Jadestone suspends Australian infill drilling

Jadestone Energy Co., Singapore, will defer its planned 2020 infill drilling program in Stag, Skua, and Montara oil fields offshore northwest and northern Australia until 2021 in order to preserve its balance sheet and cash position, and enable it to maximize future returns when the global oil price recovers from its current lows, the company said.

Two development infill wells had been planned for its 100%-owned Stag oil field in the Carnarvon basin off Western Australia in 2020. Also planned were a development well on each of the 100%-owned Montara field and Skua fields in the Timor Sea along with a workover of two wells in the same fields.

The Australian drilling program deferment comes just one month after Jadestone cut its capital expenditure by 50% and deferred its Nam Du and U Minh field development program offshore Vietnam.

Collectively, these measures represent a reduction of 80% of the company’s original 2020 planned spending, resulting in anticipated total capex of $30-35 million in 2020, of which about $15.5 million was spent in the year’s first quarter, including completing the Montara seismic campaign.

With the delay in the Australian infill wells, the company is now targeting a 2020 average production range of 12,000–14,000 bbl/d.

Jadestone said that about one third of its oil production is hedged at $68.46/bbl until Sept. 30.

Despite these changes, the company’s production is still expected to grow by about 25% in 2021 with the addition of the Maari project, offshore New Zealand.