087            -     15,356 
Finance costs                        (6,823)            (1)         (10)    (6,834) 
Other financial gains                    359              -            -        359 
 
Profit/(Loss) before tax              18,952          1,228      (7,393)     12,787 
 
Additions to non-current 
 assets                                7,576         12,288          417     20,281 
 
Non-current assets                   416,276        128,394        1,014    545,684 
 
 
 
                            Producing  Exploration/ 
                              assets    Development 
                            Australia      SEA       Corporate     Total 
                             USD'000      USD'000     USD'000     USD'000 
 
Twelve months ended 31 December 2020 (audited) 
 
Revenue 
 Liquids revenue              186,572             -           -    186,572 
 Hedging income                31,366             -           -     31,366 
 
                              217,938             -           -    217,938 
 
Production costs            (105,338)             -           -  (105,338) 
DD&A                         (84,024)         (110)       (508)   (84,642) 
Staff costs                  (10,029)       (2,228)     (9,646)   (21,903) 
Other expenses               (15,068)       (9,690)     (2,160)   (26,918) 
Impairment of assets                -      (50,455)           -   (50,455) 
Other income                   14,292        12,084           -     26,376 
Finance costs                (12,625)          (29)         (1)   (12,655) 
Other financial gains             359             -           -        359 
 
Profit/(Loss) before tax        5,505      (50,428)    (12,315)   (57,238) 
 
Additions to non-current 
 assets                        11,162        27,706         914     39,782 
 
Non-current assets            349,292        97,838         945    448,075 
 
 

Non-current assets as shown here comprises oil and gas properties, intangible exploration assets, right-of-use assets, other receivables, restricted cash and plant and equipment used in corporate offices. Deferred tax assets are excluded from the segmental note but included in the Group's consolidated statement of financial position.

21. EVENT AFTER THE REPORTING PERIOD

Completion of acquisition of SapuraOMV Peninsular Malaysia assets

On 1 August 2021, all conditions precedent to closing the acquisition of the SapuraOMV Peninsular Malaysia assets were satisfied and the Group proceeded to close the acquisition, including the transfer of operatorship of PM329 PSC and PM323 PSC.

Glossary

 
GBP         British pound sterling 
2P          the sum of proved and probable reserves, reflecting 
             those reserves with 50% probability of quantities 
             actually recovered being equal or greater to the 
             sum of estimated proved plus probable reserves 
2C          best estimate contingent resource, being quantities 
             of hydrocarbons which are estimated, on a given 
             date, to be potentially recoverable from known 
             accumulations but which are not currently considered 
             to be commercially recoverable 
AAKBNLP     Abu, Abu Kecil, Bubu, North Lukut, and Penara oilfields 
AIM         Alternative Investment Market 
API         American Petroleum Institute gravity 
bbl         barrel 
bbls/d      barrels per day 
boe         barrels of oil equivalent 
boe/d       barrels of oil equivalent per day 
bscf        billion standard cubic feet equivalent 
Btu         British thermal unit 
Btu/d       British thermal unit per day 
BBtu/d      Billion Btu/d 
capex       capital expenditures 
CIF         used here to characterise the shipping arrangement 
             typically negotiated for Stag post termination 
             of Dampier Spirit FSO, whereby charges such as 
             cost, insurance and freight are paid by Jadestone 
             while the crude oil is in transit to the buyer 
DD&A        depletion, depreciation and amortisation 
EBITDAX     earnings before interest tax, depreciation, amortisation 
             and exploration 
EPS         earnings per share 
FOB         used here to characterise the shipping arrangement 
             typically negotiated for Montara liftings, and 
             for Stag liftings during the period when the Dampier 
             Spirit FSO was in place, under which liftings were 
             agreed on a free-on-board basis at the offtake 
             hose of the FPSO (Montara)/FSO (Stag) 
FPSO        floating production storage and offloading 
FSO         floating storage and offloading 
GB pence,   Great Britain pence 
 GBp 
GHG         greenhouse gases 
GST         goods and services tax 
IFRS        International Financial Reporting Standards 
JEI         Jadestone Energy Inc. 
mm          million 
mmBtu       million British thermal unit 
opex        operating expenditures 
PRRT        Petroleum Resource Rent Tax 
PSC         production sharing contract 
RBL         reserves based loan 
reserves    hydrocarbon resource that is anticipated to be 
             commercially recovered from known accumulations 
             from a given date forward 
SEA         Southeast Asia 
US$ or USD  United States dollar 
VAT         value-added tax 
 

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END

IR FIFVEARIAIIL

(END) Dow Jones Newswires

September 09, 2021 02:00 ET (06:00 GMT)

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