Jadestone Energy PLC shares jumped on Monday as it predicted that oil production at its Montara project will normalise over time and that its borrowing capacity is set to substantially increase.

The stock was up 12% at 32.29 pence in London on Monday.

The Asia-Pacific-focused oil and gas company said that its offshore Montara project, located in the Timor Sea north of Australia, has averaged about 7,000 barrels of oil per day since resuming production in early September.

Jadestone said Montara has benefitted from ongoing flush production and efforts to optimise the oil to gas ratio through active management of three of its wells. Over time, it expects average oil production rates to ‘normalise back towards previous guidance’, which is between 6,000 and 6,500 barrels per day.

Jadestone also said the first well from its ongoing infill drilling campaign at the East Belumut field off the coast of Malaysia ‘is maintaining higher-than-expected production levels’.

Moreover, Jadestone said the onshore Akatara development project in Sumatra, western Indonesia is approximately 70% complete, and remains on track for commissioning in the first three months of 2024 and first gas within the first six months.

Also on Monday, Jadestone announced completion of the bi-annual redetermination process for its $200 million reserve-based lending facility. As a result, its borrowing capacity for the six months from October 1 to March 31 has been increased to $200 million from approximately $190 million.

Borrowing capacity for the second and third quarters of 2024, meanwhile, will be $150 million, up from the previous forecast of $99 million.

Chief Executive Officer Paul Blakeley commented: ‘Jadestone is projected to have significant liquidity prior to the Akatara field commencing production, after which our borrowing base availability is expected to increase further, as we move into a period of high cash generation, in turn supporting our growth ambitions.’

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