Calgary, February 20, 2019: Valeura Energy Inc. (TSX:VLE) (“Valeura” or the “Company”), the upstream natural gas producer focused on appraising and developing an unconventional gas accumulation in the Thrace Basin of Turkey, is pleased to announce the commencement of drilling operations at the Devepinar-1 appraisal well and an update on the completion programme for the Inanli-1 well.
Valeura spudded the Devepinar-1 appraisal well on February 19, 2019, approximately 20 km to the west of the Inanli-1 appraisal well. The location was selected by Valeura and its partners Equinor Turkey B.V. (“Equinor”), and Pinnacle Turkey International (“Pinnacle”) as a substantial step-out, intended to test the lateral extent of the Basin Centered Gas Accumulation (“BCGA”) play to the western side of the basin. In continuing with its strategy to fully appraise its Thrace BCGA, the drilling programme includes an extensive data-gathering plan. Given the success of Inanli-1 in demonstrating the presence of overpressured gas down to approximately 4,900 metres, Devepinar-1 is currently planned to focus on the most promising intervals, which are shallower. The well is planned to be drilled to 4,300 metres, and will take approximately 80 days, but the design will allow for the well to be deepened further if required.
The drilling, evaluation and casing of the well is expected to have a gross cost of approximately C$25 million. Valeura is operator with a working interest of 31.5% in the deep rights of the West Thrace exploration license, with Equinor holding 50% and Pinnacle the remaining 18.5%.
Inanli-1 completion programme
Multi-stage reservoir stimulation and flow testing operations on Inanli-1 will target at least four intervals of interest identified in the well’s 1,615 metre gross objective section.
Valeura will return to well operations in the next few weeks to conduct a diagnostic fracture integrity test (“DFIT”) at the bottom of the well to confirm the maximum pressure. This is required to select equipment that will be used for the stimulation and testing operations. Details of the stimulation programme and associated costs, to be funded by Equinor, are being developed based on flow simulation modelling and the Company plans to employ production logging techniques to determine fluid composition and flow potential from each discrete interval. Where warranted, flow-back times may be extended to several weeks for individual intervals.
The Company has procured long-lead items and consumables in relation to the completion programme, and equipment is expected to be mobilised to the well site over the coming weeks, as it becomes available from prior operations. Stimulation and testing operations are expected to commence in April, 2019.
Sean Guest, President and CEO commented:
“Devepinar-1 is an important appraisal well for the play and will help to indicate the lateral extent of the BCGA by stepping out a full 20 km from Inanli-1. Success here would validate our thesis that the BCGA is pervasive across the majority of our acreage.”
“Meanwhile, we are eager to learn more about the individual zones of interest in Inanli-1, and continue to define a completion programme that will maximise our understanding of the flow potential from each relevant interval.”
For further information please contact:
Valeura Energy Inc. (General and Investor Enquiries) +1 403 237 7102
Sean Guest, President and CEO
Steve Bjornson, CFO
Robin Martin, Investor Relations Manager
CAMARCO (Public Relations, Media Advisor) +44 (0) 20 3757 4980
About the Company
Valeura Energy Inc. is a Canada-based public company currently engaged in the exploration, development and production of petroleum and natural gas in Turkey.
Forward-Looking Statements and Cautionary Statements
This news release contains certain forward-looking statements and information (collectively referred to herein as “forward-looking information”) including, but not limited to: the cost and time to drill the Devepinar-1 well, the depth of any potential sweet spots or promising zones, Valeura’s intent to frack and production test the Inanli-1 well, timing to commence fracking and testing operations, the assessment of the resources in the test formations, and the potential that the BCGA play is pervasive across the basin. Forward-looking information typically contains statements with words such as “anticipate”, estimate”, “expect”, “target”, “potential”, “could”, “should”, “would” or similar words suggesting future outcomes. The Company cautions readers and prospective investors in the Company’s securities to not place undue reliance on forward-looking information, as by its nature, it is based on current expectations regarding future events that involve a number of assumptions, inherent risks and uncertainties, which could cause actual results to differ materially from those anticipated by the Company.
Forward-looking information is based on management’s current expectations and assumptions regarding, among other things: continued political stability of the areas in which the Company is operating; continued safety of operations; continued timeliness of approvals forthcoming from the Turkish government and regulators in a manner consistent with past conduct; future drilling activity on the expected timelines; the continued favourable pricing and operating netbacks in Turkey; future production rates and associated operating netbacks and cash flow; future sources of funding; future economic conditions; future currency exchange rates; and the Company’s continued ability to obtain and retain qualified staff and equipment in a timely and cost efficient manner. In addition, the Company’s work programmes and budgets are in part based upon expected agreement among joint venture partners and associated exploration, development and marketing plans and anticipated costs and sales prices, which are subject to change based on, among other things, the actual results of drilling and related activity, availability of drilling, fracking and other specialised oilfield equipment and service providers, changes in partners’ plans and unexpected delays and changes in market conditions. Although the Company believes the expectations and assumptions reflected in such forward-looking information are reasonable, they may prove to be incorrect.
Forward-looking information involves significant known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from those anticipated by the Company including, but not limited to: the risks of currency fluctuations; changes in gas prices and netbacks in Turkey; uncertainty regarding the contemplated timelines and costs for the deep evaluation; the risks of disruption to operations and access to worksites, threats to security and safety of personnel and potential property damage related to political issues, terrorist attacks, insurgencies or civil unrest in Turkey; political stability in Turkey; the uncertainty regarding government and other approvals; counterparty risk; potential changes in laws and regulations; and risks associated with weather delays and natural disasters. The forward-looking information included in this news release is expressly qualified in its entirety by this cautionary statement. The forward-looking information included herein is made as of the date hereof and Valeura assumes no obligation to update or revise any forward-looking information to reflect new events or circumstances, except as required by law. See the AIF for a detailed discussion of the risk factors.
Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this news release.