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Jadestone Energy sign Heads of Agreement with Petrovietnam for Vietnam gas sales

Gasoil News - Published on Wed, 01 May 2019

Image Source: Jadestone Energy
Jadestone Energy Inc, an independent oil and gas production company focused on the Asia Pacific region, announced that two of its wholly-owned subsidiaries have signed a Heads of Agreement with Petrovietnam, relating to gas sales from the Nam Du and U Minh gas fields (Jadestone 70% working interest, and operator) in block 46/07 and block 51, respectively, offshore Southwest Vietnam. The HOA covers all discovered resources from the Nam Du and U Minh fields, and establishes a mutually agreeable framework for gas sales, priced at the wellhead, and delivered to a tie-in point at a nearby existing pipeline. The agreed daily contract quantity is established as 80 mmcf/d, targeting a minimum plateau period of 55 months.

In addition to the DCQ, the HOA specifies certain take-or-pay provisions, in addition to a pricing formula in principle, all of which will be finalised in the ultimate gas sales and purchase agreement. The parties intend to negotiate an initial wellhead price, in accordance with the agreed pricing formula, following the availability of updated cost data for the development, expected post summer 2019. The spirit of the HOA captures a negotiated price outcome that will be competitive, while providing Jadestone with an appropriate full cycle investment return. The parties are targeting GSPA signing and field development sanction before the end of 2019.

Mr Paul Blakeley, President and CEO commented “Signing a Heads of Agreement with Petrovietnam marks a significant milestone in our commercial negotiations, as we look to develop the Nam Du and U Minh gas fields. With key terms now broadly agreed, we can now press forward with the project activities that should lead to a development decision being taken later this year. This will realise a significant portion of the long-term value of the Company’s Southwest Vietnam Assets, delivering growth towards our target of 30,000boepd by 2023, as well as significant cash flow and value, with first gas anticipated in late 2021.”

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Posted By : Ratan Singh on Wed, 01 May 2019
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