Calgary, March 25, 2021: Valeura Energy Inc. (TSX:VLE, LSE:VLU) (the “Company” or “Valeura”), an upstream oil and gas company with assets in the Thrace Basin of Turkey, reports its financial and operating results for the three month period ended December 31, 2020 and the year ended December 31, 2020, and year-end 2020 reserves.

The complete quarterly reporting package for the Company, including the audited financial statements and associated management’s discussion and analysis (“MD&A”) and the 2020 annual information form (“AIF”), are being filed on SEDAR at and posted on the Company’s website at

Financial and operating results presented in this announcement, together with the financial statements, the MD&A, and the AIF, include results from assets associated with the Company’s shallow conventional gas business which are subject to a share purchase agreement announced on October 20, 2020 (the “Sale Transaction”).  Valeura and TBNG Limited (the “Buyer”) are progressing to closing the Sale Transaction, however, until such time as the Sale Transaction is completed, these assets remain owned and operated by Valeura.  All assets associated with the shallow conventional gas business are identified as held for sale (“Assets Held for Sale”) in this announcement and the Company’s associated reports, identified above.


  • Full year 2020 average production of 650 boe/d, relatively unchanged from 660 boe/d in 2019;
  • Full year revenues of US$8.5 million, down 16% from the full year 2019, mainly due to lower realised gas prices;
  • Total Proved Plus Probable reserves of 7,798 Mboe at year end, down 2% from the prior year;
  • Cash position of US$30.1 million at year end; and
  • Positive progress toward closing the Sale Transaction for cash consideration of US$15.5 million, plus future royalty payments.


Sean Guest, President and CEO commented:

“The sale of our conventional gas business is progressing and has now obtained all but one remaining government consent to complete the transaction.  Both Valeura and the Buyer remain committed to the deal, with confidence on both sides stemming from a solid ongoing production performance which has delivered average full year volumes that are virtually unchanged from the prior year.

“Meanwhile, we are continuing in our efforts to farm out part of our interest in our deep tight gas play.  We believe the increasingly positive investment environment we see today should increase interest by potential partners and are therefore continuing the farmout process into 2021. 

“We are also pressing ahead on our evaluation of inorganic growth opportunities.  With our strong balance sheet and internationally-experienced team, we see M&A as the right way to add near-term cash flow to our portfolio.  While our team has been aggressively evaluating and advancing potential opportunities, we are maintaining discipline in these efforts and will only do deals where we have a clear line of sight to generating value for shareholders both through the deal itself and through follow-on investment thereafter.”


Table 1 Financial and Operating Results Summary

Three Months Ended December 31, 2020 Three Months Ended September 30, 2020 Year ended December 31, 2020 Three Months Ended December 31, 2019 Year ended December 31, 2019
(thousands of US$ except share amounts)
Petroleum and natural gas revenues 1,978 1,843 8,547 2,653 10,177
Adjusted funds flow (used) (1) (335) (1,210) (1,154) 1,595 3,741
Net loss from operations (15,294) (2,149) (19,534) (735) (4,815)
Exploration and development capital 934 295 4,845 3,669 11,801
Banarli Farm-in proceeds (2) (1,452)
Net working capital surplus 42,190 32,182 42,190 37,645 37,645
Cash 30,143 31,297 30,143 36,111 36,111
Common shares outstanding












Share trading (CDN$)












  Crude oil (barrels (“bbl”)/d) 16 13 9
  Natural Gas (one thousand cubic feet (“Mcf”)/d) 4,145 3,690 3,824 3,877 3,907
  boe/d 707 615 650 646 660
Average reference price

Brent ($ per bbl)
BOTAS Reference ($ per Mcf) (3)











Average realised price

Crude oil ($ per bbl)
Natural gas ($ per Mcf)












Average Operating Netback ($ per boe) (1)

15.17 11.63 17.04 24.53 24.00
See the MD&A for further discussion.
(1) The above table includes non-IFRS measures, which may not be comparable to other companies. Adjusted funds flow is calculated as net income (loss) for the period adjusted for non-cash items in the statement of cash flows.  Operating netback is calculated as petroleum and natural gas sales less royalties, production expenses and transportation.
(2) Proceeds received from Equinor to complete spending commitment for Phase 2 of the Banarli Farm-in. Recorded in the financial statements as a reduction of exploration and evaluation assets.
(3) BOTAS regularly posts prices and its Level-2 Wholesale Tariff benchmark is shown herein as a reference price. See the AIF for further discussion.

Net petroleum and natural gas sales in Q4 2020 averaged 707 boe/d, which was 15% higher than Q3 2020. This increase in production primarily reflects the impact of successful well workovers.  Year on year, there was minimal change in production, even considering the significant reduction in gas demand in 2020 due to COVID-19 shutdowns and restrictions.

Production revenue in Q4 2020 was US$2.0 million, an increase of 7% over Q3 2020 due to the higher production in Q4 more than offsetting the impact of lower realised gas prices.  For the full year ended December 31, 2020, production revenue was US$8.5 million, a decrease of 16% from the prior year.

Exploration and development capital spending was US$0.9 million in Q4 2020, reflecting increased spending related to well workovers.  The majority of the full year 2020 capital spending of US$4.8 million was on drilling two licence commitment exploration wells and workover programmes on the shallow, conventional gas production.

As of December 31, 2020, the Company had US$30.1 million of cash and a net working capital surplus of US$42.2 million.  The increase in working capital at December 31, 2020 over the prior reporting period, and the primary difference between cash and working capital, is due to the inclusion of assets and liabilities associated with the Assets Held for Sale in working capital.  Please see the financial statements for details of the calculation.

The Company reported a net loss from operations of US$15.3 million in Q4 2020, which is primarily due to an impairment charge of US$13.4 million relating to removal of the property, plant and equipment associated with the Company’s deep, tight gas assets in the Thrace Basin (the “Deep Gas Play”).



Conventional gas business sale

Valeura has made good progress toward completing the Sale Transaction and both parties remain committed to concluding the deal as soon as possible.  The Sale Transaction has received one of two key government consents in January 2021, with only one approval outstanding before the transaction can be completed.

The Sale Transaction’s headline cash consideration price is US$15.5 million, and Valeura will receive royalty payments of up to an additional US$2.5 million thereafter.  The Sale Transaction is based on an economic effective date of July 1, 2020, meaning the purchase price will be adjusted at the time of closing to account for the net benefits of the assets accruing to the Buyer as of that time.

Deep Gas Play Farmout

Valeura views its Deep Gas Play as a core constituent of its portfolio and believes this play to be a material source of potential long-term value for shareholders.  In 2020, the Company confirmed its increased working interest in the Deep Gas Play and secured the first of three possible two-year extensions.  The three exploration licences in the core of the Deep Gas Play are now valid up to June 27, 2022.  Under Turkey’s licence terms, the Company has the ability to maintain these assets for up to approximately five more years through work programme commitments for each two-year extension period.  During the current two-year extension period, Valeura is required to drill one exploration well on each of the three exploration licences, for an estimated total net cost of  approximately US$1.6 million for the three wells combined.

Valeura initially planned to undertake a farm-out process starting in Q2 2020 aimed at identifying a new partner for the Deep Gas Play, however, the decision was taken to delay the process until Q4 2020 given the COVID-19 pandemic and resultant challenges in the oil and gas industry, which meant that fewer companies were seeking new opportunities.  The farm-out process was conducted in Q4 2020 and continues into 2021.  As of today, there is no agreement with a new party to farm in to the Deep Gas Play.  As commodity prices are now recovering, the Company anticipates an increase in appetite for opportunities of this type, and believes the Thrace basin is an appealing proposition, particularly as more companies are expressing a preference for gas-oriented opportunities and the potential for material upside.

Growth Strategy

Following a very challenging year for the upstream industry as a whole, Valeura is in a uniquely strong financial position.  The Company has no debt, and US$30.1 million in cash.  This cash position is expected to be further bolstered upon completion of the Sale Transaction, which would contribute US$15.5 million in cash, subject to normal closing adjustments as detailed above, and supplemented further with ongoing royalty payments of up to US$2.5 million.

Valeura’s strong balance sheet, coupled with its internationally experienced management team, positions it well to grow by way of mergers and acquisitions (“M&A”).  2020 was a year of historic lows for M&A transactions globally due to COVID-19 and the associated downturn in the industry.  The ability to transact has improved in 2021 as stability returns to the industry, and upon completion of the Sale Transaction, Valeura is well positioned to capitalise on its strengths. The Company remains actively engaged in evaluating inorganic growth opportunities while maintaining M&A screening criteria oriented toward assets that generate cash flow in the near term and provide opportunities for further cash flow growth through reinvestment.



The Company has signed an agreement to sell its entire shallow gas production business and these assets are reported in the Company’s financial results as assets held for sale. However, at year end the subject assets were still owned by Valeura and the Company is required to complete an independent reserves evaluation as at December 31, 2020. This evaluation was conducted by independent petroleum engineering consultants, GLJ Ltd. of Calgary Canada, (“GLJ”) and is presented in their report dated March 23, 2021 (the “GLJ Reserves Report”).

At December 31, 2020, all of the Company’s reserves are associated with gas production from the shallow assets in the Banarli exploration licences (100% working interest), the West Thrace production leases and exploration licences (81.5% working interest), and the South Thrace production leases (81.5% working interest). Table 2 summarises the Company’s reserves in Turkey and the before tax net present value discounted at 10% (“NPV10”).

The forecast realised prices used in the GLJ Reserves Report to calculate value are US$5.38/Mcf for natural gas and US$47.93/bbl for light and medium crude in 2021, and these prices escalate at approximately 2% per year going forward. More details on assets and the commodity price assumptions are included in the AIF.

Table 2 Company Gross Reserves Volumes and Values (1)(2)



Before Tax NPV10


2020 2019 %


2020 2019



Developed producing 811 526 54% 8.6 9.5 (9%)
Developed non-producing 356 477 (25%) 4.3 10.2 (58%)
Undeveloped 1,226 1,300 (6%) 1.3 12.7 (90%)
Total Proved (1P) 2,393 2,303 4% 14.2 32.4 (56%)
Probable 5,405 5,633 (4%) 17.8 59.5 (70%)
Total Proved Plus Probable (2P) 7,798 7,936 (2%) 32.0 91.9 (65%)
Possible 3,827 4,441 (14%) 17.7 55.1 (68%)
Total Proved Plus Probable Plus Possible (3P) 11,625 12,377 (6%) 49.8 147.0 (66%)
(1) See Oil and Gas Advisories and Reserves Definitions below.
(2) Due to rounding, summations in the table may not add.


The reserves are almost wholly natural gas, but small oil and natural gas liquids volumes are assigned to a number of wells. The 2020 year-end reserves by principal product type are summarised in Table 3.

Table 3 2020 Year-end Company Gross Reserves Volumes by Principal Product Type (1)









Proved 45 14.1 2,393
Probable 10 32.4 5,405
Total Proved Plus Probable 56 46.5 7,798
Possible 13 22.9 3,827
Total Proved Plus Probable Plus Possible 69 69.3 11,625
(1) See Oil and Gas Advisories and Reserve Definitions below.
(2) Natural Gas Liquids have been included in Light and Medium Crude Oil


Table 4 sets forth a reconciliation of reserves changes in 2020.

Table 4 2020 Year-end Company Gross Reserves Reconciliation





At December 31, 2019 2,303 7,936
Extensions 12 61
Improved Recovery 8 3
Technical Revisions 308 36
Economic Factors
Production (238) (238)
At December 31, 2020 2,393 7,798



Valeura will hold its annual and special meeting of shareholders on May 13, 2021 at 3:00 p.m. in Calgary. The Company continues to monitor the restrictions related to COVID-19 and will announce the format for the meeting when meeting materials are mailed in early April 2021, and in all instances, will provide an opportunity for shareholders to access the meeting remotely.



Valeura Energy Inc. is a Canada-based public company currently engaged in the exploration, development and production of petroleum and natural gas in Turkey.



GLJ Reserves Report
The GLJ Reserves Report was prepared using guidelines outlined in the Canadian Oil and Gas Evaluation Handbook and in accordance with National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities (“NI 51-101”). Additional reserves information as required under NI 51-101 is included in the AIF.

A BOE is determined by converting a volume of natural gas to barrels using the ratio of 6 Mcf to one barrel. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 BOE is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Further, a conversion ratio of 6 Mcf:1 BOE assumes that the gas is very dry without significant natural gas liquids. Given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilising a conversion on a 6:1 basis may be misleading as an indication of value.



With respect to the reserves data contained herein, the following terms have the meanings indicated:

Company Gross reserves” are the Company’s working interest (operating or non-operating) share before deducting royalties and without including any royalty interests of the Company.

developed” reserves are those reserves that are expected to be recovered from existing wells and installed facilities or, if facilities have not been installed, that would involve a low expenditure (e.g. when compared to the cost of drilling a well) to put the reserves on production.

developed producing” reserves are those reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves may be currently producing or, if shut-in, they must have previously been on production, and the date of resumption of production must be known with reasonable certainty.

developed non-producing” reserves are those reserves that either have not been on production, or have previously been on production, but are shut in, and the date of resumption of production is unknown.

possible” reserves are those additional reserves that are less certain to be recovered than probable reserves. It is unlikely that the actual remaining quantities recovered will exceed the sum of the estimated proved plus probable plus possible reserves.

probable” reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.

proved” reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.

reserves” are estimated remaining quantities of oil and natural gas and related substances anticipated to be recoverable from known accumulations, from a given date forward, based on: (a) analysis of drilling, geological, geophysical, and engineering data; (b) the use of established technology; and (c) specified economic conditions, which are generally accepted as being reasonable and shall be disclosed. Reserves are classified according to the degree of certainty associated with the estimates.

undeveloped” reserves are those reserves expected to be recovered from known accumulations where a significant expenditure (e.g., when compared to the cost of drilling a well) is required to render them capable of production. They must fully meet the requirements of the reserves classification (proved, probable, possible) to which they are assigned.



This news release contains certain forward-looking statements and information (collectively referred to herein as “forward-looking information”) including, but not limited to: the completion of the Sale Transaction; the total cash consideration for the Sale Transaction; the Company’s entitlement to contingent payments over a five-year period; the receipt of regulatory approvals, other government authorisations, and successful negotiations with the Buyer regarding any extension to the outside date, as may be required, relating to the Sale Transaction; the Company’s farm-out process for the Deep Gas Play continuing;  the Company’s belief regarding the potential of the Company’s Deep Gas Play; and, the Company’s ability to find another partner in the Deep Gas Play and to realise other growth opportunities through M&A; management’s assessment of the M&A market; the Company’s commitment to safety, environmentally responsible practices and optimising operational and administrative functions; and the Company’s business strategy and outlook.

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.

Statements related to “reserves” are deemed forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions, that the reserves can be profitably produced in the future. Specifically, forward-looking information contained herein regarding “reserves” may include: estimated volumes and value of Valeura’s oil and gas reserves and the ability to finance future development.

Forward-looking information is based on management’s current expectations and assumptions regarding, among other things: the ability to close the Sale Transaction on the terms described herein and the ability to negotiate an extension to the outside date with the Buyer if required; the continuation of operations during the COVID-19 pandemic; political stability of the areas in which the Company is operating and completing transactions; continued safety of operations and ability to proceed in a timely manner; continued operations of and approvals forthcoming from the Turkish Government in a manner consistent with past conduct; future drilling activity on the expected timelines; the prospectivity of the Deep Gas Play; the continued favourable pricing and operating netbacks in Turkey; future production rates and associated operating netbacks and cash flow; decline rates; future sources of funding; future economic conditions; future currency exchange rates; the ability to meet drilling deadlines and other requirements under exploration licences and production leases; 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, high-pressure stimulation 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. Exploration, appraisal, and development of oil and natural gas reserves are speculative activities and involve a degree of risk. A number of factors could cause actual results to differ materially from those anticipated by the Company including, but not limited to: uncertainty in capital markets and ability to raise debt and equity, as required, particularly for companies with a small market capitalisation; the ability to finance future developments and/or inorganic growth; the risks of currency fluctuations; changes in gas prices and netbacks in Turkey; potential changes in joint venture partner strategies and participation in work programmes; uncertainty regarding the contemplated timelines and costs for the Deep Gas Play evaluation; the risks of disruption to operations and access to worksites (including the impact of the COVID-19 pandemic), threats to security and safety of personnel; potential changes in laws and regulations, the uncertainty regarding government and other approvals; uncertainty regarding the ability to negotiate an extension to the outside date with the Buyer as required; counterparty risk; risks associated with weather delays and natural disasters; and the risk associated with international activity. 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.

Additional information relating to Valeura is also available on SEDAR at

This announcement contains inside information as defined in EU Regulation No. 596/2014, part of UK law by virtue of the European Union (Withdrawal) Act 2018, and is in accordance with the Company’s obligations under Article 17 of that Regulation.

This announcement does not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction, including where such offer would be unlawful. This announcement is not for distribution or release, directly or indirectly, in or into the United States, Ireland, the Republic of South Africa or Japan or any other jurisdiction in which its publication or distribution would be unlawful.

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.


For further information please contact:

Valeura Energy Inc. (General and Investor Enquiries)                       +1 403 237 7102
Sean Guest, President and CEO
Heather Campbell, CFO
Robin Martin, Investor Relations Manager,

Auctus Advisors LLP (Corporate Broker)                                          +44 (0) 7711 627 449
Jonathan Wright

CAMARCO (Public Relations, Media Adviser)                                   +44 (0) 20 3757 4980
Owen Roberts, Billy Clegg, Monique Perks, Hugo Liddy