Jadestone Energy: Leveraging Asia's Oil Demand Surge Amid Supply Constraints

In a world where Asia’s energy thirst grows while geopolitical tensions tighten supply, Jadestone Energy (JSE.L) emerges as a compelling play. With its low-cost, Brent-linked production in Southeast Asia’s hottest basins—and a valuation that lags peers by miles—this upstream firm is primed to capitalize on soaring demand. Let’s unpack why investors should act now.

Pertamina’s Gasoline Surge: A Beacon for Jadestone’s Asset Strategy

Indonesia’s state-owned oil giant Pertamina is importing ~1 million barrels per day of crude and refined products to meet domestic demand, a figure set to rise as production declines and consumption grows. This isn’t just an Indonesian story—it’s a regional one. Asia-Pacific oil demand is projected to hit 41.3 million barrels per day by 2028, fueled by India’s industrial boom and Indonesia’s petrochemical expansion.

Jadestone’s assets are front and center:
- Malaysia: The Montara field (its crown jewel) produces at a breakeven cost of * below $50/bbl, with output set to jump 11% in 2025.
- *Vietnam/Indonesia: Its Akatara gas project and Ogan Komering PSC (due for renewal) are positioned to meet Asia’s gas-hungry economies.

Operational Leverage: Low Costs, High Upside

Jadestone’s operational excellence is its secret sauce:
1. Cost Discipline: 2024 production costs hit $243.4 million (excluding royalties)—the lowest end of guidance—even as output surged 35% to 18,700 boe/d.
2. Brent Pricing Power: ~90% of its oil sales are priced to Brent, with premiums intact. Its 2025–2027 free cash flow guidance ($270–360 million) assumes a Brent floor of $70/bbl, but hedges on 1.2 million barrels (at $68.64/bbl) cushion downside risk.
3. Accretive Growth: The Skua-11ST well at Montara, online by Q2 2025, will add 3,500 bbl/d and extend field life. Meanwhile, the CWLH 2 acquisition and Sinphuhorm divestiture (a 44% ROI in 24 months) highlight smart capital allocation.

Why Supply Tightening = Jadestone’s Upside Multiplier

Two trends ensure oil prices stay elevated:
1. Geopolitical Gridlock: Iran’s sanctions and Venezuela’s crumbling infrastructure are locking out 4 million bpd of potential supply.
2. Refining Capacity Crunch: India and Indonesia are underinvesting in refining, forcing them to import gasoline rather than produce it locally.

This creates a perfect storm for Jadestone:
- Brent Exposure: Every $10 rise in Brent adds ~$150 million to its annual cash flow.
- Gas Growth: Vietnam’s 93.9 mmboe contingent gas resources (75% of 2C reserves) will offset oil price volatility and tap Asia’s gas demand.

Valuation: EV/EBITDA at 1.26x—A Fire Sale in Disguise

• Jadestone’s 2025 EV/EBITDA of 1.26x is a fraction of the sector’s 5.56x average.
• At $267.6 million EV vs. $206.7 million EBITDA, the stock trades like a distressed asset—but its $799 million 2P reserves NPV10 (post-tax) and $160 million liquidity suggest otherwise.

Catalysts to Ignite the Stock

1. Ogan Komering PSC Renewal (Q4 2025): A 20-year extension would add 3,000 bpd of low-cost oil.
2. Vietnam Gas Projects: Regulatory approvals for the Nam Du/U Minh fields could unlock 900 mmboe of value.
3. Debt Reduction: Post-Thailand asset sale, net debt is now $104.8 million—a 44% drop from 2023.

Conclusion: Buy Jadestone Before the Crowd Catches On

With Asia’s oil demand roaring and supply chains strained, Jadestone’s low-cost, Brent-linked assets are a direct beneficiary. Its undervalued EV/EBITDA, accretive projects, and hedges form a bulletproof case for investors.

Act now: The stock trades at £0.25/share, but with free cash flow hitting £140 million by 2026, this is a 5-bagger waiting to happen.

The time to bet on Asia’s energy renaissance is now.