Malcy’s Blog: Flash blog: Afentra, Jadestone.

I’m in town today doing a CEO interview, as usual with a flash blog I will add anything I need to later. 

Afentra

Afentra has announced its unaudited annual results for the year ended 31 December 2024. 

2024 SUMMARY

Key Highlights

•       Azule acquisition: completed in May 2024, increasing interest in Blocks 3/05 (30%) and 3/05A (21.33%).

•       Onshore Kwanza basin: secured Blocks KON15 (45%) and KON19 (45%).

•       2024 Net Average Production: 6,229 bopd

•       Reserve replacement: 140% replacement with year-end 2P reserves of 34.2 mmbo

•       Oil Sales: four crude liftings generating revenue of $180.9 million.

•       Year-End Net Cash Position: $12.6 million with cash balance of $54.8 million.

Financial and Risk Management Highlights

•       Revenue of $180.9 million

•       Year-end cash of $54.8 million; net cash position of $12.6 million.

•       Borrowings of $41.4 million; total debt / adjusted EBITDAX 0.5x.

•       Adjusted EBITDAX of $90.9 million and profit after tax of $49.8 million.

•       Four liftings totaling 2.3 mmbbls, average price of $82.2/bbl

•       Placed 2025 hedge programme with ~68% of sales volumes hedged: combination of $60-65/bbl floors and calls with $80-89/bbl caps.

Operational Highlights

•       Block 3/05 and 3/05A gross average production 21,111 bopd (2023: 20,180 bopd).

•       40 light well interventions (LWIs) delivered 2,000 bopd. Increased programme planned for 2025.

•       Reserve replacement since last CPR of 140% for Block 3/05, as a result of the LWI programme, increased water injection and infrastructure optimisation.

•       Three year re-development plan launched in 2024, $150 million gross (Net: $39 million)[1] invested in production optimisation, life extension and emissions reduction. 2025 spend of $180 million (Net: $54 million).

•       Successful completion of a 21-day maintenance shutdown in October enabled key upgrades to power systems, subsea infrastructure and installation of gas and water metering.

•       Water injection capacity significantly enhanced post shutdown, reaching rates of over 80,000 bwpd. A third pump is scheduled for installation in 2025, targeting water injection rates of 150,000 bwpd.

•       Installation of gas metering to support accurate measurement, flare reduction and export planning.

•       Planning progressed to prepare for first rig related activities in 2026 and 2027.

•       Onshore Kwanza Basin Blocks KON15 and KON19 secured with 45% non-operated interests. Basin-wide eFTG survey commenced in 2024 and is due to complete in 2025.

•       Initiated support for The HALO Trust’s landmine clearance work in Angola.

Post year-end Summary

•       Gross Block 3/05 and Block 3/05A production for Q1 2025 averaged 22,120 bopd (Net: ~6566, bopd).

•       Crude lifting of ~466,000 bbls sold at $74.7/bbl, generating pre-tax sales revenue of $34.8 million.

•       Net cash at end of Q1 2025 of around $9.8m with crude oil stock of around 68,000 bbls.

•       Formal signing of onshore Kwanza block KON 15 on 7th April 2025.

•       Acquired 381,719 shares in the market through Employee Benefit Trust to fulfil recent Executive share awards, thereby avoiding issuance of new shares.

Strategic Focus for 2025

•       Continued focus on value driven M&A in Angola and wider West Africa region.

•       Investments in Block 3/05 and Block 3/05A and active JV partner collaboration to drive:

o  progress infrastructure upgrades, increase water injection rates and deliver well interventions to continue to increase production and improve asset performance.

o  plan for 2026 rig activities to deliver step change in production performance and continue to deliver reserves replacement.

o  continue sustainability initiatives to reduce emissions and deliver gas export.

•       Consolidate position in Onshore Kwanza Basin and complete evaluation of basin potential.

•       Optimise crude offtake, hedging programme, focus on costs and strengthen corporate balance sheet.

•       Continue to purchase shares in the market through Employee Benefit Trust to meet the requirements of the FSP awards due March 2026, of around 6.5 million shares.

Paul McDade, Chief Executive Officer, commented:

“2024 marked a year of transformative growth and strategic progress for Afentra, as we truly established ourselves as an active partner in Angola’s oil and gas industry. With ownership of our offshore assets in place, we were able to embed ourselves operationally, build strong relationships with our joint venture partners, and demonstrate the value we can bring as a technically engaged and commercially disciplined non-operator. Afentra is fully supporting the operator, taking a long-term approach to maximising value from the assets through upgrades to asset integrity, production optimisation, and emissions reduction. We are already seeing tangible results from these redevelopment activities in enhanced production and reserves.

Opening our Luanda office and appointing an Angola-based Country Manager reflect our long-term commitment to the country and its energy sector. Further expanding our footprint, we secured new onshore opportunities through the award of KON15 and KON19 in an under-exploited yet proven hydrocarbon basin.

Importantly, we’ve also transformed our balance sheet-generating strong cash flow and ending the year with a net cash position-laying the foundation for disciplined growth ahead.”

 As always these are backward facing numbers so nothing new, the results were in line with the whisper and again, as always Afentra brings a smile to ones face. Right from the start offshore Angola has been a near perfect delivery of farming-in to a non-operated asset and as CEO McDade says, ‘we fully support the operator’ and have built strong relationships with their JV partners.

Moving forward onshore Angola is getting a great deal of press, Afentra has interesting acreage and if the stories are to be believed it may be an exciting basin to be operating in. Situation normal at Afentra, up with the best in the Bucket List and unlikely to move down the table…

Jadestone

Jadestone has successfully concluded a number of actions to enhance its balance sheet and is undertaking an extensive operating cost review to deliver a resilient business throughout the oil price cycle.

As announced on 16 April 2025, the Group successfully concluded the sale of its Thailand assets, receiving US$39.4 million, with a further US$3.5 million contingent on future licence extensions. This attractive transaction accelerated value and cashflow for Jadestone’s shareholders, resulting in a 44% return on the original acquisition cost in just over two years of ownership. The funds received were partly used to repay debt under the Group’s Reserves-Based Lending facility which, after the conclusion of the March 2025 redetermination, currently has a borrowing base of US$167 million.

The Group has also recently signed a new US$30 million working capital facility with an international bank with a 31 December 2026 maturity. The working capital facility will be used for general corporate purposes, providing additional liquidity, if required.

At 31 March 2025, consolidated Group cash balances (including restricted cash) stood at US$124.6 million, prior to incurring the majority of costs associated with the Skua-11ST drilling campaign. Available liquidity at 31 March 2025, pro-forma for the receipt of funds from the sale of the Group’s Thailand assets, debt repayments associated with the March 2025 redetermination and the working capital facility, was approximately US$160 million.

Approximately 1.2 million barrels of the Group’s oil production are hedged at a weighted average price of US$68.64/bbl across the second and third quarters of 2025, a premium to current Brent prices.

With the successful diversification of the Group’s assets in recent years, approximately 20% of revenue is now generated from the production of gas, and lower operating cost assets, such as Akatara and CWLH, provide a balance to the Group’s later life assets, Montara and Stag. An extensive operating cost review is underway to identify areas where greater operational efficiency can be implemented to lower unit operating costs and extend the economic lives of assets.

Portfolio performance in early 2025 has been in line with expectations. Akatara’s initial performance continues to impress. Recent Stag performance has benefited from proactive well management, while Montara production was ahead of expectations for the first quarter. In recent days, production from Montara was successfully restarted after the field was shut in for a period encompassing planned maintenance downtime, the commencement of the Skua-11ST drilling campaign and a significant tropical low system passing the field. The Skua-11ST well is expected to deliver an initial production rate of 3,500 bbls/d and extend the economic life of Montara by one year.

Adel Chaouch, Executive Chairman of Jadestone, commented: 

“We are proactively managing Jadestone’s balance sheet, with pro-forma liquidity of approximately US$160 million at the end of the first quarter reflecting the Sinphuhorm sale proceeds, new working capital facility and March 2025 debt redetermination. This is a strong position from which to execute this year’s capital program, and with our hedges, weather current oil price volatility. The sale of Sinphuhorm was the right deal at the right time for Jadestone’s shareholders, accelerating forward several years of cashflows into a consideration that represented a 44% return on two years of ownership, enhancing our near-term liquidity in the process.

In parallel with strengthening the balance sheet, we continue to focus on maximizing the Group’s longer-term performance, value generation and resilience. We will do this through delivering safe and reliable operations at the lowest possible cost, extending the economic lives of our assets and making them more resilient to the oil price cycle.

We remain confident in the longer-term prospects of the business, and the actions we have taken to enhance liquidity in the near-term will contribute to the success of our strategy.”

Jadestone has closed the Sinphuhorm deal which brings in cash to pay down some of the RBL and the company note that Skua costs will eat into the cash pile of $124.6m. There are two interesting points to draw from the statement, firstly that the company is instigating a wide-ranging cost reduction programme and this exercise is underway.  Personally I never understand why such a programme is needed as surely in the best companies cost reductions should happen all the time….

Secondly it seems that Jadestone is re-positioning itself away from inorganic growth and further M&A activity, I need to check I am right about this with the company but if I’m on the right track then things really are changing at Jadestone. As always, more later.