Following half-year results from Jadestone Energy (JSE) recently, we noted the financial improvement despite challenges and that with the growth potential suggested the 77p share price too harsh an appraisal. There is now a “Montara H6 well successfully brought onstream”-titled announcement and the shares are further higher.
The news is that the Montara H6 development well has been successfully tied into the field facilities, commenced production and set to be stabilised at around 3,000 bbls/d – the company emphasising it “a key step in our plan to deliver circa 20,000 boe/d towards the end of this year” and that the rig has now moved to the Skua-10 and Skua-11 workover location and commenced operations.
The financial improvement noted on the interims included a $26 million half-year improvement in current assets versus total liabilities, with production of 9,934 bbls/d and average realised oil price of $67.70/bbl. As well as increasing production, oil is currently above $75 per barrel – and the company notes “oil prices, to which we are fully exposed given our unhedged position. As a result, our balance sheet continues to strengthen, providing the platform from which to execute on further growth through investment in both the existing portfolio as well as further M&A”. We noted on 69p per share offer price March recommendation a management with a successful such industry track record.
At 87.5p to buy, the market cap is just over £400 million (currently approx. $540 million) and we also noted on recommendation we saw clear potential for the shares to return to the 90p+ of late 2019 as operational development combines with the improving oil outlook and our most recent update noted a 93p target price. We suggest that even those may be light now considering the developing operational progress here and macro-economic situation. Our revised target is 100p.
This article first appeared on the N50 website which Tom Winnifrith runs with Steve Moore & Lucian Miers. To access the website for a new shorting idea this week and for a new share tip OUT JUST LAST FRIDAY click HERE
Filed under: Jadestone Energy, Akazoo, Deepverge, James Halstead, shorted AIM shares, N50 website
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