Jadestone ups its stake in Woodside’s oil-producing fields off Australia

Singapore-headquartered and AIM-listed oil and gas company Jadestone Energy has wrapped up the acquisition of an additional interest in a Woodside Energy-operated project, encompassing oil-producing fields off the coast of Western Australia.

In a bid to boost its non-operated working interest from the current 16.67% to 33.33%, Jadestone executed a sale and purchase agreement in November 2023 to acquire an additional 16.67% stake from  Japan Australia LNG (MIMI) in the Cossack, Wanaea, Lambert, and Hermes (CWLH) oil fields development – known as the North West Shelf oil project offshore Western Australia.

Jadestone’s acquired interest includes MIMI’s entire 16.67% working interest in the CWLH oil fields, subsea infrastructure, the FPSO Okha, and full abandonment liabilities. This comes a year after the company bought BP’s stake in the project.

The MIMI acquisition has now been completed for $9 million while agreed adjustments, reflecting the accumulated economic benefits of the CWLH assets for the period from the effective date of July 1, 2022, to completion, resulted in a net receipt of $6.3 million to Jadestone from MIMI.

Furthermore, this $6.3 million and Jadestone’s $35.7 million have been paid into the CWLH abandonment trust fund, in aggregate satisfying the initial $42 million abandonment funding and in line with the original acquisition announcement.

The Singapore-based player explains that the second $23 million installment into the CWLH abandonment trust fund is payable on NOPTA’s approval of the accession documents, which is expected in April 2024, while the final installment is payable by December 31, 2024.

According to Jadestone, the CWLH fields continue to perform ahead of its expectations, averaging around 13,700 bbls/d year to date in 2024, equivalent to about 2,300 bbls/d for the 16.67% interest being acquired or approximately 4,600 bbls/d to the company’s total 33.33% interest following completion.

As liftings of crude oil from the CWLH fields are implemented on an equity basis, Jadestone’s next cargo, attributable to the 16.67% interest just acquired, is estimated at around 650,000 barrels and has been sold at a small premium to Brent with the lifting scheduled for early March 2024.

The company highlights that the receipt of proceeds for this lifting is expected in early April 2024 while two further liftings of similar size are anticipated within the next 12 months – one attributable to the original 16.67% interest in 4Q 2024 and the other attributable to the 16.67% just acquired in early 2025.

Paul Blakeley, Jadestone’s President and CEO, commented: “We are pleased to increase our interest in the CWLH fields in line with the originally announced terms. The asset continues to outperform our expectations, with the imminent early March 2024 lifting proceeds expected to substantially offset the net cost of the first two abandonment funding installments.”

Located within four production licenses (WA-3-L, WA-11-L, WA-13-L, and WA-16-L) in the North Carnarvon basin offshore Australia, the project comprises 13 subsea wells producing through the FPSO Ohka, which was installed at the fields in 2011 and has 60,000 bbls/d of oil processing capacity, along with water handling and gas processing/reinjection facilities.

“CWLH is fast becoming a key asset for Jadestone. Our increasing ownership and influence will help to realize the full potential of the fields through a life extension beyond 2031 and additional drilling,” added Blakeley.

Jadestone has been actively working on expanding its portfolio, as confirmed by the participation in the ongoing bid process related to the proposed sale of Woodside’s interests in the Macedon gas field and a cluster of producing oil fields, collectively known as the Pyrenees area off Western Australia.