Jadestone Energy shares soar on the back of New Zealand purchase
Singapore-headquarted Jadestone Energy today agreed to buy a 69 per cent stake in New Zealand’s Maari project oil field for $50m (£38.6m).
The London-listed firm’s shares jumped at the announcement, rising 17.8 per cent on Monday.
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Jadestone, which focuses on oil and gas production in the Asia Pacific region, said that the purchase, from OMV New Zealand, would increase its net production by approximately 20 per cent.
It added that it expected payback from the acquisition within a year of closing the transaction.
Jadestone’s chief executive Paul Blakeley said: “The Maari project adds both significant opportunity and diversity to our operations. New Zealand is a natural fit for Jadestone, where we see many shared values with regards to sustainable energy investment.
“We are excited by the opportunity to deploy our expertise to managing this mid-life producing asset, particularly as we see significant reserves upside.
“The Maari Project has achieved very modest recovery factors to date, relative to the substantial estimated original oil in place, making this an ideal platform to showcase our technical capabilities.”
The company said that it expected to complete the transaction in the second half of 2020.
The field is located about 80 kilometres south west of New Zealand’s North Island, and includes both the Maari and Manaia oil fields.
Production, which began in 2009, stands at 4,000 – 5,000 barrels per day. It peaked in 2010 with 16,400 barrels per day.
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Although the fields are scheduled to stop producing in 2031, Jadestone believe that the field has considerable upside potential.
The company is targeting New Zealand as an extension of its core operations area in Australia. The island nation has the best fiscal regime in the Asia Pacific region for upstream oil and gas activity, due to a simple royalty and tax system.
Main image credit: Getty