Jadestone Energy plc (JSE) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Jadestone Energy plc Annual General Meeting. [Operator Instructions] This call is being recorded on Wednesday, June 16, 2021. I would now like to turn the conference over to Dennis McShane. Please go ahead.

Thank you, Colin. Good morning, ladies and gentlemen. It is now 9:00 in London, and it is a pleasure to welcome those listening to Jadestone Energy plc's First Annual General Meeting. My name is Dennis McShane, and as Chairman of your Board, I would like to introduce you to other members of your Board who are attending through the webcast link, including Paul Blakeley, our Chief Executive Officer; Dan Young, our Chief Financial Officer; Robert Lambert, Non-Executive Deputy Chairman; Iain McLaren, Non-Executive Director; and Cedric Fontenit, Non-Executive Director. Before starting the formal business of the meeting, I would like to extend my thanks to those shareholders who are listening in at this AGM. I am sorry that the ongoing pandemic and associated restrictions in both the United Kingdom and Singapore mean that we are unable to hold an AGM, which everyone can attend in person. It is our intention to return to a more familiar approach next year, and I look forward to seeing as many shareholders as possible in person then. As we reflect on the year, Jadestone has delivered exceptional results with management adapting our strategy in order to protect the company's balance sheet by reducing costs and deferring near-term investments, all with the full support of the Board. A few key highlights include Jadestone generated positive operating cash flows of $87 million, which contributed to a reduction of substantially all our debt and a more than doubling of our net cash position to $82 million as at the -- as at December 31, 2020. Jadestone delivered an excellent performance from a health and safety perspective, with zero lost time incidents and zero serious injuries. Jadestone also demonstrated our ongoing commitment to our growth strategy through the completion of the acquisition of the Lemang asset in Indonesia, which added important diversity to the portfolio, particularly through future gas development, which will serve as a natural pricing hedge against the currently oil-weighted production base. Further, Jadestone continues to press towards completion of our acquisition of the 69% operated interest in the Maari asset in New Zealand, and the acquisition of the SapuraOMV's assets, offshore Peninsular Malaysia. And following Jadestone's maiden dividend in 2020, we declared on 11th June 2021, a second 2020 dividend of USD 0.018 per share, or 0.77p per share on the current spot exchange rate of $0.7087, equivalent to a total distribution of USD 5 million. Further, we completed our internal reorganization on the 23rd of April 2021, resulting in a new U.K.-based parent for the group, Jadestone Energy plc, which has unlocked further cash flow savings for Jadestone and for our shareholders. Now moving to the formal business of the meeting, I hand over to Dan Young, who will chair the formal meeting. Dan?

Thank you, Dennis. Resolutions 1 to 12 will be proposed as ordinary resolutions, and Resolutions 13, 14, and 15 will be proposed as special resolutions. With the consent of the meeting, I have taken the notice of meeting as read. Further, with the consent of the meeting, I've also taken the report of the auditors to the shareholders as read. As usual, I direct the voting on all the resolutions will be via a poll. This is recommended best practice, and we believe that the voting instructions of all shareholders should be taken into account and not just those of shareholders who are able to attend. I will complete poll cards for all shares in respect to which I have been appointed proxy. These poll cards will be totaled at the end of the meeting, and the results announced and published on our website as soon as possible. In the meantime, I will provide a breakdown of the proxy votes received after introducing each resolution. The first item on the agenda is the receipt of the audited consolidated financial statements of Jadestone Energy Inc. for the period ended 31st of December 2020 as the holding company of the group during that year. I propose that the audited consolidated financial statements that Jadestone Energy Inc. as at and for the financial year ended 31st of December 2020, together with the Director's report and auditor's report thereon, be received. Proxies received on Resolution 1 were: For 235,275,355; against, 2,910; withheld, 10,000. Next, we deal with the appointment of auditors. I propose that Deloitte & Touche LLP be appointed as auditor of the company to hold office from the conclusion of the meeting to the conclusion of the next meeting at which the accounts are to be laid. Proxies received on Resolution 2 were: For, 235,276,999; against, 11,266; withheld, nil. Resolution 3 grants the Directors' authority to fix the remuneration of the auditors. I propose that the Directors of the company be authorized to agree Deloitte's remuneration. Proxies received on Resolution 3 were: For, 227,451,932; against, 7,836,333; withheld, nil. Next, we come to the reelection of Directors. Under the Articles of Association, the Directors are required to submit themselves to reelection at every Annual General Meeting. Myself, Mr. Blakeley, Mr. Fontenit, Mr. Lambert, Mr. McLaren, Mr. McShane, Mr. Neuhauser, and Ms. Stewart, hereby retire, as being eligible, offer ourselves for reelection. Biographical details of all the Directors standing for reelection appear on the website in Pages 94 and 95 of the annual report. In respect of Resolution 4, I propose to reelect Alexander Paul Blakeley as a Director of the company. Proxies received on resolution 4 were: For, 235,283,855; against, 2,910; withheld, 1,500. In respect of Resolution 5, I propose to reelect Cedric Fontenit as a Director of the company [Audio Gap] against, 3,629,737; withheld, 1,500. In respect of Resolution 6, I propose to reelect Robert Lambert as a Director of the company. Proxies received on Resolution 6 were: 235,283,855; withheld (sic) [ against ], 2,910; withheld, 1,500. In respect of Resolutions 7, I propose to reelect Iain McLaren as a Director of the company. Proxies received on Resolutions 7 were: For, 231,657,028; against 3,625,737; withheld, 1,500. In respect of Resolution 8, I propose to reelect Dennis McShane as a Director of the company. Proxies received on Resolution 8 were: For, 231...

Excuse me, Colin, are you there? Can you hear me?

[ 28 ]; Against, 3,629, [Audio Gap]; withheld, 1,500. In respect of Resolution 9, I propose to reelect David Neuhauser as a Director of the company. Proxies received on Resolution 9 were: 235,283,855; against, 2,910; withheld, 1,500. In respect of Resolution 10, I propose to reelect Lisa Stewart as a Director of the company. Proxies received on Resolution 10 were: For, 235,283,105; against, 3,660; withheld, 1,500. As Resolution 11 relates to my reappointment, I hand over to Neil Prendergast, the company's Secretary to propose the resolution.

In respect of Resolution 11, I propose to reelect Dan Young as a Director of the company. Proxies received on Resolution 11 were: For 234,699,932; against, 586,833; withheld, 1,500. I now hand back to Dan.

Thank you, Neil. Paragraph a of Resolution 12 authorizes the Directors to allot shares of the company up to an aggregate nominal amount of GBP 154,567, representing 1/3 of the existing issued ordinary share capital of the company as at 21st of May 2021, excluding treasury shares. Paragraph b of Resolution 12 authorizes the allotment of an additional 1/3, giving the Directors authority to allot equity securities of the company up to an aggregate nominal amount of GBP 309,133, in connection with the rights issue. The authority source at the Annual General Meeting will expire on 30th June 2022, or if earlier, the conclusion of the next Annual General Meeting of the company. Although the company has no present intention to exercise these authorities, it is considered prudent to take advantage of the flexibility they provide. This resolution complies with the latest institutional guidelines issued by the Investment Association. I propose that Resolution 12 set out in the notice of meeting be approved. Proxies received on Resolution 12 were: For 235,276,514; against 11,751; withheld, nil. Under special Resolutions 13 and 14, it is proposed to renew the authority for the Directors to allot equity securities for cash without first being required to offer such securities to existing shareholders. Resolution 13 fix authorization to disapply the preemption rights for up to 5% of the company's issued share capital, and Resolution 14 seeks authorization to disapply the preemption rights for an additional 5% for transactions, which the Board determines to be an acquisition or other capital investment as defined in the preemption group statement of principles. The authority sought at the Annual General Meeting will expire on 30th of June 2022, or if earlier, the conclusion of the next Annual General Meeting of the company. The Board intends to adhere to the provisions in the preemption group's statement of principles. Shareholders will note that this resolution also relates to the sale of treasury shares. I propose that Resolution 13 as set out in the notice of meeting be approved. Proxies received on Resolution 13 were: For 235,247,931; against 39,584; withheld, 750. I propose that Resolution 14 as set out in the notice of the meeting be approved. Proxies received on Resolution 14 were: For 235,249,764; against, 37,751; withheld, 750. Special Resolution 15 proposes that the company be permitted to purchase up to 10% of its ordinary shares at or between the minimum and maximum prices specified in this resolution. This power would be used only after careful consideration by the Directors having taken into account market conditions prevailing at that time, the investment needs of the company, its opportunities for expansion, and its overall financial position. The Directors would exercise the authority to purchase ordinary shares only if they consider it to be in the best interest of the shareholders and if the purchase could be reasonably expected to result in an increase in earnings per share. The authority to be sought by this resolution is intended to apply equally to shares to be held by the company as treasury shares. Treasury shares may be canceled sold [Audio Gap] all rights attaching to them, including voting rights and any right to receive dividends are suspended whilst they are held in treasury. The authority sought at the Annual General Meeting will expire on 30th June 2022, or if earlier, the conclusion of the next Annual General Meeting of the company. I propose that Resolution 15 as set out in the notice of the meeting be approved. Proxies received on Resolution 15 were: For 235,273,014; against, 15,251; withheld, nil. I will now complete the poll cards. Ladies and gentlemen, thank you for bearing with us while the formalities of the meeting were dealt with. I have completed poll cards for all shares in respect to which I have been appointed proxy. These poll cards have been totaled and the votes reflect the proxy votes cast as no additional votes have been cast. I declare that all resolutions have been duly passed. The results will be published on our website as soon as possible. Ladies and gentlemen, that concludes the formal business of the meeting. I will now hand over to Dennis to close the meeting. Dennis, can you hear me? In Dennis' absence, I will -- I would now close the meeting. Before closing, I would like to thank the fellow members of the Board for their continued support and contribution to our company. And on behalf of the Board, I wish to thank the rest of the executive team, managers [Audio Gap] for the efforts made during this past year and for their continued efforts [Audio Gap]. Thank you all for participating in this webcast today, and I now declare the meeting closed.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.