Calgary, December 13, 2019: Valeura Energy Inc. (TSX:VLE, LSE:VLU) (“Valeura” or the “Company”), the upstream natural gas producer focused on appraising and developing an unconventional gas accumulation play in the Thrace Basin of Turkey, reports natural gas production test results for the Devepinar-1 well.
Following short-term tests on each of the three intervals stimulated in the well, as announced on November 29, 2019, the Company drilled out the plugs isolating each interval, installed 2 7/8” production tubing, and conducted a comingled production test across a 125 metre gross section from 4,640 metres to 4,765 metres lasting approximately 11 days. The comingled test yielded gas flow rates similar to the results measured from the single intervals previously tested. This may indicate that each of the three stimulations contacted a common fracture network with further modelling work underway to fully interpret these test results. The average flow rate over the 11 day comingled test period was 908 mcf/d and the gas flow for the final 24 hours of testing was 462 mcf/d. In total, the well produced for approximately 20 days at an average rate of 1,106 mcf/d (including the initial individual stimulations). No condensate was measured during the testing.
Sean Guest, President and CEO commented:
“We are pleased with initial rates from each of the three stimulated intervals, and with the substantial data set we acquired through the comingled production flow test. The results from Devepinar are on trend with our predictions derived from the other tests conducted in the basin with regard to product characteristics – at this depth we see dry gas, with no condensate. While every test to date has resulted in gas flowing to surface, we continue to see the best flow rates at the deepest intervals in the play. Further modelling work is needed to interpret the implications of the comingled test results, which will lead to establishing the next steps for our continuing appraisal of the deep gas play.”
The Company has shut in the well and is now performing a pressure build-up survey. Completion equipment is being de-mobilised while Valeura collaborates with its partners to define the next steps for the play. Future work may include further long-term testing of the stimulated zone, additional tests shallower in the wellbore, and additional geotechnical study work, prior to defining additional drilling plans for the play.
Valeura intends to communicate its forward work programme for both ongoing appraisal of its deep gas play and its producing shallow gas business in Q1 2020.
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
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, Billy Clegg, Monique Perks, Thayson Pinedo
Oil and Gas Advisories
Short Production Test Rates
The short production test rates disclosed in this news release are preliminary in nature and may not be indicative of stabilised on-stream production rates, long-term performance or ultimate recovery. There is currently no long-term flow information for the deep, unconventional BCGA. While the same geological formations that are producing gas in the shallow are being targeted in the deep, unconventional play, they are in a different depth, pressure environment and generally have a low porosity and permeability such that any type curves from the shallow are not expected to be indicative of deep, unconventional well production rates.
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 Company’s ability to interpret the results from the production test programme including the results of further modelling studies; the next steps for the continuing appraisal of the deep gas play; and the Company’s intent to communicate its future work programme, and the timing thereof.
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 and ability to proceed in a timely manner; continued operations of and approvals forthcoming from the Turkish government and regulators in a manner consistent with past conduct; future seismic and 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; decline rates; future sources of funding; future economic conditions; future currency exchange rates; the ability to meet drilling deadlines and other requirements under licenses and 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, including the future work programmes and budgets are in part based upon expected agreement among joint venture partners and support of 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, reservoir 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 regarding ultimate joint partner decisions regarding the future work programmes; 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 or civil unrest in Turkey; 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 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.
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.