Total, Jadestone Give up Philippine Block

France's Total and southeast Asia-focused Jadestone Energy have relinquished service contract 56 (SC56) covering an area offshore the Philippines, Jadestone said on November 18.

“SC56 was a legacy asset inherited from the previous management and only had option value through a carried well.  The decision not to drill the well now removes any interest for Jadestone to continue further, requiring as it would, new deep-water frontier exploration commitments,” Jadestone CEO Paul Blakeley said.  “It would also not compete with existing portfolio investment options, nor potentially some of the more interesting inorganic opportunities moving into the market in the coming 12 to 18 months.” 

Jadestone’s wholly-owned subsidiary Mitra Energy and Total have notified the Philippines' department of energy of their decision.

As a condition of the surrender and termination of SC56, the partners will be subject to a payment in respect of unfulfilled work commitments.  Jadestone’s share will be met from a portion of the proceeds of the arbitration ruling announced in January this year, it said.

The company also anticipates that it will record a one-time impairment charge of approximately $50.5mn, relating to historical capitalised exploration expenditures on SC56 predominantly associated with previous management, with no associated cash impact or tax benefit.