Singapore, September 18, 2023: Valeura Energy Inc. (TSX:VLE, OTCQX:VLERF) (“Valeura” or the “Company”), the upstream oil and gas company with assets in the Gulf of Thailand and the Thrace Basin of Turkey, is pleased to announce the results of two appraisal wells drilled at the Wassana oil field and to provide an update on plans for restart of production operations.
Highlights
- Two appraisal wells were successfully drilled on flanks of Wassana oil field targeting deeper portions of reservoir;
- Wells A28 and A28-ST1 confirmed net oil pay of 72 ft and 75 ft respectively and were successful in confirming presence of oil deeper than previously proven;
- Valeura is currently re-mapping Wassana to integrate the new data and anticipates that the results will yield an increase in its volumetric estimates and could yield an additional approximately 20 production well locations; and
- On the strength of these results, the Company has commenced a review of development options to expand the production infrastructure which could increase production and extend the field life beyond 2030.
Appraisal wells
Valeura has drilled two appraisal wells on the flanks of the Wassana oil field to test for suspected additional oil accumulations in the field’s Tertiary clastic section. Both wells targeted the deeper portions of the reservoir section (2.0 and 2.1 sands), which holds most of the remaining underdeveloped oil reservoirs in the field. The appraisal programme was driven by the fact that an oil-water contact in this section had not yet been penetrated, implying potential for additional down-dip oil volumes. Further, recently reprocessed 3D seismic data suggested upside in a thickening of the reservoir section in the targeted locations. Both wells were successful in fulfilling these objectives and the Company believes the well results indicate the potential for substantial further development of the field which could yield an increase in production and a significant extension of the field’s economic life.
The first well, A28, was drilled in the main producing fault block of the field, downdip of existing production wells and encountered 72 ft of net oil pay. While previous reserves estimates were based on a demonstrated oil-down-to depth of 5,517 ft true vertical depth sub-sea (“TVDSS”), the new well has confirmed the presence of oil down to at least 5,594 ft TVDSS, exceeding the Company’s expectations for the vertical extent of the oil column. In addition, the well encountered a thicker package of reservoir sands and new oil-filled sands that have not been previously developed.
The second well, A28-ST1, was drilled to confirm the presence of oil in an untested area south of the main producing part of the field. The well encountered 75 ft of net oil pay proving the presence of oil in this undeveloped area.
Valeura is currently re-mapping the field to integrate the new data and anticipates that the results will yield an increase in its volumetric estimates. These additional volumes will be assessed as part of the Company’s next external third-party reserves and resources evaluation. Preliminary analysis indicates that an additional approximately 20 production well targets are now potentially viable within the reservoir section appraised by these two wells. In light of this upside potential, Valeura has begun the concept selection phase of a project to expand the development of the Wassana field. The Company envisages this will involve deploying additional wellhead and oil processing structures to be used as a higher-capacity production hub than is currently available through the existing mobile production facility.
The drill rig has since mobilised to the Jasmine oil field where it is commencing a four well drilling programme comprising two production wells and two appraisal wells to support additional production well drilling in 2024. After the programme at Jasmine, the rig is scheduled return to the Nong Yao oil field for a five well infill drilling campaign.
Wassana Field production update
In July 2023, Valeura suspended production operations at the Wassana field in order to undertake a review of safety and operating practices of the field’s third-party-owned and operated floating storage and offloading vessel (“FSO”). As a result of this review, Valeura and the FSO’s third-party owner have opted to select a new sub-contractor to operate the FSO going forward and are working together to formalise the engagement. The Company intends to implement a phased transition plan resulting in production resuming in Q4 2023.
Sean Guest, President and CEO commented:
“This is an excellent outcome for the Wassana field and a demonstration of our team’s ability to uncover further value-adding subsurface opportunities. As a result of a thorough review of the asset, we are now facing several opportunities to increase the scale of the Wassana field, and see the potential for further reserves development, increased production, and an extension of the field’s economic life well into the 2030’s.
Wassana is shaping up to deliver much more than its original expectations, a characteristic which is consistent with the ultimate recovery we are achieving at our other fields in the Gulf of Thailand.
We are also making good strides toward resuming production operations at the field, which prior to the suspension, accounted for approximately 10% of our total aggregate production. We look forward to re-starting under conditions that fit with our high standards for health, safety, and environmental responsibility.”
For further information, please contact:
Valeura Energy Inc. (General Corporate Enquiries) +1 403 237 7102
Sean Guest, President and CEO
Yacine Ben-Meriem, CFO
Contact@valeuraenergy.com
Valeura Energy Inc. (Investor Enquiries) +1 403 975 6752 / +44 7392 940495
Robin James Martin, Vice President, Communications and Investor Relations
IR@valeuraenergy.com
Auctus Advisors LLP (Corporate Broker to Valeura) +44 (0) 7711 627 449
Jonathan Wright
Valeura@auctusadvisors.co.uk
CAMARCO (Public Relations, Media Adviser to Valeura) +44 (0) 20 3757 4980
Owen Roberts, Billy Clegg
Valeura@camarco.co.uk
About the Company
Valeura Energy Inc. is a Canada-based public company engaged in the exploration, development and production of petroleum and natural gas in Thailand and in Turkey. The Company is pursuing a growth-oriented strategy and intends to re-invest into its producing asset portfolio and to deploy resources toward further organic and inorganic growth in Southeast Asia. Valeura aspires toward value accretive growth for stakeholders while adhering to high standards of environmental, social and governance responsibility.
Additional information relating to Valeura is also available on SEDAR+ at www.sedarplus.ca.
Advisory and Caution Regarding Forward-Looking Information
Certain information included in this news release constitutes forward-looking information under applicable securities legislation. Such forward-looking information is for the purpose of explaining management’s current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Forward-looking information typically contains statements with words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “estimate”, “propose”, “project”, “target” or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this news release includes, but is not limited to: the potential for substantial further development of the field which could yield an increase in production and a significant extension of the field’s economic life; the Company’s anticipation that the results will yield an increase in its volumetric estimates; the expectation that the additional volumes will be assessed as part of the Company’s next external third-party reserves and resources evaluation; the potential for an additional approximately 20 production well targets; the timing and composition of future drilling campaigns on the Jasmine and Nong Yao oil fields; and the timing to implement a phased transition plan at the Wassana FSO and to restart production in Q4 2023.
Forward-looking information is based on management’s current expectations and assumptions regarding, among other things: political stability of the areas in which the Company is operating; continued safety of operations and ability to proceed in a timely manner; continued operations of and approvals forthcoming from governments and regulators in a manner consistent with past conduct; future drilling activity on the required/expected timelines; the prospectivity of the Company’s lands; the continued favourable pricing and operating netbacks across its business; future production rates and associated operating netbacks and cash flow; decline rates; future sources of funding; future economic conditions; the impact of inflation of future costs; future currency exchange rates; interest rates; the ability to meet drilling deadlines and fulfil commitments under licences and leases; future commodity prices; the impact of the Russian invasion of Ukraine; royalty rates and taxes; future capital and other expenditures; the success obtained in drilling new wells and working over existing wellbores; the performance of wells and facilities; the availability of the required capital to funds its exploration, development and other operations, and the ability of the Company to meet its commitments and financial obligations; the ability of the Company to secure adequate processing, transportation, fractionation and storage capacity on acceptable terms; the capacity and reliability of facilities; the application of regulatory requirements respecting abandonment and reclamation; the recoverability of the Company’s reserves and contingent resources; future growth; the sufficiency of budgeted capital expenditures in carrying out planned activities; the impact of increasing competition; the ability to efficiently integrate assets and employees acquired through acquisitions; global energy policies going forward; future debt levels; 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, offshore storage and offloading facilities 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 and resources 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: the ability of management to execute its business plan or realise anticipated benefits from acquisitions; the risk of disruptions from public health emergencies and/or pandemics; competition for specialised equipment and human resources; the Company’s ability to manage growth; the Company’s ability to manage the costs related to inflation; disruption in supply chains; the risk of currency fluctuations; changes in interest rates, oil and gas prices and netbacks; potential changes in joint venture partner strategies and participation in work programmes; uncertainty regarding the contemplated timelines and costs for work programme execution; the risks of disruption to operations and access to worksites; potential changes in laws and regulations, the uncertainty regarding government and other approvals; counterparty risk; the risk that financing may not be available; risks associated with weather delays and natural disasters; and the risk associated with international activity. See the most recent annual information form and management’s discussion and analysis of the Company for a detailed discussion of the risk factors.
Certain forward-looking information in this news release may also constitute “financial outlook” within the meaning of applicable securities legislation. Financial outlook involves statements about Valeura’s prospective financial performance or position and is based on and subject to the assumptions and risk factors described above in respect of forward-looking information generally as well as any other specific assumptions and risk factors in relation to such financial outlook noted in this news release. Such assumptions are based on management’s assessment of the relevant information currently available, and any financial outlook included in this news release is made as of the date hereof and provided for the purpose of helping readers understand Valeura’s current expectations and plans for the future. Readers are cautioned that reliance on any financial outlook may not be appropriate for other purposes or in other circumstances and that the risk factors described above or other factors may cause actual results to differ materially from any financial outlook. The forward-looking information contained in this new release is made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward-looking information contained in this new release is expressly qualified by this cautionary statement.
This news release 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 news release 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.
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