Calgary, November 13, 2020: Valeura Energy Inc. (TSX:VLE, LSE:VLU) (“Valeura” or the “Company”), an upstream oil and natural gas company with assets in the Thrace Basin of Turkey, reports its financial and operating results for the three month and nine month periods ended September 30, 2020.


  • Operations – Return to steady operations throughout Q3 with average production up 10% from Q2 to 615 boe/d, generating petroleum and natural gas sales revenue of US$1.8 million;
  • Financial position – A strong financial position, with net working capital surplus of US$32.2 million at September 30, 2020 (including US$31.3 million cash), and no debt;
  • Shallow sale – Announced sale of its producing shallow conventional gas business for cash consideration of US$15.5 million, plus royalty payments of up to an additional US$2.5 million;
  • Growth – Incremental cash from the shallow sale bolsters the Company’s ability to execute its inorganic growth strategy; and
  • Deep play – Valeura’s interest in its 20 Tcfe unrisked mean prospective resource deep, tight gas play will be unaffected by the sale and the Company retains access to infrastructure with work continuing in the period to secure a partner for the Group’s upcoming appraisal campaign.

Sean Guest, President and CEO commented:

“Q3 was a steady quarter with operations conducted safely and with production ramping up to pre-COVID-19 levels.  As announced last month, we have agreed to sell our interest in the producing conventional business, with an effective date of July 1, 2020 and anticipate the deal closing in Q1 of next year. 

Our efforts have resulted in Valeura being in a very strong financial position, which as of September 30, 2020 included a working capital surplus of US$32.2 million, with no debt.  This balance sheet strength, plus the additional approximately US$15.5 million in cash to be received shortly from the shallow conventional sale, places us in an opportune position to access opportunities at a time when our industry is cash starved.  We are focused on value growth and intent on deploying cash to build a more material near-term and mid-term portfolio.  This will complement our longer-term growth opportunity in Turkey, where we retain our full interest in, and control of the deep tight gas appraisal play.”


Q3 Financial and Operating Results Summary

 Three Months Ended September 30, 2020Three Months Ended June 30, 2020Nine Months Ended September 30, 2020Nine Months Ended September 30, 2019Nine Months Ended September 30, 2019
(thousands of US$ except share amounts)
Petroleum and natural gas revenues1,8431,9186,5692,1667,524
Adjusted funds flow (1)(1,210)339(819)1,0322,147
Net loss from operations(2,149)(1,899)(4,240)(166)(4,079)
Exploration and development capital2951,7343,9118098,132
Banarli Farm-in proceeds (2)(1,452)
Net working capital surplus32,18233,23132,18239,86739,867
Cash 31,29730,46931,29738,48638,486

Common shares outstanding












Share trading (CDN$)












Crude oil (barrels (“bbl”)/d)18121813
Natural Gas (one thousand cubic feet (“Mcf”)/d)3,6903,2603,7173,0783,917

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) 11.6315.2717.7325.0223.91
  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 Company’s AIF filed on SEDAR for further discussion.

Additional information and commentary on the three and nine months ended September 30, 2020 is included in the Company’s Management’s Discussion and Analysis, which is available on the Company’s website and on

Strategy Update

Valeura is pursuing a three-pronged strategy intended to leverage the Company’s assets, financial strength, and differentiated capabilities, toward delivering shareholder value.

Conventional gas production business

Valeura’s strategy has been to maximise the near-term value of its producing conventional gas business.  Monetising the business via its sale to TBNG Limited, as announced in October, will further bolster cash resources which can be redeployed to the growth-oriented components of the Company’s strategy.

The Company’s focus is on satisfying the conditions to closing, which include regulatory approvals and governmental authorisations.  Initial progress is in line with expectations, and Valeura continues to anticipate closing the deal in Q1 2021.

Inorganic growth

Valeura is actively seeking opportunities to grow its business inorganically.  The Company is working with RBC Capital Markets to screen and evaluate deal opportunities, spanning Eastern Europe and the greater Mediterranean region.  In all instances, the Company is adhering to strict evaluation criteria, such that any new asset would add both cash flow in the near term and opportunities for significant follow-on organic growth in the medium term.

With an increasing number of companies facing liquidity constraints and dwindling cash resources, the M&A landscape is increasingly becoming a buyers’ market.  As such, the Company believes conditions are favourable for inorganic growth to enable a step change in the materiality of its business, while fitting with the team’s international upstream expertise.

Deep gas upside

Valeura is continuing to pursue its 20 Tcfe unrisked mean prospective resource deep, tight gas play in the Thrace Basin.  The Company has engaged Stellar Energy Advisors Limited, with a mandate to secure a partner with technical and commercial expertise suited to a tight gas appraisal play of this magnitude, and anticipates this process continuing throughout Q4 at least.

Pending the entry of a new partner, Valeura is poised to resume appraisal activities rapidly, including drilling the next appraisal well which will target the best quality reservoir encountered to date at the most optimal depth for hydrocarbon flow encountered to date in the dry gas window. Four appraisal well locations have been submitted for government approval.

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,

Canaccord Genuity Limited (Corporate Broker)                                +44 (0) 20 7523 8000
Henry Fitzgerald-O’Connor, James Asensio

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


Oil and Gas Advisories

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.


Resource disclosure in this announcement is based on an independent resources evaluation as at December 31, 2018 conducted by D&M in its report dated March 13, 2019, which was prepared using guidelines outlined in the Canadian Oil and Gas Evaluation Handbook and in accordance with NI 51-101, as adjusted to reflect Equinor’s withdrawal in Q1 2020. Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects.  Prospective resources have both an associated chance of discovery and a chance of development.  The unrisked estimates of prospective resources referred to in this announcement have not been risked for either the chance of discovery or the chance of development.  There is no certainty that any portion of the prospective resources will be discovered.  If a discovery is made, there is no certainty that it will be developed or, if it is developed, there is no certainty as to the timing of such development or that it will be commercially viable to produce any portion of the prospective resources.  Additional resources information is included in the Company’s annual information form for the year ended December 31, 2018.

Advisory and Caution Regarding Forward-Looking Information

Certain information included in this new 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 new release includes, but is not limited to: the completion of the shallow sale, the total cash consideration, the Company’s entitlement to contingent payments over a five-year period, the receipt of regulatory approvals and other governmental authorisations, and the anticipated closing time; statements with respect to the Company’s conventional gas production business strategy, including its ability to maximise the near-term value of its producing conventional gas business through monetising the business;  statements with respect to the Company’s inorganic growth strategy, including its ability to identify M&A targets and the geographic area of focus; statements with respect to the Company’s deep tight gas play strategy, including management’s belief that the play represents a material value proposition for shareholders, the sweet spots of the play, its ability to target these sweet spots with the next appraisal well, its ability to find another partner for the play, the Company’s farm-out process for the for the play continuing through Q4, 2020 at least, and its ability to resume appraisal activities rapidly thereafter; and management’s belief that its three-pronged strategy above has the potential to deliver shareholder value.  In addition, statements related to “resources” are deemed to be forward-looking information as they involve the implied assessment,  based  on  certain  estimates  and  assumptions,  that  the  resources can  be discovered and profitably  produced  in  the  future.

Forward-looking information is based on management’s current expectations and assumptions regarding, among other things: the resumption of operations following 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 required/expected timelines; the prospectivity of the Company’s lands, including the deep potential; 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 licences and leases; the ability to attract a new partner in the deep play; the ability to identify attractive merger and acquisition opportunities to support growth; 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: the risks of further disruptions from the COVID-19 pandemic; 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 evaluation; 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; risks associated with weather delays and natural disasters; and the risk associated with international activity. The forward-looking information included in this new release is expressly qualified in its entirety by this cautionary statement. See the AIF for a detailed discussion of the risk factors.

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.

Additional information relating to Valeura is also available on SEDAR at

This Announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 (“MAR”). Upon the publication of this Announcement, this inside information is now considered to be in the public domain.

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.