Paul Blakeley was busy helping to run the Asian business of Canadian giant Talisman Energy when the group was snapped up by Spanish rival Repsol in 2014.
He and some ex-Talisman colleagues have now returned for what Blakeley calls “unfinished business” in the Asia-Pacific region with oil and gas producer Jadestone Energy.
Listed in London and Toronto, Jadestone is one of a growing band of newcomers buying fields from the oil majors as they move on to new areas.
The upstarts hope to use more efficient methods to work the fields at lower cost. The strategy helped Blakeley build Talisman’s North Sea business into one of the biggest during the 1990s. (It also helped win Blakeley, now chief executive of Jadestone, an OBE for services to the oil and gas industry in 2002.)
Jadestone owns active fields off the coast of Australia, and development interests in Vietnam and the Philippines. It plans to double production from its existing assets to about 30,000 barrels of oil equivalent (boe) a day by 2023. That would put it almost on a par with the likes of Genel Energy.
There are encouraging early signs. Jadestone joined AIM last year, raising $110m (£85m) to buy the Montara field off northern Australia from Thailand’s PTTEP. It has yet to take full control, but has already managed to increase efficiency and boost production at Montara by about 50% — to 12,000 boe a day. At Stag, its other active field, Jadestone has cut costs and increased production from about 2,600 boe a day in 2017 to 3,600 last year.
Other areas also look promising. Jadestone expects to start producing gas from its fields in southwest Vietnam by 2021. In April, it announced plans to sell the gas to the state-owned PetroVietnam as demand booms in the region.
There are risks ahead. The Australian regulator has yet to accept Jadestone’s safety plan for Montara, delaying its full takeover of the field by a few months. Jadestone says the process is nearly finished.
The rigour is unsurprising: an oil spill from Montara in 2009 was one of Australia’s worst. On top of that, keeping costs down while trying to boost production and manage assets across huge areas could prove tough.
Analysts point to Blakeley’s strong track record, however, and the 75% rally in the shares this year suggests the market is starting to take note. Analysts at house broker BMO believe the business is trading at a 45% discount. Analysts at Stifel, also a house broker, have a target of 114p — far ahead of the Friday closing price of 58p. Buy.
