Jadestone Energy cuts 2026 production guidance despite Vietnam and Malaysia progress

Jadestone Energy PLC has lowered its 2026 production guidance after prolonged disruption at the Stag and CWLH fields weighed on first-half output.

There is more to this update than the headline downgrade, though. Revenue increased by 3%, net debt fell sharply and a successful Malaysian drilling campaign has lifted production at East Belumut. Jadestone also continues to advance its Nam Du/U Minh gas development in Vietnam towards a potential investment decision before the end of 2026.

The main question for investors is whether that operational and financial progress can outweigh the longer wait for production to return at Stag.

The figures in the original company announcement are unaudited. Full half-year results are due on 27 August 2026.

Jadestone Energy's key H1 2026 figures

Metric	H1 2026	H1 2025
Average production	15,281 boepd	20,368 boepd
Revenue after hedging	US$234.0 million	US$228.3 million
Average realised oil price	US$90.43/bbl	US$77.45/bbl
Operating costs	US$142.2 million	US$112.8 million
Capital expenditure	US$35.3 million	US$69.4 million
Net debt at period end	US$25.7 million	US$89.1 million at 31 December 2025

Production fell because Stag was shut in following cyclone damage, while maintenance and repair work delayed the restart of the CWLH fields.

Higher oil prices helped cushion the financial effect. Jadestone achieved an average realised oil price of US$90.43 per barrel, up 17% from US$77.45 per barrel, supported by higher Brent prices and strong premiums on several cargoes.

That allowed revenue to rise despite the lower production base. However, operating costs increased to US$142.2 million, driven by the CWLH floating production, storage and offloading vessel dry-dock, foreign exchange movements and higher logistics costs.

Around US$6 million of first-half operating costs related to the cyclone damage at Stag. Jadestone expects these costs to be recoverable through insurance.

Production guidance takes a hit

Jadestone has revised its full-year production guidance to 16,000-18,000 barrels of oil equivalent per day, down from 18,000-21,000 boepd.

The reduction is significant. At the midpoint, guidance has fallen by 2,500 boepd. Management points out that this is less than the 3,250 boepd of annualised deferred production associated with Stag and CWLH, reflecting stronger performance elsewhere in the portfolio.

Operating cost guidance remains at US$260-300 million, although Jadestone now expects the result to land in the upper half of that range. The company cited currency movements, higher royalties linked to oil prices and increased diesel costs.

Capital expenditure guidance is unchanged at US$50-80 million. The 2025-2027 free cash flow guidance of US$200-240 million before debt servicing also remains intact, based on a real Brent oil price assumption of US$70 per barrel from 2025.

Keeping the cash flow target unchanged is encouraging, but it is worth noting that Jadestone plans to review the range formally in early 2027.

Stag will remain offline until 2027

Stag is the clearest operational negative in this update.

The field was shut in on 23 March 2026 before Cyclone Narelle passed through the area, generating estimated wave heights of 18 metres. The storm damaged the field's catenary anchor leg mooring, or CALM buoy, which is used for tanker mooring and oil offloading.

Jadestone has decided that replacing the buoy is more efficient than continuing attempts to refloat the existing equipment. Deployment of a replacement is expected during the first quarter of 2027, with production now targeted to restart during the second quarter.

Business interruption insurance runs until May 2027. Jadestone expects an initial insurance payment of approximately US$12 million during the third quarter of 2026 and continues to expect no material impact on current-year or longer-term cash flow projections.

Insurance provides an important financial buffer, but the extended outage still leaves the group without Stag's production for considerably longer than investors might have hoped.

CWLH restart targeted around the end of Q3

The outlook at CWLH is nearer term.

The Okha vessel returned from its scheduled dry-dock in May, but inspections identified an issue with the subsea riser's J-tube. Operator Woodside has developed repair plans, with production targeted to resume around the end of the third quarter of 2026, subject to regulatory approval and successful completion of the work.

A timely restart would help rebuild group output, but the wording still leaves execution and regulatory risk.

Malaysia drilling delivers the standout result

The East Belumut drilling campaign was the operational highlight.

The first two wells increased field production by more than 150%, equivalent to approximately 6,000 bopd. Their success supported the decision to drill a third well, EBA-19ST2, which came onstream at approximately 2,500 bopd.

All three wells are now online, and the field is producing at a gross rate of around 12,000 bopd. The campaign was completed safely and at an overall cost more than 20% below budget.

That cost performance matters because the third well was not included in Jadestone's initial capital expenditure guidance. Savings across the programme mean the company can absorb it without increasing the full-year spending range.

Vietnam moves closer to sanction

Jadestone also made several important advances at Nam Du/U Minh in Vietnam.

The field development plan was approved in March, allowing the company to book approximately 32 million barrels of oil equivalent of gross proved and probable reserves for the initial development phase. A gas sales and purchase agreement followed in April.

A farm-out process, through which Jadestone would bring in another industry participant to share the project and its costs, began in May. Bids were due by the end of July, although the selected partner and proposed financial terms were not disclosed in this announcement.

A preferred bidder has also been selected for the project's floating production, storage and offloading vessel contract and recommended to Petrovietnam for approval.

Management remains on track to complete the farm-out and formally sanction the initial project phase before year-end. Delivering those two steps would represent a meaningful de-risking of Jadestone's next major growth project.

Balance sheet improvement comes with a price

Net debt fell from US$89.1 million at the end of 2025 to US$25.7 million at 30 June 2026. The period-end position comprised US$174.3 million of cash, including restricted cash, and US$200 million of debt.

Jadestone completed a US$200 million senior secured bond issue in March, using part of the proceeds to repay its reserves-based lending facility. The bond matures in 2031 and carries a 12% coupon.

The refinancing gives Jadestone more room to direct near-term cash generation towards growth rather than principal repayments. However, a 12% coupon is a substantial financing cost, making project execution and cash generation especially important.

What investors should watch next

This is a mixed update rather than a straightforward disappointment. Lower production guidance and the delayed Stag restart are material setbacks, while higher operating costs add pressure.

Against that, Jadestone has reduced net debt, maintained capital expenditure and free cash flow guidance, delivered a strong Malaysian drilling campaign and reached several key milestones in Vietnam.

The next major markers are the CWLH restart around the end of the third quarter, the initial Stag insurance payment, completion of the Vietnam farm-out and formal sanction of Nam Du/U Minh. The full unaudited half-year results on 27 August should also provide a clearer view of profitability, financing costs and cash generation.