Good morning and good afternoon, everyone. I would like to welcome you to Jadestone Energy's half-year and the 2024 results conference call. I am Adel Chaouch, as Sami mentioned. I am the Executive Chairman of Jadestone Energy, and I'm also joined on the call today by our CFO, Andrew Fairclough. On this webcast, I will walk you through this presentation, which is already actually uploaded to our website in the Investor Relations section. You can also view it on this webcast, and there's a link for that. After our prepared comments, we will open the session for questions and answers. For Andrew and I, this is our first webcast with Jadestone Energy, so we are looking forward to an engaged Q&A session with the attendance. Slide number two outlines our standard disclaimers. We'll skip now to slide number three, and let's get started.
I would like to cover the 2024 highlights for the company. We are very proud of our performance during that year. Big focus was on HSE, and with the record that we felt was excellent, with the highlight being over 10 million hours worked across our Indonesia and Malaysia businesses without a lost-time injury. We also completed construction and commissioned the ACATARA development onshore Indonesia later in the year. The commencement of production of ACATARA, coupled with the increased stake in our CWLH interest and higher uptime at Montara, drove annual production to a record of 18,696 barrels of oil equivalent per day, up by 35% year on year. This higher production and the resulting increase in sales volumes led to a significant increase in revenue during 2024. We also exhibited good cost performance year on year, with an adjusted unit operating cost reduced by 10% in 2024.
Together, this led to significant increases in both EBITDA and operating cash flows. We also more than replaced reserves in 2024, with 1P reserves replacement of over 200% and 2P reserves replacement of over 100%. Our reserve base and our significant contingent resource base represent the material position source for future cash flow and value for the company. Let's move now to slide number four, where I would like to cover to date the performance of the company in 2025. With the refreshed management team in charge now, Jadestone has had a strong start for this year, delivering first on a production for the first four months of this year that has averaged nearly 21,000 barrels of oil equivalent per day, a new record for the company for this period, and up by 22% year over year.
This performance was underpinned by ACATARA, where uptime of production had been ahead of plan and very high. We have also seen a renewed momentum behind the commercialization of raw material Vietnam gas resource, with a field development plan submitted for Nam Do and Yu Min, and also further progress towards finalizing the gas sales agreement. Our production and cost guidance is reiterated today. Delivering against guidance remains a priority for Jadestone this year and forward. Please note. In the face of macroeconomic volatility early in 2025, we have taken several steps to enhance the resilience of our business and boost our liquidity levels. We sold our Thailand assets for a very attractive price of approximately $40 million in upfront payments. We also added a new $30 million working capital facility, providing additional liquidity to the business should we need it.
We are also in the process of a thorough review of costs, both operating and overhead. This morning, we have announced a difficult but necessary decision to reduce staff numbers and costs in our onshore Australia office, given the need to drive efficiency in this part of our business. These actions, coupled with our near-term oil hedging, fixed price gas, production at ACATARA, the premium to Brent for oil sales, and greater diversification in our business, all provide greater resilience to oil price cycles. All of the updates on the slide demonstrate the positive impact that the refreshed management team is having on the business. Let's now move to slide number five. We have set out some of the notable achievements of the business early in 2025.
In addition to those I have already mentioned, we have seen some encouraging operating developments in Australia, with the Montara oil cargo tank capacity now back to above 600,000 barrels for the first time in many years after the return of tank 2C to service. We also have successfully increased STAG production from 2,000 barrels a day to 2,700 barrels a day on the back of a trial to recalibrate the settings of the down-hole pumps and the STAG wells. While the impact of these achievements was partially offset by some challenging weather conditions early in the year, particularly cyclone activity offshore Western Australia, I am pleased at the progress we are making in this strategically important part of our portfolio. With that, I would like to hand over to Andrew. Andrew, all yours.
Adel, thanks. Good afternoon to everyone. Over the next few slides, I'll take you through my first set of Jadestone results, in which I'm pleased to report positive momentum in many aspects of the business. One of our priorities is to maintain that momentum and deliver further improvements. As Adel has already commented, production in 2024 increased 35% to nearly 18,700 barrels of oil equivalent per day, which underpinned an increase in lifted volumes of 5.3 million BOE and significant increases in revenue and cash flow year on year. The average oil price realization for the year was slightly down on the prior year, with the underlying Brent price for our liftings essentially flat, while the average premium for our oil sales declined from $5.58 per barrel to $3.76 per barrel.
The reason for this decline in the average premium is because CWLH attracts a lower premium than STAG, and following the acquisition of the additional interest in CWLH in early 2024, it constituted a higher proportion of liftings during the year. Revenue growth over the year came in at 28%, totaling $395 million. Reported production costs increased 19% to $277 million. However, if we look at the underlying asset operating costs, being the cost of operations, workovers, logistics, repairs and maintenance, and transportation, this increased 11.5%, mainly due to the doubling of our interest in CWLH and the startup of production at ACATARA, while adjusted operating cost per barrel declined 10%, benefiting from the associated increased production during the year. The increase in revenues was the primary driver of the 41% increase in adjusted EBITDA during the year.
The same was largely true for the narrowing of the annual loss year on year, also helped by the fact that there was no impairment in 2024 compared to the $30 million impairment taken the previous year. Similar drivers explain the increase in operating cash flow, pre-working capital for the year. Capital expenditure was 36% lower than the prior year at $74.5 million, with a reduction in activity at ACATARA as plant construction was largely complete early in 2024, as well as no major drilling activity during the year. Net debt increased during the year, with the primary driver being the payment into the abandonment trust fund associated with the CWLH acquisition out of cash resources and a full drawdown of the RBL to $200 million by the end of the year. Looking further at the underlying drivers of operating costs during the year on the next slide, slide seven.
On the left-hand side of the slide, we set out our reported production costs, split between field-level operating costs, being the dark green section, and the non-cash inventory and lifting effects and royalties. As I mentioned previously, field-level operating costs are the cost of operations, workovers, logistics, repairs and maintenance, and transportation, and totaled $238 million in 2024 compared to $213 million in 2023. On the right-hand side, we show the movement in operating costs at the field level during the year. In aggregate, we saw a decrease at Montara and STAG as costs associated with tanker offloadings and diesel consumption decreased at Montara, partially offset by slightly higher workover costs at STAG.
CWLH operating costs increased with increased ownership in the asset after the CWLH2 acquisition completed in February 2024, while we started to expense ACATARA operating costs after the field started production in the second half of the year. Overall, it was positive to see costs under control on a like-for-like basis, and the additional costs incurred in the year took us from about 13,800 BOE per day to nearly 18,700 BOE per day of production by the end of the year. Moving to slide eight, which summarizes the cash flows in the business over the year, which combines several line items from the cash flow statement for simplicity. Moving left to right, we can see that cash from operations after working capital was $53.1 million. Cash CapEx of just over $50 million was predominantly related to ACATARA and SKU 11 long lead items.
The contribution to the decommissioning trust fund for CWLH was the single largest expenditure item in the year at $84 million. This was partially offset by other investing cash flows of $21.4 million, consisting of Simple Horn dividends, the cash received on completion of the CWLH acquisition, and cash interest received primarily from the CWLH trust fund. Financing activities of $41.4 million represent interest payments and also operating costs that are classified as lease payments. Finally, the RBL was fully drawn by the end of the year, leaving us with $95 million of cash as at 31st of December. On slide nine, we can see that net debt has improved materially through the start of this year, currently standing at $54 million at the end of April, nearly 50% less than at the year-end.
Through this year, the cash position has increased to $113 million, that's including restricted cash of $9 million, while debt outstanding under the RBL reduced to $167 million. The primary driver of the increase in cash is the timing of the drilling cost for the SKU 11 sidetrack well, where the rig arrived several months later than planned and expenditure has been delayed accordingly, while proceeds from the sale of Simple Horn were utilized to pay down $33 million of debt as part of our March redetermination. It should be noted that we expect the cash position to change in the coming months as ongoing CapEx at SKU 11 is paid out. At the end of April 2025, and including the undrawn working capital facility, which was signed earlier this year, we had $142 million of liquidity.
We've also set out some of the main drivers of liquidity and spending for over the remainder of the year. At the end of April 2025, we had a combined inventory at STAG and Montara of 520,000 barrels. We expect three liftings from each asset over the second half of the year, with each lifting from Montara being approximately 550,000 barrels and STAG 250,000 barrels. We're scheduled to have one lifting of CWLH crude for 650,000 barrels, also in the second half of the year, and Penmell liftings from the PM323 and PM329 PSCs are every six to eight weeks, while revenues are received on a monthly basis from ACATARA. I'd stress that these lifting schedules, particularly for our Australian assets, can change or could change for a variety of reasons. The major component of our spending this year is the SKU 11 sidetrack well.
We now expect this well to cost slightly more than originally budgeted at approximately $70 million, primarily associated with cyclone activity around offshore Western Australia in April, which forced us to demobilize the rig for a period of time. To the end of April, around $28 million of that drilling cost has been paid. We also expect to repay approximately $30 million of debt later this year, with the amortization of the RBL as projected, and pay $18 million of associated RBL interest charges during 2025. Given that we're now two years into a four-year tenor on the RBL, we're looking at the capital structure carefully and looking at refinancing alternatives.
Lastly, I'd note as part of the going concern exercise, which accompanied the audited results, we ran downside scenarios, including an oil price at $60 per barrel, together with operational sensitivities, including three months of additional unplanned downtime over the going concern period. Under these scenarios, we maintained sufficient liquidity to continue as a going concern. Lastly, moving to slide ten, we've reiterated our guidance today for production and costs. Production is expected to average between 18,000-21,000 BOE per day in 2025, which we formally adjusted in mid-April to incorporate the Simple Horn disposal. Operating cost guidance is unchanged, with capital expenditure guidance also remaining at $75-95 million, with an outcome in the upper half of that range more likely on the basis of the current estimate of the SKU 11 sidetrack well costs.
Our 2025 to 2027 free cash flow guidance, pre-debt servicing, remains unchanged at $270 million-$360 million and includes the Simple Horn sale proceeds in place of the expected contribution from the Thailand assets over that period. I should remind you that this free cash flow guidance is based on an oil price range of $70-$80 per barrel Brent, that's real from 2025 onwards. We've elected not to recast this in light of the recent oil price sort of movements, given year-to-date Brent has averaged still about $70 per barrel, and we're only four and a half months into a three-year measurement period, but we will keep this under review. With that, I'll hand back to Adel. Thank you.
Thank you, Andrew. Appreciate that. With that, I would like to take you through the business update, starting with slide number 11, please. I'm pleased to report that ACATARA has outperformed our expectations in the early life of the asset. We have now worked over 8.2 million man-hours at ACATARA without a lost-time injury. A very impressive HSE record and performance, particularly during the construction and commissioning period, where at some period we had over 1,000 employees and workers on the site. The ACATARA gas processing facility itself has achieved 96% uptime over the first four months of this year. This has delivered an average gross production of 6,200 barrels of oil equivalent per day for that same period. Both uptime and production are ahead of plan so far, making it a very strong start for this year for ACATARA.
We are just about to enter into a short seven-day period of planned downtime, where we will be performing scheduled maintenance, but also implementing several minor upgrades to the facility to enhance reliability and resilience. Previously, we had disclosed to the market the potential for a de-bottlenecking project to be implemented at the end of this year to accelerate 3.5 million barrels of equivalent oil of 2P reserves. Since then, we have been optimizing the de-bottlenecking project, which has now resulted in a phased approach, which will bring forward about 50% of this production uplift in the middle of this year at around 20-30% of the total de-bottlenecking cost. A great result, I'm sure you will agree with me. The second phase to deliver the remaining production uplift is now planned to be implemented in the second half of 2026.
Overall, we are pleased with the performance and progress at ACATARA, and we are confident that the asset will generate significant cash flow and value for Jadestone over the upcoming years. Now, let's move to Australia operations update, and we can go to slide 12, please. Year-to-date, Montara has produced in line with our expectations, the SKU 11 sidetrack well campaign, as you have already heard earlier in the presentation, will take longer than originally planned to execute largely due to events outside of our control, with an unusually late-season major weather system offshore Western Australia in April, which passed directly over the Montara assets. This meant downmanning both the rig and Montara facilities for a period. Since remanning the rig, we have seen progress with existing SKU 11 well safely decommissioned and now drilling the new production well.
We expect results to be online by the end of next month, late in June. One of the major positives so far this year with Montara is a return to service of tank 2C, which many of you will remember was the source of the original small leak of the oil to sea back in 2022. This tank, after a comprehensive repair and maintenance program, was recently brought back into service, increasing the tank capacity for oil of the FPSO to over 600,000 barrels. This will now give us much greater operational flexibility, including a return to sending much bigger parcels of Montara crude, which allows us to reduce offtake-related costs. At CWLH, the asset continues to deliver impressive well performance, with the field currently producing around 4,300 barrels per day net to our stake, which is 33%.
Again, there were some periods of facilities downtime early in the year, again primarily linked with poor weather conditions offshore Australia. At STAG, we have seen significant production response to trials on the downhole pumps and the wells, performance of which has been a key issue at the field in recent years. This has increased production at times in recent months to over 2,800 barrels a day, and the field is currently producing around 2,700 barrels per day. As Andrew mentioned earlier, we have seen good cost control at Montara and STAG during 2024, but more must be done on operating costs at these fields to maximize cash flows, value, and the economic life of the assets. This would be a key focus area for the business in the near term.
We have also taken the difficult decision to reduce the onshore headcount of our Australia operations in the Perth office by 25%, reflecting the necessity to make our Australia operation more efficient and more resilient. No offshore staff are affected, and safe and reliable operations will remain the overriding priority for Jadestone. Moving to Vietnam on slide 13, please. Since submitting the Nam Do and Yu Min field development plan earlier this year, we have been engaged with the government in the formal review phase and process. In parallel, we continue to push for finalization of the gas sales agreement and portions of agreement for the assets. We continue to see positive engagement with the government. It is encouraging to note that a recently enacted Vietnam electricity law gives priority to domestic gas projects, adding further momentum and government support to our projects with Nam Do and Yu Min.
We continue to review and fine-tune the economics of the project internally. We are confident in the belief that the asset will achieve key milestones, which will allow us to seek external funding prior to FID, most likely in the form of farm outs at the appropriate time. Moving now to slide 14, we discuss Malaysia. The PM323 and PM329 PSCs continue to be reliable in terms of performance. The current focus in Malaysia is preparing for the next phase of drilling on the PM323 license, going and following the very successful infill campaign of drilling that we took in 2023. The proposed phase nine drilling program in 2026 will be targeting the endrained southwest area of East Belumut Field, which you can see on the photo on the right-hand side.
This field, which was discovered in the 2023 program, these wells have all the characteristics of what we look for when making capital allocations: relatively low risk, low cost, with attractive economics, particularly quick paybacks driven by the cost recovery in the PSC terms. We will also be soon engaging with Petronas on potential extensions and enhanced terms for both PM323 and PM329 PSCs. We see a lot of potential remaining in both licenses, particularly PM323, and we are seeking appropriate terms to recognize the maturity of the asset while also ensuring a fair split of revenue between us and Petronas. Let's please move to slide 15. Let me cover the portfolio management earlier this year and the growth opportunity for Jadestone. In April, we announced that we have sold our Thailand asset to PTTEP for an upfront consideration of $39 million and an additional $3.5 million of contingent payments.
This disposal was justified by the decision to focus on resources and growth initiatives on areas where we have operated presence and scale, namely Australia, Malaysia, and Indonesia. We are very happy with the price achieved and with the deal being a win-win for both the seller and the buyer. The true differentiating aspect of the Jadestone investment case is that we can operate across Australia, Malaysia, and Indonesia, three of the top four Asia-Pacific upstream producing countries in which, according to Wood Mackenzie data, have potentially 75 billion barrels of equivalent oil with remaining conventional resources to be produced. A significant part of this remaining resource potential is in existing fields, and we at Jadestone are well positioned to acquire interests where we can apply our expertise of late-life assessments and management.
We also will be looking to leverage our recently acquired gas development knowledge from ACATARA, coupled with our organic growth potentials and options, particularly in Vietnam. We see a very exciting growth outlook for Jadestone in the future. Slide number 16, please. I would like to speak to our financial strategy. This is a change from what we have presented previously. We will exercise financial discipline and only allocate capital to the highest return, lowest risk, quick payback projects. We will identify efficiencies in the business, looking for the optimal approach to operations, reducing costs in the process in order to lower break-evens and increase resilience. We will ensure that cash generated is retained in the business for growth where possible. Many of you have read in our results statements this morning that certain shareholders have requested that we seek authorizations at the upcoming AGM to re-purchase shares.
Energy has not had this authority since the 2023 AGM. I want to be clear that this is first and foremost about process, ensuring that we have the authority to re-purchase shares if the board decided that this was the highest returning capital allocation option available to the company. It is no guarantee of a buyback commencing immediately post this upcoming AGM. However, I do think this is also a positive signal from certain shareholders that they think the current market valuation of the shares is fundamentally mispriced. Finally, let me finish on slide 17, please. I would like to summarize the outlook for Jadestone Energy and the attractions of the investment case. If not unique, our investment case is highly differentiated, offering investors exposure to one of the fastest energy-growing regions globally, with a platform that can operate both late-life oil assets and new gas developments.
These capabilities, our strong relationships with key stakeholders, including state oil companies and regulators in the region, put us at an advantage when it comes to accessing growth opportunities. Moreover, there is a significant cash flow and value potential in our existing asset base, evidenced by our year-end 2024 reserves and NPV disclosures, as well as our 2025-2027 free cash flow guidance and portfolio of organic growth opportunities. Our focus in the near term is to navigate ongoing oil price volatility by protecting liquidity and the balance sheet and ensuring that we have the appropriate balance sheet from which to grow the business. I want to thank you for your attention today. With that, Sami, please, we can open the Q&A session.
Thank you, Adel. To ask a question, please press Star followed by One on your telephone keypad now.
If you change your mind, please press Star followed by Two. On preparing to ask your question, please ensure your device is unmuted locally. Our first question comes from James Carmichael from Berenberg. Your line is open. Please go ahead.
Hi. Morning, guys. Just a couple for me, if possible. Firstly, on Vietnam, I was just wondering if you could sort of maybe describe the next steps or the remaining negotiating points on the SPA there. You also talk about sort of potential partnering on the assets. Just wondering if you've had any sort of interest or spoken to any potential partners at this stage. Secondly, just looking at the free cash flow guidance, appreciate you're not sort of restating that given where Brent is and where it's averaged year to date.
I guess, is there anything you can say on the sort of sensitivity in that number? The slide seems to imply sort of $30 million per year for every $10 on the Brent price. I do not know if that is the right way to think about it. If there is anything you can say around the sort of CapEx behind that number, that would be helpful. Thanks.
Thank you for the questions. Since we have two, let me cover the first one on Vietnam, and then I will ask Andrew to cover the piece on the financials, if that is okay. Vietnam, in terms of next steps, clearly with the submitted plan development, we need to finish the negotiations, have that landed and signed off. Looking at a country like Vietnam, we estimate this process can take anywhere between six months to 12 months.
We're in the middle of it here, hopefully. Again, without any commitment, we'll hopefully see that resolved by the end of the year. In parallel, as I mentioned, we're pursuing the GSA. We're progressing that. We've seen a lot more momentum, particularly now that there's a new law that gives priority to local investment, which is the case for us. The teams are progressing these engagements. Overall, we think from this point on, until we have FID, the spirit of time of negotiations and sign-offs might take anywhere between 6-18 months. Thinking maybe a good midpoint would be within a year. In terms of commitment when it comes to post-FID, yes, we are seeking to have a partner or partners, whether in the form of a partner that has the technical, operational, and financial support or financial partner.
I think it's always a prudent approach for a company of our size to look at projects with this kind of investment as being done in partnership. 100% investment in this case could be larger than what the company should invest in. So we want to bring a partner that can help us satisfy a balance with these three elements I mentioned. We've seen some interest from a variety of possible partners. Without saying this is a formal process, these are early conversations. It will make more sense to engage once we have line of sight of the FID and a better idea of the GSA outcome. Andrew, would you like to cover the question on finances?
Yeah. I think really sort of, I think from a CapEx perspective, we've sort of given the range for this year of $75-$95 million. Next year is about, again, the same.
I mean, really what we're seeing with the cash flow projections is very much sort of CapEx weighted this year and next with the delivery of what we expect, sort of the increased production from SKU 11, the various activities. We're looking at phase nine in Malaysia next year and sort of additional deep bottlenecking going through the two periods at ACATARA. The idea is to invest in sort of the first two years of that three-year window to then actually deliver the returns and upside at the back end of that period.
Very good. Thank you.
As a reminder, to ask a question, please press Star followed by One on your telephone keypad. Our next question comes from David Round from Stifel. Your line is open. Please go ahead. Cheers.
Thanks for the presentation, guys. A couple from me.
Firstly, just on the balance sheet, you've obviously taken a number of steps already this year. I mean, the position is much improved. You mentioned a future refi. Can we or should we anticipate any other news on that this year, or is that more likely to be a 2026 item? Secondly, can I just ask about the share repurchases, please? I suppose my question is whether that would have been part of the strategy or the plan before the shareholder request and also what cash you'd be comfortable allocating to that. Thank you.
Andrew, you want to cover the first one?
Yep, sure. Dave, forgive me for not being drawn on the timing of the refinancing. I mean, it's market conditions. It's looking at the optimal structure. It's looking at pricing. We're looking at quite a range of different options.
If I'm honest, I know it's not really answering the question. We're looking at quite a variety of things. It's really about ensuring that we get the best outcome, dependent, again, also on the sort of current economic environment, what's going on beyond our control. If I'm honest, it's quite a hard one to pin down and put a very sort of specific timeline on it. I'd love to be getting on doing something sooner rather than later, but I think we just have to be cognizant of how these things play out. David, thanks for the questions.
There's no urgency there, though. Sorry, Adel. Go ahead.
No, go ahead. Please go ahead. You just finished that.
No, I was just going to say. I think it's about. It sounds like you're in a good place. Yeah, I think so. Reasonably.
Look, I mean, I think you've got to look forward. You've got to look forward to what we want to do with the business. It's about ensuring that the capital structure allows us to do that and sort of tying the strategy in with our capacity to execute on that.
Okay. Thanks. David, coming to your second question around the stock buyback. Look, there's a couple of aspects to it here. Constantly, the management team is looking on a regular routine basis on all options available for the company in terms of realizing the best value for their shareholders. Clearly, this is one possible tool. From a practical point of view, it makes a lot of sense to have the feedback from the shareholder because this is a resolution that will be voted down or up by shareholders.
It makes a lot of sense that we consult and see the support for that. It makes a lot of sense that we have their view in terms of if this is an instrument we can have in place because it does have a lead time of 12 months. If you decide to do it, you do not have the authority, then you are going to have to wait 12 months. Hopefully, it will be voted during the AGM or ahead of the AGM there. We will have a tool for when the time and if the time makes sense and if we have the capacity to do it. In terms of partial size, probably too early to talk about that. If we do it, David, we need to look at a process that could be on multi-prongs where it is not in one event.
It will be something that makes sense, that could be consistent, that can create stable shareholder value in terms of an instrument if to be implemented.
Okay. Great. While I'm on, can I just ask a really quick one just on the SKU well at the moment? I know you've said the results expected next month. I mean, have you had any indications of how that well's gone? And are we talking sort of beginning, end of the month? Because that's obviously quite a big catalyst for you guys coming up.
Just to thank you. Yeah, sure. We're happy to address that. We mentioned that we've had a little bit of delay, largely due to weather. And David, look, usually in Western Australia, there is one cyclone every three years. We happen to have had three this year.
One of them went directly above the Montara facility that, of course, for precautionary and safety reasons, would demand and remain after the formation has moved. There is a weather-related event and delay based on that. I think it is safer to say right now we are back in the way. We are progressing. We took the top off. The team, the drilling team, is going through the sidetrack. I think from good precautionary measures, we need to think about delivering the well towards the end of June.
Okay. Great. Thank you.
Thank you.
We currently have no further questions. I would like to hand back to Adel Chaouch for closing remarks.
Thank you, Sami. Thank you, everyone, for your time today and your continued interest in Jadestone Energy. Please get in touch if you have any questions or comments on the results today and the presentation.
You guys have a good day or good evening. This concludes today's call. Thank you very much for joining. You may now disconnect your lines.