Production Focus,
Sustainable Returns
2020 Annual Report
2
3
Jadestone is a leading independent
upstream oil and gas company focused
on the Asia Pacific region.
Its strategy is to acquire production
and near-term development
assets, create value through smart
reinvestment and generate increasing
cash flow from an expanding portfolio
of balanced, low risk assets across
the region.
Cover Photo:
Well pressure monitoring at the Akatara Field – Lemang PSC, Sumatra, Indonesia
STRATEGIC REPORT
2020 Highlights
Foreword from Jadestone’s Chairman
Chief Executive Officer’s Review
Market Overview
Jadestone’s Strategy
Operational Review
Project Clover
Financial Review
Sustainability Report
CORPORATE GOVERNANCE
Statement on Corporate Governance Approach
Board Chair’s Corporate Governance Statement
Compliance Statement to QCA Principles
Directors’ Report
Board of Directors Biographies
Senior Management Biographies
Committee Reports
– Audit Committee Report
– Compensation and Nominating Committee Report
– Disclosure Committee Report
– HSE Committee Report
4
6
8
12
14
16
22
24
36
84
86
88
90
94
96
98
100
108
110
CONSOLIDATED FINANCIAL STATEMENTS
Management’s Report
Independent Auditor’s Report
Consolidated Statement of Profit or
Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Significant Accounting Policies and Explanation Notes
114
115
120
121
122
123
124
ADDITIONAL INFORMATION
Oil and Gas Reserves
Reserves Outlook
Licence Interests
Glossary
Shareholder Information
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176
176
177
180
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JADESTONE ENERGY 2020 ANNUAL REPORT
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2020 HIGHLIGHTS STRATEGIC REPORT
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OH&S - Occupational
Health & Safety
Environmental
Management
0 Zero total recordable
injury frequency rate
0 Zero reportable
environmental incidents
Sales
Price Premiums
Revenue
5 –
4 –
3 –
2 –
1 –
4.5
4.2
1.7
0 –
mm bbls
2018
2019
2020
4.2 mm bbls
Operating Costs
28.72
22.85
23.10
2018
2019
2020
23.10 /bbl
5 –
4 –
3 –
2 –
1 –
0 –
$/bbl
$
4.97
4.17
1.63
2018
2019
2020
500 –
400 –
300 –
200 –
100 –
0 –
$ million
$
4.17 /bbl
218 million
325
218
113
2018
2019
2020
2020
Highlights
Operating Cash Flow 1
Net Cash
Dividend 2
177
87
–0.3
2018
2019
2020
100 –
80 –
60 –
40 –
20 –
0 –
–20 –
–40 –
$ million
$
82
39
–30
2018
2019
2020
100 –
7.5 –
5.0 –
2.5 –
0 –
$ million
$
7.5
Nil
2018
Nil
2019
2020
87 million
82 million
7.5 million
40 –
30 –
20 –
10 –
0 –
$/bbl
$
2.0 –
1.5 –
1.0 –
0.5 –
0 –
–0.5 –
$ million
$
Focusing on
deeper efficiency
Jadestone achieved its revised production
target for 2020, producing an average
of 11,438 bbls/d, lifting 4.2 million bbls.
While revenue was affected by lower
benchmark prices, pricing premiums
remained strong.
The Company focused on driving deeper efficiency across the entire business,
resulting in operating costs being driven down approximately 12% on an
absolute basis and within the original guidance range, and broadly flat on
a per unit of production basis compared with the prior year.
Approximately 25% of the savings identified through the
Company's Group-wide efficiency and cashflow savings programme,
project Clover, have been locked in as permanent changes in the
operating cost base.
The Company generated positive operating cash flow of $87 million,
which contributed to a reduction of substantially all of its debt,
and a more than doubling of its net cash position to $82 million
at 31 December 2020.
Jadestone made no compromises to safety or integrity, and
adhered to strict COVID-19-related protocols throughout the year.
The Company recorded no serious incidents and experienced
no reportable environmental incidents, which demonstrates
the Company’s commitment to its people and the environment
in which it operates.
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1
2
Before movements in working capital.
The second 2020 dividend of US$5.0 million to be declared by the directors following completion of the capital reduction and filing of audited initial accounts.
Well pressure monitoring at the Akatara Field
– Lemang PSC, Sumatra, Indonesia
JADESTONE ENERGY 2020 ANNUAL REPORT
6
FOREWORD FROM JADESTONE’S CHAIRMAN STRATEGIC REPORT
7
Foreword from Jadestone’s Chairman
Dear fellow shareholders
On behalf of the Board of Directors of your
Company, I am pleased to present the
2020 Jadestone Energy Annual Report and
Sustainability Report. Your Company delivered
exceptional results, against the backdrop of
an exceptionally challenging year.
Management was able to rapidly adapt their efforts toward protecting the Company’s balance
sheet and, with the full support of the Board, took difficult decisions to defer near-term
investments. We believed that spending should be rephased to resume under the much more
favourable environment we see today, thereby maximising investment returns. At the same
time, the team did not compromise on its steadfast commitment to world class health, safety,
and environmental protection, all which took on new meaning as the world grappled with the
challenges cascaded by the COVID-19 pandemic.
Akatara Field – Lemang PSC, Sumatra, Indonesia
The Company also demonstrated its ongoing commitment to its
growth strategy, including pursuing inorganic transactions where
there is a strong value add proposition. During the year, Jadestone
negotiated, announced, and completed the acquisition of the
Lemang asset, onshore Indonesia, which added important diversity
to the portfolio, particularly through its future gas development,
which will serve as a natural pricing hedge against the currently
oil-weighted production base. At the same time, the Company
continues to press toward completion of its acquisition of a 69%
operated interest in the Maari asset, offshore New Zealand. These
acquisitions, once bedded into the portfolio, add to the existing
organic growth profile, which also includes the Nam Du and U Minh
gas development offshore Vietnam, as well as continuing high-
value re-investment into the producing assets at Montara and
Stag. More recently, Jadestone has also announced the acquisition
of several assets offshore Peninsular Malaysia. In addition to an
immediate and significant increase in both production and reserves,
this transaction is important from a strategic perspective as it
sets the stage for the Company to prove its operating credentials
in Malaysia, elevates the Jadestone profile in the region, and will
hopefully pave the way for access to more material opportunities to
continue pursuing our high value strategy.
Outlook
Despite all the challenges our industry faced in 2020, from a
collapse in benchmark oil prices, a loss of demand for equity
investment in the sector, and the many challenges posed by
the COVID-19 pandemic, including global lockdowns and travel
restrictions, Jadestone not only delivered a sound performance, but
also gathered new insight into how to further reduce waste and
ensure our operations are as efficient as possible. Through a tough
interrogation of our cost base, we have identified savings across
the business, many which have been locked in as structural changes
in the way the Company operates, and will serve to benefit all
shareholders in 2021 and beyond.
At the same time, I am excited by the return to active reinvestment
into our portfolio, at a time when global benchmark oil prices are
recovering. While the Company will always be highly discerning in
where resources are deployed, we are moving ahead with growth
plans that will generate strong investor returns across the business.
Finally, I want to thank the Board for their advice, expertise
and support during this past year. I especially wish to thank the
executive team and all Jadestone staff for their sacrifices and
contributions to our success, and I am confident we are well
positioned for future successes too.
Thank you for your continued support.
Dennis McShane
NON-EXECUTIVE CHAIRMAN
ESG Progress
Today, the Company has published its second annual Sustainability
Report. From the early formation of the current management
team, we recognised the importance of transparency and open
communication with regard to our environmental, social, and
governance responsibilities. Moreover, as we increase the depth of
our sustainability reporting, we are beginning to recognise the many
competitive advantages that come with being a strong performer in
this regard.
I am pleased to report that the Company is making ongoing
progress in formalising its approach to environmental stewardship.
With increased alignment to the Taskforce on Climate Related
Financial Disclosure principles, and ongoing commitment to the UN
Sustainable Development Goals, the Company is deepening what it
means to be a responsible environmental citizen. We are committed
to reporting on both key emissions metrics and carbon intensity of
operations and seeking to reduce our environmental impact through
continuous improvement.
Once again, the Company has delivered an excellent performance
from a health and safety perspective, with zero lost time incidents
and zero serious injuries. The Board takes an uncompromising
approach to HSE as we strongly see world class HSE performance as
a prerequisite to operational performance. Protecting and nurturing
our workforce during the spread of the pandemic in 2020 has
brought new challenges, affecting Jadestone as much as anyone,
and yet we maintained safe operations without interruption.
Jadestone's governance practices continue to evolve and mature as
well, while at the same time, shifting toward UK-style norms and
practices. As a precursor to relocating the corporate residence to
the UK (a process that is now complete), the Company adopted the
Quoted Companies Alliance governance code, which is typical of our
AIM-listed peers, and provides the Board with a solid governance
framework to ensure ongoing protection of value and adherence to
best practices.
Shareholder Returns
2020 saw Jadestone deliver its maiden dividend, a significant
milestone, and one we had always envisaged for the type of
Company we are building. Our business remains strongly cash
generative, and the portfolio has been crafted to generate direct
returns for shareholders, while maintaining a strong balance sheet
and without compromising our ability to continue to grow. With our
continuing focus on balance sheet strength and increasing cash flow
generation in the years ahead, we expect dividends to increase too,
but it will always be balanced by our primary focus of investment
into the business.
“Once again, the Company has delivered an excellent
performance from a health and safety perspective,
with zero lost time incidents and zero
serious injuries.”
Dennis McShane
NON-EXECUTIVE CHAIRMAN
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JADESTONE ENERGY 2020 ANNUAL REPORT
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CHIEF EXECUTIVE OFFICER’S REVIEW STRATEGIC REPORT
9
Chief Executive Officer’s Review
Our performance in 2020 underscores the
resilience of the Jadestone work culture and
portfolio. We have demonstrated what it is
to be nimble and flexible, while maintaining
a steadfast commitment to efficiency and
shareholder returns, and without compromising
on our commitment to health, safety, and
environmental protection.
Drilling offshore western Australia
Stronger
and more
resilient
2020 was an extraordinary year, and by March and
April, against the backdrop of collapsing oil prices
and the global pandemic, we shifted our short-term
strategy to protect our balance sheet. We cut near
term capital investment into our assets by nearly 90%
versus the original plan, and at the same time set out
to cut costs, setting the stage to generate stronger
returns than would otherwise have been possible.
We made it clear that adding production while Brent
was at record lows made no sense, and we therefore
pulled back on activity and reduced our production
guidance accordingly.
Throughout the year, our personnel have remained healthy, and
operations uninterrupted, recording only one COVID-19 case
within the Jadestone organisation, one of our leadership team in
Jakarta who has since fully recovered. We instigated project Clover,
which delivered $33 million in cashflow savings versus 2020 plan,
across the business, and as a result were able to meet our original
operating cost target on a per unit basis. A great illustration of the
Jadestone culture at work was the team effort in delivering these
savings, from every part of the business, while locking in over 25%
of these savings as structural changes for the future. We’re not
here for the short-term, and so these decisions which constantly
drive us to be more efficient, minimising waste, can add value for
shareholders year after year.
We also maintained our commitment to our core principles
towards environmental stewardship, social responsibility, and high
governance standards, and have recorded no major incidents on any
of these fronts, in keeping with our pursuit toward Target Zero.
Paul Blakeley
EXECUTIVE DIRECTOR,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Nimble Capital
Investment
$
90 Reduction
in spending vs original plan
%
Project Clover
+
$
$
33 Million in cash
savings versus plan
Target Zero
0 No reportable
environmental incidents
or injuries
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JADESTONE ENERGY 2020 ANNUAL REPORT
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CHIEF EXECUTIVE OFFICER’S REVIEW STRATEGIC REPORT
11
Asset Review
At Montara, we implemented a new and innovative offshore roster
to maintain asset efficiency while meeting COVID-19 protocols,
including some temporary reduced manning and longer shift
patterns. This commitment from the offshore teams, along
with some shared logistics arrangements in conjunction with
neighbouring operators, resulted in uninterrupted production
operations throughout the year. The pursuit toward Target Zero
continued, with no lost-time injuries, reportable environment
incidents or significant non-compliances recorded during the year.
From a production perspective, we deferred the drilling of an infill
well at the Montara field and also identified problems within the
well bores of two Skua field subsea wells during the year. These
two wells are temporarily offline while we prepare for a workover
and repairs to be implemented as part of the 2021 work programme
which will also drill the Montara H6 infill well. Despite the deferral of
production from the Skua field wells, revised production guidance
was met, largely by way of increases from the Swift/Swallow fields
and improved uptime performance in the latter part of the year.
Importantly, the production outage at Skua has no reserves-related
impact, meaning production was deferred, not lost, and we will
benefit from production being restored in a much higher priced
oil market.
At Stag, we realised meaningful improvements in efficiency too,
led by an innovative new offload tanker arrangement. By offloading
production directly into shuttle tankers, without a Floating Storage
and Offloading vessel as an intermediary, we now have one less
vessel in the field, and an overall lower cost base. This also has a
safety and environmental benefit with no ship-to-ship transfer
now occurring at Stag. As with all operations, we constantly focus
on maintaining best-in-class health and safety performance, and
have experienced no reportable incidents during the year. Production
met revised guidance in 2020 as we once again elected not to drill
a new infill well and purposely slowed workover activity during the
worst of the COVID-19 restrictions, with logistics challenges for both
workover crews and equipment.
Despite reduced global consumption of crude oil during 2020,
cleaner-burning fuels have remained in demand. Stag’s low sulphur
medium-heavy crude oil, helping to meet ever more stringent
fuel oil requirements, has continued to attract strong premiums,
averaging between $5.50/bbl to $21.00/bbl above Brent through
the price cycle during the year.
Our planned Nam Du/U Minh gas development was deferred as
part of the measures taken early in the year to protect the balance
sheet. This was also consistent with slow progress on agreeing
gas sales, and subsequently Vietnam has secured some additional
gas volumes from the PM3 CAA licence in Malaysia and Vietnam
to fill near term supply shortfall. Nonetheless, the demand for
Nam Du and U Minh gas remains on the near term horizon, and
the commercial drive to develop this resource is recognised by both
Jadestone and Vietnam. Cooperation with Petrovietnam remains
strong and discussions are ongoing regarding a first gas date
and production profile, as a precursor to a gas sales contract and
government sanction for the field development.
Akatara Field – Lemang PSC, Sumatra, Indonesia
Our planned acquisition of a 69% operated interest in New
Zealand’s Maari project achieved several key milestones over the
course of the year, albeit with delays in progress caused by both
the COVID-19 pandemic, and New Zealand’s general election in the
fourth quarter. One final government regulatory approval is required
to complete the transaction, and both Jadestone and the seller
remain committed to the deal.
In Indonesia, we acquired a 90% interest in the Lemang PSC,
onshore Sumatra, containing the fully appraised undeveloped
Akatara gas field. The transaction was finalised, signed, approved
and closed within the year, and the next steps will be to agree a
gas sales agreement and move the project forward to sanction.
Adding Lemang to the Jadestone portfolio introduces a mix of
gas, condensate and NGLs, in an onshore setting with low cost
development and a PSC regime, bringing diversity as well as fixed
price gas to naturally balance oil price volatility. Importantly, it also
re-establishes our operating presence in Indonesia as an important
step to accessing further opportunity and deepening working
relationships with government and regulators.
Looking forward, having successfully navigated one of the
toughest years our industry has ever experienced, we are now
very well positioned to re-instate growth through capital deployed
into our current assets, drilling in Australia and moving the gas
developments forwards, as well as the potential to add more assets
to our portfolio through inorganic opportunities. This is reinforced
by the 2021 guidance which shows strong growth in the second half,
and the recent announcement of the acquisition of a collection of
assets offshore Peninsular Malaysia. The acquisition is an excellent
fit with our capabilities and our strategy, and provides a material
and immediate uplift in both production and reserves, together with
a strong platform to grow further in Malaysia.
With our strong balance sheet and our reputation as a quality
counterparty of choice, we are more upbeat than ever on the
potential to continue adding value through acquisitions.
Results Review
In 2020, the business generated $218 million in net revenue,
down by approximately 33% from the previous year, reflecting
the combined impact of the collapse in oil prices and slightly
lower liftings. We sold 4.2 mm bbls of crude oil and generated
$86.9 million in cash flow from operations before working capital
changes, with adjusted EBITDAX of $62.6 million. Following the
non-cash impairment of the legacy Mitra SC56 exploration licence,
the business reported a net post tax loss of $60.2 million on a
unadjusted basis.
While 2020 was a year that presented challenges to business
performance across the upstream sector, Jadestone’s approach
has been to leverage teamwork, engage the whole organisation
in finding better ways of working and continuously improve our
performance. We reduced headline production costs, down to $106
million, versus $120 million in the previous year and, when adjusting
for the impact of well workovers as we usually do, held unit cash
operating expense almost flat at $23.10/bbl compared to $22.85/bbl
in the prior year, despite lower production.
Our end 2020 reserves position primarily reflects the end 2019
position, adjusted for the impact of production during the year.
As of 31 December 2020, Jadestone had total 1P reserves of 23.2 mm
bbls, and 2P reserves of 37.1 mm bbls. Reservoir performance at both
producing assets remains very much as expected, but our reserves
for end 2020 reflects the fact that volume additions which had
previously been envisaged for 2020 have been deferred as a result
of rephasing investment activities to coincide with a stronger price
environment.
Instead, we deployed our cash flow to paying down debt, which
was reduced by $42.8 million to just $7.3 million by the end of the
year, and to providing direct returns to shareholders with a maiden
dividend, paying the interim one third portion in October.
We also closed and paid for the Lemang acquisition in Indonesia
and, in a commitment to shareholders to maintain our balance
sheet strength, we more than doubled our net cash position to
$82 million, and have done so without any compromise to health,
safety, and environmental responsibility. This is a performance our
team can be proud of, and I’m grateful for the contribution and
commitment of the team.
Paul Blakeley
EXECUTIVE DIRECTOR,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
“Even in the face of substantial challenges,
we have almost eliminated our debt and
more than doubled our net cash position
to $82 million, while also building out the
portfolio with another acquisition.”
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Emergency evacuation drill at Montara
Crude oil offload by shuttle tanker at Stag
JADESTONE ENERGY 2020 ANNUAL REPORT
12
MARKET OVERVIEW STRATEGIC REPORT
13
Market Overview
Agility in a
changing
world
Brent oil, in $/bbl, quarterly
63.13
Q1 2019
68.86
Q2 2019
62.00
Q3 2019
62.08
Q4 2019
50.10
Q1 2020
29.56
Q2 2020
42.94
Q3 2020
44.16
Q4 2020
61.12
Q1 2021
COVID-19 and the Economy
Upswing
Market Comment
In Q1 2020, the world began to appreciate the wide-reaching
impacts of the COVID-19 pandemic on the health and well-being
of the global population. Keeping people healthy became such a
challenge that all public institutions, not just those directly linked to
medical care, were pushed to their limits, while industrial activity fell
dramatically. The result was a swift and sharp retraction in global
economic activity.
Upstream Oil & Gas Challenges
At the same time, the upstream oil and gas sector grappled with
the predicament of a reduction in demand for hydrocarbons driven
by reduced mobility and lower industrial output. To exacerbate
matters, the usual global mechanisms to offset shocks in the
demand for hydrocarbons also faltered, at least initially, with the
major hydrocarbon producing countries of OPEC+ failing to reach
an agreement to reduce oil supplies. This drove a precipitous fall
in global oil benchmark prices through the first four months of the
year, with Brent crude dropping below the $20/bbl mark just over
one year ago, in April. For those companies who produce oil price
linked hydrocarbon or those individuals whose livelihood depends
in some way on ongoing production and investment into the sector,
survival mode was the order of the day.
Survival Mode
Jadestone recognised the severity of the situation and undertook
a methodical assessment of both operational and financial risks
for its ongoing business. The result was a suite of actions aimed
at protecting our people, ensuring critical supply chains continued
working so as to continue safe ongoing operations, and adjusting
spending plans to preserve the financial strength of the business.
With a highly flexible and discretionary investment programme
initially planned for the year, the Company was able to be proactive,
and to adjust plans to both weather the worst of the impact and set
the stage to maximise value creation thereafter.
Along with the fall in activity, drop in cash flow, and slower
deal completion activity, investment into the sector dropped
off as well. Those that have endured have done so because of
strong balance sheets, ongoing cash generation through the
low price cycle, and demonstrated sustainable behaviour on the
environment, social and governance agenda. We are optimistic that
capital markets will be supportive of value accretive organic and
inorganic growth.
Dampier Spirit FSO departing Stag
Cautious optimism began to appear mid-way through 2020, fuelled
primarily by medical science breakthroughs in COVID-19. And while
the implementation of developments like new vaccines is bound to
be slow and non-linear in nature, the direction of travel was positive
throughout the second half of the year.
Our industry too, saw positive steps to rebalance the global supply-
demand picture, with OPEC+ ultimately agreeing to restrict supplies
to the market, while the world demonstrated that the demand for
hydrocarbons remains, even under lock-down conditions. This trend
has continued through the first part of 2021 as economies have
begun to rebound, and benchmark prices have briefly climbed as
high as the $70/bbl mark, a level that seemed almost inconceivable
a year ago.
M&A Overview
With 2020 bringing changes in how we work, where we work, and
what we prioritise, global M&A activity fell to the lowest level seen
in recent history. But even against that backdrop, transactions that
had been planned as part of a long-term strategy continued to
progress. Jadestone completed its Indonesia Lemang acquisition,
made progress on its New Zealand Maari acquisition, and began
evaluation work on several other opportunities. Competition for
assets remains low in the Asia Pacific region, and with a financial
position bolstered by tough action in 2020, Jadestone is poised to
continue pursuing its inorganic growth agenda.
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Montara Venture FPSO
JADESTONE ENERGY 2020 ANNUAL REPORT
14
JADESTONE’S STRATEGY STRATEGIC REPORT
Jadestone’s Strategy
Fit for growth
Jadestone Energy aspires to be a leading
oil and gas development and production
company in the Asia Pacific region, and is
pursuing a strategy led by the acquisition
and development of producing fields and
discovered resource that can be quickly
brought to production.
The Company is building a balanced portfolio of production and development assets with
additional growth from low-risk exploration. The Company is exclusively focussed on the
Asia Pacific region, and prefers select core areas in the region where the team has pre-
existing expertise. The Company believes the Asia Pacific region presents a compelling
proposition, with growing energy demand, industry leading margins and returns, and the
potential for resilient cash flow generation.
Jadestone’s strategic decisions are tailored to prioritise margin
improvement and identify accretive growth which delivers
exceptional value and leverages the team’s expertise in second
phase operating capabilities.
In a short period of time, Jadestone has built a business that delivers
a solid free cash flow stream which is being actively redeployed
into value accretive investments in the business and into inorganic
opportunities, while at the same time, providing direct returns to
shareholders in the form of dividends. The Company adheres to
stringent screening criteria in all its investments, and is confident
that the current market environment creates an opportunity set
that meshes well with the strategy, and provides a platform to
continue generating incremental value for shareholders.
View from the Montara Venture FPSO
NETTS apprentices
Jadestone’s strategic decisions
are tailored to prioritise margin
improvement and identify
accretive growth which delivers
exceptional value
15
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JADESTONE ENERGY 2020 ANNUAL REPORT
16
OPERATIONAL REVIEW STRATEGIC REPORT
1 7
Operational
Review
Vietnam
Block SC 57
HO CHI
MINH CITY
Block 51 PSC
Block 46/07 PSC
KUALA LUMPUR
SINGAPORE
Lemang
Ogan Komering
Indonesia
JAKARTA
Philippines
Montara
Australia
Stag
PERTH
Producing Assets
Montara
Timor Sea
Montara
Western Australia
0
25
50
75
100kms
Montara Project Australia
WORKING INTEREST: 100%
GROSS ACREAGE: 672km2
LOCATION: Offshore Western Australia
WATER DEPTH: 77m
The Montara Project is located in production licenses AC/L7 and AC/
L8, offshore Western Australia, in a water depth of approximately
77 meters. The Montara assets, comprising the three separate fields
being Montara, Skua and Swift/Swallow, are produced through
an owned floating production storage and offloading vessel, the
Montara Venture. As at 31 December 2020, the Montara assets
had proven plus probable reserves of 23.4mm barrels of oil, 100%
net to Jadestone. The fields produce light sweet crude (42º API,
0.067% mass sulphur), which typically sells at a premium to Dated
Brent. The premium in 2020 ranged between a discount of US$2.19/
bbl to a premium of US$7.54/bbl due to the impacts on demand
of COVID-19. The most recent lifting was agreed at a premium of
US$0.66/bbl.
During the year, the Group completed a 3D seismic acquisition
programme covering the AC/L7 and AC/L8 licences, to improve
reservoir imaging for future infill wells and to assess prospects for
future exploration targets. Interpretation work on the seismic data
is being carried out by licence area and is expected to be completed
by 2023.
Production averaged 9,045 bbls/d in 2020 (2019: 10,483 bbls/d).
Lower production was primarily the result of natural field production
decline, and identified problems within the well bores of the two
Skua field wells, which were taken offline while workovers are
planned.
During 2021, the Group plans to drill the H6 well, which was deferred
from 2020 in response to COVID-19 and to perform the two Skua
workovers. In the meantime, production volumes deferred from
the Skua satellite field are being substantially offset by increased
rates from the Swift and Swallow fields.
There were six liftings in 2020, resulting in total sales of 3,221,258
bbls, compared to 3,577,199 bbls in 2019 from the same number
of liftings.
NEW PLYMOUTH
Maari
New Zealand
Montara Venture FPSO
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JADESTONE ENERGY 2020 ANNUAL REPORT
18
OPERATIONAL REVIEW STRATEGIC REPORT
19
Producing Assets Continued
Indian Ocean
Stag
Western Australia
Stag
0
25
50
75
100kms
Drilling rig and work boat on location at Stag
Stag Oilfield Australia
WORKING INTEREST: 100%
GROSS ACREAGE: 160km2
LOCATION: Offshore Western Australia
WATER DEPTH: 47m
The Stag Oilfield, in block WA-15-L, is located 60km offshore
Western Australia in a water depth of approximately 47 meters.
As at 31 December 2020, the field contained total proved plus
probable reserves of 13.7mm barrels of oil, 100% net to Jadestone.
The Stag oilfield produces heavier sweet crude (18º API, 0.14% mass
sulphur), which historically sells at a premium to Dated Brent. The
premium in 2020 ranged between US$5.50/bbl to US$21.00/bbl,
due to the impacts on demand from COVID-19. The most recent
lifting was agreed at a premium of US$13.88/bbl.
In May 2020, the owners of the Dampier Spirit floating storage
and offloading vessel (“FSO”) advised the Group of their intention
to retire the vessel. In response, the Group adopted a tanker
shuttle operating model, whereby modern double hulled tankers
are loaded directly, on a rotational basis, thus eliminating the need
for ship to ship oil transfers in field. The new model commenced
in September 2020, immediately following the departure of
the Dampier Spirit. The tanker shuttle operating model offers
environmental benefits relative to the permanently moored
Dampier Spirit, as well as cost savings of approximately 20% per
annum.
Reduced manning on the facility, due to restrictions arising from
COVID-19, impacted upon the ability to conduct major activities,
other than mandatory and core maintenance requirements. To work
within these restrictions and in view of the lower oil price during the
year, workover activity was reduced in the second and third quarters,
before picking up again in the last quarter of 2020.
Production was 2,394 bbls/d in 2020, compared to 3,049 bbls/d
in 2019. Lower production was primarily the result of the pull-back
on well workovers during a period of prolonged lower oil prices
and amidst heightened COVID-19 restrictions and costs on moving
people and equipment.
There were four liftings in 2020, for total sales of 944,354 bbls,
compared to 918,961 bbls in 2019 from the same number of liftings.
During 2021, the Group will continue the well workover programme,
primarily as a result of the need to replace electronic submersible
pumps at the end of their useful lives, and will conduct well
planning work, in preparation for future drilling activities.
Tasman Sea
Maari
Maari
New Zealand
Cook Strait
0
25
50
75kms
Maari Oilfield New Zealand
WORKING INTEREST: 69%
GROSS ACREAGE: 34km2
LOCATION: Offshore Taranaki Basin
WATER DEPTH: 100m
On 16 November 2019, the Group executed a sale and purchase
agreement (“SPA”) with OMV New Zealand Limited (“OMV New
Zealand”), to acquire an operated 69% interest in the Maari project,
shallow water offshore New Zealand, for a total cash consideration
of US$50.0 million, and subject to customary closing adjustments.
The transaction has achieved several key milestones with regard to
regulatory approvals, and the Group continues to focus on securing
Ministerial consent. Jadestone and OMV New Zealand continue to
work towards completion of the transaction. The SPA long stop
date has been revised to 30 June 2021. The Group will assume the
operatorship upon completion of the transaction. The economic
benefits from 1 January 2019 until the closing date will be adjusted
in the final consideration price. This is now anticipated to be a net
receipt to the Group.
As at 31 December 2020, the field holds 2P audited reserves of
10.6mm barrels of oil, net to Jadestone’s 69% interest.
Raroa FPSO on location at Maari
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JADESTONE ENERGY 2020 ANNUAL REPORT
20
OPERATIONAL REVIEW STRATEGIC REPORT
21
Pre-Production Assets
Cambodia
Phnom Penh
Ho Chi Minh
Vietnam
Vietnam
Thailand
Cambodia
Block 51
Block 46/07
Malaysia
Singapore
Indonesia
Indonesia
East Jabung
Gulf of Thailand
Ca Mau
Block 51
Gas Pipeline
Block 46/07
Lemang
Lemang
Indonesia
0 25 50 75 100kms
0
15
30kms
Block 51 PSC and
Block 46/07 PSC Vietnam
WORKING INTEREST: 100%
GROSS ACREAGE: Block 46/07 – 2,622km2, Block 51 – 887km2
LOCATION: Malay-Tho Chu Basin
WATER DEPTH: Block 46/07 – 48m, Block 51 – 64m
Jadestone holds a 100% operated working interest in the Block 46/07
PSC and Block 51 PSC, both in shallow waters in the Malay Basin,
offshore Southwest Vietnam. The two contiguous blocks hold three
discoveries: the Nam Du gas field in Block 46/07 and the U Minh and
Tho Chu gas/condensate fields in Block 51.
The formal field development plan (“FDP”) in respect of the Nam
Du/U Minh development was submitted to the Vietnam regulatory
authorities in late 2019. In mid-March 2020, amid delays in
Vietnamese Government approvals and the drop in global oil prices
related to COVID-19, the Group opted to delay the project, as part of a
review of its 2020 capital programme.
Discussions are continuing with Petrovietnam to agree a gas
production profile for the development, as a precursor to a gas sales
contract, and ultimately attaining government sanction for the
field development.
Lemang PSC Indonesia
WORKING INTEREST: 90%
GROSS ACREAGE: 743km2
LOCATION: Onshore South Sumatra Basin PSC
On 29 June 2020, the Group executed an acquisition agreement
with Mandala Energy Lemang Pte Ltd, to acquire an operated 90%
interest in the Lemang PSC, onshore Indonesia, for an acquisition
price of US$16.5 million, comprising cash consideration of US$12.1
million after closing statement adjustments and future estimated
fair value potential contingent payments of US$4.4 million.
The Lemang PSC is located onshore Sumatra, Indonesia. The block
includes the Akatara gas field, with a net to Jadestone 2C resource
of 15.2 mm boe.
The asset has been substantially de-risked with 11 wells drilled into
the structure, plus three years of oil production history, up until the
field ceased production in December 2019.
The acquisition closed on 11 December 2020, following the receipt
of governmental approval of the assignment of the interest and
of the Group’s appointment as operator.
The Group intends to commence a gas development project on the
Lemang PSC and current efforts are focused on finalising a heads
of agreement on gas sales, to be followed by a gas sales agreement
with a buyer before seeking formal field development sanction.
The timeline for the Lemang development is highly flexible, and
at Jadestone’s discretion.
Exploration
Assets
Service Contract 56 (“SC56”) Philippines
Jadestone held a 25% interest in SC56 in partnership with operator
Total E&P Philippines B.V. (“Total”). The exploration period on the
block expired on 1 September 2020. During the year, Total was
granted a 12-month extension on the exploration period until
1 September 2021, with the COVID-19 pandemic representing
a force majeure event under the service contract.
Following management’s strategic review of available options
for the asset, a mutual agreement was reached in mid-November
between Jadestone and Total regarding the voluntary relinquishment
of SC56. On 18 November 2020, Total and Jadestone expressed
their intention to the Philippines Department of Energy (“DOE”) to
voluntarily surrender the entire interest in SC56 and accordingly,
to terminate the contract. The effective date of termination is 21
December 2020.
SC56 was inherited from the former Mitra Energy management
team and was not an asset consistent with Jadestone’s strategy.
It remained in the Jadestone portfolio due to the carried well
commitment, which was intended to provide a cost-free option
to further test this frontier basin/new basin entry opportunity.
It was important for the Group and our shareholders to pursue this
potential to its ultimate conclusion. The Mitra Energy management
team had incurred an accumulated US$49.4 million of costs in
capitalised exploration value by 30 June 2016. Jadestone spent
a further US$1.1 million over the last four-and-a-half years.
The relinquishment decision has resulted in the recognition of
an impairment in Q4 2020 in relation to the capitalised intangible
exploration value of US$50.5 million.
Following the termination, the Group is liable for 25% of the
unfulfilled minimum work programme as at the termination date.
The total unfulfilled minimum work programme amount has been
submitted by Total to the DOE and is currently under review.
The Group’s share of the unfulfilled minimum work programme
will be funded from the net arbitration proceeds of US$2.2 million
received from Total in Q1 2020.
Service Contract 57 (“SC57”) Philippines
The Group holds a 21% working interest in SC57, which has been
under force majeure since 2011, and these conditions are not
expected to change in the foreseeable future.
Akatara Field – Lemang PSC, Sumatra, Indonesia
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JADESTONE ENERGY 2020 ANNUAL REPORT
22
PROJECT CLOVER STRATEGIC REPORT
23
Project Clover
Project Clover, an initiative that commenced in
early Q2 2020, was one of the key steps taken
by the Company in response to COVID-19 and
the related oil price collapse.
Jadestone embraced the principle that its focus should be on cash flow, and not just
capital spending or opex, but rather all aspects of its business that drive financial
performance. In keeping with its pursuit of continuous improvement, the initiative was
also guided by the notion that savings should come from across the entire business.
The results surpassed expectations, and achieved savings of
US$33.0 million relative to the plan, and unlocked a number of
sustainable changes to the Group's cost base. Jadestone's Project
Clover achievements represent some of the very best of what the
team is capable of.
While a portion of the savings that were implemented came in the
form of cashflow deferrals, a meaningful contribution also came
from innovative solutions sourced directly from the business itself.
This included optimising commercial terms with vendors, adjusting
our organisation to make it fit for purpose, and stamping out
inefficiency across all operations including new and clever logistics
arrangements in collaboration with adjacent operators.
Cash Flow Savings
AUD/USD FX Contract
The team also took a decisive approach to tackling G&A, with the
senior management team agreeing to a 25% reduction to base
salary and a 20% reduction to allowances for six months of 2020.
Overseas assignment allowances remained at 80% for the full
calendar year 2020. The Board also agreed to a 25% reduction in
fees. These changes set the scene for reductions in G&A across the
business, with most employees accepting salary reductions as well.
Having locked in 25% of the total Project Clover savings as structural
changes in our cost base sets the organisation to be more efficient
than ever in 2021 and beyond.
Taxation and COVID-19 Assistance
Capital Expenditure
Project Clover
Akatara Field – Lemang PSC, Sumatra, Indonesia
Cash flow savings by category in percentage of overall saving
General and Administration
Operating Expenditure
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JADESTONE ENERGY 2020 ANNUAL REPORT
24
FINANCIAL REVIEW STRATEGIC REPORT
25
Financial Review
The following table provides select financial information of the Group, which was derived from, and should be read in conjunction with, the
audited consolidated financial statements for the year ended 31 December 2020.
USD’000 except where indicated
Sales volume, barrels (bbls)
Production, bbls/day
Realised oil price, $/bbl1
Revenue
Production costs
Operating costs/bbl ($/bbl)2
Adjusted EBITDAX2
Depletion, depreciation & amortisation costs/bbl ($/bbl)
Impairment
(Loss)/Profit before tax
(Loss)/Profit after tax
(Loss)/Earnings per ordinary share: basic & diluted
Operating cash flows before movement in working capital
Capital expenditure
Outstanding debt2
Net cash2
2020
4,165,612
11,438
44.79
217,938
(105,338)
23.10
62,582
16.24
50,455
(57,238)
(60,178)
(0.13)
86,883
24,065
7,386
82,055
2019
4,496,164
13,531
69.07
325,406
(119,898)
22.85
187,505
16.94
-
73,281
40,505
0.09
176,908
77,240
50,144
39,275
1
Realised oil price represents the actual selling price, net of marketing fees, and before net impact from commodity hedging instruments. Inclusive of hedges, the average realised
price was US$52.32/bbl (2019: US$72.39/bbl), compared to average annual Dated Brent of US$41.84/bbl (2019: US$64.21/bbl).
2 Operating cost per bbl, adjusted EBITDAX, outstanding debt and net cash are non-IFRS measures and are explained on pages 29-31.
“During one of the most
challenging years our sector
has seen, we doubled net
cash, substantially paid off
debt, and provided direct
shareholder returns by way
of our maiden dividend.”
Dan Young
EXECUTIVE DIRECTOR, CHIEF FINANCE OFFICER
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Jadestone’s Kuala Lumpur office
JADESTONE ENERGY 2020 ANNUAL REPORT
26
FINANCIAL REVIEW STRATEGIC REPORT
Benchmark Commodity Price And
Realised Price
The annual average benchmark Brent crude decreased 35% to
US$41.84/bbl, compared to US$64.21/bbl. The average benchmark
price based on liftings was US$40.61/bbl in 2020, compared to 2019
at US$64.13/bbl.
The actual average realised price in 2020 decreased in line with the
benchmark price, by 35% to US$44.79/bbl, compared to US$69.07/
bbl in 2019. The average annual premium in the year was US$4.17/
bbl, compared to 2019 at US$4.97/bbl. The premiums have gradually
improved from the oil price trough in Q2 2020, with the Group
achieving US$13.88/bbl and US$0.66/bbl from its latest liftings of
Stag and Montara crude oil, respectively.
Amidst an uncertain global outlook, including second and third waves
of COVID-19 infection, the Group has entered into Dated Brent swaps
covering 30% of planned H1 2020 production at an average swap
price of U$55.16/bbl, to support the 2020 planned organic growth
programme.
Production and Liftings
The Group generated average production in 2020 of 11,438 bbls/d,
compared to 13,531 bbls/d in 2019. Production at both Montara and
Stag was lower compared to 2019, primarily the result of natural
field production decline in addition to deferred production due to an
intentional pull-back on well workovers during a period of prolonged
lower oil prices and amidst heightened COVID-19 restrictions and
costs on moving people and equipment.
The Group had 10 liftings during the year (2019: 10), resulting in
sales of 4,165,612 bbls (2019: 4,496,164 bbls), reflecting the lower
production compared to 2019.
Revenue
The Group generated US$217.9 million of revenues in 2020, compared
to US$325.4 million from 2019, or a drop of 33%. Revenue derived
from the sale of crude oil declined by US$124.0 million or 40%, from
US$310.5 million in 2019 to US$186.6 million in 2020, due to:
• Lower average realised prices in 2020, compared to 2019
(US$44.79/bbl vs US$69.07/bbl), giving rise to a decline of
US$101.2 million; and
• Lower lifted volumes in 2020 at 4.2mm bbls, compared to
4.5mm bbls in 2019, generating an additional decline of US$22.8
million.
This was partly offset by an increase in hedging income of US$31.4
million, more than double 2019’s hedging income of US$14.9 million.
Production Costs
Other Income
Taxation
Production costs declined 12% in 2020 to US$105.3 million, from
US$119.9 million in 2019, predominately due to:
Other income was US$26.4 million (2019: US$3.0 million).
The variance of US$23.4 million was predominately due to:
Taxation charges declined 91% to US$2.9 million from US$32.8
million in 2019.
2 7
• Monetary damages awarded of US$11.1 million, for the breach of
the SC56 farm out agreement by Total;
• Release of the provision made in relation to the Stag FSO of
US$5.0 million, payable to the crew at the expiration of the
Dampier Spirit FSO lease. Following the termination of the lease,
the Group was no longer required to make this payment, and the
provision reversed;
• Rebate income of US$3.6 million from the Group’s helicopter
lease contract, arising from the sublease of the right-of-use
assets to a third party;
• Gain of US$1.4 million from the termination of the Dampier Spirit
FSO lease in September 2020; and
• Settlement sum of US$1.0 million received from Inpex to resolve
the dispute over the Block 05-1 PSC.
Impairment
The Group recorded an impairment of US$50.5 million associated
with the capitalised intangible exploration costs at SC56 as the costs
are no longer deemed recoverable. In Q4 2020, the Group and Total
decided to voluntarily relinquish their interests in the block. US$49.4
million of the impaired amount was incurred by the previous Mitra
Energy management team up to 30 June 2016.
The current tax charge was US$11.7 million, which consists of
US$10.0 million of corporate tax expense and net PRRT paid of
US$1.7 million, which is lower, compared to corporate tax expense of
US$43.4 million and net PRRT refunded of US$1.9 million in 2019.
This was due to:
•
Lower corporate tax expense by US$33.4 million due to the
significant decrease in realised average lifting price reductions
and slightly lower lifted volumes. The Group was in a taxable
position, despite the loss before tax position as presented in the
consolidated statement of profit or loss, which was mainly the
result of non-deductible expenses and DD&A recognised for oil
and gas properties; and
• Net PRRT paid of US$1.7 million, compared to net PRRT refunded
of US$1.9 million in 2019, which was predominately due to the
liftings made in the first half of the year, prior to the significant
decline in commodity prices, and the Group has spent less on
its capital expenditure, resulting in lower PRRT deductibles
generated, compared to 2019, when the 49H infill well was
drilled.
The corporate tax expense was partly offset by a deferred tax credit
of US$8.7 million, which consists of US$4.0 million (2019: US$20.3
million) for the unwinding of deferred tax liabilities and US$4.7
million of deferred PRRT credit (2019: expense of US$6.3 million).
The smaller unwinding of deferred tax liabilities in 2020 versus 2019
was due to the lower production and depletion charges in 2020, and
hence a smaller gap between the book depletion charge and the tax
charge. The deferred PRRT credit of US$4.7 million in 2020 was due
to the reduction of deferred tax liabilities associated with Stag PRRT,
mostly attributable to the lower realised prices and the lower capital
expenditure in 2020.
Impact of COVID-19
In view of the low crude oil price environment arising from the
impacts of the COVID-19 pandemic, the Group has undertaken an
impairment review on its non-financial assets, as at 31 December
2020, reflecting, among other factors, the then spot price for
Dated Brent of US$50.48/bbl and the outlook for crude oil prices.
Following this review, no impairment is required with respect to the
Group’s producing assets in Australia (Stag and Montara) and the
exploration assets in Montara and Vietnam.
• Logistics costs were lower by US$6.3 million compared to 2019,
as a result of the reduction in the usage of transportation
facilities in the production process, in line with the decreased
production in 2020;
• Workover costs were US$8.6 million lower compared to 2019,
due to the decision to defer several well interventions amid the
costs and logistics challenges posed by COVID-19. In addition,
high workover costs in 2019 were unusually high due to the non-
routine replacement work associated with the riserless light well
intervention;
• Operating staff costs were lower by US$2.9 million, as part of the
Project Clover cost savings initiatives implemented by the Group
in response to COVID-19; and
• A positive variance of US$4.5 million in movement of crude
inventories, reflecting the year-on-year differential of the
Group’s inventories on hand at year end. There were 601,999
bbls in inventory as at 31 December 2020, compared to 581,133
bbls as at 31 December 2019.
Unit operating costs per barrel were US$23.10/bbl (2019: US$22.85/
bbl), before workovers and movement in inventories, but including
net lease payments and certain other adjustments (see non IFRS
measures below), with the variance a result of lower production rates
during the year.
DD&A
DD&A charges were US$84.6 million in 2020, compared to US$90.7
million in 2019, reflecting lower production during the year. The
depletion cost on a unit basis was US$16.24/bbl in 2020 (2019:
US$16.94/bbl), predominately due to a technical adjustment on
Montara reserves at December 2019 vs December 2018.
Other Expenses
Other expenses in 2020 totalled US$26.9 million (2019: US$9.4
million). The variance of US$17.5 million was predominately due to:
• One-off litigation costs related to the settlement of SC56 of
US$8.8 million and 05-1 PSC of US$0.3 million (see also other
income, with respect to the arbitration awards to Jadestone that
more than offset these costs);
• Rig contract deferral costs in Australia of US$3.0 million,
following the decision to defer the Australian 2020 drilling
campaign in response to the impact of COVID-19;
• Unrealised foreign exchange loss of US$2.6 million (2019: US$0.2
million), due to the depreciation of the United States Dollar
against the Australian Dollar; and
• Professional and consultancy charges of US$1.3 million, in
support of several business development projects in 2020,
including the acquisition of the Lemang PSC.
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JADESTONE ENERGY 2020 ANNUAL REPORT
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FINANCIAL REVIEW STRATEGIC REPORT
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2020 Reconciliation of Net Cash
Non-IFRS Measures
US$’000
US$’000
The Group uses certain performance measures that are not specifically defined under IFRS, or other generally accepted accounting principles.
These non-IFRS measures comprise operating cost per barrel (opex/bbl), adjusted EBITDAX, outstanding debt, and net cash.
Cash and cash equivalents, 31 December 2019
Restricted cash1, 31 December 2019
Total cash and cash equivalent, 31 December 2019
Revenue
Other operating income
Operating costs
Staff costs
General and administrative expenses
Cash flows from operations
Movement in working capital
Tax paid
Interest paid
Purchases of intangible exploration assets, oil and gas properties, and plant and equipment2
Net cash outflows on acquisition of Lemang PSC
Other investing activities
Financing activities
Total cash and cash equivalent, 31 December 2020
Outstanding debt, 31 December 2020
Net cash3, 31 December 2020
217,938
19,690
(105,338)
(20,775)
(24,632)
75,934
13,485
89,419
86,883
25,225
(25,969)
(1,542)
(19,458)
(11,959)
257
(53,415)
89,441
(7,386)
82,055
Despite the dramatic fall in average realised prices in 2020, and the Group’s reduced production and hence liftings amidst the pullback
in workovers due to COVID-19 restrictions and the lower oil price environment, the business still generated positive operating cash flow.
Additionally, after financing activities including US$42.8 million of debt principal repayments and interest payments on the Group’s RBL,
the Group also generated positive organic equity free cashflow during the year (before the acquisition cost of the Lemang PSC).
The following notes describe why the Group has selected these non-IFRS measures, and reconciles amounts to the nearest equivalent IFRS
measure.
Operating costs per barrel (Opex/bbl)
Opex/bbl is a non-IFRS measure used to monitor the Group’s operating cost efficiency as it measures operating costs to extract oil from the
Group’s producing reservoirs on a unit basis. Opex/bbl is defined as total production costs excluding oil inventories movement, write down
of inventories, workovers (to facilitate better comparability period to period) and non-recurring repair and maintenance. It also includes lease
payments related to operational activities, net of any income earned from right-of-use assets involved in production, and foreign exchange
gains arising from foreign exchange forwards in respect of local currency operating expenditure, and excludes depletion, depreciation and
amortisation and short term COVID-19 subsidies. Adjusted aggregate production cost is then divided by total produced barrels for the prevailing
period, to determine the unit cost per barrel.
USD’000 except where indicated
Production costs (reported)
Adjustments
Lease payments related to operating activity1
Movement in oil inventories2
Workover costs3
Impact from foreign exchange derivatives apportioned to production costs4
Other income5
Non-recurring repair and maintenance6
Australian Government JobKeeper scheme
Adjusted production costs
Total production, barrels
Operating costs per barrel
2020
105,338
17,548
2,806
(21,686)
(2,649)
(3,634)
(1,619)
600
96,704
4,186,478
23.107
2019
119,898
15,947
7,337
(30,331)
-
-
-
-
112,851
4,938,867
22.85
Restricted cash in 2019 excludes US$10.0 million in support of a bank guarantee to a key supplier in respect of Stag’s FSO vessel.
5 Other income represents the rental income from a helicopter rental contract (a right-of-use asset) to a third party.
1
Lease payments related to operating activity are lease payments considered to be operating costs in nature, including leased helicopters for transporting offshore crews, and FSO
rental fees. The lease payments are added back to reflect the true cost of production.
2 Movement in oil inventories are added back to the calculation to match the full cost of production with the associated production volumes.
3 Workover costs are excluded to normalise the opex/bbl so as to enhance comparability. The frequency of workovers can vary significantly, across periods, particularly at Stag.
4 A portion of the net impact from foreign exchange hedging instruments was apportioned to production costs, based on the Group’s actual local currency expenditure during the
hedging period.
Total capital expenditure was US$24.1 million (2019: US$77.2 million), comprising total capital expenditure paid of US$17.9 million (2019: US$68.3 million), plus accrued capital
expenditure of US$6.1 million (2019: US$8.9 million).
3 Net cash is a non-IFRS measure and is explained on page 31.
6 Non-recurring repair and maintenance costs relates to costs associated with Cyclone Damien.
7
The Company previously announced unaudited estimate 2020 opex/bbl of US$23.24/bbl. This estimate was before removing the Australian Government JobKeeper scheme of
US$0.6 million and upward revision of US$0.6 million to the Cyclone Damien costs noted in footnote 6, following finalisation of works.
1
2
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JADESTONE ENERGY 2020 ANNUAL REPORT
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FINANCIAL REVIEW STRATEGIC REPORT
31
Adjusted EBITDAX
Adjusted EBITDAX is a non-IFRS measure which does not have a standardised meaning prescribed by IFRS. This non-IFRS measure is included
because management uses the information to analyse cash generation and financial performance of the Group.
Outstanding debt
Total borrowings, as recorded in the Group’s consolidated statement of financial position, represents the carrying amount of interest bearing
debt, measured at amortised cost pursuant to IFRS 9 Financial Instruments.
Adjusted EBITDAX is defined as profit from continuing activities before income tax, finance costs, interest income, DD&A, other financial gains
and exploration.
The calculation of adjusted EBITDAX is as follow:
Outstanding debt is a non-IFRS measure which does not have a standardised meaning prescribed by IFRS. Management uses this measure to
manage the capital structure, and make adjustments to it, based on the funds available to the Group. Outstanding debt is defined as long and
short-term interest bearing debt, with effective interest method financing costs added back (i.e. excluded), and excluding derivatives.
As at 31 December 2020, the Group had outstanding debt of US$7.4 million, which was fully repaid at the end of the first quarter of 2021.
USD’000
Revenue
Production cost
Staff cost
Impairment of assets
Other expenses
Other income, excluding interest income
Other financial gains
Unadjusted EBITDAX
Non-recurring
Net gain from oil price derivatives
Impairment of assets
Non-recurring opex1
Net litigation income
Rig contract deferral costs
Gain on contingent considerations
Gain from termination of FSO lease
Others2
Adjusted EBITDAX
2020
217,938
(105,338)
(21,903)
(50,455)
(26,918)
26,119
359
39,802
(30,889)
50,455
8,270
(3,005)
3,000
(359)
(6,429)
1,737
22,780
62,582
2019
325,406
(119,898)
(22,027)
-
(9,379)
-
3,389
177,491
(14,242)
-
23,785
-
-
(3,389)
-
3,860
10,014
187,505
USD’000
Long term borrowing
Short term borrowing
Add back: effective interest method financing costs
Outstanding debt
2020
-
7,296
90
7,386
2019
7,328
41,795
1,021
50,144
Net cash
Net cash is a non-IFRS measure which does not have a standardised meaning prescribed by IFRS. Management uses this measure to analyse
the financial strength of the Group. The measure is used to ensure capital is managed effectively in order to support its ongoing operations,
and to raise additional funds, if required.
USD’000
Outstanding debt
Cash and cash equivalents
Restricted cash
Net cash
2020
(7,386)
81,996
7,445
82,055
2019
(50,144)
75,934
13,485
39,275
Net cash is defined as the sum of cash and cash equivalents, which included the minimum working capital balance of US$15.0 million required
under the Group’s RBL, and restricted cash of US$7.4 million in the RBL debt service reserve account (2019: US$13.5 million), less outstanding
debt. The restricted cash in 2020, as shown here, excludes the US$1.0 million cash collateralised bank guarantee placed with the Indonesian
regulator with respect to a joint study agreement entered into by the Group in Indonesia. The restricted cash in 2019 excludes the US$10.0
million deposited in support of a bank guarantee to a key supplier in respect of the Stag FSO. This guarantee was wound-up by the Group
during the year as part of the move to the shuttle tanker model.
1
2
Includes one-off major maintenance/well intervention activities, in particular the workover campaigns at Skua 10 and H3 in 2020, and the riserless light well intervention in 2019,
as well as other non-recurring production expenditures such as the repair and maintenance costs associated with weather downtime.
2020 includes Montara seismic acquisition costs associated with areas outside the current license, Maari transition team costs, Australian Government JobKeeper scheme and gain
on contingent considerations, while 2019 includes Montara transition team costs and gain on contingent considerations.
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2020 PRINCIPAL FINANCIAL RISKS AND UNCERTAINTIES STRATEGIC REPORT
33
2020 Principal Financial Risks and Uncertainties
The Group manages its principal risks and uncertainties via its risk management framework. The Group is exposed to a variety of political,
environmental, commercial, operational, and financial risks, which are mitigated and monitored to acceptable levels.
The risk management framework provides a systematic process for the identification of principle risks which have the possibility of impacting
the Group’s strategic objectives. The Board regularly reviews the principle risks and defines the key performance indicators (“KPIs”) based on
acceptable risk levels. The Board assesses material risks quarterly with a full review of the risk matrix at least twice per year.
The principal risks which are currently recognised and their mitigating actions are detailed below.
Risk group
Risk
Select mitigations
Business
development
opportunities
Capital funding
The Group is in a growth phase. If there is a lack of
high-quality opportunities, the anticipated growth of
the business may not be achieved. Poor due diligence or
unfavorable transaction terms may add low quality assets
or unexpected material liabilities to the Group.
The Group will at times require external funding to finance
organic growth and/or M&A opportunities. A change in
investor sentiment towards funding of upstream oil & gas
production and development could impact access to funds
and increase debt margins.
Climate change risks
In the face of growing societal expectations and emerging
policies including a tax or taxes on carbon, there are risks
arising from the Group’s failure to manage the impact of
climate change and to demonstrate climate action.
The potential impacts from emerging policy, regulation and
a shift to renewable energy could impact the performance
of the business and may increase costs, reduce value and
restrict future opportunities.
Commodity price risk
The Group’s earnings are dependent on commodity prices
which are influenced by global events. A prolonged decline
in oil prices will have a negative impact on revenues,
margins, profitability and cashflows.
Opportunities are assessed against a set of strict
evaluation criteria. Thorough and detailed due diligence
analysis is performed, including the use of third-party
experts wherever applicable. Detailed transition plans
are prepared to ensure a seamless and successful asset
transition.
The Group maintains a strong balance sheet by maximising
net cash to ensure sufficient liquidity within the business,
and minimising interest bearing debt.
Cash forecasts are continually monitored including
considering multiple scenarios for base case, and low cases
with mitigations.
Disciplined allocation of capital across the portfolio.
Strong long-term relationships are sought and maintained
with major international financial institutions.
The Group has a dedicated Climate Change Working Group
to drive Jadestone’s climate action agenda.
Climate action priority areas include:
1 Reducing GHG
2
3 Supplying cleaner energy alternatives
Increasing climate resiliency
Sustainability measures are to be disclosed and in
alignment with climate related financial disclosure
recommendations.
ESG performance is reflected in executive KPIs and
cascaded throughout business. The Group targets top-
quartile ESG performance among its peer group.
The Group maintains a continual focus on its cost
structure and continually seeks cost efficiency initiatives
to embed further cashflow resiliency. The Company will
use commodity price hedging to mitigate the exposure to
fluctuations in oil prices during periods of elevated capital
expenditure and/or debt incurrence.
The Company seeks to diversify its asset portfolio and
reduce exposure to commodity price fluctuation through
fixed price gas contracts, including the Nam Du/U Minh
gas development in Vietnam and the Lemang gas and
liquids project in Indonesia.
Risk group
Risk
Select mitigations
Health, safety, and
environment (“HSE”)
risks
HSE is a key priority for the Board and senior management
team. The Group operates in challenging locations and
conditions both off and onshore.
An unsafe working environment and failure of HSE
standards could result in personal injury, fatality and/
or reputational damage. The consequence of a failure to
manage HSE risk could result in penalties, increased costs
and a potential loss of a licence to operate.
IT resiliency &
continuity
The reliance on IT systems, networks and processes
continues to evolve, and as the Group grows and develops,
the connectivity of networks and systems becomes more
complex. The risk from cyber threats continues to escalate.
Operating
performance
The Group is focused on producing assets and discovered
resource able to be brought to production rapidly. In the
case of mid-life and/or mature producing assets there is
a risk that operational performance will decline through
lower production and increased costs.
Pandemic impacts
During 2020, the Group has changed its working practices
as offices adapted to working from home and offshore
workers had to quarantine between shifts. While the
disruptions have been managed in the short term, any
prolonged pandemic related restrictions could impact
business performance through a decline in commodity
prices and additional expenditure to meet the new working
arrangements.
Project execution &
economics
As part of the growth strategy, the Group is dependent on
the successful execution of strategic projects in Australia,
New Zealand, Vietnam and Indonesia. Project failures
could negatively impact operational performance and
economic outcomes.
Regulatory
infringement
The regulatory frameworks across the region within which
the Group operates are diverse and complex and include
emission controls, operational efficiency, legal and tax
regulations, among others. A breach of any aspect could
result in loss of production, revenues, increased costs, and/
or reputational damage.
The Board, through the HSE committee, oversees and sets
standards for the Group.
HSE performance target of zero lost time incidents.
Any lost time or near miss incidents are investigated
and lessons learnt implemented promptly, alongside
active monitoring of HSE standards leading and lagging
indicators.
The Group is committed to maintaining robust health and
safety procedures including procedures in place to respond
to unexpected operational incidents.
The HSE management system includes environmental
impact statements, environmental plans, oil spill response
and other emergency plans and operational safety cases.
Extensive data and server backups are performed regularly.
The Group’s redundancy strategy is applied to critical
systems and network. The most up to date security
software is maintained, and support and training is
provided to all staff to minimise the exposure of security
threats. Network and critical system penetration tests
are also performed to measure and assure our level of
protection.
The Group deploys a midlife field operating philosophy,
which closely monitors reservoir, well and plant
performance while continuously seeking out operating
efficiencies and reinvestment opportunities to increase
recovery rates and the production life of each field. In 2020
Jadestone has implemented a cost saving and efficiency
project, Project Clover, to further lower the cost base across
all operations and offices.
The Group has assessed the financial and operational
risks to the business and implemented multiple policies
in response to the COVID-19 pandemic. The Group
implemented new procedures covering IT, travel, supply
chain and operations. The Group also implemented
recommended safe practices across its operations
and offices including remote working guidelines and
established pandemic response committees at each
location to manage local best practice.
Regular liaison with national oil companies, regulators,
and other government bodies to ensure acceptance and
approvals are obtained as soon as possible.
Projects are tailored to the local market conditions,
including with regard to supply and price.
Project economics are assessed with multiple sensitives to
identify critical challenges, including contingency planning
for potential project failures.
Policy and procedures are regularly updated to reflect
changes in each of the regulatory environments in which
the Group operates.
Government relations officers are employed in-country,
where it is deemed appropriate, to liaise with government
bodies to understand the potential impacts of likely
regulatory changes on the business.
Regular communications occur with government and
trade bodies to understand potential looming and actual
changes in the regulatory environment.
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2020 PRINCIPAL FINANCIAL RISKS AND UNCERTAINTIES STRATEGIC REPORT
35
Risk group
Risk
Select mitigations
Reserve write-downs
The Group is currently dependent on two producing assets
and a reserve write down may impact long term business
performance and corporate reputation.
The majority of the Group’s reserves are in production.
Estimation is done based on actual performance data,
reducing the uncertainty range and risk of a write down.
Internal technical reserves reviews ensure a high quality
submission. All assets are either audited or reviewed
on an annual basis pursuant to the Group’s 51-101 filing
requirements.
Sovereign / political
risk
The Group’s key assets are located in politically
stable countries, but there is always the possibility
of governmental or regulatory changes which could
negatively impact the business.
The Group maintains positive relationships with
governments and key stakeholders, and actively monitors
the political and regulatory environment within each of the
countries and regions in which it operates.
Jadestone operates as a good corporate citizen, including in
accordance with PSC and tax regulations.
New assets are assessed for political risk, and the potential
negative impacts that could arise on the Group.
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Management team visit to Montara
JADESTONE ENERGY 2020 ANNUAL REPORT
36
SUSTAINABILITY REPORT STRATEGIC REPORT
37
2
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Marine growth at Stag well conductors
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OverviewAbout Jadestone 38About this Report 392020 Jadestone Highlights 40Message from the CEO 412020 ESG Performance Overview 42Sustainability at Jadestone 43The UN Sustainable Development Goals 44Material Matters 45 Environment 46Environmental Management 48Discharges and Emissions 51Climate Change and Greenhouse Gas Emissions 54TCFD Disclosures 57Social & Human Capital 58Occupational Health and Safety 60Stakeholder Management 63Community Engagement 65Workforce Management and Diversity 68 Governance & Leadership 72Governance, Business Ethics and Compliance 74Asset Integrity and Process Safety 76Critical Incident Risk Management 78 GRI Index 80JADESTONE ENERGY 2020 ANNUAL REPORT
38
SUSTAINABILITY REPORT STRATEGIC REPORT
39
Vietnam
Block SC 57
HO CHI MINH CITY
Block 51 PSC
Block 46/07 PSC
KUALA LUMPUR
SINGAPORE
Lemang
Ogan Komering
Indonesia
JAKARTA
Philippines
Montara
Australia
Stag
PERTH
About Jadestone
NEW PLYMOUTH
Maari
New Zealand
Jadestone Energy is an independent
oil and gas company listed on
the AIM market of the London
Stock Exchange.
Jadestone’s business model focuses on acquiring mid-life producing
assets and stranded discoveries in the Asia Pacific region and,
through significant additional capital investment, maximising
reserves recovery and improving operating performance, thereby
extending field life beyond any previous expectations and creating
significant shareholder value.
Jadestone's Mission
To continue to grow as a leading
independent oil and gas development
and production company in Asia Pacific
respected as an operator, partner and
employer of choice.
Operational Footprint
Jadestone is focused solely on the Asia Pacific region, headquartered
in Singapore, with its principal technical team in Kuala Lumpur and
country operations based in Perth, Jakarta, Ho Chi Minh City and in
New Plymouth.
The Company’s asset portfolio includes:
•
•
•
100%-owned producing Montara oilfield, offshore Australia
(Timor Sea)
100%-owned producing Stag oilfield, offshore Australia
(North-West Shelf)
100% interest in the pre-development Nam Du and U Minh
gas fields, offshore southern Vietnam
• 90% interest in the pre-development Akatara gas field on the
Lemang PSC onshore South Sumatra, Indonesia
Jadestone is also expanding into New Zealand, by acquiring a
69% operated interest in the Maari asset, offshore New Zealand.
This transaction is subject to regulatory approvals and joint venture
partners’ acceptance. Following these approvals, the transaction will
close and control of the Maari project will transfer to the Group.
Jadestone’s full Mission & Values can be found on Jadestone’s website.
About this Report
This Sustainability Report provides an overview of Jadestone’s sustainability
approach and performance for the 12-month period from 1 January to
31 December 2020.
It is part of Jadestone’s 2020 corporate reporting, along with the Annual Report
2020, and provides further insight into how the Company manages its material
sustainability risks, issues and opportunities, to create social, economic and
environmental value. This Sustainability Report was approved by Jadestone’s
Board of Directors.
Frameworks and Standards
This report has been prepared in accordance with the Global
Reporting Initiative (“GRI”) Standards: Core option. Sector-
specific sustainability reporting guidance from IPIECA, the global,
not-for-profit upstream and downstream oil and gas industry
association, as well as London Stock Exchange ESG Reporting
Guidance have been consulted in the preparation of this report.
Finally, we have built further alignment with the recommendations
of the Task Force on Climate-related Financial Disclosures
(“TCFD”) as well as the UN Sustainable Development Goals
(the “UN SDGs”).
Reporting Scope and Boundaries
Jadestone is committed to being transparent about sustainability
reporting boundaries and the effect of any changes in future
reporting years. Jadestone primarily reports on an ‘operational
control’ basis. This means that, in principle, this report focuses
on those assets, offices and activities where Jadestone is the
operator and over which it has control, in terms of policies and
practices during 2020, irrespective of the licensed operating party.
In the future, this may change to include other activities where
participation without full control is included, and will reflect
Jadestone’s influence wherever possible.
Memberships
• Platinum Sponsor Member of the Energy Club NT
• Australian Petroleum Production & Exploration Association
•
Indonesian Petroleum Association
• Energy Resources Aotearoa (previously the Petroleum
Exploration and Production Association of NZ)
As a result, the Stag and the Montara assets and operations in
Australia are a primary focus for many of the environment, health
and safety disclosures in this report. Where Jadestone is to assume
operational control in the near future (as is in particular the case
with the Maari asset in New Zealand), associated regulatory and
transitional activities and their impacts have been disclosed. At the
beginning of 2020, in response to the challenges of the COVID-19
global pandemic and approval delays, Jadestone made the decision
to defer its Vietnamese operations. Therefore, in contrast to 2019,
disclosures on Vietnam have been scaled back accordingly in 2020.
Sustainability Data and Disclosures
Jadestone calculates its greenhouse gas (“GHG”) emissions in
accordance with the Australian National Greenhouse and Energy
Reporting (Measurement) Determination 2008. In 2020, GHG
emissions data includes relevant Australian subsidiaries as set out
in the National Greenhouse and Energy Reporting Act 2007, which is
also in line with Jadestone’s operational footprint.
This Sustainability Report has not been subject to external third-
party assurance. However, to ensure stakeholder’s confidence
in environmental management and performance, Jadestone has
engaged an independent third-party environmental accounting firm
to prepare its 2020 Energy Use and GHG emissions data.
Jadestone has also sought support from MCC Environment &
Sustainability, an environment and sustainability consultancy
in developing its Environmental, Social and Governance (“ESG”)
agenda and disclosures further. These steps are a further testimony
to credibility and reasonable external assurance over this report.
Report feedback: Jadestone welcomes your feedback on this report
via esg@jadestone-energy.com
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2020 Jadestone
Highlights
0
‘Reportable’
environmental
incidents
90,000 t
Reduction of CO2-e
due to significant
reduction in flaring
Effective
stakeholder
consultation
across regions
NETTS
Apprentice
programme
participation
ESG
Metrics incorporated
into executive KPI’s
14 mg/L
Average OIW
concentration
TCFD
Alignment across
risk and governance
88 %
Nationals directly
employed by
Jadestone
0
Incidents of
non-compliance
in business ethics
COVID-19
Workforce kept
safe in COVID-19
15 %
Reduction of
overall GHGs
0
Lost Time
Injuries (LTIs)
at operating assets
$28.7mm
Paid in local
taxes and fees
in Asia Pacific
QCA
Corporate
governance
code adoption
0
Critical risk
incidents
“Reportable” refers to there being no breach of the Environmental Performance Outcomes as defined in the Environment Plan for the asset in alignment with NOPSEMA's definition
Message from the CEO
I am pleased to present Jadestone’s Sustainability Report for 2020, which
provides details on our progress against a wide range of environmental, social,
and governance priorities, while also demonstrating our ongoing commitment
to enhanced transparency.
In this second Sustainability Report, we have progressed our
alignment with the recommendations of the Task Force on Climate-
related Financial Disclosures. Jadestone is committed to further
investigate the material implications of climate-related risks on
its business. This analysis will inform our climate change strategy
which will be developed in 2021, setting a more strategic direction
for navigating the energy transition, and mapping out a route to
developing targets towards net zero carbon emissions, in line with
the Paris Agreement.
We have continued integrating ESG considerations across our
business and have taken steps to further align our framework
with the UN Sustainable Development Goals in order to better
demonstrate Jadestone’s commitment and to measure our
progress. We have increased our engagement with local
communities, we are encouraging employment of local nationals
(with 88% representation so far) and, through targeted community
programmes, we are working to help address local needs. Jadestone
remains committed to creating job opportunities for those entering
the workforce for the first time, participating in the NETTS
programme in Australia, and in graduate recruitment and internship
opportunities throughout Asia Pacific.
Finally, we have also continued to strengthen our Governance
systems through the recent adoption of the QCA Code and by
specifically formalising Board-level oversight over ESG matters.
These are only some of the highlights from 2020. I invite you to
read full details in the report.
Paul Blakeley
EXECUTIVE DIRECTOR,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
2020 was a year like no other, with the COVID-19 pandemic taking
hold of our globalised economy and bringing with it health risk and
socioeconomic disruption. In response, Jadestone acted decisively
to the challenges imposed on our business, with both a significant
reduction in near-term capital investment, and an extensive review
of our operating cost base across the board, to remove or defer non-
essential activity and costs, preserving the strength of our balance
sheet and protecting longer-term project returns.
We also introduced measures to ensure the safety of our
employees, as well as processes to minimise disruption to our
business activities. Looking back and reflecting on this toughest
of years, it is clear that Jadestone, and everyone who works within
the business have navigated the challenges with perseverance
and commitment, ensuring we retained financial resilience while
continuing production operations without compromising our
environmental and safety record.
Despite such difficult conditions, we achieved the majority of
our 2020 sustainability targets and I am delighted to detail our
performance and future outlook in this report. Some of the
highlights include areas where we have exceeded our operational
targets such as flaring volumes, with a reduction of 40% compared
to the 2019 baseline for the recently acquired Montara asset.
This translates into a substantial GHG reduction, which reinforces
our strategy of investing in operational efficiencies for business
improvement with an equal benefit in environmental performance.
There are a number of recent examples, such as investments in new
control systems, in produced water handling equipment and in the
re-injection compressor, all on Montara, as well as the replacement
of the ageing floating storage vessel at Stag. We will work on
continuously improving our performance in all key areas and have
committed to a further reduction in overall GHG emissions and
improvement of water quality discharges in 2021, as an example.
Jadestone is also diversifying its production mix with the pursuit of
natural gas development projects in both Vietnam and Indonesia.
These developments will result in the supply of low-cost energy to key
domestic markets within Southeast Asia, most likely replacing coal
alternatives. This is energy to local communities who might otherwise
not see the benefits that affordable energy can bring. We also
understand the advantage of gas over coal, from an environmental
perspective, is realised when fugitive emissions are measured and
minimised, and this will be a focus for these developments.
“Despite the challenges brought about by the
pandemic, we achieved the majority of our 2020
sustainability targets, working hard to prioritise
the health and wellbeing of our people, stepping
up our climate change agenda and maintaining our
community engagement commitments, all with
no detriment to operational excellence.”
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JADESTONE ENERGY 2020 ANNUAL REPORT
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SUSTAINABILITY REPORT STRATEGIC REPORT
4 3
2020 ESG Performance Overview
The Company’s ESG targets are an expression of Jadestone’s commitment to continuous improvement and
full transparency. They form part of the annual Executive KPIs, linking sustainability performance with pay,
which enable Jadestone to incentivise and measure progress against its strategic objectives.
Aspiration
2020
Target
2020
Performance
• Not Achieved • Ongoing • Achieved
More
Info
l Reducing our Energy
a
& GHG Emissions
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E
Excellence in
Environmental
Management
Reduce gas flaring at Montara
(GHG emissions) by 10%
Target exceeded with flaring reduced by 40% compared to 2019,
equivalent to 90,000 t of CO2-e saved
Reduce diesel usage at Montara by 10%
Target exceeded with diesel use reduced by 33%
Ensure zero Loss of Primary Containment (LOPC)
-Tier 1
1 LOPC - Tier 1 event
Improve overall oil-in-water (OIW) discharge
performance at both facilities by 10% < 30mg/L
Target exceeded with average oil-in-water discharge around
14mg/L
Exceptional Regulatory
Management
Target Zero regulatory enforcement notices and
zero fines for regulatory breaches
1 enforcement notice issued to the Stag asset
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Exceptional
Occupational Health
and Safety Culture
Target Zero Recordable Incidents, with
continuous improvement year on year (<2)
0 Recordable incidents
Reduce Medical Treatment Cases by 10% through
leadership and culture
0 Medical treatment cases
Provide full time medic to indigenous
communities at Truscott during the COVID-19
pandemic
Recruit and train local nationals where possible,
and to the highest standards
Medic currently stationed at Truscott
Breakdown of local nationals and Jadestone’s internship and
apprenticeship programme are detailed in Section “Workforce
Management and Diversity”
Engaged, supported
and diverse workforce
Provide training programmes for 4 Interns, and
recruit 2 new graduates in 2020
9 internship and apprentice placements in Australia
and Malaysia
Ensure robust succession plan in place & high
retention of 92% with positive feedback
Leadership team and key roles succession plans in place; high
retention of 96% reflective of positive sentiment amongst
employees
Build open relationships with key local
stakeholders and communities
Jadestone’s approach is discussed in Sections “Stakeholder
Management” and “Community Engagement”
Growing engagement
and investment in local
communities
Develop increasing effort and investment into
local social support. Target 10% increase year-
on-year
Investment target exceeded, with Community Engagement and
volunteering funded and delivered
Develop a local stakeholder consultation strategy
Corporate Stakeholder Engagement Strategy approved
ethics and transparency
Critical Incident
Risk Management
Excellence in business
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L
Providing energy
to meet global demand
in the most efficient
and sustainable way
i
Target Zero fines for any regulatory breaches for
non-compliance
0 fines or sanctions for non-compliance with laws and
regulations
Maintain top Quartile Governance Standards
QCA Corporate Governance Code adoption
Perform 1 full emergency exercise and minimum
2 desktop exercises to test preparedness
Target exceeded, with 1 full and 4 IMT drills conducted
Deliver production at the improved unit cost as
agreed in performance targets
• Delivered unit opex in line with original guidance;
• Delivered revised production target, reduced in step with
deferred capital investment
Deliver capital investment programmes, adding
reserves and extending facility life as agreed in
performance targets
Jadestone reduced 2020 activity and investment levels to
maintain balance sheet strength with revised short-term
production guidance in the face of the pandemic
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Sustainability at Jadestone
As a leading oil and gas development and production company in the Asia
Pacific region, Jadestone strives to deliver sustainable value for all of its
stakeholders in a safe, secure, environmentally and socially responsible
manner. It achieves this by ensuring it reduces its environmental footprint
through the life cycle of developments and by bringing social and economic
benefits for people associated with its operations, in alignment with
Jadestone's Shared Values.
Jadestone’s Shared Values
Respect
Integrity
Safety
Sustainability
Passion
Results-Orientated
Jadestone’s key policies can be found on Jadestone’s website
Jadestone’s ESG Framework
Sustainability
Ensuring Jadestone reduces its environmental footprint through the life cycle of developments
and brings social and economic benefits for people associated with its operations
Strategic Pillar
Environmental
Human & Social Capital
Leadership & Governance
ESG Aspiration
• Excellence in Environmental
Management
• Reducing our Energy & GHG Emissions
• Exceptional Regulatory Management
• Exceptional Occupational Health &
Safety (“OHS”) culture
• Engaged, supported and diverse
workforce
• Growing engagement and investment
• Exceptional Incident Preparedness
• Excellence in business ethics,
transparency & governance
• Meet global energy demand in the
most efficient and sustainable way
in our communities
Material Matters
• Environmental Management
• Emissions and Discharges
• Climate Change - GHG
• OHS
• Workforce Management & Diversity
• Stakeholder Management
• Leadership & Governance
• Critical Incident Risk Management
• Business Ethics & Transparency
• Economic Performance
• Asset Integrity & Process Safety
• Regulatory Management
SDG Alignment
7 RENEWABLE
ENERGY
14
LIFE BELOW
WATER
13
CLIMATE
ACTION
3
GOOD
HEALTH
8
GOOD JOBS
AND ECONOMIC
GROWTH
8 GOOD JOBS
AND ECONOMIC
GROWTH
7 RENEWABLE
ENERGY
14 LIFE BELOW
WATER
“Jadestone’s ESG Framework has evolved
over the course of 2020 to depict its
continued alignment with wider societal
challenges addressed by the Sustainable
Development Goals.”
Paulina Poray
ESG LEAD
MCC ENVIRONMENT & SUSTAINABILITY
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The United Nations
Sustainable Development Goals
The UN SDGs were developed and adopted by all United Nations Member
States in 2015 to achieve a more sustainable future for all by 2030.
The UN SDGs represent an opportunity for organisations to
identify the major global challenges on which they can create the
most impact. Jadestone believes it can support a number of UN
SDGs, either through positive contributions or by preventing or by
mitigating negative impacts. Whilst its business activities touch
directly or indirectly on many of the goals, Jadestone has selected
the goals that most closely align with its current business strategy,
activities and purpose. It has also considered how these specific
goals relate to the material matters, orientating its 2021 strategic
corporate goals around them. Jadestone will continue to align its
ESG framework and programmes with the UN SDGs in the years
to come.
3 GOOD HEALTH
AND WELL-BEING
7 AFFORDABLE AND
CLEAN ENERGY
8 DECENT WORK AND
ECONOMIC GROWTH
13 CLIMATE
ACTION
14 LIFE
BELOW WATER
Ensure healthy lives
and promote well-being for
all at all ages
Ensure access to
affordable, reliable,
sustainable and modern
energy for all
Promote sustained,
inclusive and sustainable
economic growth, full and
productive
employment and decent
work for all
Take urgent action to
combat climate change and
its impacts
Conserve and sustainably
use the oceans, seas and
marine resources for
sustainable development
• OHS
• Workforce Management
• Climate Change and GHG
• Economic Performance
• Economic Performance
• Workforce Management
• Climate Change and GHG
Related Material Matters
& Diversity
Through strong efforts to
protect its workforce from
the on-the-job risks and
hazards as well as employee
assistance programmes,
Jadestone ensures that
its workforce is supported
and can sustain healthy
livelihoods.
Jadestone also recognised
the need to support the
wider community in the face
of the global pandemic by:
• Provision of a full-time
medic to the indigenous
community of a remote
part of Western Australia
• Supporting a local
orphanage in Malaysia
For more details refer to
Sections “Occupational
Health & Safety”,
“Workforce Management &
Diversity” and “Community
Engagement”
& Diversity
• Stakeholder
Management
Jadestone’s Contribution
Jadestone will play a vital
role in providing access to
affordable, and reliable
energy by the supply of gas
to local Southeast Asian
communities and industries;
a region experiencing energy
supply shortage in the midst
of rapid growth.
Jadestone is committed
to sustainable extraction
from existing infrastructure,
thereby reducing the need
for greenfield development,
whilst setting emission
reduction targets to lower
its operational carbon
footprint.
For more details refer to
Section “Climate Change
and Greenhouse Gases”
Jadestone recognises that
it can create sustainable
value for local communities
and maximise positive
contribution by:
• Creating local
employment
• Paying local taxes
• Supporting local business
as part of its supply chain
• Community support
programmes based on
community needs
For more details refer to
Sections “Community
Engagement” and
“Workforce Management
& Diversity”
As society responds and
transitions to a low-carbon
economy, Jadestone’s
contribution in the mid-
term is to ensure the most
efficient use of existing
facilities and maximising
reserves recovery from
already discovered reservoirs
and existing infrastructure.
Jadestone is committed
to reducing its energy use
and GHG emissions from
operations by identifying
further emission reduction
opportunities and making
deliberate investments
towards improved emissions
outcomes.
The Company is currently
reviewing the material
implications of climate-
related risks on its business,
and this analysis will further
inform its climate change
strategy to be developed in
the course of 2021.
For more details refer to
Section “Climate Change
and Greenhouse Gases”
• Environmental
Management
• Emissions & Discharges
• Critical Incident
Response
Jadestone recognises that
its offshore operations
carry a risk of impacting the
aquatic systems and it takes
great care in minimising
any negative impacts by
investing into its assets and
raising their environmental
performance.
For more details refer to
Section “Emissions and
Discharges”
Material Matters
The annual materiality assessment helps to identify and prioritise the most
significant sustainability issues to Jadestone’s business and its stakeholders.
Materiality Map
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Local Community Impacts
Human Rights & Modern Slavery
Energy Consumption
Waste
Fossil Fuel substitutes
Indigenous Peoples
Stakeholder Management
Asset Integrity & Process Safety
Business Ethics & Transparency
Economic Performance
Leadership & Governance
OHS
Emissions & Discharges
Climate Change – GHG
Regulatory Management
Workforce Management
& Diversity
Critical Incident Risk Mgt.
Environmental Management
(incl. Unplanned Hydrocarbon
Releases)
Innovation & Technology
Cyber Security
LOW
MEDIUM
HIGH
VERY HIGH
Importance to Jadestone and its business
Environment
Human & Social Capital
Leadership & Governance
Materiality Assessment
In 2020 Jadestone conducted its second materiality assessment.
This assessment is important to the Company as it ensures
that it is responding to the ESG issues, risks and opportunities,
seen in the context of emerging global and local trends, key
stakeholder interests, industry best-practice and Jadestone’s
overall corporate context.
In line with the GRI standards and IPIECA Guidelines, Jadestone has
sought input from a range of internal and external stakeholders to
help establish ESG materiality. It regularly engages the investment
community in gauging feedback on what ESG topics it should
prioritise and, for the purpose of this assessment, targeted
interviews have been conducted to inform this round of disclosures.
Internally, an extensive review of potential topics of high materiality
was reviewed by Jadestone leadership from across functional areas
and geographies.
The Company also reached out to its employees through a survey,
asking which ESG topics they identified as most important,
resulting in a balanced internal and external perspective.
Material Matters
The outcomes of this assessment are displayed in the sustainability
map above, with 12 Material Matters identified across the
Environment, Human & Social Capital as well as Leadership &
Governance pillars.
In addition to those matters listed as highly material, Jadestone
also recognises matters that are the ones ‘of very high importance’
to stakeholders demand respect and attention. These are also
referenced in this report.
Principle Changes in Materiality
Jadestone’s Material Matters have largely remained unchanged from
2019. However, some matters increase in their importance to the
business as summarised below:
• Climate Change – GHG emissions now has elevated importance
to the Jadestone business, reflecting a growing recognition of
the role Jadestone can play in the energy transition.
• Workforce Management has an expanded scope to include
Diversity, reflecting an area that is increasingly recognised as
requiring more management attention and focus.
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Environment
2020 Highlights
0
‘Reportable’
environmental
incidents
90,000 t
Reduction of CO2-e
due to significant
reduction in flaring
2021 Outlook
14 mg/L
Average OIW
concentration
TCFD
Alignment across
risk and governance
15 %
Reduction of
overall GHGs
8 %
OIW Reduction at
the Montara asset
• Target Zero regulatory enforcement notices
• Seek opportunities for continuous
• Target Zero ‘reportable’ incidents
• Target Zero environmental HiPOs
• Target Oil-in-Water concentration in produced
water <15mg/L
• Meet the Asset Safeguard limits for air
emissions at operating assets
improvement in emissions and discharges
• 5% reduction of flaring and diesel use
• Continued alignment with the TCFD
recommendations and commitment to
transparent disclosures
“Jadestone takes a precautionary approach
to managing its environmental impacts
through robust environmental
management that focuses on
minimising pollution, reducing
carbon footprint and commitment
to safety.”
Helen Astill
HSE MANAGER
Produced water sampling
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MATERIAL MATTER
Environmental Management
Strong environmental performance
is essential to Jadestone's success
and continued growth.
2020 HIGHLIGHTS
• Zero ‘reportable’ incidents
• Zero environmental HiPOs
Jadestone’s HSE Management System (Australia)
Corporate level
Corporate HSE Plan
HSE Policy
Legal Obligations
Asset level
Environmental Impact
Statements
Environmental Plans
Oil Pollution
Emergency Plans
Safety Cases
Why it Matters
Jadestone recognises the environmental risks associated with the
operations of its facilities and offshore installations. Effective
Environmental Management is central to its operations to ensure
best-practice environmental stewardship through efficient resource
use, reducing emissions and discharges, preventing pollution and
spills, managing waste and protecting biodiversity.
Retrieving the Stag marine breakaway coupling
Management Approach
Jadestone applies the precautionary principle when undertaking
activities across the whole life cycle of operating assets in all
countries where it has operations. For its operations in Australia the
approach to managing environmental risks is closely integrated with
health and safety considerations, addressed through an overarching
HSE Management System (“HSE MS”). The system is aligned to
the principles of the ISO14001 standard, ensuring that there are
processes and practices in place to manage environmental impacts,
risks and performance whilst meeting legislative and corporate
requirements.
Robust impact and risk assessment form a cornerstone of
Jadestone’s management framework, along with a strong focus
on prevention of spills, effective and reliable emergency response
and preparedness systems, including hydrocarbon spill response
capability.
For the assets Jadestone operates in Australia, bespoke
Environment Plans have been developed. These Plans establish
the regulatory context and legal requirements, identify key areas
of impact and risk, define the most appropriate management
practices and performance outcomes whilst embedding a principle
of continued review, consultation and improvement.
In addition, Jadestone applies a comprehensive compliance
assurance programme to demonstrate its environmental
performance is as intended. This programme includes monthly
checks of conformance with the environment plans, quarterly
planned audits at operating facilities, six-monthly checks for
currency in the legislative framework, and annual performance
reporting to national Regulators. These activities then contribute to
identifying lessons learnt and ensuring a continuous improvement
in environmental performance.
As an expanding business, environmental standards, policies and
practices are established for acquired assets that align with the
standards in their local jurisdictions.
Regulatory Management
Jadestone is committed at a minimum, to comply with applicable
national and international regulatory requirements at all levels
in its operating regions. Regulatory Management pertaining
to environment, health and safety is integral to Jadestone’s HSE
Management System. This starts with proactive dialogue with
relevant regulatory bodies in the countries of operation. Below
is a summary of key 2020 regulatory activities across the regions:
• Australia
In addition to routine environmental performance reporting
submitted to the regulator on an annual basis to demonstrate
compliance with regulatory approval commitments:
– Revised Environment Plan for the Stag asset prepared
to reflect the change to tanker operations in the field.
– New Environment Plan prepared for the Montara asset
in relation to drilling campaigns.
– Enforcement notice issued by the regulator for the Stag
asset (discussed in detail in Case Study: Stag).
•
Indonesia
– Applications for Environment and Forestry Permits for the
Company’s Akatara gas development project in Sumatra
prepared; the Environment permit obtained in August 2020.
– An Environmental Impact Analysis as required by the
Indonesian regulator prepared.
– Environmental licence for field development and production
obtained, a significant milestone for the Company.
• New Zealand
– Regulatory approval obtained for a suite of documents
pertaining to the Maari permit, as part of approval process
for the transfer of interest and operatorship (e.g. Oil Spill
Contingency and Emergency Spill Response Plans,
Ecological Effects Management Plan)
CASE STUDY: STAG
Ensuring safe and sustainable offtake
arrangements at Stag
In September 2020 Jadestone changed its offtake arrangements
at the Stag oilfield, substituting an old FSO with a direct offtake
tanker. Jadestone awarded this contract to a respected international
tanker provider.
During the first crude loading under new offtake procedures, traces
of oil were spotted around the offtake tanker and as a result, the
transfer was immediately stopped. It was later confirmed that the
marine breakaway coupling (“MBC”) in the import floating hose
connected to the tanker had activated due to impact by the bulbous
bow of the tanker with the MBC. The valve of the MBC (as shown
in the photo above) closed in accordance with its design and shut
off the hose line, thereby preventing any significant leakage of oil
into the marine environment. A nominal amount of oil was released
from the hose connected to the MBC, again as per equipment
design, causing the oil sheen observed. Based on characteristics of
the sheen, equipment design and historical events, it was estimated
that 68.5 litres of oil was released; an amount below the required
regulatory reporting limits. Regardless, Jadestone reported the
release to NOPSEMA, the Australian regulator.
Spill management
Jadestone’s HSE framework examines the risk and potential
consequences of incidents and accidents. This includes oil spills,
chemical spills and the release of other hazardous substances.
Jadestone has developed contingency plans and spill management
and emergency response practices.
Jadestone’s HSE Policy can be found on Jadestone’s website.
Inspecting the Stag marine breakaway coupling
Following the incident, Jadestone conducted an internal
investigation into the root cause and contributing factors of
the MBC activation. The Australian regulator NOPSEMA issued
Jadestone with a direction notice containing a number of actions,
including a direction to identify and implement interim control
measures to prevent recurrence. Jadestone management worked
through the directions in close consultation with NOPSEMA,
implementing and evidencing amendments to its practices. A
key lesson from the event is for a comprehensive handover to be
undertaken for new tanker crews to ensure MBC related risks and
safe operations are fully understood.
Notwithstanding this event, Jadestone remains confident that it
has implemented a new operating model that will be a significant
improvement compared with the previous offloading model,
which relied on an ageing vessel on location, inherited as part
of the acquisition of the Stag asset. The new model provides
environmental risk mitigants by eliminating one vessel in the
field, removing the need for ship-to-ship oil transfers at sea, and
providing modern double-hulled tankers. At the same time, this
innovative offloading model results in substantial cost savings for
the business.
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JADESTONE ENERGY 2020 ANNUAL REPORT
50
SUSTAINABILITY REPORT STRATEGIC REPORT
51
2020 Performance
Jadestone remained a strong and resilient operator, maintaining
operations despite tough logistical challenges amidst the global
pandemic. This was achieved without compromising operational
excellence in environmental management:
• Zero ‘reportable’1 environmental incidents at its operating
facilities
• Zero environmental high potential incidents recorded during
the reporting period
• One enforcement notice issued in relation to an incident at the
Stag oilfield (see Case Study: Stag) which has been satisfactorily
closed with the Regulator.
Environmental management metrics
2020
2019
‘Reportable’1 environmental incidents
Loss of Primary containment - Tier 1
Environmental High Potential Incident (“HiPO”)
Regulatory enforcements
Regulatory fines
0
1
0
1
Nil
0
0
0
0
Nil
Future Outlook
Jadestone is committed to maintaining the highest environmental
standards and will foster a culture of continuous improvement by
aspiring to achieve in 2021 the following goals:
2021 ESG STRATEGIC CORPORATE GOALS
• Target Zero regulatory enforcement notices
• Target Zero ‘reportable’1 incidents
• Target Zero environmental HiPOs
Jadestone will also continue integrating its new assets into its HSE
Management Systems.
1
‘Reportable’ refers to there being no breach of the Environmental Performance
Outcomes as defined in the Environment Plan for the asset in alignment with
NOPSEMA’s definition
View from Montara
MATERIAL MATTER
Discharges and Emissions
Jadestone carefully manages discharges
and emissions and is committed to
continuous improvement.
2020 HIGHLIGHTS
• 6ppm OIW concentrations at Stag
• 8% reduction in OIW concentration
at Montara
Why it Matters
A range of pollution impacts and risks to air and water are
associated with offshore oil and gas production activities.
Jadestone monitors and manages its emissions very closely
across a range of parameters including nitrogen oxides (“NOx”),
sulphur dioxide (“SO2”), total volatile organic compounds (“TVOC”),
particulate matter and GHGs.
As an offshore oil and gas operator, Jadestone understands that its
business operations impact and depend on water resources.
Jadestone is committed to minimising impacts of its discharges
to water by managing produced water and process wastewater in
line with national management framework recommendations and
industry best practice.
Montara Venture FPSO
Management Approach
Air emissions
The main sources of atmospheric emissions during operations
include the use of fuel to power generators and mobile and fixed
plant, flaring of gases encountered from the oil extraction process,
venting from storage infrastructure as well as fugitive emissions.
Jadestone implements management measures that include
scheduled maintenance of equipment and availability of critical
equipment spares, to keep air pollutant emissions from Jadestone
operations as low as possible. In Australia, Jadestone reports a
range of its pollution emissions to the National Pollutant Inventory
and GHG emissions to the Clean Energy Regulator. NOx and SO2
emissions released from Jadestone's operations in Australia have
increased in 2020 due to full year of Montara operations (acquired
in August 2019). GHG emissions are discussed at length in the
section Climate Change and GHG emissions.
Air Emissions: NOx, SO2, TVOC
1,000
800
600
400
200
0
tonnes/year
NOx
SO2
TVOC
2019
2020
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SUSTAINABILITY REPORT STRATEGIC REPORT
Discharges and Emissions (continued)
Discharges to water
A key focus for Jadestone in managing impacts to the marine
environment from its offshore facilities, relates to the treatment
and discharge of operational waste streams, including produced
water. Produced water is formed as a by-product of extracting oil
from Jadestone’s offshore operations.
Production from the subsurface reservoirs is typically processed
in an on-site processing plant through a separation system into
oil, gas, and water streams. The latter stream is either re-injected
into the reservoir to maintain underground reservoir pressure, or
it is cleaned, filtered, monitored for contaminants such as residual
Oil-in-Water (“OIW”), and then discharged into the sea, should
discharge quality be satisfactory.
Jadestone’s approach to managing produced water is to reduce
the OIW content to threshold concentrations which are below
that considered appropriate under the National Water Quality
Management Framework (ANZECC/ARMCANZ 2000).
Whilst other routine operational liquid discharges (e.g. flame
retardants, cooling water, treated sewage) may be introduced
to the environment from Jadestone’s operations, the potential
impact is minimised through the use of a risk assessment process
for chemicals, onsite wastewater treatment and other specific
management controls as appropriate.
Waste management
Jadestone waste streams on its offshore facilities typically include
putrescible waste and non-hazardous materials resulting from day-
to-day operations. Hazardous waste associated with the facilities
may include fuel and lubricating oils, and chemicals associated
with operations. Jadestone’s approach to hazardous waste starts
with effective materials management. Storage and handling of
mixed classes of dangerous goods follows the guidelines set in
Australian and New Zealand best practice standards. The transport
of hazardous wastes is managed in accordance with respective
MARPOL Regulations and relevant legislative requirements. Solid
waste produced at the sites in Australia are logged and reported
in monthly waste reports by Jadestones’s waste management
contractor. Solid wastes are segregated and transferred to a licensed
waste facility as per Waste Management Plans and the assets’
Environmental Plans.
Stag crude oil offtake using the Maersk Tacoma
53
2020 Performance
Through its focus on OIW performance, Jadestone has continued
to reduce the concentration levels at the Montara oilfield, achieving
an 8% reduction in average concentrations when compared to 2019
levels. The Company continues to investigate further improvement
options for produced water streams.
The Stag asset, with concentrations around 6 ppm, is considered
to be best-in-class with very low OIW discharge performance,
and with little room for further optimisation. Jadestone monitors
OIW concentrations daily ensuring that it maintains this high
performance.
Through the application of best practice topside management,
regular maintenance of oil removal equipment and investment
in upgrading equipment from time to time, improvement of
combined OIW concentration in 2020 to a daily average of 14mg/L
was achieved. This is well below the upper limit of 30mg/L required
by the operational Environment Plans.
Emissions & Discharges Metrics
Unit
2020
2019
Oil in Water Concentrations
Air emissions NOx
Air emissions SO2
Air emissions TVOC
ppm /mg/L
tonnes
tonnes
tonnes
14.42
422
9
776
14.7
222
9
448
Future Outlook
Jadestone is focused on meeting performance pertaining to the
quality of produced water discharges. It continues to commit to
achieving the following environmental performance outcomes for
produced water discharges, which is satisfied through rigorous and
impartial laboratory testing.
Achieve the national marine water quality
guidelines for protection of 99% of species
as defined by the National Water Quality
Management Framework (ANZECC/ ARMCANZ
(2000)) at the boundary of the area of impact.
Jadestone has the following performance outcome targets for
produced water quality and air emissions in 2021:
2021 ESG STRATEGIC CORPORATE GOALS
• Target Oil-in-Water concentration in produced
water <14mg/L
• Meet the Asset Safeguard limits for air
emissions at our operating assets
• Seek opportunities for continuous improvement
in emissions and discharges
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Decommissioning
Decommissioning is the process of removing or applying to leave
in-situ production-related assets, including platform installations,
equipment, pipelines and other subsea infrastructure, in a safe and
environmentally responsible manner, at the end of their useful life.
This includes plugging and abandoning wells, removal of unused
equipment and carrying out any necessary post-decommissioning
monitoring.
When managing unused equipment in its petroleum titles, Jadestone
considers a range of priorities including maintenance and integrity
requirements of the equipment while in-situ, needs of other marine
users in the area, and environmental impacts and risks associated
with the equipment whilst both in-situ and during removal, once this
has been determined to be the best course of action.
Jadestone recognises that titleholders are required by law to
dismantle and remove, reuse equipment or seek exemption to
allow the equipment to be left in place. Jadestone takes a cradle-
to-grave approach to its operations and sees decommissioning at
the end of life of its assets as a phase in the overall value chain, for
which it takes full responsibility. With all Jadestone’s assets’ lives
being extended through investment by at least another decade
or so, decommissioning of assets is not yet a material matter
for Jadestone, although disused equipment is actively managed.
Jadestone’s insurance and financial positions guarantee that
the Company will be ready to take on decommissioning activities
when required.
Whales with calf, offshore western Australia
CASE STUDY:
Plastics Free July campaigns
Waste streams generated in Jadestone's offices are typically
separated into recyclables and landfill, with increasing efforts
to minimise the latter.
In 2020, Jadestone’s regional offices participated in the Plastic
Free July campaign for the second year running. Due to restrictions
related to the global pandemic, not all offices were able to run
office-based initiatives and instead expanded the campaign,
encouraging minimising plastics from day-to-day household use.
The Perth office, not subject to COVID restrictions, ran in July
2020 an office-based Plastics Free campaign which focused on
collecting soft plastics for disposal the REDcycle programme.
Due to the commitment of the Perth employees, over 4kg of soft
plastics had been diverted away from landfill and the effort of
Perth employees has continued beyond the campaign.
Through supporting participation the Plastic Free July campaign,
the Company is encouraging employees to consider waste
management and efficient disposal solutions both as part of
their daily lives, and as part of Jadestone’s corporate culture.
Minimising waste is a key part of driving efficiency throughout
everything Jadestone does.
JADESTONE ENERGY 2020 ANNUAL REPORT
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55
MATERIAL MATTERS
Climate Change and Greenhouse
Gas Emissions
Jadestone is ensuring it is well positioned
to navigate the energy transition through
its focus on efficient, lower-carbon and
lean operations.
2020 HIGHLIGHTS
• 90,000 t of CO2-e avoided as a result
of significant reduction in flaring
• 15% reduction of GHGs
• TCFD alignment across governance
and risk
Why it Matters
The oil and gas industry is directly responsible for 9% of the global
GHG emissions causing climate change. Furthermore, 33% of global
emissions stem from downstream combustion of fossil fuels1.
At the same time, oil and natural gas play critical roles in today’s
energy and economic systems, with low carbon alternatives not yet
able to fully satisfy the world’s energy needs. The energy system
will need to undergo a carefully orchestrated transition to meet
this dual challenge, and it is Jadestone’s view that the oil and gas
industry plays a vital role in providing responsible solutions during
this transition.
Climate change presents a pressing societal
challenge of our times: to decarbonise the
economy and limit global warming, whilst
continuing to provide affordable, reliable
and abundant energy which is essential
for economic development and sustained
improvements in the quality of life and the
eradication of poverty.
Management Approach
Even as society transitions to a low-carbon economy, Jadestone
believes that the ongoing need for energy will continue to increase,
with more efficient extraction and use of hydrocarbon fuels being
an indispensable part of energy supply for some time to come.
According to the International Energy Agency, in the Sustainable
Development Scenario, that charts a path consistent with the Paris
Agreement, oil and gas are still expected to account for 46% of the
world’s energy mix in 20402. Despite the circa 6% energy demand
decline experienced in 2020 due to COVID-19, the most recent
forecasts suggest that global energy demand will still grow as a
result of population growth and further progress within developing
economies. The demand for reliable and affordable energy is
particularly strong in Southeast Asia, with some populations not yet
having any access to modern energy. A clear focus on minimising
GHG emissions, whilst maintaining a low-cost structure ensuring
profitability even in a low oil price environment is critical.
As the industry is learning how to navigate this new landscape,
Jadestone continues to develop its approach to climate change
focusing its climate action across three main pillars.
Energy use
Direct energy use on Jadestone’s facilities arises from combustion
of such fuels as produced gas, and diesel that support day to day
operations. In August 2019 Jadestone acquired the Montara asset,
including a warehouse in Darwin, which resulted in the Company’s
energy consumption almost doubling in 2020.
Given that Jadestone is currently in a growth phase, with more
new assets to be added to the portfolio, its overall energy use is
expected to increase in the coming years. Additional maintenance
activities and drilling campaigns may see energy use fluctuate
annually. Jadestone is committed to being fully transparent about
such activities. Simultaneously, when taking on mid-life assets,
Jadestone continuously looks for ways to optimise operations
opportunities as well as investing in equipment which reduces
emissions and discharges.
Whilst electricity used in Jadestone's offices is low when compared
to use in operations, it did increase by 30% in 2020, with the
variation attributable to the addition of an office in New Zealand
and a warehouse in Australia.
GHG emissions
Jadestone’s scope 1 GHG emissions typically arise from the
combustion of fuel gas, diesel and flaring of unprocessed natural
gas, a by-product of the production process. In 2020 the Company
experienced a considerable increase in its overall GHG emissions due
to the acquisition and operatorship transfer of Montara in 2019.
As per Jadestone's business strategy of acquiring mature, mid-life
assets and transforming them into more sustainable, productive
and efficient entities, the Company has invested in efficiency
measures and introduced improvements to Montara’s operational
practices. Through an increase of unprocessed gas reinjection at the
site, an estimated 90,000 t of CO2-e of emissions was eliminated
(see Case Study: Montara). Had Jadestone continued to operate the
site in the same way as the previous operator, Jadestone’s Scope 1
emissions in 2020 would have been 36% higher. To illustrate this
positive improvement, Jadestone has charted a full 2019 emissions
data set for Montara as a baseline, on the principle that Jadestone’s
operational control and thus GHG responsibility begins at the point
of operator transfer in August, 2019.
Total Energy Use:
Operations and Office Electricity
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
GJ
1,092
4,234,802
838
2,203,587
2019
2020
Direct Energy – Operations
Electricity – Offices
Total GHG Emissions: Scopes 1* and 2
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
t CO2-e
15%
223
253,366
164,529
205
134,382
2019
2020
Scope 1
Scope 2
Scope 1 –
under former operator
* A full 2019 emissions data set for Montara had been plotted,
designating the portion of emissions that Jadestone has no operational
control over as it covers the emissions for period January - July 2019,
under former operator
Jadestone's Climate Action Priority Areas
JADESTONE'S CLIMATE CHANGE ACTION:
Supplying cleaner energy alternatives to Southeast Asia
1.
Reducing GHG emissions in
operations
2.
Increasing climate-resiliency
of the business
3.
Supplying cleaner energy
alternatives
Continued focus on efficient
energy use and minimising
GHG emissions
Ensuring business model and
strategy is resilient in the face of the
energy transition
Increasing gas ratio in the product mix3
and continued supply of high-quality low-
sulphur crude oil
1 McKinsey & Company, “The future is now: How oil and gas companies can decarbonise”, January 2020
2
International Energy Agency, “Total energy supply outlook by fuel and scenario, 2000-2040”, September 2020
3 Over the past decade, switching from coal to gas has proven to be a highly effective way to reduce power generation emissions while minimising costs and preserving grid stability.
Such a switch can reduce emissions by 33% when applied to heating, and up to 50% in electricity generation with the caveat that fugitive emissions are managed responsibly (EIA,
2019, The role of gas in Today’s energy transition).
Jadestone plays a vital role in providing access to affordable, and
reliable energy by the supply of gas to local Southeast Asian
communities and industries, in a region experiencing energy supply
shortage in the midst of rapid growth.
environmental impact. This will reduce dependence on imported
thermal coal given the operational constraints imposed by the
national electricity grid and the regionalised nature of the Vietnam
gas pipeline network.
Jadestone has plans to develop two fully appraised gas fields in
Vietnam, which will see this lower carbon fuel, brought to the
market, potentially replacing coal, and backfilling existing but
declining sources of energy. The Nam Du and U Minh gas fields in
offshore southern Vietnam, when developed, will supply domestic
gas to the Ca Mau power and industrial complex and feedstock
to a fertiliser plant supporting farmers in the Mekong Delta. The
development will use existing pipeline infrastructure to reduce
In Indonesia, Jadestone is supporting the Government’s efforts
to meet local energy needs and domestic liquefied petroleum gas
(“LPG”) demand for residential and cooking purposes through the
development of Jadestone’s Akatara gas field in Sumatra. When
operations commence, the Akatara field is expected to produce
around 200 metric tonnes of LPG per day targeting the total LPG
demand of the whole local province.
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SUSTAINABILITY REPORT STRATEGIC REPORT
5 7
Future Outlook
Jadestone is committed to ensuring that the carbon footprint of its
assets is reduced to as low as reasonably practicable. Throughout
2021 Jadestone will continue looking for emissions reduction
opportunities across existing and newly added assets. Furthermore,
Jadestone recognises that it will continue to evolve its strategy
to demonstrate to its stakeholders a compelling business case and
a relevance in the face of the energy transition as demonstrated
by priority 2.
Jadestone’s climate change strategy will identify priority areas for
action, setting a more strategic direction for navigating the energy
transition and inevitably, mapping out a route towards net zero
carbon emissions, in line with the Paris agreement.
2021 ESG STRATEGIC CORPORATE GOALS
CLIMATE CHANGE AND GHG COMMITMENTS
Energy & GHG Emissions
Metrics
Unit
2020
2019
Hydrocarbon production
Energy use - Operations
Electricity Use - Offices
Total Flaring
mm bbls
GJ
GJ
m3
4,2
4,234,802
1,092
62,123,031
Diesel Use
kL
1,326
Total GHG Scope 1
tCO2-e
253,366
GHG – crude oil
GHG – produced gas
GHG – flaring
tCO2-e
tCO2-e
tCO2-e
13,066
73,609
161,953
GHG – diesel
tCO2-e
3,592
Total GHG Scope 2
tCO2-e
223
4,5
2,178,652
838
35,551,790
(91,764,2901)
942
(1,8791)
134,382
(298,9111)
13,284
25,229
92,683
(239,2271)
2,551
(5,0901)
180
1
To ascertain the magnitude of GHG reduction, 2019 performance in brackets also
includes Montara performance data covering the period under the previous operator
Task Force on Climate-related
Financial Disclosures
In 2020 Jadestone developed its alignment with the recommendations outlined in the G20’s Financial Stability Board Task
Force on Climate-related Financial Disclosures, utilising it as a practical tool for navigating the transition to a low-carbon
economy and increasing our understanding of the resilience of our business strategy. Jadestone introduced improvements
across the Governance and Risk Management areas.
Governance
Disclose the organisation’s governance around climate-related risks and opportunities
Board oversight of climate-related risks and
opportunities
Jadestone recognises that climate change is a potential strategic risk to companies and society at large, and it
is therefore the duty of the Board to manage it in the same way as any other strategic risk. The Board reviews
Jadestone’s Corporate Risk Matrix biannually, which as of 2020, also includes the transitional risk of climate
change. In addition, the Board receives monthly ESG briefings from the Leadership Team, which report on progress
of climate-related programmes where appropriate.
The Board’s HSE, Remuneration and Disclosure Committee are jointly responsible for overseeing Jadestone’s
strategies, programmes, performance and disclosures relating to ESG, which includes climate change.
Management role in assessing
and managing climate-related risks
and opportunities
In 2020, the Climate Change Working Group (“CCWG”) was formed, which included senior leaders from Finance,
Risk & Strategy, HR, Investor Relations and Environment. The CCWG is tasked with developing climate-related
strategies and programmes in line with the TCFD recommendations and its work is supported by energy and
emissions reporting from key functional areas such as HSE and Operations.
1. Reducing GHG emissions in operations by…
2. Increasing climate-resiliency of the business by …
Strategy
A further 5% reduction of flaring and diesel use
•
•
Emissions Reduction options prioritised and deployed across
existing assets
Increased internal GHG reporting to support performance tracking
and decision-making
• GHG Emission review conducted on the New Zealand asset
• Survey of actual fugitive emissions conducted in a pilot project
at Stag
Continued alignment with the TCFD
recommendations and commitment to
transparent disclosures
• Develop a Climate Change Strategy in alignment with TCFD
•
requirements
Further integration of climate risk into the Corporate Risk
Framework and business processes
• Define most suitable metrics for assessing climate related risks
and opportunities
• Develop Scenario Analysis methodology
CASE STUDY: MONTARA
Reduction of flaring and diesel use
2020 performance:
40% reduction in flaring, 10% target exceeded
33% reduction in diesel use
90,000t of CO2-e avoided
Upon taking over operatorship of the Montara asset, Jadestone’s
Operations team identified an opportunity to increase the uptime
of the reinjection compressor and therefore enable increased
reinjection of produced gas. This presented an opportunity of great
environmental value whilst also maintaining reservoir pressure
support. At acquisition, the average daily flaring volume was
approximately 10mm scf/d, with the majority of produced gas
being flared. The Company has made a substantial investment into
the gas reinjection system and has adopted improved operating
practices. This is reflective of the strong management focus on
flaring volumes, a key metric monitored and reviewed daily at
Jadestone.
*
2019 levels include data from previous operator to arrive at the full calendar
year performance
Montara Venture FPSO
A reduction target was set at 10% for Montara, however through
this project, Jadestone has managed to increase equipment
reliability more than expected, achieving 40% reduction in flaring
during 2020, compared to 2019 levels*. A further 5% reduction has
been targeted for 2021. Jadestone will continue to seek ways of
further driving down flaring volumes, whilst acknowledging that
some level of residual gas flaring is necessary to maintain safe oil
and gas operations.
Diesel consumption at Montara was also reduced by 33%,
exceeding the 10% target set, due to an increased availability of
reinjection gas to kick off wells instead of using diesel. This is both
an environmental and economical improvement to the business.
Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s business, strategy and financial planning
where such information is material
Climate-related risks and opportunities
identified over short, medium and long term
Throughout 2020, Jadestone made considerable progress in understanding its climate-related risks. Through a
series of risk workshops the Company identified and assessed the following climate-related risks:
-
Key physical risks include increase of extreme/adverse weather events, change in metocean conditions and an
increase in high heat days.
Transitional risks include changes in government legislation, shareholder divestment and public expectation
around emissions management and decarbonisation.
-
Impacts of climate-related risks and
opportunities on organisation’s businesses,
strategy and financial planning
Jadestone is currently reviewing the material implications of climate-related risks on its business. This analysis will
inform Climate Change Strategy to be developed in the course of 2021.
These risks were assessed considering short (<2 years) and medium (3-5 years) and long (>5 years) timeframes.
Resilience of organisation’s strategy taking
into account different climate scenarios,
including a 2°C scenario
as above
Risk Management
Disclose how the organisation identifies, assesses and manages climate-related risks
Processes for identifying and assessing
climate-related risks
Climate change considerations are aligned with Jadestone’s formal Risk Management Framework and follow the
same process as the identification and management of risk in other parts of the business. Climate-related risks,
that are of strategic importance, have been incorporated into the Corporate Risk Register in 2020 after a series
of risk workshops facilitated by the newly formed CCWG. Further integration of climate risk into Corporate Risk
Framework is planned in 2021.
Processes for managing climate-related risks
as above
How processes for identifying, assessing,
and managing climate-related risks are
integrated into the organisation’s overall risk
management
as above
Metrics and Targets
Disclose the metrics and targets used to assess and manage the relevant climate related risks and opportunities where such information is material
Metrics used by the organisation to assess
climate-related risks and opportunities in
line with its strategy and risk management
process
For the purposes of internal performance review, Jadestone monitors metrics such as flaring, diesel consumption
and absolute GHG emissions as well as emission intensity of its assets by unit of production.
Jadestone is currently reviewing the implications of the climate-related risks on its business which includes
consideration of the most suitable metrics for assessing climate related risks and opportunities.
Scope 1, Scope 2, and, if appropriate, Scope 3
GHG emissions, and the related risks
Jadestone collects and manages the emission and energy consumption data for its operated assets and
continuously looks for ways to improve the efficiency of operations. Jadestone currently reports Scope 1 and 2
emissions, as per Section "Climate Change - GHG" of this report.
Targets used by the organisation to manage
climate-related risks and opportunities and
performance against targets
In 2021, Jadestone commits to reducing flaring and diesel use by 5% compared to 2020 levels at its Australian
assets.
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Social and Human
Capital
2020 Highlights
0
Lost Time
Injuries (LTIs)
at operating assets
88 %
Nationals directly
employed by
Jadestone
NETTS
Apprentice
programme
participation
2021 Outlook
• Target Zero recordable incidents, (<2)
• Conduct an Employee Engagement Survey,
• Undertake Company-wide HSE Culture Survey
• Complete 8 OHS & Environment audits
•
•
Implement a community activity in all countries
of operation, target 10% increase in spending
year-on-year
Improve the measurement of community
investment impact as well as employee
participation in community programmes
• Retain local national talent, targeting 90%
representation
targeting for 80% participation rate
• Sponsor 2 more apprentices as part of NETTS
programme, and provide student internships
for at least 5 new graduates
• Ensure all employees have completed a
Performance Review under a range of KPIs
• Ensure the offshore workforce achieves
training and competency levels as defined in
the Offshore training matrix, targeting at least
90% completion
“At Jadestone we strive to create
a safe and rewarding working
environment for our workforce,
and go beyond this to recognise
the positive impacts we can
make on wider society.”
Lucy Dean
GROUP HR MANAGER
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Mark Pearce, a mechanical technician on the Montara Venture FPSO
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MATERIAL MATTER
Occupational Health and Safety
Providing a safe working environment and
maintaining people’s health and well-being
is of paramount importance to Jadestone.
2020 HIGHLIGHTS
• Zero LTIs at operating assets
• Healthy and safe workforce during
COVID-19 pandemic
• HSE Culture Survey launched
CASE STUDY:
Exceptional safety record in Australia:
1 and 8 years LTI free
2020 was a year of important safety milestones for the Company’s
Australian operations. In August 2020, Montara achieved 1-year
LTI free (representing the time under Jadestone operating control),
whilst Stag celebrated 8 years LTI free. These milestones are
particularly meaningful in the context of the pandemic and the level
of activity on both assets.
A safety performance like this is a huge credit to the safe and
professional behaviour of the offshore team involving both core
crew and contract partners, onshore support functions, the safety
leadership and the commitment to safety shown throughout the
business right to the top.
Why it Matters
Health and safety considerations remain a central focus for
Jadestone. The Company is committed to providing a safe and
rewarding work environment, and to maintain an exceptional health
and safety performance wherever it operates. As safety starts with
the individual, all individuals who work for Jadestone are expected
to demonstrate a commitment to their own health, safety and
wellbeing. Jadestone is committed to supporting its workforce with
the necessary training, systems, procedures, personal preventative
equipment and tools.
Management Approach
Jadestone’s Board-approved HSE Policy and Corporate HSE Plan
lay out Jadestone’s philosophy and approach to health and safety.
This is further supported by the shared value of “Safety”. Safety
takes precedence in everything Jadestone does and is a key element
identified in Management and employee performance pay.
Electrical maintenance and testing at Lemang
Jadestone's Shared Value
Putting safety first at all times, aligning standards
across assets, geographies and cultures
Jadestone’s HSE Policy can be found on Jadestone’s website.
Regulatory management
Jadestone recognises its duty of care to protect the health,
safety and welfare of its workforce and other stakeholders who
might be impacted by the business. Jadestone abides by the legal
requirements in the countries within which it operates as
a minimum.
In Australia, the OHS regulatory regime for offshore oil and
gas operators uses a safety case approach, as underpinned by
the Offshore Petroleum and Greenhouse Gas Storage (Safety)
Regulations 2009. In this regime an operations-specific Safety
Case document is developed, which identifies the hazards and
risks, describes how the risks are controlled as well as the safety
management system in place to ensure the controls are effectively
and consistently applied.
In 2020, Jadestone engaged in the following OHS regulatory
activities:
• Australia: In regard to the new offtake model at Stag (refer to
Case Study: Stag, pg 49), the revision to operations necessitated
a change to the regulatory management framework that had
been in place for the prior floating, storage and offloading
arrangement. Jadestone worked with Australian regulators
to ensure the new operating model complied with all relevant
laws and regulations and to obtain their acceptance. As part of
that effort, the Company’s Safety Case for the Stag asset was
updated.
• New Zealand: Jadestone has engaged New Zealand’s Health
and Safety regulator, Worksafe NZ, in respect of the Maari
Safety Case and has received consent for its Maari Field
Bridging Document. This document will be replaced in due
course following the transfer of interest and commencement
of operatorship by Jadestone. (For more details please refer to
Section: Environment Management, pg. 48 for more details.)
Pictured above is Australia’s Operations Manager Tom Coolican
presenting the award of safety excellence to Montara and Stag
OIMs.
Emergency Response Training Hours*
HSE Management System
In order to satisfy its commitments to proper control of risk at
the facility, as well as to protection of workers, environment and
communities, Jadestone relies on its HSE MS, as per Section:
Environmental Management, pg. 48. The HSE MS describes the
standards, procedures and behaviours necessary to achieve the
desired HSE performance and outcomes when it comes to the
assets in Australia.
2020
2019
2018
To drive continuous improvement, Jadestone regularly reviews
and updates the HSE MS system in line with its operational
requirements and the findings from the activity risk assessments
and internal audits. As Jadestone continues to grow and expand its
geographical footprint as a business, it recognises the importance
of aligning its HSE standards across regional assets, whilst ensuring
local requirements are well understood and addressed as
a minimum.
The Company monitors its OHS performance closely through
a combination of leading and lagging KPIs and reports this
information on an ongoing basis to the Leadership Team and
to the Board.
Jadestone’s Leadership Team is responsible for the implementation
of the HSE MS, which is supported by executive performance
KPIs. In Australia, a Regional HSE Committee, which includes
representatives from onshore, offshore and senior management,
meets quarterly to review HSE performance and to identify
opportunities for improvement.
Furthermore, the Health, Safety and Environment Board Sub-
Committee meets at least three times a year and assists the Board
in obtaining assurance that appropriate policies and systems are in
place to effectively manage the health, safety and environmental
as well as ESG risks in relation to the Group’s operations and ensure
that the Group’s activities are planned and executed in a safe and
responsible manner.
0
500
1,000
1,500
2,000
* applies to workforce in Australia and NZ
Culture of safety
To ensure a culture of safety is maintained throughout its
operations, Jadestone regularly conducts safety briefings, toolbox
talks and emergency drills. These activities are underpinned by
workplace risk assessments and audits to identify unsafe practices
or conditions. Other mitigations include engineering controls, permit
to work controls and safe work procedures.
Jadestone maintains an onsite emergency response capability
and mandates that all incidents, including accidents and spills are
reported and recorded in an electronic incident management and
hazard reporting tool. Any actions which may arise from incident
investigations are assigned and tracked. HSE KPIs are set for each
facility and reviewed by management on a monthly basis.
Jadestone ensures that all individuals have the correct competencies
to achieve its HSE targets. In Australia, anyone visiting sites must
complete Jadestone’s formal online HSE required inductions prior
to their arrival on site. The completion of Safety Case Awareness
training for offshore personnel is mandatory for employees
and contractors, as is a site-specific induction, and formal helicopter
and sea survival training.
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COVID-19 Response to Health and Wellbeing
Jadestone developed and implemented management frameworks
to manage the COVID-19 pandemic and potential exposure for all
individuals. Jadestone offices took steps to strengthen the working-
from-home arrangements, while rostering and travel arrangements
for offshore personnel in Australia were modified to accommodate
quarantine and isolation requirements, as well as reducing exposure
risks wherever possible.
Jadestone recognises that the mental health and wellbeing of its
workforce is of paramount importance to its business with the issue
becoming more critical during the COVID-19 pandemic. Recognising
this increasing need for workforce support, Jadestone introduced the
following measures:
• Mental health programme for offshore employees (e.g. mental
health check ins, on-call support during the time working
offshore); and
• Fatigue risk assessment to support the temporary need for
longer offshore work cycles.
HSE Culture Survey
Jadestone launched its first HSE Culture survey in 2020, to further
assess Jadestone’s safety culture and improve the understanding
of HSE Performance. The survey was based on the industry-wide
‘Safer Together’ HSE Culture survey.
The 2020 results instigated the following Company-wide focus
areas:
• The provision of mental health first aid training for employees;
• Leadership training for supervisory and management roles; and
• Delivering information sessions on Jadestone’s behavioural
based safety programme.
It is Jadestone’s intention to undertake the HSE Cultural survey on
an annual basis and to conduct peer benchmarking to ensure the
continued improvement of its practices.
Stephen Porter on Montara
Occupational H&S Metrics
Unit
2020
2019
Manhours worked
Recordable Incidents
Total Recordable Injury Rate
Medical Treatment Cases
High Potential Incident
Lost Time Injury
Loss of Primary containment - Tier 1
HSE Audits
Full emergency exercises
Desktop Emergency exercises
mm hours
# per year
rate
# per year
# per year
# per year
# per year
# per year
# per year
# per year
3.2
0
3.15
0
2
0
1
7
1
4
* Jadestone commenced operation of Montara facilities August 2019
0.21 *
1
12.32
0
0
0
0
8
1
3
2020 Performance
Despite the recognised impacts of the COVID-19 pandemic,
Jadestone’s performance across key OHS indicators has remained
strong.
Future Outlook
Robust health and safety management systems rely on a cycle
of continuous improvement. In 2021 Jadestone has committed to
improving its HSE performance through the following targets:
•
Improvement of Recordable Incidents, achieving target
of < 2
• Zero LTIs at our Stag facility offshore Australia for 8
consecutive years and 1 year at Montara
• Combined Total Recordable Injury Rate (“TRIR”) significantly
reduced
Despite these positive developments reflected in lagging statistics,
Jadestone experienced an increasing number of HiPOs. Transparent
reporting of incidents including HiPOs is important and actively
supported at Jadestone to allow for continuous improvement.
Jadestone carefully investigates each HiPO with a view to ensure
learnings are cascaded widely and aimed to prevent re-occurrence
and further improve safety performance.
2021 ESG STRATEGIC CORPORATE GOALS
• Target Zero Recordable Incidents, with
continuous improvement year on year (<2)
• Undertake a further company-wide HSE Culture
Survey
• Complete 8 OHS & Environment Audits as per
HSE Audit Plan 2021
• Continue the provision of full-time medic to
indigenous communities at Truscott during the
COVID-19 pandemic emergency
MATERIAL MATTER
Stakeholder Management
Jadestone is committed to engaging
with its stakeholders in a transparent
and meaningful way, ensuring they are
considered in the Company’s processes
and operations.
Why it Matters
Inclusive and tailored stakeholder management is key to successful
operations across geographies, jurisdictions and cultures. With an
expanding operating footprint in the Asia Pacific region, Jadestone
recognises the importance of a comprehensive stakeholder
management strategy to successfully and considerately operate
in this diverse range of countries.
Management Approach
Jadestone’s commitment to understanding stakeholders’ feedback
and views is fundamental to achieving balanced outcomes for
the community, workforce and shareholders. Jadestone strives
to facilitate open communication in order to build and maintain
relationships with both internal and external stakeholders and
dedicates a significant amount of time and effort to engage with
stakeholders all year-round.
In 2020, Jadestone developed a Corporate Stakeholder Engagement
Strategy. This strategy was implemented to determine a more
strategic and cohesive approach, and an overall engagement
framework as to how Jadestone engages with its stakeholders
across Asia Pacific.
The table below lists its key stakeholders and methods of
engagement.
Jadestone Stakeholders
How we Engage
2020 HIGHLIGHTS
• Relationship Agreement with the Iwi
communities in New Zealand
• Stakeholder programmes successfully
undertaken in Australia
• Corporate Stakeholder Engagement
Strategy developed
Paul Blakeley and Owen Hobbs at Montara
Employees and contractors
Holding regular staff and contractor meetings, internal news updates and newsletters, tailored
surveys, townhalls, apprenticeship and internship shows
Communities and Indigenous
groups
Country specific stakeholder mapping and consultation, interviews and surveys, support through
community programmes and events
Regulators
Regular meetings and correspondence, representation on industry associations, site visits, ongoing
information sharing
Shareholders and investment
community
Annual General Meeting, Capital Markets Events, roadshows, webcasts, investor presentations,
correspondence and direct contact through dedicated investor relations function, social media
engagement, ESG questionnaires and surveys, website
Business partners and suppliers
Regular meetings, active management of key projects and assets, contracts and tenure
Non-government organisations
Collaboration on social investments, representations through industry associations, media monitoring
Media
Industry peers
Media releases, interviews, contact through dedicated media liaison function, website
Industry conferences and presentations, representation on industry associations
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2020 Overview
In 2020 Jadestone initiated its first ESG survey. The intent of this
survey was to seek feedback from its workforce on ESG topics that
matter to them the most, and what more the Company should be
doing in the context of the ESG agenda.
Future Outlook
Jadestone is committed to developing tailored Stakeholder
Management Plans for each location in which it operates, with
early engagement expected to take place prior to transfer
of operatorship.
The key stakeholder engagement activities undertaken across
regions in 2020 are summarised below:
Jadestone will continue to engage with internal and external
stakeholders in a transparent manner. Jadestone’s country-specific
engagements will help it to understand the local communities and
will help shape Jadestone’s community development programmes.
View from the Montara FPSO
Maari (New Zealand)
Key Stakeholders:
Local Iwi communities, neighbours and NZ Regulators
Context:
Ahead of assuming operatorship over the Maari asset, Jadestone confirmed and prioritised key stakeholders that may be affected by
its operations. Jadestone has also initiated a dialog with the Iwi representatives, entering into a Relationship Agreement
Through the agreement Jadestone committed to working together with Iwi representatives, Te Kāhui, “to enable on-going
information sharing and mutual education on matters relating to Jadestone’s activities and Te Kāhui’s interests ...”.
Key stakeholder
topics:
Environmental impacts that may affect the Iwi ability to use, protect and enhance the land and sea that is of cultural, historical and
environmental significance to them.
Outcome:
• Stakeholder Engagement Plan developed
•
Jointly signed Relationship Agreement with the Iwi community
Stag and Montara (Australia)
Key Stakeholders:
Local communities and Australian Regulators
Context:
Key stakeholder
topics:
Outcome:
In relation to a planned drilling campaign on the Montara asset, Jadestone developed a specific Environment Plan for this discrete
activity, which was accompanied by a stakeholder consultation exercise.
All relevant persons to the operations received information sheets detailing the scope and timing of the activities, with an
opportunity to ask questions and raise concerns.
Jadestone liaised with the West Australian Fishing Industry Council to consult relevant fishing licence holders.
Environmental and other impacts and risks posed by the drilling activities and the effect they have on the stakeholders.
• Relevant stakeholder informed on the planned activities
• Successful Environmental Plan approval
Lemang (Indonesia)
Key Stakeholders:
Local communities, local and Indonesia central Government bodies
Context:
In line with the acquisition of Lemang assets during 2020, a smooth transition process was achieved from the previous operator.
Transition was facilitated by the Jadestone Indonesia team liaising with the Government in relation to the work programme and
budget commitments to meet the regulatory compliance obligations.
Early engagement with local communities to introduce Jadestone was carried out successfully.
Key stakeholder
topics:
Impact of development activities during the future construction work and operations of the Akatara gas plant and sales gas pipeline;
employment and economic growth opportunities.
Outcome:
• An Engagement Plan developed
• Smooth transition that takes into account stakeholder expectations
Community Engagement
Jadestone strives to deliver positive
socioeconomic outcomes for the local
communities in the countries where
it operates.
Management Approach
Jadestone recognises that it can create sustainable value for the
local communities and maximise positive contribution by:
• Creating local employment
• Paying local taxes
• Supporting local business as part of its supply chain
• Community support programmes based on community needs
Through its targeted business strategy of taking over mid-life
assets in Asia Pacific that otherwise might have been retired,
Jadestone extends employment opportunities to local communities.
In doing so, it actively seeks to employ the national workforce.
This is demonstrated by 88% representation across the
organisation.
Jadestone’s contribution goes beyond job creation. Jadestone
endeavours to utilise local supply chains by engaging local
contractors.
Jadestone makes a positive contribution to local economies in 2020
by paying local taxes and fees amounting to $28.7 million.
2020 HIGHLIGHTS
• 88% Nationals directly employed in
Company operations in Asia Pacific
• $28.7mm paid in local taxes and fees
in Asia Pacific
• 3 Community programmes in
Southeast Asia
Community Engagement Programmes
Jadestone is focused on forming long term partnerships in
communities where it operates. It is involved in local community
projects that contribute to a more sustainable future. When
investigating the most suitable options to support, Jadestone’s
sustainability material matters are taken into consideration,
amongst other parameters. As per Jadestone Social Investment
Guidelines, the potential programmes are screened according
to their ability to contribute in two focus areas:
Education: Jadestone is committed to finding opportunities to
support education and training in local communities, through
corporate sponsorship, training and volunteer time.
Health & Wellness: Jadestone looks for ways in which it can
contribute to improving the health and wellness of partner
communities.
CASE STUDY:
Continued partnership with local NGO
in Vietnam
In Vietnam, Jadestone has continued to collaborate with a local NGO
supporting two initiatives that delivered positive education and
health outcomes for disadvantaged local communities.
Supporting early education
Jadestone identified an opportunity to support early education
in one of the poorest remote areas of Vietnam. It supported the
development of three public school libraries in the central highlands
of Vietnam: Kroongpa – Gia Lai, Phu Mo – Phu Yen, and Phu Hai
– Binh Thuan province, through purchase of children’s books and
necessary equipment. The desired outcome of the initiative is
improvement in the quality of local primary education.
Public school library at Kroongpa - Gia Lai province, Vietnam
Clean water access
As part of Jadestone’s ongoing engagement with communities in
the U Minh district in the Ca Mau province of Vietnam, a coastal
area close to Jadestone’s development project, Jadestone’s team
identified challenges for local families accessing consistent supplies
of clean, fresh water. Water provision can be sporadic in the region,
especially during the dry season, with saltwater intrusion impacting
large parts of the Mekong Delta in southwestern Vietnam.
Jadestone has provided high quality water storage tanks to over
50 families in the region.
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Volunteering
Jadestone’s direct investment initiatives are complemented by
employee volunteering within the organisation.
•
Indonesia
Jadestone’s Indonesia team have a long-standing relationship
with a Jakarta-based soccer club, Kemang FC.
The club aims to promote the sport and provide positive
activities for children and teenagers. Jadestone employees
are passionate about playing alongside the local community
members as well as training the members of the club and
advancing their skills.
• Singapore
Willing Hearts was selected as an organisation of choice for
volunteering in 2020. Willing Hearts is a secular, non-affiliated
charity, that operates a soup kitchen. Beneficiaries include
the elderly, the disabled, low-income families, children from
single parent families or otherwise poverty-stricken families,
and migrant workers in Singapore. Jadestone Singapore staff
were able to take part in the food preparation process that
contributed to the daily effort of very many volunteers resulting
in about 5,000 meals daily.
• Australia
The Montara facility has been involved in the ‘Cash for
Containers’ programme since 2015. In this scheme, Jadestone’s
personnel collect water bottles, aluminium cans and soft
drink bottles used on the facility and donate them to the
Down Syndrome Association of Northern Territory (Australia).
Association workers remove and count the lids and receive
Cash for Containers donations, which in 2020 amounted to over
$10,000 (60% increase from 2019).
Future Outlook
Throughout 2020 Jadestone has increased its focus on supporting
targeted community programmes. This commitment will extend
into 2021 and beyond.
2021 ESG STRATEGIC CORPORATE GOALS
•
•
Implement a community activity in all countries
of operations, target 10% increase
in spending year-on-year
Improve the measurement of community
investment impact as well as employee
participation in community programmes
COVID-19 SUPPORT
Supporting an orphanage in Malaysia
Jadestone identified an opportunity to support an orphanage
in Kuala Lumpur, that was struggling financially throughout
the enforced lockdown during the pandemic.
Housing 55 children ranging from 8 months to 19 years old,
the centre was having difficulties paying rent and providing
for utilities, school supplies and groceries.
Jadestone Malaysia staff visited the center a number of
times throughout 2020 and were able to assist with the
outstanding bills as well as the purchase of new household
appliances. Company donations were supplemented by generous
direct contributions from the employees.
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Setting up a school library in rural Vietnam
Jadestone Indonesia team supporting a local soccer club
Volunteering at Willing Hearts in Singapore
The Company is humbled by recognising the opportunity to support
the center, its staff and the children, recognising the devastating
effects of the COVID-19 pandemic on those groups who are
particularly vulnerable.
Water tank in transit, Vietnam
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MATERIAL MATTER
M ATERIAL M ATTER
Workforce Management
and Diversity
2020 HIGHLIGHTS
Jadestone strives to create a working
environment that recognises and rewards
performance, offers development
opportunities and promotes diversity.
• Diversity Policy developed
• Mental Health programme for
Offshore Workforce
• ESG Employee Survey conducted
• NETTS apprentice programme
participant
Why it Matters
Comprehensive workforce management helps provide a positive
working environment, improves retention, and minimises
operational disruptions.
Jadestone values its people and the contribution they make and has
an engaged, supported and diverse workforce.
“We attract the best talent from different
backgrounds, empower them, develop capable
leaders and offer challenging opportunities that
help them realise their potential.”
As per Jadestone’s mission
Management Approach
Jadestone’s people strategy focuses on building strong capabilities
and driving a diverse culture that optimises workforce performance
and fuels business growth. Its approach to managing people is
reflective of a diverse workforce that is office and site-based,
spanning across a number of geographies and cultures.
Jadestone’s working environment offers equal opportunities,
safe working conditions, competitive terms of employment and
comprehensive learning and development opportunities. Jadestone’s
HR, compensation and performance management practices are
overseen by the Board’s Compensation Committee.
Jadestone’s Ho Chi Minh City office
Diversity
Jadestone’s approach to diversity and inclusion is underpinned
by its Diversity Policy, which was approved by the Board in 2020.
This policy recognises that people from different backgrounds
and experiences can bring valuable insights to the workplace
and enhance Jadestone’s operations. Ultimate responsibility for
ensuring implementation and operation of this policy rests with
the Jadestone Board and Leadership team.
Jadestone’s diversity principles
• Develop a workforce that reflects the diversity of the
communities we serve
• Cultivate a culture which fosters access and inclusion, with
all internal and external stakeholders treated fairly and with
respect
• Recruit, develop and manage employees in line with individual
competencies
• Provide a supportive working environment that is adapted as
required to meet the needs of a diverse workforce
• Adapt and adopt an organisation and work methods to include
everyone
• Commit to a policy of equal employment opportunity and pay
equality
• Maintain a workplace that is free of any harassment or unfair
discrimination with appropriate avenues for the investigation
of complaints
Workforce profile
At the end of 2020, Jadestone had 161 permanent employees and
66 temporary employees, with females representing 19% and 27%
of the totals respectively. Jadestone only had 1 part-time employee.
Permanent and temporary employees by regions - Southeast Asia
(SEA) and Australia & New Zealand (A&NZ) are summarised below:
• Permanent: SEA - 41, A&NZ - 120
• Temporary: SEA - 14, A&NZ - 52
32% of total employees were at year’s end covered by Enterprise
Bargaining Agreements.
Women represent 36% of the total onshore workforce and 18%
of total overall workforce, with 25% percent of women holding
leadership positions at year end. A Company-wide gender balance
of 18% female is reflective of gender diversity being a common
challenge for most oil and gas operators.
Diversity at Jadestone has many facets and goes beyond the
issues of gender balance. Jadestone is committed to developing a
workforce that reflects the diversity of the communities it serves.
Jadestone prioritises the employment of suitably qualified nationals
and supports this by investing in their skills, knowledge and
experience. 88% of Jadestone’s employees are nationals.
Jadestone’s Diversity Policy can be found on Jadestone’s website.
Jadestone Permanent Employees
161
2020
162
2019
Women in Jadestone*
36%
of onshore
workforce
19%
of overall
workforce
21%
of Senior
Management
12.5%
of Jadestone’s
Board
* relates to permanent employees
% of Local Nationals across Jadestone Offices
100% 75% 72% 44% 96%
in
Vietnam
in
Indonesia
in
Malaysia
in
Singapore
in
Australia
Performance, training and development
Jadestone has an annual performance review process that enables
employees and managers to review the performance of the previous
year and to determine performance outcomes for the year ahead.
This is in line with Jadestone's focus on a performance culture, with
all permanent employees required to complete a performance review.
Jadestone develops its workforce through on-the-job opportunities
and formal training. In Australia, Jadestone provides training
and competency assessments to all of its workforce through the
implementation of role-specific training matrices for office and
offshore workforce.
Jadestone is committed to ensuring its offshore workforce achieves
training and competency levels as defined in the Offshore training
matrix, targeting at least 90% completion. Performance against the
matrix Key Performance Indicators is tracked on a monthly basis for
each site.
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Diversity of Governance Bodies and Employees (2020)
%
Female
<30
years old
30-50
years old
>50
years old
12.5%
Board %
Senior Management* % 21%
16%
Middle Management* %
21%
Other Employees* %
0%
0%
0%
8%
13%
43%
47%
49%
88%
57%
53%
43%
* employee categories have been established according to job bands
HR Metrics
Unit
2020
2019
Total permanent employees
Female
Male
Retention rate
Local national representation
#
#
#
%
%
161
29
132
96
88
162
33
129
97
88
Graduate and apprentice programme
Jadestone seeks to create opportunities and build capacity amongst
the future workforce through a programme of apprenticeship and
internships, enabling in 2020:
• 4 apprentices seconded to Jadestone Australia. Jadestone has
committed to ongoing apprenticeship placement via the NETTS
programme in Australia
• A vacation student programme established in Perth with 2
Engineering, 1 Finance and 1 HR student
• Graduate and Intern programmes established in Malaysia in
Subsurface, Finance and IT
NETTS apprentices
RUOK?:
Raising awareness of mental health
Jadestone Australia participated in the 2020 RUOK? day for the
second year running.
RUOK? is a suicide prevention charity that aims to start life-
changing conversations by creating a more connected world.
The charity aims to engage as many people as possible in a safe
and inspiring way, and we are proud to be ambassadors toward
that endeavour.
Jadestone's objective is to help its team learn simple but effective
ways to be more connected with one another and the world
around them, and to raise awareness of mental health issues.
Future Outlook
2021 ESG STRATEGIC CORPORATE GOALS
• Conduct an Employee Engagement Survey,
aiming for 80% participation rate
• Sponsor 2 more apprentices as part of NETTS
programme (Australia), and provide student
internships for at least 5 new graduates
(Australia and Malaysia)
• Ensure all employees have completed a
Performance Review
• Ensure the offshore workforce achieves training
and competency levels as defined in the
Offshore training matrix, targeting at least
90% completion
• Retain local national talent, targeting 90%
representation or more
Commitment to building a highly
skilled workforce for the future
• NETTS is the National Energy Technician Training Scheme, an innovative collaboration between
major oil and gas organisations and Programmed to build a skilled, diverse and capable
workforce for the future of the oil and gas industry.
•
•
Jadestone has registered with the NETTS programme for 2021, where it will select apprentices
across Process, Mechanical, and Electrical disciplines.
Jadestone Australia welcomed two 3rd year Process Plant specialist apprentices to its offshore
team in July 2020 as part of the scheme.
• Their enthusiasm and eagerness to learn was an excellent fit with the Jadestone culture, and
through this programme the Company provided plenty of exposure and real-life experience
in the offshore environment to further their education.
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73
Governance
and Leadership
2020 Highlights
0
Incidents of
non-compliance
in business ethics
0
Critical risk
incidents
QCA
Corporate
governance
code adoption
TCFD
Alignment across
risk and governance
ESG
Metrics incorporated
into executive KPI’s
2021 Outlook
• Target Zero violations of anti-bribery and anti-
• Target Zero loss of primary containment
corruption laws
• Support timely regulatory approvals for new
operations and growth projects
• Continue strengthening governance over
climate risk as per TCFD recommendations
• Undertake comprehensive emergency training
“Sustainability is a C-suite matter
at Jadestone that starts with
effective governance.”
Incident response exercise, Perth office
Neil Prendergast
GENERAL COUNSEL
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75
MATERIAL MATTER
M ATERIAL M ATTER
Governance, Business Ethics
and Compliance
Operating in accordance with high
standards of governance, transparency
and business ethics is essential to creating
long-term sustainable value and a key
priority for Jadestone.
2020 HIGHLIGHTS
• QCA corporate governance code
adoption
• Zero fines for any regulatory breaches
for non-compliance
• ESG metrics incorporated in executive
performance plans
Jadestones's ESG Governance
The Board
Ensures ESG risks and opportunities have been identified and incorporated into the Corporate Risk
Framework, with risk considerations integrated into the Company’s long-term strategy
HSE Committee
Oversees operational risks pertaining to health, safety, environment and sustainability, including those
related to climate change. The Committee’s remit has been expanded in 2020 to formalise its oversight
over ESG topics.
Compensation Committee
Develops and proposes changes to the Remuneration Policy which are in line with Jadestone’s strategic
performance targets. As of 2020, ESG Strategic Corporate Goals have been aligned with executive
incentive schemes, cascading from CEO through to the leadership team and deeper into the organisation.
Disclosure Committee
Oversees the appropriateness of disclosures included in the Company’s financial and non-financial
reporting, which include sustainability and climate-related disclosures.
Why it Matters
Effective governance at Jadestone means that Board members,
the management team and shareholders clearly understand their
roles and responsibilities. It also ensures that the right policies
and procedures are in place which promote individual and group
accountability, ethical and responsible decision making and effective
risk management. The ability to create long-term value is the
ultimate measurement of successful corporate governance.
Management Approach
Corporate governance
Jadestone believes that an effective corporate governance
framework adds value to its business and enhances stakeholder
confidence in the Company. Jadestone complies with the Quoted
Companies Alliances Corporate Governance Code 2018 (the “QCA
Code”), which was adopted in December 2020.
Jadestone has embedded appropriate governance systems to
ensure that the Board and Jadestone leadership have oversight of
the critical ESG issues and enterprise-level risks, such as climate
change, safety, incident preparedness and community impacts.
The Board’s HSE, Compensation as well as Disclosure Committees
are jointly responsible for overseeing Jadestone’s strategies,
programmes, performance and disclosures relating to ESG.
In 2020, the HSE Committee oversaw changes to:
•
Jadestone’s Community Investment programme with an
increased budget allocation
• Further alignment with the TCFD
• UN SDG alignment
The Jadestone Board recognises that the QCA Code provides the
Company with the appropriate framework to sustain a strong level
of governance, given its size on the AIM market of the London Stock
Exchange. The Board of Directors regularly assesses Jadestone’s
corporate governance against regulatory developments, relevant
best practice standards and stakeholder demands.
For details of Jadestone's governance, including our
Board of Directors, Board Committees and other governance
arrangements, please see the Website and the Corporate
Governance section of the Annual Report.
Refer to QCA Disclosures for more information on how
Jadestone abides by the QCA Code.
In 2020 Jadestone recoded zero incidents
of non-compliance in relation to violations
of anti-bribery and anti-corruption laws.
Business ethics
The Board sets the “tone at the top” that demonstrates the
Company’s commitment to integrity and compliance. This tone
lays the groundwork for a corporate culture that is communicated
to individuals at all levels of the organisation.
Jadestone has implemented a Code of Conduct Policy
("Code" or "Code of Conduct") that applies to all individuals working
at Jadestone. The Code clarifies Jadestone’s mission, values and
principles, linking them with standards of professional conduct.
The Code articulates the values Jadestone wishes to foster with
all who work for the Company and defines desired behaviours.
The Code of Conduct reflects the Company’s commitment to a
culture of honesty, integrity and accountability. It condemns such
practices as corruption, anti-trust or any other practices that may
result in violating anti-bribery and anti-corruption laws.
The Company shares a set of core values – Respect, Integrity,
Safety, Results-Orientated, Sustainability and Passion.
All individuals working at Jadestone are expected to make a
commitment to these values, and to contribute to protecting
and enhancing the Company’s reputation. Jadestone’s core values
underpin every aspect of work done within the business, and form
the foundation of the Code of Conduct.
It is the responsibility of all individuals working at Jadestone
to familiarise themselves with the Code, and to comply with it.
All Jadestone onshore and offshore employees undertake an
e-learning course on the Code of Conduct upon commencing
their employment. The induction is monitored to ensure a 100%
completion rate. Employees are required to complete a refresher on
the Code of Conduct every 12 months including confirmation of their
compliance with the Code.
Regulatory compliance
The oil and gas industry is subject to a rapidly-changing regulatory
environment, which can result in material impacts on shareholder
value. As the Company’s footprint spans across several jurisdictions
in Asia Pacific, Jadestone sets high expectations of all of its business
activities in relation to meeting regulatory obligations as well as
managing risk and stakeholder expectations. This task is carried out
jointly in the regions with such functions as Legal, HSE and Finance
working in tandem to ensure Jadestone maintains its licence to
operate.
Extractive sector transparency
As part of its commitment to transparency and legal compliance,
Jadestone disclosed all payments made to governments in all
jurisdictions, in accordance with Canada’s Extractive Sector
Transparency Measures Act.
Jadestone’s Code of Conduct can be found on Jadestone’s website.
Business Ethics Metrics
Unit
2020
2019
Number of legal actions for anti-
competitive behaviour, anti-trust,
and monopoly practices and their
outcomes
Significant fines and non-monetary
sanctions for non-compliance with
laws and regulations
Confirmed incidents of corruption
# per year
# per year
# per year
0
0
0
0
0
0
2020 Performance
Jadestone is committed to conducting business in accordance with
all applicable laws and regulations and the highest ethical standards
in all jurisdictions in which it operates. In 2020 Jadestone has
recoded zero incidents of non-compliance in relation to violations
of anti-bribery and anti-corruption laws.
2021 ESG STRATEGIC CORPORATE GOALS
• Target Zero violations of anti-bribery and
anti-corruption laws
• Support timely regulatory approvals for new
operations and growth projects
• Continue strengthening Governance over climate
risk as per TCFD recommendations
Jadestone’s Kuala Lumpur office
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7 7
MATERIAL MATTER
M ATERIAL M ATTER
Asset Integrity and Process Safety
Jadestone deploys robust processes and
systems that ensure process safety and
integrity of its operating assets.
2020 HIGHLIGHTS
• Safe and reliable adaptation to COVID
operations
• Assimilation of Montara
• Realisation of savings from
innovative maintenance
Asset Integrity
Asset integrity includes all integrity aspects of Company owned
facilities. Significant effort is applied to ensure fabric maintenance
is managed consistently with Jadestone’s end of field life projection
for each of its facilities. Innovation is applied to maximise
productivity and impact in all of its activities (as per Case Study).
2020 Performance
Lagging process safety metrics (Tier 1 and 2)
In 2020, there were zero Loss of Primary Containment events
associated with Jadestone’s Australian facilities in either Tier 1 or
Tier 2 classification. There was, however, a Tier 1 release of 3,900kg
of lift gas from one of the Montara wells in November. A lift-gas
leak is not a part of primary well containment and the wellbore
remained intact. As a result, the well was removed from service
awaiting a well workover, scheduled in the second half of 2021.
The investigation into this event is ongoing and will be informed
by recovery of key components during the well workover.
Leading process safety metrics (Tier 3 and 4)
COVID-19 had a significant impact on the ability to execute work
efficiently in 2020. By year end, however, logistical efficiencies were
re-established and 97% of assurance activities were completed
on time.
Annual Independent Competent Person audits were completed for
Stag and, for the first time, Montara. Six performance standards
were reviewed for Stag, with four minor non-compliances identified.
Sixteen performance standards were reviewed for the Montara
assets, including the Montara Venture FPSO and wellhead platform,
with one significant and nine minor non-compliances identified.
Why it Matters
Process Safety is a disciplined framework for managing the
integrity of operating systems and processes that handle hazardous
substances . Its primary focus is on prevention and control of events
that have the potential to release hazardous materials and could
result in an explosion or fire, leading to a major incident. Whilst
typically initiated by a hazardous release, a major incident may also
result from a structural failure or loss of stability. Process safety
is delivered through its innovative and holistic approach to asset
integrity management.
Management Approach
As an operator of mid-life assets, Jadestone’s approach to delivering
best practice asset integrity & process safety performance covers
Plant, Process and People improvements:
• Plant: Upgrading asset infrastructure in line with remaining
field life
• Process: Rapid assimilation of new assets into Jadestone’s
rigorous facility and well integrity management systems
• People: Adoption of skills and good practice from the
experienced staff from newly acquired assets
Process safety
Process safety management practices in Australian operations
are described in facility Safety Cases. These are accepted by the
regulator, NOPSEMA to reduce risks to As Low As Reasonably
Practicable. Safety Cases for each of the Company’s Australian
assets describe the specific process safety controls. Failure of these
controls upon demand, may lead to Tier 1 or Tier 2 process safety
events as defined by the International Association of Oil & Gas
Producers (“IOGP”).
Verification of the effectiveness of these controls are subject to
Jadestone’s assurance and audit processes. Jadestone tracks its IOGP
Tier 3 performance for each asset by measuring the percentage of
assurance activities completed versus plan.
Tier 4 performance is assured by Independent Competent Person
audits, which investigate the entire set of performance standards
on each asset on a rolling 5-year review cycle.
CASE STUDY:
Stag conductor guide repair
When Cyclone Damien passed directly over the Stag platform in
February 2020 it caused violent swells that dislodged the stabilising
guides of several well conductors. Conductors are non-pressure
retaining piping elements that support individual well heads.
With dislodged guides, the conductors lose lateral stiffness and
move with ocean waves and tides.
Such subsea repair work is complicated by the marine growth
that occurs in the warm waters of North West Australia and the
congestion caused by the close coupling of the Stag wells.
CASE STUDY:
Montara fabric maintenance campaign
On Montara, a fabric maintenance campaign was launched
as part of the careful transition to Jadestone Operations.
Improvements to the facility are much more than cosmetic,
symbolising Jadestone’s intent to reinforce the value of its assets
through to end of field life. The following images provide an
example of after shots of the starboard deck at the Bow of the
Montara Venture FPSO:
The four tiers of lagging and
leading indicators1
Tier 1
LOPC events of
greater consequence
L
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i
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Tier 2
LOPC events of lesser consequence
d
i
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a
t
o
r
s
Tier 2
Challenges to safety systems
Leading indicators
Tier 4
Operating discipline & management system performance indicators
1
IOGP. “Process safety – recommended practice on key performance indicators”,
IOGP Report 456
The typical repair would need to be conducted by a full work-class
Remote Operated Vehicle (“ROV”), launched from a specialised
vessel with Dynamic Positioning capability. With careful planning
and innovative use of a smaller package ROV, deployed directly from
the Stag platform, the displaced guides were refitted directly from
the platform, facilitating repair up to 6 months earlier than the
traditional approach, at a saving of some $3-4 million.
Other 2020 highlights
Jadestone retains Technical Authorities (“TAs”) to oversee all
aspects of asset integrity and process safety, including well integrity
and environment. The TAs are required to provide direction on
specific and systemic risk issues, ensuring that the primacy of
safety is preserved at all times. In line with Jadestone’s focus
on establishing systematic processes to efficiently support the
acquisition of new assets, all of the core TA disciplines were brought
in house in 2020.
• Zero Tier 1 or 2 LOPC events at Jadestone facilities
• Refinement of the Jadestone process safety Management
Framework
• Design of an electronic implementations of the Jadestone
Management of Change (“MOC”) system
•
Integration of TAss across regulatory areas (Safety; Well
integrity and environment)
• Development of the Jadestone Well Integrity Assurance
Management Framework
• Closeout of 6/7 Stag 2019 Independent Competent Person
review actions
Future outlook
Jadestone will continue its focus on maintaining effective and
efficient process safety and asset Integrity practices built on best
practice industry standards. In 2021, these considerations will
be extended onto newly acquired assets as part of operatorship
transition and careful change management. Good practices from
new assets will be codified in Jadestone’s corporate standards.
2021 ESG STRATEGIC CORPORATE GOALS
• Zero Loss of Primary containment
• Extending process safety and asset integrity
practices onto newly acquired assets
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79
MATERIAL MATTER
M ATERIAL M ATTER
Critical Incident Risk Management
Effective Risk Management and Incident
Response in the unlikely event of a major
incident are a key priority for Jadestone.
2020 HIGHLIGHTS
• 75% of the Perth office are trained
and participate in the IMT
• Successful IMT exercise with AMSA
• 1 full emergency and 4 IMTs
Why it Matters
The unplanned release of hydrocarbons or spills of chemicals,
oils, and fuels, can potentially affect soil, water, air, biodiversity,
and human health. Effective and reliable emergency response
and preparedness systems including hydrocarbon spill response
capability is crucial.
As an operator of two offshore oil and gas facilities in Australia,
Jadestone is committed to managing major incident risk and
developing robust response capabilities in line with regulatory
requirements and industry best practice.
Management Approach
Risk management
The Jadestone Energy Risk Management framework is aligned with
the requirements of ISO 31000 and addresses risk management
at three levels 1 - Task, 2 - Facility and 3 – Business. The three
risk levels are directly related and the risk assessments cascade
such that Business level risks set the context for Facility risk
assessments, and Facility level risks set the context for Task risk
assessments.
Emergency Preparedness
Corporate response
Jadestone’s Group Crisis Team (“GCT”) are responsible for the
development of the Group Crisis plan and the management of
Jadestone’s reputation, operability, licence to operate, liabilities and
potential financial loss.
The GCT identify and manage domestic and global issues and
developments that may have an impact upon the business
operations of Jadestone Energy. The GCT follow the Jadestone
Energy Crisis Management Plan that defines process and procedures
to respond effectively to a major crisis event and provide the
framework for the integrated management of crisis and incidents
within Jadestone Energy. The GCT provide technical, operational and
communication advice to country-level incident management teams
or to the wider Jadestone organisation.
Jadestone utilises a tiered incident response structure to deal with
and manage crises, incidents and disruptions associated with each
of the organisation’s risks. This structure is activated progressively,
from facility-based Emergency Response Team “ERT”, shore-based
Incident Management Team “IMT”, then if required to the corporate
GCT as illustrated below.
Level 1 Task
Task level risks are assessed ahead of execution of each task, as
required by the Integrated Safe System of Work.
Strategic
3
Group Crisis Team
Corporate response
• Business Continuity
• Liability
• Reputation
• Stakeholder management
Level 2 Facility
Risks are assessed concurrently with the requirements of key
regulatory documents, and are continually reviewed against the
context of planned activity over the detailed plan time horizon.
Operational
2
Incident
Management Team
Shore-based response
• People
• Environment
• Assets
• Recovery
Level 3 Business
Risks are assessed concurrently with the development of the Annual
Value Plan, which details the high-level activities over a 12 month
reporting period.
Tactical
1
Emergency
Response Team
& First Responders
Facility/Site-Level response
• Lifesaving
• Mustering
• Firefighting
• Rescue
• First Strike Actions
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Operational response
Jadestone’s IMT Response Plan is the Company’s response tool at a
facility level, that, amongst other things, defines the IMT exercises
that the Company undertakes.
To maintain Jadestone’s ability to react to and manage major
incidents, a three-year exercise cycle has been implemented.
Over the course of a three-year period it is intended that all major
incident events including key major accident events and oil spills
are exercised using a stand-alone IMT drill or as part of an annual
functional exercise. The exercise cycle is planned in such a way as to
include a quarterly major accident event scenario, oil spill response
workshop and exercises to test the IMT. The exercises alternate
between offshore facilities, with all completed IMT exercises
recorded.
2020 Performance
Jadestone has remained committed to its culture of safety and
delivered on its IMT Exercise and Testing Programme in 2020 as
planned. Throughout 2020 Jadestone focused on improving its oil
spill and incident management team training and drills. To ensure
the best response in the event of an incident, 75% of the Perth
office are trained and participate in the IMT.
CASE STUDY:
Incident management team exercise:
“Black Hawk Down”
In June 2020 Jadestone conducted an IMT exercise drill - ‘Black Hawk
Down’ in the Perth office. The drill was one of the quarterly IMT
drills that are planned to address a Jadestone major accident event
for both Stag and Montara over a period of three years.
The Black Hawk Down scenario was a controlled emergency landing
into the ocean from a helicopter on route to Montara for a crew
change-out. Planning for the exercise involved the key personnel
from Operations, the Aviation contractor and the Australian
Maritime Safety Authority “AMSA” representatives.
Montara control room
Future Outlook
Jadestone will ensure that it maintains high levels of preparedness
and response through its testing and exercising programme.
2021 ESG STRATEGIC CORPORATE GOALS
Undertake:
• Quarterly IMT exercises*
• Annual oil spill response exercise*,
• Annual oil spill workshop*,
• Weekly facility drills
* Relates to Australia IMT
The drill achieved the key objectives: clarification of roles and
responsibilities and ensuring collaborative approach with the
external parties.
IMT exercises form a cornerstone of Jadestone’s commitment to
safety and emergency preparedness.
JADESTONE ENERGY 2020 ANNUAL REPORT
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SUSTAINABILITY REPORT STRATEGIC REPORT
GRI Content Index
Standard
Disclosure
Description
GRI 102: General disclosures (2016)
Organisational profile
102-1
102-2
102-3
102-4
102-5
102-6
102-7
102-8
102-9
102-10
102-11
102-12
102-13
Strategy
102-14
Ethics and integrity
102-16
Governance
102-18
Name of organisation
Activities, brands, products and services
Location of headquarters
Location of operations
Ownership and legal form
Markets served
Scale of the organisation
Information on employees and other workers
Supply chain
Significant changes to the organisation and its supply chain
Precautionary principle or approach
External initiatives endorsed
Membership of associations
Statement from senior decision-maker
Values, principles, standards, and norms of behaviour
Governance structure
Stakeholder engagement
102-40
102-41
102-42
102-43
102-44
List of stakeholder groups
Collective bargaining agreements
Identifying and selecting stakeholders
Approach to stakeholder engagement
Key topics and concerns raised
Reporting practice
102-45
102-46
102-47
102-48
102-49
102-50
102-51
102-52
102-54
102-54
102-55
102-56
Entities included in the consolidated financial statements
Defining report content and topic boundaries
List of material topics
Restatement of information
Changes in reporting
Reporting period
Date of most recent report
Reporting cycle
Contact point for questions regarding the report
Claims of reporting in accordance with the GRI standards
GRI content index
External assurance
Topic-specific disclosures
Environmental Management and Regulatory Management
103-1
103-2
103-3
GRI 307 (2016): Environmental Compliance
307-1
GRI 306: Effluents and Waste (2016)
306-3
Significant spills
Explanation of the material topic and its Boundary
The management approach and its components
Evaluation of the management approach
Non-compliance with environmental laws and regulations
Explanation of the material topic and its Boundary
The management approach and its components
Evaluation of the management approach
Interactions with water as a shared resource
Management of water discharge-related impacts
Discharges and Emissions
103-1
103-2
103-3
GRI 303: Water and Effluents (2018)
303-1
303-2
GRI 305: Emissions (2016)
305-7
GRI 306: Waste (2020)
306-1
Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions
Waste generation and significant waste-related impacts
Reference
page 38
pages 14 – 21, 38
page 38
pages 14 – 21, 38
page 38
page 38
pages 4, 16 – 21, 68 – 70
pages 68 – 70
page 63, 65
page 10
page 48
page 39
page 39
page 41
pages 74 – 75
pages 74 – 75, 82 – 111
page 63
page 69
pages 45, 63
pages 63 – 64
pages 63 – 64
pages 16 – 21
page 39, 45
page 45
page 39
pages 39, 45
page 39
2019
page 39
page 39
page 39
page 80
page 39
page 48
pages 48 – 49
pages 48 – 49
pages 48 – 50
pages 49 – 50
pages 51 – 53
pages 51 – 53
pages 51 – 53
pages 51 – 53
pages 51 – 53
pages 51 – 53
page 52
Standard
Disclosure
Description
Climate Change and GHG
103-1
103-2
103-3
GRI 305: Emissions (2016)
305-1
305-2
305-5
GRI 302: Energy (2016)
302-1
Explanation of the material topic and its Boundary
The management approach and its components
Evaluation of the management approach
Direct (Scope 1) GHG emissions
Energy indirect (Scope 2) GHG emissions
Reduction of GHG emissions
Energy consumption within the organisation
Explanation of the material topic and its Boundary
The management approach and its components
Evaluation of the management approach
Occupational Health & Safety
103-1
103-2
103-3
GRI 403: Occupational Health ad Safety (2018)
403-1
403-2
403-3
403-4
403-5
403-9
403-10
Occupational health and safety management system
Hazard identification, risk assessment, and incident investigation health and safety
Occupational health services
Worker participation, consultation, and communication on occupational
Worker training on occupational health and safety
Work-related injuries
Work-related ill health
Workforce Management & Diversity
103-1
103-2
103-3
GRI 405: Diversity and Equal opportunity
405-1
Explanation of the material topic and its Boundary
The management approach and its components
Evaluation of the management approach
Diversity of governance bodies and employees
Stakeholder Management
* As per general disclosures GRI 102-40 to 102-44
103-1
103-2
103-3
Explanation of the material topic and its Boundary
The management approach and its components
Evaluation of the management approach
Leadership & Governance*, Business Ethics & Transparency, Regulatory Management
* As per general disclosures GRI 102-18
103-1
103-2
103-3
GRI 205: Anti-Corruption (2016)
205-3
GRI 206: Anti-competitive behaviour (2016)
206-1
Explanation of the material topic and its Boundary
The management approach and its components
Evaluation of the management approach
Confirmed incidents of corruption and actions taken
Legal actions for anti-competitive behaviour, anti-trust, and monopoly Practices
Asset Integrity & Process Safety
103-1
103-2
103-3
GRI 306: Effluents and Waste (2016)
306-3
Significant spills
Explanation of the material topic and its Boundary
The management approach and its components
Evaluation of the management approach
Critical Incident Risk Management
103-1
103-2
103-3
GRI 306: Effluents and Waste (2016)
306-3
Significant spills
Explanation of the material topic and its Boundary
The management approach and its components
Evaluation of the management approach
Economic Performance and Contribution
103-1
103-2
103-3
GRI 203: Indirect Economic Impacts (2016)
203-1
203-2
GRI 201: Economic Performance (2016)
201-1
201-2
Explanation of the material topic and its Boundary
The management approach and its components
Evaluation of the management approach
Infrastructure investments and services supported
Significant indirect economic impacts
Direct economic value generated and distributed
Financial implications and other risks and opportunities due to climate change
81
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Reference
page 54 – 55
pages 54 – 57
pages 54 – 57
pages 55, 56
pages 54 – 57
pages 55, 56
pages 55, 56
pages 60 – 62
pages 60 – 62
pages 60 – 62
page 61
page 61
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pages 60 – 62
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pages 68 – 71
pages 68 – 71
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pages 63 - 64
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pages 76 – 77
pages 49 – 50
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pages 78 – 79
page 79
pages 49 – 50
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page 25, 65
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pages 55, 65 – 66
pages 25 – 31
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JADESTONE ENERGY 2020 ANNUAL REPORT
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CORPORATE GOVERNANCE
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Preparing for Montara crude oil offload
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Corporate GovernanceStatement on Corporate Governance Approach 84Board Chair’s Corporate Governance Statement 86Compliance Statement to QCA Principles 88Directors’ Report 90Board of Directors Biographies 94Senior Management Biographies 96Committee ReportsAudit Committee Report 98Compensation and Nominating Committee Report 100Disclosure Committee Report 108HSE Committee Report 110JADESTONE ENERGY 2020 ANNUAL REPORT
84
STATEMENT ON CORPORATE GOVERNANCE APPROACH CORPORATE GOVERNANCE
85
Statement on Corporate
Governance Approach
Jadestone Energy Inc. was the parent company of the Group for the full
calendar year 2020. This Annual Report, including the audited financial
statements as at and for the year ended 31 December 2020, is a report of the
business of Jadestone Energy Inc.
Adoption of QCA Code
Over 2020, the Board reviewed the Company's corporate governance
practices and assessed the codes commonly adopted by UK listed
companies. With a view to the size, structure and business of
the Company, the Board adopted the Quoted Companies Alliance
Corporate Governance Code (the "QCA Code"), with implementation
to be effective 31 December 2020. As a result, the Board completed
a review and update of the Board Charter and Terms of Reference
for each of the Board Committees. The Board also determined that
the Compensation and Nominating Committee would be separated
into a Remuneration Committee and a Nomination Committee.
Following the internal reorganisation, Jadestone Energy plc adopts
and currently applies corporate governance practices to reflect the
QCA Code. Jadestone Energy plc will prepare a corporate governance
statement at least annually to explain the way in which it has
applied the QCA Code and to identify any areas in which governance
structures and practices differ from the expectations set out under
the QCA Code.
TSX Venture Exchange Delisting
Since the admission of the Company’s shares to trading on AIM, in
August 2018, the Company has experienced a significant shift away
from Canada in both the composition of its share register and in the
trading volume of its shares. Approximately 97% of the Company’s
shares were held by non-Canadian residents as at 31 December 2019,
while more than 98% of all Jadestone shares that traded in 2019,
were traded on AIM. Effective at the close of business on 24 March
2020, the Company’s shares were delisted from the TSX Venture
Exchange. The Company’s shares continued to trade on AIM.
BCSC Order
Following the TSX Venture Exchange de-listing, on 28 May 2020,
the Company's principal regulator in Canada, the British Columbia
Securities Commission (“BCSC”) issued an order (the “Order”),
granting the Company relief from certain Canadian disclosure
requirements, generally consistent with the relief granted to a
designated foreign issuer (“DFI”), as defined in National Instrument
71-102 Continuous Disclosure and Other Exemptions Relating to
Foreign Issuers.
While the Company remained as a British Columbia incorporated
company, following issuance of the BCSC Order, the Company
provided disclosure in Canada generally consistent with the
disclosures required of a DFI. In the Company’s case, satisfaction
of its disclosure obligations under the AIM Rules and UK legislation
applicable to the Company, were required under the BCSC Order.
Corporate Reorganisation
Jadestone Energy Inc. was the parent company of the Group for
the full calendar year 2020. In early 2021, the Group commenced an
internal corporate reorganisation by way of a plan of arrangement
under the Business Corporations Act (British Columbia) (the
“Reorganisation”). Under the Reorganisation, a newly incorporated
English public limited company, Jadestone Energy plc (“Jadestone
plc”), became the ultimate parent company of the Jadestone Group,
including all subsidiaries. Jadestone plc acquired the entire issued
share capital of Jadestone Energy Inc., in exchange for new ordinary
shares in Jadestone plc on a one for one basis. The Arrangement was
approved by Jadestone Energy Inc. shareholders and received the
required court approvals.
The Reorganisation did not result in a change in control in the
ultimate holding company of the Group, or in a change of ultimate
shareholding in any of the assets of the Group, or in a change in
the management of any the Group’s assets. Immediately prior to
completion of the Arrangement on 23 April 2021, the shares of
Jadestone Energy Inc. were delisted from trading on AIM. On 26 April
2021, the shares of Jadestone plc were admitted to trading on AIM.
As Jadestone Energy Inc. was the parent company of the Group
for the full calendar year 2020, this Report, including the enclosed
audited financial statements, are prepared and presented with
Jadestone Energy Inc. as the parent company of the Group.
Reference to the Company in relation to the period prior to
23 April 2021 means Jadestone Energy Inc. Reference to the
Company in relation to the period from 23 April 2021 means
Jadestone Energy plc.
The Reorganisation effected a re-domicile of the ultimate holding
company to the United Kingdom. Upon completion at 11:59pm
Canadian Pacific Time on 23 April 2021, Jadestone plc became
the ultimate holding company of the Group in place of Jadestone
Energy Inc.
Reserved Matters for the Board
The Board has a primary responsibility to foster the success of
the Company through the management or supervision of the
management of the Company’s business and affairs. The Board
is responsible for the direction and overall performance of the
Company with an emphasis on strategy, policy, financial results
and compliance matters.
The matters reserved for the Board include, amongst others:
(i) setting the Group’s purpose, values and standards;
(ii) reviewing and approving the Group’s strategy and annual plans
for achievement;
(iii) monitoring corporate governance compliance with significant
policies and procedures, including health and safety;
(iv) oversight of communications and timely disclosure;
(v) ensuring the integrity of internal controls and management of
risks, including regular risk review; and
(iv) approving the Group’s annual and interim reports and accounts.
In addition to the above, the Board has approved a set of financial
delegations of authority to ensure clarity throughout the business
concerning the distinction between financial matters which
require Board approval and those that can be delegated to senior
management.
Board Composition and
Independence
During calendar year 2020, the Board was comprised of eight
directors. These included the Non-Executive Chair, the Group’s
President and CEO, the Group’s CFO and five Non-Executive Directors.
Four of the five Non-Executive Directors are considered independent.
The skills and experience of the Non-Executive Directors vary across
disciplines, each enhancing the Board’s independent oversight of
the Group’s business. The Directors biographies on pages 94 and 95
speak to their relevant skills and experience.
More than half of the Board is independent when accounting for
the independent Non-Executive Chair and four independent Non-
Executive Directors. The composition of each of the Audit Committee
and the Remuneration Committee is fully independent. With Lisa
Stewart’s appointment at the end of 2019, female representation on
the Board has improved from 0 to 13%. The Nomination Committee
is charged with increasing diversity at the Board level and within
senior management.
All Directors have access to independent legal advice in addition
to the Company Secretary. Any Director may take independent
professional advice at the Group’s expense in the furtherance of
their duties.
Board Committees
The Board delegates specific responsibilities to the Board
committees. Each committee has Board approved Terms of
Reference which describe the committee’s responsibilities and the
framework by which those responsibilities are fulfilled. The Terms
of Reference for each Committee were last reviewed and updated in
2020 to align with the QCA Code.
During calendar year 2020, the Board operated four committees:
an Audit Committee, a Compensation and Nominating Committee,
an HSE Committee and a Disclosure Committee. A summary of the
roles, responsibilities, composition and 2020 activities of each of
these committees is found at pages 98 to 111 of this Report.
With the adoption of the QCA Code, effective 31 December 2020,
the Compensation and Nominating Committee was separated into
the following two committees: a Remuneration Committee and a
Nomination Committee.
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JADESTONE ENERGY 2020 ANNUAL REPORT
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BOARD CHAIR’S CORPORATE GOVERNANCE STATEMENT CORPORATE GOVERNANCE
87
Board Chair’s Corporate
Governance Statement
It is the role of the Board, led by myself as Board Chair, to ensure that
Jadestone has both sound corporate governance and an effective Board.
Strong corporate governance helps strengthen the foundations of a solid
and successful business. The Board is supportive of embracing a high level
of corporate governance and works to instil a culture across the Company
which delivers strong values and behaviours.
It is my responsibility to ensure that good standards of governance
are delivered, from executive level and throughout the operations
of the business. The importance of engaging with our shareholders
underpins the essence of the business, ensuring that there are
opportunities for investors to engage with both the Board and
executive team.
Jadestone is committed to upholding high standards of governance
and responsible, social and ethical behaviour. Jadestone has
implemented a Code of Conduct Policy that applies to all employees
and contractors and which provides a framework of principles for
conducting business, dealing with other employees, clients and
suppliers, and reflects the Company’s commitment to a culture
of honesty, integrity and accountability. The Company shares a
set of core values – Respect, Integrity, Safety, Results-Orientated,
Sustainability and Passion. Each employee is expected to make
a commitment to these values, and to contribute to protecting
and enhancing the Company’s reputation. Jadestone’s core values
underpin the work the business does, and forms the foundation
of the Code of Conduct. A copy of the Company’s key governance
documents, including the Company’s Articles of Association, the
Code of Conduct and related policies, are available on the Company’s
website at www.jadestone-energy.com.
In accordance with the QCA Code and AIM Rule 26, the report below
provides a high-level overview of how Jadestone has applied the
principles of the QCA Code. The Board considers that the Company
complies with the QCA Code in all material respects. Further details
on the Company’s adherence to the QCA Code can be found on the
Company’s website at https://www.jadestone-energy.com/wp-
content/uploads/2020/12/QCA-Code-JSE-Board-Chairs-Corp-Gov-
Statement-vf-PDF.pdf.
As Board Chair, I will work with the Board members to build upon
the existing values that are in place and ensure that good corporate
governance continues within the organisation and is delivered
throughout the business, ensuring that Jadestone grows with
foundations of integrity and strong principles for the benefit of all
stakeholders.
Dennis McShane
Board Chair
Dennis McShane
NON-EXECUTIVE CHAIRMAN
Principles of Corporate
Governance
The Board fully endorses the importance of good corporate governance and
applies the corporate governance code in the form issued by the Quoted
Companies Alliance in April 2018. The Board views the QCA Code as an
appropriate, recognised governance code for a company of Jadestone’s size
and structure with shares listed on AIM.
The Board believes that the QCA Code provides the Company with the framework
to add value to its business, enhance stakeholder confidence in the Company
and sustain a strong level of governance.
The QCA Code identifies ten principles of corporate governance for companies
to apply and against which companies must publish certain specified disclosure.
The Company has committed to apply these ten principles within the foundation
of the business. These principles are:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Establish a strategy and business model which promote long-term value for shareholders.
Seek to understand and meet shareholder needs and expectations.
Take into account wider stakeholder and social responsibilities and their implications for long term success.
Embed effective risk management, considering both opportunities and threats, throughout the organisation.
Maintain the Board as a well-functioning, balanced team led by the chair.
Ensure that between them the directors have the necessary up to date experience, skills and capabilities.
Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement.
Promote a corporate culture that is based on ethical values and behaviours.
Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board.
10.
Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other
relevant stakeholders.
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JADESTONE ENERGY 2020 ANNUAL REPORT
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COMPLIANCE STATEMENT TO QCA PRINCIPLES CORPORATE GOVERNANCE
89
Compliance Statement to
QCA Principles
PRINCIPLE ONE – Establish a strategy and business model
which promote long-term value for shareholders
Jadestone is a leading independent upstream oil and gas production
and development company in the Asia Pacific region. The Company
has an acquisitive strategy and is focused on growth and creating
value through identifying, acquiring, developing and operating assets
within select parts of the Asia Pacific region. The Company is
focused on creating value through leveraging the significant
experience and track-record of its management team to maximise
value from Jadestone’s existing asset base through production
and cost optimisation, and on identifying acquisitions that offer
significant value both at the time of purchase and through potential
organic development and reinvestment. The Board’s objective
is to create and maintain a leading independent Asia-Pacific-
focused upstream oil and gas company that generates significant
shareholder returns through capital growth and, dividends.
The Company’s strategy and business model are further detailed
in the Strategic Report at page 10.
PRINCIPLE TWO – Seek to understand and meet
shareholder needs and expectations
Jadestone is committed to effective communication and constructive
dialogue with its shareholders and the investment community
at large. The Company actively strives to understand and meet
shareholder needs and expectations. Jadestone works hard to ensure
members of the Board and the executive team are highly accessible
to shareholders. The Company offers direct lines of access to the
Chief Executive Officer and Chief Financial Officer, as applicable,
and members of the Board.
The Company has two retained corporate brokers, with mandates
that include coordinating corporate access for shareholders, and
eliciting feedback from the investment community on corporate
developments and news flow. Jadestone hosts conference calls and
webcast presentations to accompany financial results disclosures,
and in respect of major announcements.
Shareholder feedback
Jadestone regularly meets with shareholders and prospective
investors through periodic investor conferences and roadshows
which are conducted at numerous times throughout the year.
Through these interactions, which take the form of both one-on-
one and group meetings, the Board and executive team maintain
relationships with investors and elicit ad-hoc feedback to understand
shareholder preferences and needs.
Information
Jadestone provides regular updates to shareholders through guidance
announcements, operations updates, and the release of half yearly
and annual financial and operating results. These disclosures are
designed to set expectations, to provide previews of performance
against those expectations, and to offer detailed accounts
of performance. In accordance with its continuous disclosure
obligations, Jadestone will provide corrective guidance where
forecasts differ materially from publicly disclosed expectations, and
announce price-sensitive developments in its business without delay.
Shareholder advisory bodies
Jadestone has ongoing relationships with multiple shareholder
advisory bodies to enable feedback regarding proposals either put
to, or to be put to, shareholders for voting at annual meetings.
Annual General Meeting
The annual general meeting is the main forum for dialogue between
the Board and the Company’s shareholders, and all shareholders are
encouraged to attend and participate.
PRINCIPLE THREE – Take into account wider stakeholder
and social responsibilities and their implications for long-
term success
The Board recognises that the long-term success of the Company
is reliant upon the efforts of employees of the Group and its
contractors, suppliers, regulators and other stakeholders. With an
expanding operating footprint in the Asia-Pacific region, Jadestone
recognises the importance of a comprehensive stakeholder
management strategy to successfully and considerately operate
in this diverse range of countries.
The Company engages with its key stakeholders through various
channels, dependent on the nature of the relationship, and values
the feedback it receives from those stakeholders. The Company
takes every opportunity to ensure that, where possible, the views
of its stakeholders are considered and acted upon when these are
believed likely to bring material benefit to the success and integrity
of the Company’s business activities.
For the latest update on Jadestone’s key stakeholder consultation
and engagement activities in 2020, please refer to the “Stakeholder
Management” section in the Sustainability Report at page 63.
PRINCIPLE FOUR – Embed effective risk management,
considering both opportunities and threats, throughout the
organisation
Jadestone has in place a risk management framework which assists
the Board in identifying, assessing, and mitigating the risks faced by
the Group to an acceptable level. This is reviewed on an ongoing basis
and actions are taken as needed to reduce the risks to an acceptable
level, as required.
The Company’s risk management process is aligned with the
requirements of ISO 31000 and addresses risk management at three
levels: Business, Facility and Task. The Company's risk management
framework is also discussed in the Audit Committee Report.
PRINCIPLE EIGHT – Promote a corporate culture that is
based on ethical values and behaviours
As stated in the Chair’s corporate governance statement above, the
Board is responsible for the management, or for supervising the
management, of the Company’s business and affairs. In supervising
the conduct of the business, the Board through the CEO sets the
standards of conduct for the Company. Further the application of
details of the Company’s corporate governance, including business
ethics and integrity, are set out within the Sustainability Report on
pages 74-75.
The Group’s values of respect, integrity, safety, result-oriented,
sustainability and passion foster a culture of accountability,
efficiency and innovation which support the Group’s mission and
promote a corporate culture based on ethical behaviours and
conduct. These values are enshrined in the written policies and
working practices, including the Code of Conduct, adopted by all
Group employees. An open culture is encouraged across the Group,
with regular communications to staff regarding progress. The
senior management team regularly monitors the Group’s cultural
environment and seeks to address any concerns than may arise,
escalating these to Board level as necessary.
PRINCIPLE NINE – Maintain governance structures and
processes that are fit for purpose and support good decision-
making by the Board
The Board has a primary responsibility to foster the short and long-
term success of the Company and is accountable to the shareholders.
Details on the Company’s governance structures, including matters
reserved for the Board are set out on pages 84 and 85.
PRINCIPLE TEN – Communicate how the company is
governed and is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
The Board is committed to ensuring that it communicates with
shareholders and other stakeholders in a transparent and timely
manner, and believes that by doing so it demonstrates the
importance it places upon the views of all stakeholders.
The Company’s methods for maintaining a dialogue with
shareholders and other relevant stakeholders is set out in Principles 2
and 3 above. The Company’s financial and operational performance,
in addition to reports from each of the Board Committees, is
summarised in this Annual Report.
PRINCIPLE FIVE – Maintain the Board as a well-
functioning, balanced team led by the chair
Details on the Board structure and composition are set out on
page 85.
PRINCIPLE SIX – Ensure that between them the directors
have the necessary up-to-date experience, skills and
capabilities
The Board covers a wide range of experience and skills. To meet the
requirements of an independent upstream oil and gas production
and development company, these experiences and skills must cover
financial, legal, operational and technical knowledge, experience of
risk management and growth in the independent E&P sector and
of public markets. The Company believes that the current balance
of skills in the Board as a whole reflects a very broad range of
commercial and professional skills across geographies and industries
and each of the Directors has experience in public markets. Details of
the Directors’ experience and areas of expertise are outlined on pages
94 and 95.
The Company’s secretary (“Company Secretary”) is responsible
for ensuring that Board procedures are complied with and that
governance matters are addressed by the Company. All Directors
have direct access to the Company Secretary and are able to take
independent legal advice. The Board has considered the guidelines
under the QCA Code with regard to the key responsibilities of a
Senior Independent Director (“SID”), and took into account additional
facts, including the role of the Board Chair, the size of the Board, the
existence of a Deputy Chair of the Board, the number of independent
non-executive directors, and the channels of communication
amongst the Company’s executive, the non-executive directors and
shareholders. As such, the Board has determined that it will not
currently appoint a SID, though the matter will be considered at
regular intervals and as circumstances change.
PRINCIPLE SEVEN – Evaluate Board performance
based on clear and relevant objectives, seeking continuous
improvement
A Board matrix helps guide the assessment of the skills and diversity
of the Board members and highlights any skill gaps that requires
addressing. The Board considers that its effectiveness and the
individual performance of Directors is vital to the success of the
Company. The Company currently conducts an internal process
which involves each Board member completing a self-assessment
and delivering it to the Board Chair who is also the Chair of the
Nomination Committee. However, it is recognised that with the
potential increase of the Board, in parallel with the expansion of the
Company's activities, and the need to meet the requirements of the
QCA Code, a more formal evaluation process will be adopted during
the course of 2021.
Directors are (re)elected by shareholders pursuant to the Company’s
Articles, while taking into consideration the provisions of the QCA
Code, having due regard to their performance and ability to continue
to contribute to the Board in the light of the knowledge, skills and
experience required and the need for progressive refreshing of the
Board (particularly in relation to Directors serving for a term beyond
nine years).
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JADESTONE ENERGY 2020 ANNUAL REPORT
90
DIRECTORS REPORT CORPORATE GOVERNANCE
91
Directors’ Report
The Directors present their Annual Report on the affairs of the Group and the
audited Group, including the audited consolidated financial statements of
Jadestone Energy Inc. as at and for the year ended 31 December 2020.
Corporate Reorganisation
Jadestone Energy Inc. was the parent company of the Group for the full calendar year 2020. In early Q1 2021, the Group commenced an
internal corporate reorganisation by way of a plan of arrangement under the Business Corporations Act (British Columbia). Under the
Reorganisation, a newly incorporated English public limited company, Jadestone Energy plc (“Jadestone plc”), became the ultimate parent
company of the Group.
The Reorganisation did not result in a change in control in the ultimate holding company of the Jadestone group, or in a change of ultimate
shareholding in any of the assets of the Jadestone group, or in a change in the management of any the Jadestone group’s assets. Following
completion of the Arrangement on 23 April 2021, the Company’s shares were delisted from trading on AIM. On 26 April 2021, the shares of
Jadestone plc were admitted to trading on AIM.
On 15 March 2021, Jadestone plc, Jadestone Energy Inc. and a wholly owned subsidiary, Jadestone Energy Holdings Limited, entered into an
arrangement agreement pursuant to which, through Jadestone Energy Holdings Limited, Jadestone plc acquired the entire issued share
capital of Jadestone Energy Inc., in exchange for new ordinary shares in Jadestone plc on the basis of one ordinary share in Jadestone plc for
each outstanding common share in Jadestone Energy Inc. The arrangement agreement was approved by Jadestone Energy Inc. shareholders
and received the required court approvals.
The Reorganisation effected a re-domicile of the ultimate holding company to the United Kingdom. Upon completion, Jadestone plc became
the ultimate holding company of the Jadestone group of companies, in place of Jadestone Energy Inc.
As Jadestone Energy Inc. was the parent company of the Group for the full calendar year 2020, this Report, including the audited consolidated
financial statements, are prepared and presented with the Jadestone Energy Inc. as the parent company of the Group.
Incorporation and Listing
Jadestone Energy Inc. was incorporated and exists under the Business Corporations Act (British Columbia) and its head office is located in
Singapore. The Company’s shares were admitted to trading on AIM on 8 August 2018. The Company’s shares were delisted from AIM on 23
April 2021 as part of the Reorganisation, with the shares of Jadestone plc admitted to trading on AIM on 26 April 2021.
Principal Activities
Jadestone is an independent oil and gas production and development company focused on the Asia-Pacific region. The Company has an
acquisitive strategy and is focused on growth and creating value through identifying, acquiring, developing and operating assets within select
parts of the Asia-Pacific region.
Jadestone currently has a portfolio of oil and gas production, development and exploration assets in Australia, Indonesia, Vietnam and the
Philippines and has signed binding sales and purchase agreements to acquire assets in New Zealand and Malaysia. The Company is focused
on creating value through leveraging the significant experience and track-record of its management team to maximise value from Jadestone’s
existing asset base through production and cost optimisation, and on identifying acquisitions that offer significant value both at the time of
purchase and through potential organic development and/or reinvestment. The Directors’ objective is to create a leading independent Asia-
Pacific-focused upstream oil and gas company that generates significant shareholder returns through capital growth and dividends.
Business Review and Future Developments
A review of the business and the future developments of the Group is included in the Strategic Report (including the Chief Executive Officer’s
Report, Review of Operations and Financial Review) and Chairman’s Statement (all of which, together with the Corporate Governance
Statement, are incorporated by reference into this Directors’ Report).
Dividend
The Board’s target is provide direct returns to shareholders by way of dividend, on a biannual basis, and intends to maintain and grow the
dividend over time, in line with underlying cash flow generation. In light of the Group's strong financial position including a record high net
cash position, the Company declared its maiden dividend in 2020, and paid the interim one third portion, being 0.54 US cents per share in
October 2020.
The Board intends to declare the second 2020 dividend of US$5.0 million following completion of the capital reduction and filing of audited
initial accounts.
The dividend policy reflects the Group’s current and expected future cash flow generation potential. The Board may further revise the Group’s
dividend policy from time to time in line with the actual results and financial position of the Group.
Financial Instruments
The Group’s financial risk management objectives and policies are discussed in note 35 to the Consolidated Financial Statements.
Events Since the Balance Sheet Date
Events since the balance sheet date are disclosed in note 38 to the Consolidated Financial Statements.
Directors and Their Interests
The following Directors have held office in the Company during the year:
• Dennis McShane
• A. Paul Blakeley
• Daniel Young
• Robert A. Lambert
• Cedric Fontenit
•
Iain McLaren
• David Neuhauser
• Lisa A. Stewart
(Independent Non-Executive Chair)
(Executive Director, President and CEO)
(Executive Director and CFO)
(Independent Non-Executive Deputy Chair)
(Independent Non-Executive Director)
(Independent Non-Executive Director)
(Non-Executive Director)
(Independent Non-Executive Director)
The Directors who held office at the end of the financial year had the following interests in the ordinary shares of the Company:
Director
Dennis McShane
A. Paul Blakeley
Daniel Young
Robert A. Lambert
Iain McLaren
David Neuhauser
Cedric Fontenit
Lisa A. Stewart
Interest as at start of year
Interest as at end of year
302,919
2,482,798
217,919
553,919
162,870
32,319,167 1
Nil
Nil
453,651
2,732,798
217,919
553,919
163,778
32,319,167 1
200,000 2
Nil
No rights to subscribe for shares in or debentures of Group companies were granted to any of the Directors or their immediate families, or
exercised by them, during the financial year.
Details of share awards that have been granted to certain Directors under the Company's Stock Option Plan in addition to details of
performance shares awarded to certain Directors under the Performance Share Plan and the Restricted Share Plan are also included in the
Compensation and Nominating Committee report, included in this Annual Report.
1 Mr. Neuhauser does not own any common shares of the Company directly but, as managing director of Livermore Partners LLC, exercises control or direction over the common
shares beneficially owned by Livermore Partners LLC.
2 Mr. Fontenit owns 200,000 Common Shares of the Company directly. He also holds an indirect beneficial interest in the Company through 443.5565 units of a fund managed by
Tyrus Capital S.A.M. (the “Fund”) holding an interest in the common shares of the Company. However, Mr. Fontenit does not exercise control or direction over the Fund’s holding
in the Company.
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JADESTONE ENERGY 2020 ANNUAL REPORT
92
DIRECTORS REPORT CORPORATE GOVERNANCE
93
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and
regulations. The Directors are required to prepare financial statements for each financial year. They have elected to prepare the Financial
Statements in accordance with International Financial Reporting Standards “IFRS” as adopted by the European Union.
In preparing these Financial Statements, the Directors are required to:
• Select suitable accounting policies and then apply them consistently;
• Make judgments and accounting estimates that are reasonable and prudent;
• State whether the applicable IFRS’s as adopted by the European Union have been followed, subject to any material departures disclosed
and explained in the Financial Statements; and
• Prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in
business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain Jadestone’s transactions and
disclose with reasonable accuracy the financial position of the Company. They are also responsible for safeguarding the assets of Jadestone
and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
They are further responsible for ensuring that the strategic report and director’s report and other information included in the annual report
and financial statements is prepared in accordance with applicable law.
The maintenance and integrity of the website is the responsibility of the Directors.
The work carried out by the auditors does not involve consideration of information included on the Company’s website and, accordingly, the
auditors accept no responsibility for any changes that may have occurred to the information contained in the Financial Statements since
they were initially presented on the website. Legislation governing the preparation and dissemination of the Financial Statements and other
information included in annual reports may differ from legislation in other jurisdictions.
Share Dealing Code
The Group adopted a code for share dealings appropriate for an AIM company, in compliance with Rule 21 of the AIM Rules for Companies and
with the Market Abuse Regulation.
Annual General Meeting
Jadestone Plc’s annual general meeting will be held in Singapore on 16 June 2021. Formal notice of the AGM will be issued separately from this
Annual Report.
Registrar
Jadestone plc’s share registrar in respect of its ordinary shares traded on AIM is Computershare Investor Services plc, full details of which can
be found on the Company's website.
Auditor
Having reviewed the independence and effectiveness of the auditor, the Audit Committee has recommended to the Board that the existing
auditor, Deloitte & Touche LLP (“Deloitte”) be reappointed. Deloitte has expressed its willingness to continue in office as auditor. A resolution
to appoint Deloitte, as auditor of Jadestone plc, will be put to the shareholders at the annual general meeting of Jadestone plc.
Disclosure of information to auditors
The Directors who were members of the Board at the time of approving the Directors’ Report are listed above. So far as each person who was
a Director at the date of approving this report is aware, there is no relevant audit information, being information needed by the auditors in
connection with preparing its report, of which the auditors are unaware. Having made enquiries of fellow Directors and the Group’s auditors,
each Director has taken all the steps that he or she is obliged to take as a director in order to make him or herself aware of any relevant audit
information and to establish that the auditors are aware of that information.
Directors’ Indemnities
As permitted by the Articles of Association, the Directors have the benefit of an indemnity, which is a qualifying third party indemnity
provision as defined by Section 234 of the Companies Act 2006. The indemnity is currently in force. The Company also purchased and
maintained throughout the financial period Directors’ and Officers’ liability insurance in respect of itself and its Directors.
On behalf of the Board
A. Paul Blakeley
DIRECTOR | 22 APRIL 2021
2020 Board and Committee Attendance
Conflicts of Interest
There are no potential conflicts of interest between any duties owed by the Directors to the Company and their private interests and/or other
duties, nor any arrangements or understandings with any of the shareholders of the Company, customers, suppliers or others pursuant to
which any Director was selected to be a Director. The Company tests regularly to ensure awareness of any future potential conflicts of interest
and related party transactions.
Substantial Shareholders
As at 19 May 2021, the Jadestone plc has received notification from the following shareholders of interests in excess of 3% of the Company’s
issued ordinary shares with voting rights, being the level at which notification is required to be made to the Jadestone plc.
Shareholder
Tyrus Capital S.A.M.
Baillie Gifford & Co
Livermore Partners LLC
Odey Asset Management
Premier Miton Investors
Polar Capital
Blackrock
Invesco
Sandgrove Capital Management
Number of Common Shares as at
19 May 2021
% Interest as at
19 May 2021
118,205,247
39,195,875
32,295,867
28,690,514
23,117,512
22,440,273
17,296,655
16,400,791
15,189,197
25.49%
8.45%
6.96%
6.19%
4.99%
4.84%
3.73%
3.54%
3.28%
The table below shows a summary of directors’ attendance at Board and Committee meetings for the period from 1 January 2020 to
31 December 2020.
Name and positions
held in the Company
A. Paul Blakeley
Director, President and
Chief Executive Officer
Daniel Young
Director and
Chief Financial Officer
Dennis McShane
Director and Chairman
Robert A. Lambert
Director and Deputy Chairman
Cedric Fontenit
Director
Iain McLaren
Director
David Neuhauser
Director
Lisa Stewart
Director
Board
6 of 6
6 of 6
6 of 6
6 of 6
6 of 6
6 of 6
6 of 6
6 of 6
Audit
committee
Compensation
and nominating
committee
Disclosure
committee
N/A
N/A
N/A
4 of 4
N/A
4 of 4
N/A
4 of 4
N/A
N/A
5 of 5
N/A
5 of 5
5 of 5
N/A
N/A
1 of 1
1 of 1
N/A
N/A
N/A
N/A
N/A
N/A
• 2020 Board Meetings (6 meetings): 4 Mar, 25 Mar, 17 Jun, 9 Sep, 27 Oct and 1 Dec
• 2020 Audit Committee Meetings (4 meetings): 15 April, 22 May, 4 Sep, and 24 Nov
• 2020 Compensation and Nominating Committee Meetings (5 meetings): 25 Feb, 11 Mar, 19 Mar, 27 Apr and 20 Nov
• 2020 HSE Committee Meetings (3 meetings): 18 Feb, 30 Jul and 1 Oct
• 2020 Disclosure Committee Meeting (1 meeting): 16 Dec
Health,
safety and
environment
committee
3 of 3
N/A
N/A
3 of 3
N/A
N/A
N/A
3 of 3
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JADESTONE ENERGY 2020 ANNUAL REPORT
94
BOARD OF DIRECTORS CORPORATE GOVERNANCE
Board of Directors
95
Paul Blakeley OBE
EXECUTIVE DIRECTOR, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
Cedric Fontenit
INDEPENDENT NON-EXECUTIVE DIRECTOR
Dennis McShane
INDEPENDENT NON-EXECUTIVE DIRECTOR,
CHAIRMAN
David Neuhauser
NON-EXECUTIVE DIRECTOR
Appointed:
Executive Chairman June 7, 2016 / President and CEO June 15, 2017
Appointed:
June 7, 2016
Appointed:
December 10, 2017
Appointed:
June 7, 2016
Committee Memberships:
HSE Committee, Disclosure Committee and Nomination Committee
Committee Memberships:
Remuneration Committee (Chair) and Nomination Committee
Committee Memberships:
Nomination Committee (Chair) and Remuneration Committee
Paul commenced at Jadestone in June 2016. Paul holds a BSc. from
Bedford College, University of London. Paul has over 40 years’
energy experience, including over 20 years at Talisman Energy Inc
(‘Talisman’). As Executive Vice President Asia Pacific & Middle East
at Talisman, Paul led the building of Talisman’s portfolio in Asia
Pacific to become the largest upstream independent in the region.
Paul has a long track record of acquiring production and managing
commercial and operational risks, while overseeing investment to
further enhancing value through follow-on development activity.
Directorships of Other Reporting Issuers:
None
Cedric has extensive experience in advising on M&A, financing
and structuring investments gained from his 20-year career in
investment banking and hedge fund industries. Cedric is currently
co-founder and managing partner of Amavia Capital, a private
investment firm. He was previously a senior member of the
investment team at Tyrus Capital S.A.M. where he had significant
investment experience in the oil and gas and mining industries,
among others.
Directorships of Other Reporting Issuers:
None
Dennis has over 40 years’ experience in finance, oil and gas, and
mining sectors in the US, Europe, Africa, and Australia.
Dennis has been involved in numerous transformational corporate
transactions both as director or advisor. He currently serves as an
Executive Director of The Advertising Checking Bureau, Inc., and
previously he was the Executive Director of Strategy for Ophir
Energy, Plc having previously served as a Senior Independent
Director during its Initial Public Offering (IPO), and Director of
Finance and Strategy leading the IPO of Ferrexpo, Plc. Dennis was
also previously a Managing Director with JP Morgan Chase and Co.
Directorships of Other Reporting Issuers:
None
David has extensive capital markets and M&A experience and is
currently founder and managing director of event-driven hedge fund
Livermore Partners in Chicago, and the chairman of Kolibri Global
Energy Inc. He has invested in and advised global public companies
for the past 21 years and has a strong track record of enhancing
intrinsic value through restructuring and strategic initiatives.
Directorships of Other Reporting Issuers:
Kolibri Global Energy Inc.
Robert Lambert
INDEPENDENT NON-EXECUTIVE DIRECTOR,
DEPUTY CHAIRMAN
Appointed:
May 5, 2011
Committee Memberships:
HSE Committee (Chair) and Audit Committee
Robert has over 50 years’ experience in the international petroleum
exploration and production business. Robert is MBA-qualified and
is a Chartered Geologist (GSL and EFG), having held numerous
operational and management positions (during his long career with
Conoco Inc from 1978 to 2004), Robert’s contributes his extensive
experience in commercial and operational risk management in
upstream oil & gas to the Jadestone board. Robert is currently also
a Director of Ipex Energy Ltd. and Hillcrest Petroleum Ltd.
Directorships of Other Reporting Issuers:
Hillcrest Petroleum Inc.
Iain McLaren
INDEPENDENT NON-EXECUTIVE DIRECTOR
Appointed:
April 21, 2015
Committee Memberships:
Audit Committee (Chair), Nomination Committee and Remuneration
Committee
Iain has significant experience in the oil and gas sector and is
currently Director, Chair of the Audit Committee and a member of
the Remuneration and Nominations committees for Wentworth
Resources Plc, as well as a Director of Ecofin Global Utilities and
Infrastructure Trust Plc. Iain is a past Senior Independent Director
for Cairn Energy Plc and a number of other companies. Iain was the
President of the Institute of Chartered Accountants of Scotland,
and was a partner in KPMG for 28 years until 2008, bringing
extensive experience in public company audit, internal control and
risk management.
Directorships of Other Reporting Issuers:
Ecofin Global Utilities and Infrastructure Trust Plc; and Wentworth
Resources Plc.
Lisa Stewart
INDEPENDENT NON-EXECUTIVE DIRECTOR
Appointed:
December 1, 2019
Committee Memberships:
HSE Committee and Audit Committee
Lisa has over 30 years of experience in the upstream oil and
gas industry in engineering and senior management positions.
Currently Lisa is a Director of Cimarex Energy Co, Director of Western
Midstream Partners LP, and Executive Chairman of Sheridan
Production Partners, previously Lisa has served as President and
Chief Executive Officer of Sheridan Production Company LLC. Lisa
was an Executive Vice President of El Paso Corporation, President
of El Paso E&P, and Director of Talisman Energy Inc. Prior to her
time at El Paso, Lisa spent 20 years at Apache, including extensive
experience in Asia Pacific, leaving in January 2004 as Executive Vice
President with responsibility for reservoir engineering, business
development, land, environmental, health & safety, and corporate
purchasing.
Directorships of Other Reporting Issuers:
Cimarex Energy Co., Western Midstream Partners LP
Dan Young
EXECUTIVE DIRECTOR AND
CHIEF FINANCIAL OFFICER
Appointed:
CFO January 18, 2017, Executive Director August 8, 2018
Committee Memberships:
Disclosure Committee
Dan commenced at Jadestone in January 2017. Dan holds a BCom
(Hons) from the University of Western Australia, and an MBA(Hons)
from the University of Chicago Booth School of Business. Dan is
a Chartered Accountant and a CFA charter holder. Dan has more
than 24 years’ experience in senior oil and gas, energy and natural
resources investment banking, advisory and consulting roles,
including financial and commercial risk. Prior to joining Jadestone,
Dan was the Senior Vice President and Head of APAC Consulting
for Wood Mackenzie. Dan also worked for 13 years in JP Morgan’s
investment banking coverage/mergers and acquisitions group.
Directorships of Other Reporting Issuers:
None
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JADESTONE ENERGY 2020 ANNUAL REPORT
96
SENIOR MANAGEMENT CORPORATE GOVERNANCE
97
Senior
Management
Fauzi Abbas
GROUP DRILLING MANAGER
AND GENERAL
MANAGER,
MALAYSIA
Fauzi has 25 years’ of operations and technical experience with
a strong background in Drilling, Wells and Completions, with a
track record of leading low cost drilling initiatives and delivering
numerous development projects from conceptual well design
through FDP approval to production. Just prior to Jadestone, he
worked for Vestigo Petroleum, the marginal field development
specialist company within PETRONAS, as a Senior Manager,
Well Engineering. Fauzi planned and executed wells from
conceptual design through first oil on the fast-track South Angsi
development in Malaysia, and has prior experience in drilling and
engineering roles in for Petronas Carigali, for BG Group in Tunisia
and for Saudi Aramco in the Middle East.
Mark Craig
GROUP OPERATIONS
MANAGER
Lucy Dean
GROUP HR MANAGER
Nguyen
Thanh Ha
GROUP COMMERCIAL
MANAGER
Mark has 28 years’ energy experience, including
over four years at Jadestone Energy. He previously
held positions in Wells, Projects and Operations
departments, and has spent the last four years at
Jadestone working within the asset teams, and
now as the Group Operations Manager. Mark’s
focus is on implementing midlife operating
philosophies in the operated assets and ensuring
efficient design of the Jadestone project portfolio.
Marks holds an MBA and a Masters in Petroleum
Engineering, both from Robert Gordon University,
Aberdeen.
Lucy has over 26 years’ HR experience working
in both the Energy Sector and top tier Financial
Institutions in South East Asia and the UK. Her
experience includes business partnering at an
international level and coordinating HR activities
across multiple geographies. Lucy has spent
the last 10 years in Singapore working in the
upstream oil and gas industry. During her time
with Jadestone she has overseen all HR activities
including the successful transition of employees
to Jadestone as part of the Stag and Montara
acquisitions.
Ha has spent over 17 years working in the oil
and gas industry with both BP and Talisman
Energy. Ha has significant experience in M&A,
operational commercial, project evaluation,
strategy and portfolio management. Ha’s last
seven years were with Talisman Energy where she
undertook a regional Business Development and
Commercial role for the Company’s Asia Pacific
portfolio. During her time with Jadestone, Ha
has played a pivotal role in delivering successful
M&A transactions. She also oversees commercial
evaluation and portfolio analysis to support the
Company’s organic growth.
Paul Blakeley OBE
EXECUTIVE DIRECTOR,
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
Helen Astill
HSE MANAGER
Owen Hobbs
COUNTRY MANAGER,
AUSTRALIA AND
NEW ZEALAND
Henning
Hoeyland
GROUP SUBSURFACE
MANAGER
Michael Horn
EXECUTIVE VICE PRESIDENT,
CORPORATE AND BUSINESS
DEVELOPMENT
Paul commenced at Jadestone in June 2016. Paul holds a BSc.
from Bedford College, University of London. Paul has over 40
years’ energy experience, including over 20 years at Talisman
Energy Inc (‘Talisman’). As Executive Vice President Asia Pacific
& Middle East at Talisman, Paul led the building of Talisman’s
portfolio in Asia Pacific to become the largest upstream
independent in the region.
Paul has a long track record of acquiring production and
managing commercial and operational risks, while overseeing
investment to further enhancing value through follow-on
development activity.
Helen is an HSE specialist with over 15 years’ experience in
development of business and HSE management systems, risk
management and organisational processes, and capability building
across a number of industries.
Prior to Jadestone, Helen has worked with ConocoPhillips, Quadrant
Energy, and Apache Energy. She has extensive experience with
regulatory requirements within the Australian offshore oil and
gas industry, and in the development and implementation of
assurance systems used for compliance, executive performance
reporting and continuous improvement objectives.
Owen has over 30 years of experience in the
upstream oil and gas industry, including leading
some of Australia and New Zealand’s largest
onshore and offshore operations with roles in
Boral Energy, Santos, and Origin Energy. He
has managed conventional and unconventional
assets, provided leadership to cross- functional
teams, worked closely with regulators, and been
involved in M&A and divestment activities. Prior
to Owen’s career in the Oil and Gas industry he
spent five years with the Royal New Zealand Navy
as an Executive Branch officer.
Henning has 20 years’ experience in the upstream
sector and was with Schlumberger and Talisman
Energy in the North Sea and Southeast Asia prior
to joining Jadestone. He has held various roles
across operations and subsurface where his focus
has been on maximising value from producing
assets and extending field life. Over the last five
years Henning has led all subsurface activities
within Jadestone with a special focus on technical
due diligence. Henning’s strong analytical bias
is a key differentiator which identifies the
value opportunities that underpin Jadestone's
investment options and growth potential.
Michael has over 30 years’ experience in the oil
and gas industry, largely in Asia Pacific, with
assignments in Vietnam, Malaysia and Singapore,
12 of which were with Talisman Energy. He has
identified and closed a number of key transactions
which were a vital part of Talisman Energy’s
success in Asia, and has a strong reputation
as a dealmaker within Asia amongst industry
stakeholders and the investment community.
Over the past five years, Michael has successfully
delivered Jadestone’s acquisitions in Australia,
Indonesia and New Zealand and remains active
in the pursuit of new opportunities.
James Borras
GENERAL MANAGER,
VIETNAM
James has worked in oil and gas for 26 years. Prior to Jadestone,
he worked for Talisman Energy and BP, and holds a BEng in
Electrical Engineering. James has been in Vietnam for 13 years and
was lead engineer on several field development projects before
joining Jadestone in 2018. James has a strong track record in
successful project delivery and HSE leadership. He assembled the
Vietnam project team and led the gas development project to the
point of being sanction ready in less than 18 months.
David Lamb
COUNTRY MANAGER,
INDONESIA
Neil
Prendergast
GENERAL COUNSEL
AND COMPANY
SECRETARY
Dan Young
EXECUTIVE DIRECTOR
AND CHIEF FINANCIAL
OFFICER
David has over 40 years’ oil and gas industry
experience, mostly in Asia. He has a proven track
record of operational excellence, particularly
with HSE matters, and is also fluent in Bahasa
Indonesia. David was previously the country
manager of Talisman Energy Indonesia where
he created and executed the company’s South
Sumatra Strategy, successfully partnering with
the national oil company Pertamina. Jadestone
has returned to South Sumatra as operator
of the Lemang PSC and are now progressing
development of the Akatara gas field.
Neil has more than 19 years of experience advising
on operations, joint venture projects, acquisitions
and divestitures within the energy industry and
across Asia Pacific, the Middle East, North Africa
and North America. He has played an integral
role in the expansion of Jadestone’s portfolio
and the Company’s listing on AIM since joining
in early 2017. Neil previously spent six years as a
member of Talisman Energy Indonesia’s senior
management team, setting strategy, mitigating
risk and ensuring safe and profitable production.
Dan commenced at Jadestone in January 2017.
Dan holds a BCom (Hons) from the University of
Western Australia, and an MBA(Hons) from the
University of Chicago Booth School of Business.
Dan is a Chartered Accountant and a CFA charter
holder. Dan has more than 24 years’ experience in
senior oil and gas, energy and natural resources
investment banking, advisory and consulting
roles, including financial and commercial risk.
Prior to joining Jadestone, Dan was the Senior
Vice President and Head of APAC Consulting for
Wood Mackenzie. Dan also worked for 13 years
in JP Morgan’s investment banking coverage/
mergers and acquisitions group.
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JADESTONE ENERGY 2020 ANNUAL REPORT
98
AUDIT COMMITTEE REPORT CORPORATE GOVERNANCE
99
Audit Committee Report
Committee members and meeting attendance
In 2020 the Audit Committee comprised:
•
Iain McLaren (Committee Chair)
• Robert Lambert
• Lisa Stewart
All of whom are independent.
Iain McLaren
4 out of 4
Robert Lambert 4 out of 4
4 out of 4
Lisa Stewart
15 April • 22 May • 4 September • 24 November
Role of the Committee
The Audit Committee has oversight of the Company's financial reporting,
including any accompanying narrative, internal controls and risk management
systems, compliance, whistle-blowing and fraud, as well as external statutory
financial audits and reserves audits.
Responsibilities of the Audit Committee include:
a. Monitor the integrity of the Company's financial statements,
including its annual and interim financial statements and
reviewing significant financial reporting issues and judgments
contained within them;
b. Overseeing the Company’s accounting and financial
reporting processes, the Company's internal controls and
risk management systems and the resolution of any issues
identified by the Company’s external auditors;
c. Meeting with the Company's external auditors, along with the
Chief Financial Officer and select senior finance managers of the
Company, to review the annual and interim financial statements
of the Company; and
d. Ensuring the Company meets its reporting obligations related to
oil and gas reserves, as prescribed under the Canadian National
Instrument on Standards of Disclosure for Oil and Gas Activities
(“NI 51-101”), including overseeing the work undertaken by the
Company’s independent third party reserves evaluator.
Review of the financial statements
The Audit Committee monitored the integrity of the annual and
interim financial statements and reviewed the significant financial
reporting matters and accounting policies and disclosures in the
financial reports. The external auditor attended all Audit Committee
meetings during the year.
The annual audit process included consideration of the auditor's
annual planning report to the Audit Committee. This report
addressed a number of topics including the planned scope and audit
approach, the level of materiality, significant risks and areas of focus,
and independence, among other matters.
At the conclusion of the annual audit process, the auditor provided
a detailed final report to those charged with governance, which
revisited these same topics, along with the results of their audit and
other audit matters. The audit committee also evaluated the overall
performance of the auditors and recommended their continued
appointment to the Board.
In addition, the Audit Committee monitored the integrity of the
interim financial statements for both the three month period ended
31 March 2020 (as was required by Canadian financial reporting
obligations at the time) and the interim financial statements for
the six month period ended 30 June 2020.
Internal controls and risk management
The Audit Committee is responsible for the oversight of the
Group’s system of internal controls, including the risk management
framework. The Group’s principal risks and uncertainties, which
provide a framework for the Committee’s focus, are discussed
on pages 32-33. Management has identified the key operational
and financial processes that exist within the business and has
developed an internal control framework. This is structured around
a number of Group policies and procedures and includes a delegated
authority framework.
Compliance, whistleblowing and fraud
The Audit Committee reviews the Company’s procedures, systems
and controls, including for detecting fraud, for the prevention
of bribery, money-laundering, and corporate criminal offence.
The Committee receives reports on any non-compliance, of which
there were none in 2020.
The Group has a Whistleblowing policy in place and the Committee
is responsible for overseeing the arrangements and the effectiveness
of the processes for this. The policy exists to enable employees to
raise any concerns in confidence about wrongdoing or impropriety
within the Group.
Internal audit
The Group currently does not have an internal audit function.
The committee continues to monitor the appropriateness of this
as the Group evolves and grows.
Letter from the Committee Chair
Dear shareholder,
It is my pleasure to present the Audit Committee Report for the year ended
31 December 2020.
Financial reporting
Over the last twelve months, the Audit Committee has monitored
and reviewed the preparation and issuance of the Company's
consolidated audited financial statements as at and for the
year ended 31 December 2020, along with each of the unaudited
condensed consolidated interim financial statements for the three-
months ended 31 March 2020 and for the six months ended 30 June
2020.
Following the Company’s delisting from the TSX-V in late March
2020, the Company was granted relief from certain Canadian
disclosure requirements, generally consistent with the relief granted
to a designated foreign issuer, as defined in Canadian National
Instrument 71-102 Continuous Disclosure and Other Exemptions
Relating to Foreign Issuers. The Company was no longer required to
report quarterly financial information, and immediately moved to
report financial results on a semi-annual basis, in line with market
practice in the UK, and as required by the AIM Rules for Companies.
The Audit Committee has remained focussed on reviewing material
matters affecting the risks and financial position of the Company.
This focus took on a special meaning in early 2020 as the combined
impact of the COVID-19 pandemic and the collapse in the price
of crude oil presented significant new risks for the Company. We
reviewed and challenged a series of stress tests to the Company’s
financial resilience, along with a number of scenarios as part of
impairment testing of the Company’s carrying values for oil and gas
properties.
We also reviewed the auditor's planning report for the 2020 full
year audit, including consideration of the materiality level and the
auditor’s identified items of significant risk and areas of audit focus.
The Committee then oversaw the completion of the preparation and
finalisation of the issuance of the Company’s consolidated audited
financial statements as at and for the year ended 31 December
2020. This has included a thorough review and challenge of the
financial statements as well as the significant financial reporting
issues and judgements contained within them, and a detailed
discussion with the auditor of their April 2021 final report to those
charged with governance.
QCA Code implementation
During Q4 2020 the Audit Committee Terms of Reference (“TOR”)
were modified, along with a number of other changes noted in the
Directors’ Report, as part of the adoption of the QCA Code. Changes
to the Audit Committee’s TOR included:
• Ensuring at least one member of the committee has recent and
relevant technical experience in reserves audits and reserves
reviews;
• Appointments to the committee shall be for up to three years,
extended for further periods of three years provided the director
still meets the membership eligibility requirements;
• The external audit lead partner must be rotated after a
maximum period of five years;
• At least once every ten years the audit service contract shall be
put out to competitive tender; and
• A series of provisions to ensure that the Committee subjects
the Company’s annual reserves disclosures to challenge and
review, including the procedures related to the determination
and accompanying disclosures of the Company’s reserves and
resources.
Reserves reporting
The Board has continued to delegate to the Audit Committee
the oversight, monitoring and review of the Company’s oil and
gas reserves and resources disclosures, including the Company’s
disclosures in April 2020 under the Canadian National Instrument
51-101 Standards of Disclosure for Oil and Gas Activities.
The Audit Committee has duly overseen the work conducted by
management and by the Company’s qualified third party reserves
evaluator, culminating in the Company’s disclosure of year end 2020
reserves in March 2021.
Sincerely,
Iain McLaren
NON-EXECUTIVE DIRECTOR AND
CHAIR OF THE AUDIT COMMITTEE
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JADESTONE ENERGY 2020 ANNUAL REPORT
100
COMPENSATION AND NOMINATING COMMITTEE REPORT CORPORATE GOVERNANCE
101
Compensation and
Nominating Committee
Report
Committee members and meeting attendance
In 2020 the Compensation and Nominating Committee comprised:
• Cedric Fontenit (Committee Chair)
• Dennis McShane
•
Iain McLaren
All of whom are independent.
Cedric Fontenit 5 out of 5
Dennis McShane 5 out of 5
5 out of 5
Iain McLaren
25 February • 11 March • 19 March • 27 April • 20 November
Role of the Committee
The Compensation and Nominating Committee ensures that the compensation
of directors, employees and officers is set appropriately based on industry data,
with the goal of attracting, retaining and motivating key management personnel
to ensure the long-term success of the Company.
• Be willing to seek and take into consideration the views of
shareholders; committing sufficient time to the role to develop
the necessary skills and knowledge (including, for example,
current market practice, taxation and legal requirements) to
work as part of a small committee;
• Conduct an annual review of remuneration committee advisers,
and the fees charged for remuneration committee advice and
other services, including review of their independence and
potential conflicts of interest; and
• Review the Company’s legal obligations, including changes to
employment and discrimination law, Company law and relevant
regulations as well as the effect of any changes to tax law or
rates of tax.
Key roles and responsibilities
The Compensation and Nominating Committee
responsibilities include:
• Annually reviewing and making recommendations with respect
to executive remuneration including short term and long-term
incentives;
•
Identifying individuals qualified to become new Board members;
and
• Annually assessing the contribution and effectiveness of each
director, as well as the competencies and characteristics each
director is expected to bring to the Board.
The Chairman of the Compensation and Nominating
Committee is responsible for:
• Setting agendas, chairing committee meetings and ensuring all
tasks delegated to the committee are dealt with;
• Leading consultations with shareholders on the Company’s
remuneration policy when ever there is a significant change
proposed;
• Answering questions about remuneration more generally with
shareholders.
Members of the Compensation and Nominating Committee
must:
• Be independent and willing to justify the decisions of the
remuneration committee to executive directors and senior
management;
• Be willing and able to resist inappropriate demands from
executive directors and senior management;
• Be prepared to seek external advice when necessary;
Letter from the Committee Chair
Dear shareholder,
On behalf of the Board, I am pleased to present the Compensation and
Nominating Committee Report for the year ended 31 December 2020.
This report is divided into three sections – this introductory letter, a summary
of our Total Reward structure, and the remuneration report.
The first section describes the in-place Total Reward structure, and
explains its application and implementation in 2020 and beyond,
including the application of long-term incentive policies, which were
approved by shareholders on 15 May 2019. Our remuneration strategy
was crafted in recognition of the Company’s ongoing pivot away
from its Canadian heritage and toward norms and practices more
typical of a UK-based entity. This prescribes a three-year transition
in aspects which include director compensation, performance-based
compensation, and long-term incentives. Also in keeping with that
transition, for 2021 and beyond we have divided the committee’s
responsibilities into a separate Remuneration Committee and a
Nomination Committee.
The remuneration report provides detail on how the policy was
applied in 2020, and demonstrates the inherent flexibility we have
instilled in our policies so as to preserve shareholder value in the face
of a challenging external environment for the upstream industry
as a whole, while still ensuring we are able to attract, retain, and
motivate the team for success. The report details the remuneration
paid to senior management and directors in 2020, and underscores
the adjustments made in service of protecting long- term project
returns and ensuring the ongoing financial strength of the business
in light of the challenges our industry faced in 2020.
In 2020, key matters considered by the committee included:
• Reviewing the CEO’s 2019 Performance contract and agreeing
on outcomes relating to performance pay, as well as reviewing
and providing constructive input on the CEO’s proposed 2020
performance agreement;
• Reviewing recommendations for salary increases for 2020,
and subsequently agreeing that salary revisions would not be
implemented in 2020 as a result of the economic downturn due
to COVID-19;
• Reviewing and agreeing on Performance Share Plan metrics for
2020 and 2021 and agreeing on long term incentive plan grants
for individuals;
• Acknowledging an overall 2020 performance of 46% of total
objectives for the year 2020, as further detailed below;
• Reviewing Board fees in relation to the decision to no longer have
Board members participate in the Long Term Incentives (“LTIP”)
programme, but instead receive cash fees only, in alignment with
the pivot toward UK company practices;
• Conducting a review of foreign service allowances;
• Reviewing Board competencies in line with the Company’s move
toward adopting the QCA code; and
• Overseeing an update to the Company’s succession plans for key
roles in the organisation, a project that will continue into 2021.
In conducting its work, the Compensation and Nominating
Committee sought the support of several independent specialist
service providers. Mercer Singapore provided assistance with the roll
out of the Performance Share Plan, and Mercer UK assisted with NED
compensation benchmarking and Pay Peer Group Disclosure with
regard to executive compensation. Mercer Singapore presented a
Performance Share Plan (“PSP”) proposal to the Compensation and
Nominating Committee and PWC Singapore provided benchmarking
analysis on foreign service allowances in several of the Company’s
key office locations - Singapore, Kuala Lumpur and Jakarta.
The Committee also works to ensure that the Board continues
to have the appropriate balance of skills, knowledge, experience,
independence and diversity to lead the Company effectively. The
Committee keeps under review the composition of the Committees
to ensure that they retain the appropriate combination of expertise
and diversity, and that their non-executive members remain
independent and are not overly committed elsewhere such that they
risk being unable to attend properly to Jadestone’s affairs. Further,
the Committee takes into account the findings of an annual Board
and Committees evaluation exercise, commissioned by the Board
chair, in exercising its duties.
The Board recognises that diversity and inclusion are essential
both for the Board and throughout the Company. In 2020, the
Board approved the Company’s Diversity Policy, which recognises
that people from different backgrounds and experiences can
bring valuable insights to the workplace and enhance Jadestone’s
operations. While all appointments are made based on merit,
the Board embraces the principles of the Diversity Policy and
seeks to ensure inclusion and diverse representation in all its
recommendations.
In 2021 and beyond, the newly formed Remuneration Committee
will consider how best to instill additional linkages between ESG
performance and performance pay, and will once again, conduct
a review of remuneration for Senior Management roles, and a
review of Board performance. The Remuneration Committee will
be comprised of the same members as the Compensation and
Nominating Committee. The newly formed Nomination Committee
will primarily focus on identifying individuals qualified to become
new Board members, and will make recommendations to the Board
with respect to membership on Board committees other than the
Nomination Committee, as well as assisting the Board with respect
to providing continuing education programmes for directors. The
Nomination Committee is comprised of Dennis McShane (Committee
Chair), Cedric Fontenit, Iain McLaren and Paul Blakeley.
The work of both new committees is founded in the notion that the
Company’s practices should evolve in step with its ongoing pivot
toward practices more typical of a UK company, while ensuring our
key objectives, as identified above, are met to best support the
ongoing delivery of shareholder value.
Sincerely,
Cedric Fontenit
NON-EXECUTIVE DIRECTOR AND CHAIR OF THE COMPENSATION AND
NOMINATING COMMITTEE (2020) / REMUNERATION COMMITTEE (2021)
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JADESTONE ENERGY 2020 ANNUAL REPORT
102
COMPENSATION AND NOMINATING COMMITTEE REPORT CORPORATE GOVERNANCE
103
Total Rewards Structure
Jadestone’s Total Rewards structure offers a competitive package aligned to the principles of performance and delivery. The Company believes
that emphasis on performance pay, with clear goal-setting, helps to deliver a results-oriented culture that generates exceptional results with
visible recognition and reward for delivery of objectives.
Jadestone is committed to employees’ personal and professional development in a work place environment that appreciates diversity, inclusion
and provides equal opportunities.
a. Remuneration at a glance
Total Reward component
Detail
Base Salary
Performance Pay
Pension
Long Term Incentive
To enable the recruitment and retention of individuals who possess
the appropriate experience, knowledge, commercial acumen and
capabilities required to deliver sustained long-term shareholder value.
Annual Performance Pay Target for 8 Job Bands with performance pay
ranging from 0-10% to 0-150%. Annual performance pay depends
on both employee and company performance against agreed Key
Performance Indicators.
Eligible employees
All permanent employees
All permanent employees
Aligned to pension standards in the country of jurisdiction (EPF for
Malaysia; CPF for Singapore; Superannuation for Australia) etc.
All permanent employees
Transition from Share Option Plan to a Performance Share Plan to align
with pivot to UK market. Implemented over a 3-year transition with
100% PSP award by 2023.
Limited to permanent employees
at a senior job band who can most
influence corporate outcomes.
b. Executive employment agreements
Mr. Blakeley is party to an executive employment agreement which provides that in the event of a change of control of Jadestone and
where notice of termination is given by Jadestone to Mr. Blakeley in connection with such change of control, Mr. Blakeley is entitled to
payment in the amount of twenty-four (24) times his monthly salary; two (2) times the annual performance pay target (the annual
performance pay target amount in respect of the year preceding the date of notice, if the date of notice precedes the date upon which such
performance pay amount would have been paid and, a pro-rata portion of the annual performance pay target amount in respect of that
portion of the current year to the date of notice) and an amount equivalent to US$500,000 as compensation for the loss of foreign service
allowances and all other benefits over the period of twenty-four (24) months.
Mr. Young is similarly party to an executive employment agreement which provides that in the event of a change of control of Jadestone
and where notice of termination is given by Jadestone to Mr. Young in connection with such change of control, Mr. Young is entitled to
payment in the amount of twelve (12) times his monthly salary; two (2) times the annual performance pay target (the annual performance
pay target amount in respect of the year preceding the date of notice, if the date of notice precedes the date upon which such performance
pay amount would have been paid and, a pro-rata portion of the annual performance pay target amount in respect of that portion of the
current year to the date of notice) and an amount equivalent to US$100,000 as compensation for the loss of foreign service allowances and
all other benefits over the period of twenty-four (24) months.
c. External input to policy
Where required, the Compensation and Nominating Committee relies on external input to remuneration-related policy, and in 2020 has
elicited input from Mercer in the UK and Singapore and PWC in Singapore.
d. External appointments
The Company has no explicit restriction to its directors accepting additional directorship appointments, external to Jadestone seeking to
ensure adequate time commitment to Jadestone and no conflicts of interest.
e. Illustration of policy application
The following table presents the targets and maximums possible for each component of the Total Reward structure.
Reward component
2020 Base Salary
Performance Pay
Pension Allowance
LTIP – SOPs and PSPs
Position
Detail
CEO
CFO
CEO
CFO
CEO
CFO
CEO
CFO
Annual salary of USD$550,000 per annum1
Annual salary of USD$320,000
0 – 150%
0 – 130% (Increased from 0 -100% to 0 – 130% effective for 20202)
10% of base salary
10% of base salary
95% of base salary
80% of base salary (increased from 70% to 80% effective for 20202)
1
In 2020 Mr Blakeley elected to receive USD50,000 of his annual base salary of USD 550,000 in the form of Restricted Share Units. Note that RSUs are only used as an
alternative to cash under exceptional circumstances to provide greater alignment with shareholder objectives.
2
Following an independent market review, Mr Young’s Performance Pay target and LTIP target in 2020 was increased to ensure competitive remuneration within the peer group.
Remuneration Report
a. Total remuneration
The following table sets out the total remuneration, excluding the value of Long Term Incentive Programme (“LTIP”) awards, for Executive
Directors and Non-Executive Directors for 2020, as compared to 2019.
Name and position
Year
Salary, con-
sulting fee,
retainer, or
commission
(US$)
Perfor-
mance
pay
(US$) 1 2
Committee
or meeting
fees
(US$)
Pension
allowance
(10%
of base
salary)
Value of
overseas
allowance
support
(US$)
Value of
all other
compen–
sation
(US$)
Total
fixed
remuner-
ation
Total
variable
compen-
sation
Total
compen-
sation
LTIP 1 2 3
2020
2019
437,500
500,000
536,250
585,000
Nil
Nil
55,000
50,000
443,332
516,926
A. Paul Blakeley
Director, President and
Chief Executive Officer
Cedric Fontenit
Director
Robert Lambert
Director and
Deputy Chairman
2020
2019
56,667
56,250
2020
2019
56,667
56,250
Iain McLaren
Director
2020
2019
56,667
56,250
Dennis McShane
Director and Chairman
2020
2019
114,583
125,000
David Neuhauser
Director
2020
2019
56,667
56,250
2020
2019
n/a
56,250
2020
2019
56,667
5,000
Eric Schwitzer
Director
Lisa Stewart
Director
Daniel Young
Director and CFO
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
n/a
Nil
Nil
Nil
9,792
10,000
13,125
12,500
21,875
25,000
4,375
5,000
Nil
Nil
n/a
10,000
17,500
833
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
n/a
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
n/a
Nil
Nil
Nil
Nil
Nil
449,433
317,640
935,832
1,066,926
985,683
902,640
1,921,515
1,969,566
11,395
19,853
11,395
19,853
66,459
66,250
69,792
68,750
11,395
19,853
78,542
81,250
17,093
26,470
118,958
130,000
11,395
19,853
0
19,853
11,395
28,343
56,667
56,250
n/a
67,619
74,167
5,833
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
66,459
66,250
69,792
68,750
78,542
81,250
118,958
130,000
56,667
56,250
n/a
67,619
74,167
5,833
213,952
198,525
640,460
683,538
437,952
396,925
1,078,412
1,080,463
2020
2019
280,000
320,000
224,000
198,400
Nil
Nil
32,000
32,000
328,460
331,538
1
2
3
The performance pay is finalised and approved in the March of the following year based on the achievement of various corporate targets and objectives. The amounts shown
in 2020 reflect the bonus paid during the year based on performance targets set for 2019, the bonus for 2020 will be paid in April 2021 once targets have been reviewed and
approved by the remuneration committee. The LTIP awards are subject to three year cliff vesting as discussed further in this report.
Performance pay and LTIP awards comprise amounts paid or awarded in the prevailing year based on performance in the prior year.
LTIP for CEO includes Share Options, Performance Shares and USD$50,000 elected by CEO to be received in form of RSUs.
Overseas allowance support
Overseas Allowance Support is provided to individuals on assignment in a Host Location with the objective of providing market competitive
benefits consistent with the role and location of the posting. Jadestone shares are listed on AIM but the Company is headquartered in
Singapore. This unique approach among its peers ensures the leadership team work closely within the business in Asia Pacific. This has an
advantage both within the organisation in managing the activity, as well as with external stakeholders, being able to interact directly. It also
eliminates the cost of maintaining a London office. Because the CEO and CFO are foreigners working in a host location, aligned to standard
market practice, they receive certain allowances to ensure that they are maintained cost neutral on housing, schooling, transportation, home
leave and utilities when compared with their home location. These allowances are reviewed on an annual basis by a third-party provider.
The overseas allowance values could not be benchmarked against Jadestone peer companies, due to limited data points. The review was based
on the current market data for each element, per the relevant assumption (i.e. median values were used where a range existed, applied based
on compensation, location and / or family size as appropriate) across a range of sectors including Finance, Oil and Gas, Blue Chip companies.
There are a significant number of data points to ensure competitive positioning by Jadestone.
Market data in this context means actual costs in each location / location combination as researched by Mercer, rather than reported allowance
values by a peer group of companies.
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JADESTONE ENERGY 2020 ANNUAL REPORT
104 COMPENSATION AND NOMINATING COMMITTEE REPORT CORPORATE GOVERNANCE
105
CEO Fixed Pay Targets
CFO Fixed Pay Targets
Fixed 1 2
95%
5%
US$985,832
Fixed 2
100%
US$640,460
Target 3
53%
23%
24%
US$1,776,677
Target 3
61%
20% 19%
US$1,053,527
Maximum 4
42%
37%
21%
US$2,241,223
Maximum 4
50%
32%
18%
US$1,286,399
0
$,000
500
1,000
1,500
2,000
2,500
0
$,000
500
1,000
1,500
2,000
Fixed
Short Term Incentive
Long Term Incentive 5
1
2
3
4
5
2020 Base salary figure reflects reduction as a result of Project Clover and described below.
Fixed Pay – Base Salary (including USD50,000 for CEO paid as RSUs and reflected as LTIP), Pension Allowance, Overseas Allowance.
Total Pay Target – Base Salary (including USD50,000 for CEO paid as RSUs and reflected as LTIP), Pension Allowance, Performance Pay at Target – CFO at 65% and CEO at 75%
and assumed LTIP value.
Total Pay Maximum – Base Salary (including USD50,000 for CEO paid as RSUs and reflected as LTIP), Pension Allowance, Performance Pay at maximum pay-out – CFO at 130%
and CEO at 150% and assumed LTIP value.
Performance Share Target – calculated on 2020 share price at date of grant. Maximum award to achieve 200% performance outcome requires >80% share performance
compared with Jadestone Peer group for Relative TSR and >40% increase in share price for Absolute TSR. Further details see page 106.
In recognition of the extraordinary financial challenges the industry faced in 2020, and with a priority on protecting balance sheet strength,
the CEO and CFO agreed to a 25% reduction to base salary and a 20% reduction to all cash-based allowances (excluding pension) for the period
1 June 2020 to 30 November 2020. As oil prices recovered late in the year and economic performance improved, the CEO and CFO’s base salaries
were restored to 100% in December 2020. Cash based allowances (excluding pension) remained at 80% until the end of the calendar year 2020.
In line with the salary reduction of the CEO and CFO, all Board members agreed to a 25% reduction in Board fees. Board Fees were reinstated
in December 2020 and were subject to a pre-agreed increase, which had been presented in the 2019 circular, but placed on hold, and was
introduced as a result of the Board no longer participating in the Company’s Share Option Plan. This is, once again, aimed at further aligning
Board remuneration with UK standards as a part of the shift away from Canadian practices.
During 2020, an external independent benchmarking of compensation for senior executives was carried out by Mercer in the UK. The review
resulted in a base salary increase for the CFO to USD$340,000 effective 1 April 2021 and a revised Performance Pay target from 100% to 130%
and LTIP target from 70% to 80% both of which were effective for the 2020 calendar year.
2020 Performance pay
Information on 2020 performance pay
The following table presents the key performance indicators specified in the CEO’s Performance Contract, and was used to determine
performance pay in 2020.
Despite the challenges in 2020, and based on these reasons, among others, the committee believes it was appropriate to award executive
directors a performance pay award for 2020. Performance is paid 100% in cash with no deferral.
Performance measure
Weighting
Key targets summary
Assessed overall
2020 performance
Achieve 2020 Operations
Targets
Deliver Continuous
Improvement in ESG
Performance
Deliver Per Share Accretive
Growth in Asia-Pacific
Create Sustainable
Shareholder Value
40%
20%
20%
20%
100%
Deliver plan production & operating cost targets.
Capital programmes and work programmes.
Performance Improvement targets.
Maintain top quartile HSE.
Deliver improving performance on environmental targets.
Build a strong, diverse and sustainable organisation.
Adher to top quartile governance standards.
Deliver strategic portfolio objectives.
Complete one or more new accretive acquisitions.
Improve market value and share price.
Maintain sustainable funding and leverage.
Broaden shareholder base, increase liquidity and maintain
investor relationship.
20%
15%
5%
10%
5%
2.5%
2.5%
7.5%
12.5%
12.5%
2.5%
5%
12%
16%
6%
12%
46%
Each of these categories contains at least 4 sub sections with outcomes for each target assessed by the Committee.
LTIP Awards During the Year
Long-term incentives were granted to the senior executives and directors in April 2020. This was the first year in which the Company granted
incentives under the Performance Share Plan ("PSP") in addition to the Stock Option Plan (“SOP”), and was the first year of the Company’s
transition away from a long-term incentive programme based solely on stock options. This transition will be completed over three years and
stock options will no longer be used as a long-term incentive after 2022. The phased replacement of stock options towards performance shares,
is consistent with the Company's pivot away from typical Canadian company practices. In the same context, 2020 was the final year that
non executive directors ("NED") will receive any form of long-term shares or share option-based incentive awards and, following an external
review of Non-executive cash remuneration within the peer group, the NED salaries were adjusted, to compensate for the loss in value of stock
options, and targeted to place pay at around the 50% percentile. This increase was finally awarded in December, 2020, having been withheld
from April as part of the Project Clover initiative to reduce 2020 costs.
The 2020 grant was the first year where the LTIP grants were subject to a 3-year cliff vest. Awards granted prior to 2020 will continue to
vest over a 3-year period. The Long-Term incentive awards granted by Jadestone under the LTIP Plans are aligned to company and individual
performance and are subject to Board approval. Both the SOP and PSP grants are subject to Good Leaver/Bad Leaver and malus and clawback
provisions.
The following table summarises the long-term incentive awards granted in 2020.
Name and position
Type of
compensation
security
Number of
compensation
securities
A. Paul Blakeley
Director, President and
Chief Executive Officer
Stock Options
Performance Share Units
Restricted Share Units
1,290,000
155,000
101,063
Stock Options
Performance Share Units
700,000
80,000
Stock Options
75,000
Date of issue
or grant
27 April 2020
27 April 2020
27 April 2020
27 April 2020
27 April 2020
27 April 2020
44.0
56.0
40.0
44.0
56.0
44.0
Stock Options
50,000
27 April 2020
44.0
Stock Options
50,000
27 April 2020
44.0
Stock Options
50,000
27 April 2020
44.0
Stock Options
50,000
27 April 2020
44.0
Stock Options
50,000
27 April 2020
44.0
Daniel Young
Director and CFO
Dennis McShane
Director and Chairman
Iain McLaren
Director
Robert Lambert
Director and
Deputy Chairman
David Neuhauser
Director
Cedric Fontenit
Director
Lisa Stewart
Director
Strike price
or unit value
at issuance
(GBp)1
Closing price
of security or
underlying
security at
year end
(GBp)
Expiry date
26 April 2030
n/a
n/a
26 April 2030
n/a
26 April 2030
26 April 2030
26 April 2030
26 April 2030
26 April 2030
26 April 2030
61.5
61.5
61.5
61.5
61.5
61.5
61.5
61.5
61.5
61.5
61.5
1.
For Stock Options, values are strike price, for Performance Share Units and Restricted Share Units, values are unit value at issuance.
b. Stock options phase-out
While common practice in North America, the granting of stock options is being phased out by the Company, as part of the ongoing pivot
towards UK standards and best practice. A phased approach is being taken, and 2020 was the first year in which options were reduced by
25% of the grant value in favour of performance shares which were introduced at matching value. Valuations of both forms of long-term
incentive were independently assessed and verified by Mercer UK. The table below lays out the plan for full conversion to performance
shares. It is worth re-emphasising that this transition does not apply to NEDs who will no longer receive any LTIP awards going forwards,
in line with UK best practice.
Year
2020
2021
2022
2023
SOP grant allocation
PSP grant allocation
75%
50%
25%
0%
25%
50%
75%
100%
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JADESTONE ENERGY 2020 ANNUAL REPORT
106
COMPENSATION AND NOMINATING COMMITTEE REPORT CORPORATE GOVERNANCE
107
2020 Performance measures
The Performance Measures agreed by the Committee incorporate a balance of relative and absolute Total Shareholder Return (“TSR”) to
reward outperformance vs. peers (relative TSR) and alignment with shareholders (absolute TSR). Jadestone considered a number of other
performance metrics but in the context of extreme volatility in the sector and in the oil price, TSR metrics seem the most transparent and
efficient to measure long term performance.
c. Performance share award details
The Performance Share awards granted by the Company in 2020 will vest in accordance with a pre-defined set of performance measures,
to be determined over a three-year performance period.
Performance measure 1: Absolute Total Shareholder Return
Share price target plus dividend to be set at the start of the performance period and assessed annually; the threshold share price plus
dividend has to be equal to or greater than a 10% increase in absolute terms to earn any payout at all, and must be 25% or greater for
target payout.
Weighting: 30%
Performance measure 2: Relative Total Shareholder Return
Jadestone’s Total Shareholder Return (TSR) as measured against the TSR of our agreed peer companies; the size of the payout is based on
Jadestone’s ranking against the TSR outcomes of our peer group.
Weighting: 70%
Jadestone peer group
Cooper Energy
Energean
Enquest
Genel Energy
Australia
UK
UK
UK
Gulf Keystone
Horizon Oil
Pharos Energy
Premier Oil
UK
Australia
UK
UK
Senex Energy
Serica Energy
Transglobe
Tullow Oil
Australia
UK
UK
UK
In 2020, Mercer undertook the first review of Jadestones Relative and Absolute TSR performance.
Full Performance Period
Performance Testing Date
% of performance period elapsed
1 January 2020 to 31 December 2022
31 December 2020
33%
Performance measure 1 –
Absolute TSR
2020
Outcome
Performance measure 2 –
Relative TSR
2020
Outcome
Average FY2020 -2022
Performance
Achievement Factor
(AF)
Average FY2020 -2022
Performance
Achievement Factor
(AF)
Superior
40%
Target
25%
Threshold
10%
<10%
2.0
1.0
0.5
NIL
<10%
Achievement
Factor - Nil
Superior
P80 (20%)
Target
P60 (15%)
Threshold
P50 (10%)
30 days past due or there has been a significant increase in credit risk since
initial recognition.
Amount is > 90 days past due or there is evidence indicating the asset is credit-impaired.
There is evidence indicating that the debtor is in severe financial difficulty and the Group
has no realistic prospect of recovery.
12-month ECL
Lifetime ECL – not credit-impaired
Lifetime ECL – credit-impaired
Amount is written off
In addition to US Dollar, the Group transacts in various currencies, including Australian Dollar, Singapore Dollar, Vietnamese Dong, Malaysian
Ringgit, Indonesian Rupiah, New Zealand Dollar, British Pounds Sterling and Canadian Dollar.
The table below details the credit quality of the Group’s financial assets and other items, as well as maximum exposure to credit risk by credit
risk rating grades:
Foreign currency sensitivity
Material foreign denominated balances were as follows:
Cash and bank balances
Australian Dollars
Trade and other receivables
Australian Dollars
Trade and other payables
Australian Dollars
Provisions
Australian Dollars
2020
USD’000
2019
USD’000
8,043
1,547
21,233
2,692
7,088
5,853
16,236
7,158
A strengthening/weakening of the Australian dollar by 10%, versus the functional currency of the Group, is estimated to result in the net
carrying amount of Group's financial assets and financial liabilities as at year end decreasing/increasing by approximately US$1.4 million (2019:
US$1.0 million), and which would be charged/credited to the consolidated statement of profit or loss.
Interest rate risk
The Group’s interest rate exposure arises from some of its cash and bank balances and borrowings. The Group’s other financial instruments are
non-interest bearing or fixed rate, and are therefore not subject to interest rate risk.
Jadestone holds some of its cash in interest bearing accounts and short-term deposits. Interest rates currently received are relatively low levels
historically. Accordingly, a downward interest rate movement would not cause significant exposure to the Group.
On 2 August 2018, the Group entered into a reserve based lending agreement with the Commonwealth Bank of Australia and Société Générale
to borrow US$120.0 million, repayable quarterly to 31 March 2021. The loan was fully drawn down on 28 September 2018 and incurred interest
at LIBOR plus 3%. The loan incurred establishment and other costs of US$3.2 million, which were offset against the proceeds received.
Based on the carrying value of the reserve based loan as at 31 December 2020, if interest rates had increased or decreased by 1% and all other
variables remained constant, the impact on the Group’s quarterly net income/(loss) before tax would be immaterial (2019: US$0.1 million).
The loan was fully repaid on 31 March 2021.
External
credit
rating
Internal
credit
rating
12-month
(“12m”) or
lifetime ECL
Note
Gross
carrying
amount(i)
USD’000
Loss
allowance
USD’000
Net carrying
amount
USD’000
2020
Cash and bank balances
Trade receivables
Other receivables
2019
Cash and bank balances
Trade receivables
Other receivables
24
23
23
24
23
23
n.a
n.a
n.a
n.a
n.a
n.a
Performing
(i)
Performing
12m ECL
Lifetime ECL
12m ECL
Performing
(i)
Performing
12m ECL
Lifetime ECL
12m ECL
89,441
106
4,273
99,419
34,007
2,311
-
-
-
-
-
-
89,441
106
4,273
99,419
34,007
2,311
(i) For trade receivables, the Group has applied the simplified approach in IFRS 9 to measure the loss allowance at lifetime ECL. The Group
determines the expected credit losses on these items by using specific identification, estimated based on historical credit loss experience
based on the past due status of the debtors, adjusted as appropriate to reflect current conditions and estimates of future economic conditions.
Accordingly, the credit risk profile of these assets is presented based on their past due status in terms of specific identification.
As at 31 December 2020, total trade receivables amounted to US$0.1 million (2019: US$34.0 million). The balance in 2020 and 2019 had been
fully recovered in 2021 and 2020, respectively.
The concentration of credit risk relates to the main counterparty to oil sales in Australia, where the sole customer has an A1 credit rating
(Moody’s). All trade receivables are generally settled 30 days after sale date. In the event that an invoice is issued on a provisional basis, the
final reconciliation is paid within three days of the issuance of the final invoice, largely mitigating any credit risk.
The Group recognises lifetime ECL for trade receivables. The ECL on these financial assets are estimated based on days past due, by applying
a percentage of expected non-recoveries for each group of receivables. As at year end, ECL from trade and other receivables are expected to be
insignificant.
Cash and bank balances are placed with reputable banks and financial institutions, which are regulated, and with no history of default.
The maximum credit risk exposure relating to financial assets is represented by their carrying value as at the reporting date.
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JADESTONE ENERGY 2020 ANNUAL REPORT
164
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
165
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet all of its financial obligations as they become due. This includes the risk that the
Group cannot generate sufficient cash flow from producing assets, or is unable to raise further capital in order to meet its obligations.
The Group’s manages it liquidity risk by optimising the positive free cash flow from its producing assets, on-going cost reduction initiatives,
merger and acquisition strategies, and bank balances on hand.
The Group’s net loss after tax for the year was US$60.2 million (2019: profit after tax of US$40.5 million), and inclusive of the non-cash SC56
impairment of US$50.4 million (2019: nil). Operating cash flows before movements in working capital and net cash generated from operating
activities for the year ended 31 December 2020 was US$86.9 million and US$84.6 million (2019: US$176.9 million and US$144.6 million)
respectively. The Group’s net current assets remained positive at US$79.5 million as at 31 December 2020 (2019: US$26.8 million).
The Group’s reserve based loan was sized on a borrowing base drawn from projected cash flows from the Montara assets, and based on proved
and probable producing reserves but including certain infill wells. This borrowing base was subject to scheduled semi-annual redeterminations
and as such, and in the event of a significant reduction in the borrowing base, there was a risk that scheduled repayments might increase to
offset any such borrowing base deficiency. The existing borrowing base, as assessed by the lenders as at 31 December 2020, was significantly
above aggregate commitments, and was fully repaid on 31 March 2021. During the life of the loan, no semi-annual redetermination resulted in
an increase in scheduled repayments, or the determination of any borrowing base deficiency.
The Group believes it has sufficient liquidity to meet all reasonable scenarios of operating and financial performance for the next 18 months.
Non-derivative financial liabilities
The following table details the expected contractual maturity for non-derivative financial liabilities with agreed repayment periods. The table
below has been drawn up based on the undiscounted contractual maturities of the financial liabilities, including interest, that will be paid on
those liabilities, except where the Group anticipates that the cash flow will occur in a different period. The adjustment column represents the
estimated future cash flows attributable to the instrument included in the maturity analysis, which are not included in the carrying amount of
the financial liabilities on the consolidated statement of financial position, namely expense and ARO accretion expense.
Weighted
average effective
interest rate
%
On demand
or within
1 year
USD’000
Within
2 to 5 years
USD’000
More than
5 years
USD’000
Adjustments
USD’000
Total
USD’000
2020
Non-interest bearing
Fixed interest rate instruments
Variable interest rate instruments
2019
Non-interest bearing
Fixed interest rate instruments
Variable interest rate instruments
-
6.049
7.570
-
7.317
7.735
36,740
13,448
7,445
57,633
27,802
20,228
44,425
38
14,042
-
352,771
-
-
(69,021)1
(1,707)
(149)
320,528
25,783
7,296
14,080
352,771
(70,877)
353,607
5,052
50,507
7,477
377,882
-
-
(102,460)1
(8,463)
(2,779)
308,276
62,272
49,123
92,455
63,036
377,882
(113,702)
419,671
Non-derivative financial assets
The following table details the expected maturity for non-derivative financial assets. The inclusion of information on non-derivative financial
assets is necessary in order to understand the Group’s liquidity risk management, as the Group’s liquidity risk is managed on a net asset and
liability basis. The table has been drawn up based on the undiscounted contractual maturities of the financial assets, including interest that
will be earned on those assets, except where the Group anticipates that the cash flow will occur in a different period. The adjustment column
represents the estimated future cash flows attributable to the instrument included in the maturity analysis, which are not included in the
carrying amount of the financial assets on the consolidated statement of financial position, namely interest income.
Weighted
average effective
interest rate
%
On demand
or within
1 year
USD’000
Within
2 to 5 years
USD’000
Adjustments
USD’000
Total
USD’000
-
-*
-
-*
4,379
89,441
93,820
36,318
89,419
125,737
-
-
-
-
10,000
10,000
-
-*
-*
-
-*
*
4,379
89,441
93,820
36,318
99,419
135,737
2020
Non-interest bearing
Variable interest rate instruments
2019
Non-interest bearing
Variable interest rate instruments
* The effect of interest is not material.
Capital management
The Group manages its capital structure and makes adjustments to it, based on the funds available to the Group, in order to support the
acquisition, exploration and development of resource properties and the ongoing operations of its producing assets. Given the nature of
the Group’s activities, the Board of Directors works with management to ensure that capital is managed effectively and the business has a
sustainable future.
To carry-out planned asset acquisitions, exploration and development, and to pay for administrative costs, the Group may utilise excess cash
generated from its ongoing operations and may utilise its existing working capital, and will work to raise additional funds should that be
necessary.
Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the
Group, is reasonable. There were no changes in the Group’s approach to capital management during the year ended 31 December 2020.
The Group is not subject to externally imposed capital requirements.
Gearing ratio
Debt
Cash and cash equivalents
Restricted cash
Cash less borrowings
2020
USD’000
(7,296)
81,996
7,445
82,145
2019
USD’000
(49,123)
75,934
13,485
40,296
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JADESTONE ENERGY 2020 ANNUAL REPORT
166
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
167
Borrowings comprise long and short-term borrowings, incorporating effective interest method financing costs, and excludes derivatives, as
detailed in Note 31. Cash and cash equivalents include the Montara assets’ minimum working capital cash balance of US$15.0 million required
under the RBL, while restricted cash comprises the US$7.4 million in the RBL debt service reserve account (2019: US$13.5 million). The restricted
cash in 2020 excludes the US$1.0 million cash collateralised bank guarantee placed with the Indonesian regulator in respect of the JSA entered
by the Group in Indonesia. The restricted cash in 2019 excludes the US$10.0 million deposited in support of a bank guarantee to a key supplier in
respect of the Stag FSO. Equity includes all capital and reserves of the Group that are managed as capital.
Information reported to the Group’s Chief Executive Officer (the chief operating decision maker) for the purposes of resource allocation is
focused on two reportable/business segments driven by different types of activities within the upstream oil and gas value chain, namely
producing assets and secondly development and exploration assets. The geographic focus of the business is on Southeast Asia (“SEA”) and
Australia.
Revenue and non-current assets information based on the geographical location of assets respectively are as follows:
36 | SEGMENT INFORMATION
The Group’s overall strategy remains unchanged from 2019.
Fair value measurements
The Group discloses fair value measurements by level of the following fair value measurement hierarchy:
i. Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);
ii.
Inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly (Level 2);
and
iii. Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
Financial
assets/
financial
liabilities
Fair value (USD’000) as at
2020
2019
Assets
Liabilities
Assets
Liabilities
Fair
value
hierarchy
Valuation
technique(s)
and key input(s)
Significant
unobservable
input(s)
Relationship
of
unobservable
inputs to fair value
Derivative financial instruments
1)
Oil price
swaps and
calls (Note 34)
-
471
5,275
-
Level 2
Third party valuations based on
market comparable information.
n.a.
n.a.
Others - contingent consideration from Montara business acquisition
-
-
-
359
Level 3
2)
Contingent
consideration
(Note 29)
Others - contingent consideration from Lemang PSC acquisition
-
4,436
-
-
Level 3
3)
Contingent
consideration
(Note 15)
Based on the nature and the
likelihood of occurrence of
the trigger event. Fair value is
estimated using future Dated
Brent oil price forecasts at the
end of the reporting period,
taking into account the time
value of money and volatility of
oil prices.
Expected future
oil price volatility
of 25% is based
on an analysis of
Dated Brent oil
price movement
prior to the
acquisition date.
A slight increase in
Dated Brent oil prices
would result in a
significant increase
in the fair value and
vice versa.
Based on the nature and
the likelihood of occurrence
of the trigger events. Fair
value is estimated taken into
consideration of future gas
production schedule, forecasted
Dated Brent oil prices and
Saudi CP prices and respective
volatility at the end of the
reporting period, as well as the
effect of time value of money.
A change in gas
production schedule
or significant
increase in Dated
Brent oil prices and
Saudi CP prices would
result in a significant
increase in the fair
value.
Gas production
schedule could be
changed
depending
on future
gas contract
negotiations
Expected future
oil price volatility
is based on an
analysis of Dated
Brent oil price and
Saudi CP price
movement as at
Closing Date.
2020
Revenue
Liquids revenue
Production cost
DD&A
Staff costs
Other expenses
Impairment of assets
Other income
Finance costs
Other financial gains
Profit/(Loss) before tax
Additions to non-current assets
Non-current assets
2019
Revenue
Liquids revenue
Production cost
DD&A
Staff costs
Other expenses
Other income
Finance costs
Other financial gains
Profit/(Loss) before tax
Additions to non-current assets
Non-current assets
Producing
assets
Australia
USD’000
Exploration/
development
SEA
USD’000
Corporate
USD’000
Total
USD’000
217,938
(105,338)
(84,024)
(10,029)
(15,068)
-
14,292
(12,625)
359
5,505
11,162
349,292
325,406
(119,898)
(90,277)
(9,595)
(4,699)
2,971
(16,387)
3,389
90,910
84,444
461,053
-
-
(110)
(2,228)
(9,690)
(50,455)
1
(29)
-
(62,511)
27,706
97,838
-
-
(113)
(3,543)
(278)
2
(7)
-
(3,939)
20,456
116,162
-
-
(508)
(9,646)
(2,160)
-
12,083
(1)
-
(232)
914
945
-
-
(356)
(8,889)
(4,402)
6
(49)
-
(13,690)
65
943
217,938
(105,338)
(84,642)
(21,903)
(26,918)
(50,455)
26,376
(12,655)
359
(57,238)
39,782
448,075
325,406
(119,898)
(90,746)
(22,027)
(9,379)
2,979
(16,443)
3,389
73,281
104,965
578,158
Non-current assets as shown here comprises oil and gas properties, intangible exploration assets, right-of-use assets, other receivables,
restricted cash and plant and equipment used in corporate offices. Deferred tax assets of US$19.7 million (2019: US$16.0 million) are excluded
from the segmental note but included in the Group’s consolidated statement of financial position.
Revenues arising from producing assets in 2020 of approximately US$217.9million (2019: US$325.4 million) primarily arose from sales to the
Group’s largest customer.
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JADESTONE ENERGY 2020 ANNUAL REPORT
168
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
37 | FINANCIAL CAPITAL COMMITMENTS
39 | RELATED PARTY TRANSACTIONS
Certain PSC’s and service concessions’ have firm capital commitments. The Group has the following outstanding minimum exploration
commitments:
During the year, the Group did not enter into any transactions with related parties other than the following:
Compensation of key management personnel
SEA portfolio PSC operational commitments
Not later than one year
More than 5 years
2020
USD’000
10,000
7,284
17,284
2019
USD’000
10,000
-
10,000
Short-term benefits
Other benefits
Share-based payments
2020
USD’000
6,284
1,006
816
8,106
169
2019
USD’000
6,746
1,052
1,038
8,836
The SEA portfolio PSC operational commitments as at 31 December 2020 amounted to US$17.3 million (2019: US$ 10.0 million), and relates to
the minimum work commitment outstanding for the Block 46/07 PSC and the Lemang PSC (2019: Block 46/07 PSC).
Under the terms of the Block 46/07 PSC, Jadestone is committed to drill one more appraisal well on the block. The Company plans to drill an
appraisal well on the Nam Du field to facilitate transition of 3C resource to 2C status. This well would be retained for future use as a Nam Du
gas producer. Following the Group’s announcement on 19 March 2020 to delay the project, the Group is seeking Vietnam Government approval
for a further extension in order to align drilling of the appraisal well with development of Nam Du/U Minh. The request of extension was
submitted in December 2020. The Group is committed to the project and expects to receive approval for the extension request in due course.
Under the terms of the Lemang PSC, Jadestone has inherited an operational commitment of US$7.3 million consisting of one exploration well
and a 3D seismic acquisition program. The commitment was carried over from the previous exploration period and is expected to be fulfilled
during the future gas production period.
Capital commitments
The Group has the following capital commitments for expenditure that were contracted for at the end of the reporting year but not recognised
as liabilities for Montara:
Not later than one year
2020
USD’000
8,977
2019
USD’000
19,441
38 | EVENTS AFTER THE END OF THE REPORTING PERIOD
Corporate reorganisation
The Company in undertaking an internal reorganisation to effect a re-domicile of the ultimate holding company to the United Kingdom.
A newly incorporated English company, Jadestone Energy plc has been established for this exercise. Following the approval from shareholders
and required court approvals, the shares of the Company will be replaced on a one-for-one basis with shares in Jadestone Energy plc. The
estimated effective date for the internal organisation is on 23 April 2021. Jadestone Energy plc is anticipated to be admitted to AIM for trading
on 26 April 2021.
The internal reorganisation will not result in a change in control in the ultimate holding company of the Jadestone group of companies and,
accordingly, will not result in a change in control in the ultimate shareholding in any of the companies or assets of the Jadestone group of
companies. Further, the internal reorganisation will not result in a change in the management of any of the companies or assets of the
Jadestone group of companies.
Oil price commodity contracts
On 16 February 2021, the Group entered into commodity swap contracts to hedge 31% of its planned production volumes from April to June 2021
to provide downside price protection. The swap price, referenced to Dated Brent, was set at US$61.40/bbl.
The total remuneration of key management members in 2020 (including salaries and benefits) was US$8.1 million (2019: US$8.8 million) and
recognised as part of the Group’s staff costs as disclosed in Note 7.
Compensation of directors
Short-term benefits
(a)
USD’000
Other benefits
(a)
USD’000
Share-based
payments
USD’000
Total
compensation
USD’000
2020
A. Paul Blakeley
Daniel Young
Dennis McShane
Iain McLaren
Robert Lambert
Cedric Fontenit
David Neuhauser
Lisa Stewart
2019
A. Paul Blakeley
Daniel Young
Dennis McShane
Iain McLaren
Eric Schwitzer
Robert Lambert
Cedric Fontenit
David Neuhauser
Lisa Stewart
991
696
119
79
70
66
57
74
2,152
1,302
707
130
81
68
69
66
56
6
2,485
324
189
-
-
-
-
-
-
513
350
174
-
-
-
-
-
-
-
524
186
114
16
10
10
9
10
11
366
233
139
21
13
25
13
9
12
-
465
1,501
999
135
89
80
75
67
85
3,031
1,885
1,020
151
94
93
82
75
68
6
3,474
(a) Short-term benefits comprise salary, director fee as applicable, performance pay, pension and other allowances. Other benefits comprise
benefits-in-kind.
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JADESTONE ENERGY 2020 ANNUAL REPORT
1 70
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
1 7 1
40 | RECLASSIFICATION OF COMPARATIVE FIGURES
Certain comparative figures in the consolidated financial statements of the Group have been reclassified to conform to the presentation in
the current period. These reclassifications were made to better reflect the nature of the respective items in the Group’s consolidated financial
statements.
The reclassification made in the consolidated statement of profit or loss is related to third party contractor costs, which are now included
within staff costs. The reclassifications made in the consolidated statement of financial position are the Australia seismic costs, which are
now included within intangible exploration assets. Additionally, provisions have been reclassified from trade and other payables, and are now
presented separately in the face of the consolidated statement of financial position.
In the consolidated statement of cash flows, the write-off of inventories has been reclassified from inventories movement to non-cash
adjustment items, and the collection of PRRT receivables has been reclassified from trade and other receivables movement to tax refunded
under operating activities.
As previously reported
USD’000
Reclassification
USD’000
As reclassified
USD’000
Consolidated statement of profit or loss and other
comprehensive income for the year ended 31 December 2019
Staff costs
Other expenses
Consolidated statement of financial position as at
31 December 2019
Intangible exploration assets
Oil and gas properties
Provisions - non-current
Other payables - non-current
Trade and other payables - current
Provisions - current
Consolidated statement of cash flows for the year ended
31 December 2019
Inventories written off
Increase in trade and other receivables
Increase in inventories
Tax refunded
(19,714)
(11,692)
116,096
383,018
(280,418)
(359)
(27,962)
-
-
(9,483)
(7,346)
1,851
(2,313)
2,313
1,344
(1,344)
(415)
359
2,163
(2,107)
164
(700)
(164)
700
(22,027)
(9,379)
117,440
381,674
(280,833)
-
(25,799)
(2,107)
164
(10,183)
(7,510)
2,551
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Drilling rig on location at Stag
JADESTONE ENERGY 2020 ANNUAL REPORT
1 72
ADDITIONAL INFORMATION
A
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View from Montara
1 73
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Additional InformationOil and Gas Reserves 174Reserves Outlook 176Licence Interests 176Glossary 177Shareholder Information 180JADESTONE ENERGY 2020 ANNUAL REPORT
1 74
OIL AND GAS RESERVES ADDITIONAL INFORMATION
1 75
Oil and Gas Reserves
Summary of Oil and Gas Reserves at 31 December 2020
Company’s Interest in Reserves1 2
Light and Medium Oil (mm bbls)
As of 31 December 2020, the Company had proved plus probable oil reserves
(“2P reserves”) of 37.1 mm bbls, decreased by 4.7 mm bbls from 31 December
2019. The decrease primarily reflects the impact of oil production during
the year. Reserves and resources estimates for both Lemang and Maari are
substantially unchanged from the Company’s previous disclosures.
Reserve estimates have been calculated in compliance with Canada’s National Instrument 51-101 Standards of Disclosure (“NI 51-101”). Under NI
51-101, proved reserves are defined as reserves that can be estimated with a high degree of certainty to be recoverable with a target of a 90%
probability that the actual reserves recovered over time will equal or exceed proved reserve estimates, while probable reserves are defined as
having an equal (50%) probability that the actual reserves recovered will equal or exceed the proved and probable reserve estimates.
In accordance with NI 51-101, proved undeveloped reserves have been recognised in cases where plans are in place to bring the reserves on
production within a short, well defined time frame. Proved undeveloped reserves often involve infill drilling into existing pools. Of the net
present value of the Company’s reserves, the Company’s Montara reserves were audited (and Stag reviewed) by an independent third-party
reserves evaluator, ERCE as of 31 December 2020 and detailed in their report dated 17 March 2021.
Reconciliation of Gross Reserves as at 31 December 2020
Forecast prices and costs
Australia
Proved Developed Producing Reserves
Proved Developed Non-Producing Reserves
Proved Undeveloped Reserves
Total Proved Reserves
Probable
Total Proved Plus Probable Reserves
Possible
Total Proved Plus Probable Plus Possible Reserves
Gross3
16.8
0.0
6.4
23.2
13.9
37.1
17.3
54.4
Net4
16.8
0.0
6.4
23.2
13.9
37.1
17.3
54.4
1
2
3
4
Totals may not add due to rounding.
The definitions of the various categories of reserves and expenditures are those set out in NI 51-101.
“Gross” reserves represent a 100% total of the estimated technically recoverable oil up to the economic limit.
“Net” reserves are the Gross reserves multiplied by Jadestone’s working interest in the field/asset.
Summary of Net Present Values of Future Net Revenues as of 31 December 2020
Forecast prices and costs (in US$ millions)
Net Present Values Of Future Net Revenue1 2 3 4 5
After income taxes discounted at
0%
(US$
millions)
5%
(US$
millions)
10%
(US$
millions)
15%
(US$
millions)
20%
(US$
millions)
Light and Medium Crude Oil (mm bbls)
Gross
Proved2
Gross
Probable2
Gross Proved
Plus Probable2
Gross
Possible2
Gross Proved
Plus Probable
Plus Possible2
Reserve category
Opening balance1
31 December 2019
Plus:
Extension & Improved Recovery
Technical Revisions
Discoveries
Acquisitions
Less:
Dispositions
Economic Factors
Production
Ending balance 31 December 20203
25.1
-
0.5
-
-
-
1.8
-4.2
23.2
16.7
-
-1.0
-
-
-
-1.8
-
13.9
41.8
-
-0.5
-
-
-
0.0
-4.2
37.1
18.4
60.2
-
-1.1
-
-
-
0.0
-
17.3
-
-1.6
-
-
-
0.0
-4.2
54.4
Australia
Proved Developed Producing Reserves
Proved Developed Non-Producing Reserves
Proved Undeveloped Reserves
Total Proved Reserves
Total Proved Plus Probable Reserves
Total Proved Plus Probable Plus Possible Reserves
-128
-
7
-121
175
810
-10
-
13
3
287
807
52
-
10
63
312
734
85
-
7
92
304
654
102
-
3
105
288
585
Opening balances are from the ERCE reserve report as of 31 December 2019
1
2 Gross reserves are based on the Company working interest share of the property gross reserves
3
Totals may not sum due to rounding
1
2
3
4
5
Based on the Company working interest.
Totals may not add due to rounding.
The definitions of the various categories of reserves and expenditures are those set out in NI 51-101. Based on forecast prices and costs at 31 December 2020.
Interest expenses and corporate overhead, etc. were not included.
The net present values may not necessarily represent the fair market value for reserves.
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JADESTONE ENERGY 2020 ANNUAL REPORT
1 76
OIL AND GAS RESERVES ADDITIONAL INFORMATION
1 7 7
Reserves Outlook
Glossary
Jadestone anticipates adding material reserves in the coming years, relating to both organic and inorganic developments.
The Company expects to close the acquisition of an operated 69% interest in the Maari project, offshore New Zealand in the first half of 2021.
In addition to acquiring an interest in offshore production infrastructure and ongoing oil production, as of 28 February 2021 the fields contained
2P reserves of 10.6 mm bbls, net to the 69% interest being acquired, based on a Competent Persons Report prepared for the Company by ERCE.
In addition, upon formal approval of its Field Development Plan for the Nam Du and U Minh gas development in Vietnam, the Company
anticipates adding 2P reserves reflecting the final commercial terms of the project. As of 31 December 2017, a Competent Persons Report
conducted by ERCE on behalf of the Company indicated 2C resources for the fields totalling 30.2 mm boe, most of which is gas.
The Company is also pursuing a development of the Akatara gas field on its Lemang block in Indonesia. The Company anticipates adding 2P
reserves reflecting the final commercial terms of the project, upon development sanction. As of 31 December 2020, a Competent Persons
Report conducted by ERCE on behalf of the Company indicated 2C resources for the field of 15.2 mm boe, comprised of approximately 57%
sales gas, and 43% condensate and LPG.
Licence Interests
Block
Licence
Acreage
Fields
Region
Situation
Water
depth
Operator
Working
interest
Australia
Montara
Stag
Indonesia
Lemang
New Zealand
Maari
Philippines
SC 57
Vietnam
AC/L7,
AC/L8
WA-15-L
672km2
Montara, Swift/
Swallow, Skua
Timor Sea
Offshore
77m
Jadestone
100%
160km2
Stag
Carnarvon Basin
Offshore
47m
Jadestone
100%
Lemang PSC
743km2
Akatara
South Sumatra
Onshore
n/a
Jadestone
90%
Permit 38160
34km2
Maari, Manaia
Taranaki Basin
Offshore
100m
Jadestone1
69%1
SC 57
7,120km2
n/a
Palawan Island
Offshore
1,500m
CNOOC2
21%2
Block 46/07
Block 46/07
2,622km2
Nam Du
Malay/Tho Chu Basin
Offshore
Block 51
Block 51
887km2
U Minh, Tho Chu
Malay/Tho Chu Basin
Offshore
48m
64m
Jadestone
100%
Jadestone
100%
$
United States Dollars, unless otherwise indicated
2C resources,
2C
best estimate contingent resource, being quantities of
hydrocarbons which are estimated, on a given date, to
be potentially recoverable from known accumulations
but which are not currently considered to be
commercially recoverable
2P reserves,
2P
the sum of proved and probable reserves, reflecting
those reserves with 50% probability of quantities
actually recovered being equal or greater to the sum of
estimated proved plus probable reserves
AGM
AIM
annual general meeting
The AIM market of the London Stock Exchange
AMSA
Australian Maritime Safety Authority
ANZECC/
ARMCANZ
Australian and New Zealand Environment and
Conservation Council/Agriculture and Resource
Management Council of Australia and New Zealand.
Asset Safeguard
limits
The safeguard mechanism applies to facilities that
emit more than 100,000 tonnes CO2-e emissions in a
financial year. Emissions baselines are the reference
point against which emissions performance is
measured under the safeguard mechanism.
A safeguard facility must keep its net emissions levels
at or below its baseline/limit.
bbls
bbls/d
bcf
Board
boe
capex
CEO
CFO
barrels of oil
barrels of oil per day
barrels of oil equivalent
capital expenditures
Chief Executive Officer
Chief Financial Officer
Clean Energy
Regulator
The Clean Energy Regulator is an Australian
independent statutory authority responsible for
administering legislation to reduce carbon emissions
and increase the use of clean energy.
Code of Conduct
The Code of Conduct Policy
MARPOL
Company
Jadestone Energy Inc.
Deloitte
Deloitte & Touche LLP
ESG
FCA
FDP
FSO
GCT
GHG
GHG
Group
HiPO
HSE
HSE
Environmental, Social and Governance
Financial Conduct Authority
field development plan
floating storage and offloading vessel
Group Crisis Team
Greenhouse Gas Emissions
greenhouse gas
Jadestone Energy Inc., with its subsidiaries
High Potential Events are defined to be any incident
or near miss that could, in other circumstances, have
realistically resulted in one or more fatalities.
Health Safety Environment
Health, Safety and Environment
HSE MS
Health Safety and Environment Management System
IFRS
IMT
IPIECA
International Financial Reporting Standards
Incident Management Team
Originally the "International Petroleum Industry
Environmental Conservation Association" is a global
not-for-profit oil and gas industry association for
environmental and social issues
KPI
LOPC
LPG
LTI
LTIP
key performance indicator
Loss of Primary Containment is an unplanned
or uncontrolled release of material from primary
containment, including non-toxic and non-flammable
materials
Liquified petroleum gas
Lost Time Injury
Long-term incentives
The International Convention for the Prevention
of Pollution from Ships (MARPOL) is the main
international convention covering prevention of
pollution of the marine environment by ships from
operational or accidental causes.
billion standard cubic feet
Jadestone
Jadestone Energy Inc.
The board of directors of Jadestone Energy Inc.
Jadestone plc
Jadestone Energy plc
1
2
Subject to completion of acquisition and transfer of operatorship.
Force majeure status, pending completion of farm-in.
DOE
DTR
EBITDAX
The Philippines Department of Energy
Mercer
Mercer LLC
Disclosure Guidance and Transparency Rules
mm
million
Earnings before interest, taxes, depreciation,
amortisation and exploration expense
mm scf/d
millions of standard cubic feet per day
MTC
Medical Treatment Case
EP
Environment Plan
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JADESTONE ENERGY 2020 ANNUAL REPORT
1 78
GLOSSARY ADDITIONAL INFORMATION
1 79
Glossary
NETTS
NGER
National Energy Technician Training Scheme
The National Greenhouse and Energy Reporting scheme
is a single national framework in Australia for reporting
greenhouse gas emissions, energy production and
energy consumption.
TCFD
Total
TSR
TVOC
Task Force on Climate-related Financial Disclosures
Total E&P Philippines B.V.
Total Shareholder Return
Total volatile organic compounds
NOPSEMA
Australian National Offshore Petroleum Safety and
Environmental Management Authority
UN SDGs
United Nation’s Sustainable Development Goals
NOx
OHS
OIM
OIW
opex
ppm
nitrogen oxides
Occupational Health and Safety
Offshore Installation Manager
Oil-in-Water concentration
Operating expenditures
Parts per million
Produced water
Produced water is water that comes out of the well with
the crude oil during crude oil production
PRRT
Petroleum Resource Rent Tax
PSC
PSE
PSP
PWC
Production Sharing Contract
Process Safety Event
Performance Share Plan
Pricewaterhouse Coopers
QCA Code
the Corporate Governance Code in the form issued by
the Quoted Companies Alliance in April 2018
RBL
reserves based loan
Reorganisation
The Group’s internal corporate reorganisation by way of
a plan of arrangement under the Business Corporations
Act (British Columbia)
Reportable
incidents
reserves
RSP
SID
SOx
SPA
Stock Option
Plan or SOP
Reportable' refers to there being no breach of the
Environmental Performance Outcomes as defined in
the Environment Plan for the asset in alignment with
NOPSEMA’s definition.
hydrocarbon resource that is anticipated to be
commercially recovered from known accumulations
from a given date forward
Restricted Share Plan
Senior Independent Director
sulphur oxides
sale and purchase agreement
The Jadestone Stock Option Plan
Jadestone’s Kuala Lumpur office
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JADESTONE ENERGY 2020 ANNUAL REPORT
180
SHAREHOLDER INFORMATION ADDITIONAL INFORMATION
Shareholder Information
Head office
Jadestone Energy Inc.
3 Anson Road
#13-01 Springleaf Tower
Singapore 079909
Investor Relations
Jadestone Energy Inc
Phone (Singapore): +65 6324 0359
Phone (UK): +44 7392 940 495
ir@jadestone-energy.com
NOMAD, Joint Broker
Stifel Nicolaus Europe Limited
150 Cheapside
London, UK
EC2V 6ET
Phone (UK): +44 (0) 20 7710 7600
Joint Broker
Jefferies International Limited
100 Bishopsgate
London, UK
EC2N 4JL
Phone (UK): +44 (0) 20 7029 8000
Public Relations Adviser
CAMARCO
3rd Floor, Cannongate House
62-64 Cannon Street
London, UK, EC4N 6AE
Phone (UK): +44 (0) 203 757 4980
jse@camarco.co.uk
Transfer Agent (Canada)
Computershare Investor Services Inc.
510 Burrard Street, 3rd Floor
Vancouver, BC, Canada
V6C 3B9
Phone (North America): +1 800 564 6253
Phone (international): +1 514 982 7555
Registrar (UK)
Computershare Investor Services plc
The Pavilions
Bridgwater Road
Bristol, UK
BS99 6ZZ
UK: +44 (0)370 702 0000
Auditors
Deloitte & Touche LLP
6 Shenton Way
OUE Downtown 2
#33-00
Singapore 068809
www.jadestone-energy.com