Jadestone announces plans to restart production at Montara

(Sharecast News) - Asia-Pacific oil and gas producer Jadestone Energy revealed plans on Thursday to resume production at its Montara facility on 1 September. The AIM-traded firm said the decision to restart the Montara facility came after an intensive investigation and assurance review regarding a defect in the 4S/5C tank.

Production was set to restart from one well with an anticipated rate of around 1,000 barrels per day to restart the floating production, storage and offloading (FPSO) oil system.

Subsequently, gas compression systems would be activated, facilitating the addition of more wells back into operation.

Jadestone said it anticipated that the production rate would ramp up to around 6,000 barrels per day within a matter of days - the production rate before the facility was shut down at the end of July.

To manage storage during the phase of limited FPSO storage capacity, the company said it would use a shuttle tanker for supplementary storage needs.

Meanwhile, FPSO tank repair and inspection work was continuing to progress, the board said.

Repairs in the 4P ballast water tank were nearing completion, while preparations for repairs in tank 5C and the 4S ballast water tank were already underway.

"The defects encountered pose no safety or structural risk, nor any risk of a hydrocarbon leak to sea," the Jadestone board said in its statement.

"The National Offshore Petroleum Safety and Environmental Management Authority has been regularly updated on progress at Montara.

"Further updates on Montara will be provided as activity progresses."

Jadestone also reported progress on the Akatara development project, which it said remained on budget and was expected to produce its first gas in the first half of 2024.

The project was currently around 55% complete - a significant increase from 42% in mid-July 2023.

Jadestone said the development had been conducted without any lost-time incidents over roughly 2.5 million man-hours of work.

Finally, in Malaysia, Jadestone reported that the Naga-2 rig had been contracted for drilling in the East Belumut field as of 15 August.

Drilling activities for the first of four planned wells had started, with the wells expected to contribute incremental gross peak oil production of 2,000 to 2,500 barrels per day.

The drilling campaign promised a projected internal rate of return of about 90%, the board explained.

At 1317 BST, shares in Jadestone Energy were up 10.12% at 37p.

Reporting by Josh White for Sharecast.com.