Calgary, November 29, 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, in response to media and market activity, is reporting interim natural gas production test information for Test #1 in the Devepinar-1 well, prior to completion of the flow testing programme.
The Company stimulated three separate intervals covering 125 metres of gross section between 4,640 metres and 4,765 metres, by deploying 41 tonnes, 61 tonnes, and 57 tonnes of proppant, respectively. As very high pressures were recorded at surface immediately after each stimulation, it was necessary to flow each interval for two to three days prior to proceeding to the next operation. The individual flow rates based on the last 24 hour flowing period were 1.6 mmcf/d, 1.3 mmcf/d, and 1.3 mmcf/d from the deepest to the shallowest interval, respectively. All of the recorded flows were up casing, not production tubing, and no artificial lift was used during these flow periods. Each interval was still cleaning up at the end of the flow period as indicated by the final 24 hour rate being higher than the average flowing rate for the period. The gas was dry with no condensate being measured.
The Company interprets these to be positive results as each of these intervals individually has yielded the best gas flow rates that the Company has recorded from its testing of the BCGA play to date. However, these results are preliminary due to the short duration of each flow period, and the next step will be to proceed with comingled flow of all three intervals to confirm the sustainability of the gas flow and to measure whether any condensate is present.
The plugs between the three stimulated zones have been drilled out and production tubing is now being installed in preparation for the comingled flow test. The Company does not intend to produce the well at an aggregate of the three individual test rates, but rather intends to production test the well under rate-controlled conditions to measure longer term flow stability. The Company and its partners will make a decision on the next steps in the Devepinar-1 testing programme once this interval has been flowed for a similar duration to the testing of the Inanli-1 intervals.
Flaring is minimised during testing with the majority of produced gas being captured in Valeura’s gas gathering infrastructure and sold to its customers.
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
GMP First Energy (Financial Adviser and Joint Corporate Broker) +44 (0) 20 7448 0200
Jonathan Wright, Hugh Sanderson
Canaccord Genuity Limited (Joint 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 flow rate of preliminary natural gas production test results of the Devepinar-1 appraisal well; the interpretation of respective gas flow rates from the Devepinar-1 appraisal well; the measurement and composition of the gas that was produced during production tests; the Company’s ability to interpret the results from the production test programme; including to compare commingled flow-test results with the previous BCGA wells’ test results; the Company’s plan to proceed with a commingled production flow-test, the duration of such a flow-test, and the ability to assess the sustainability of gas flow and the amount of condensate based on such operation; the Company’s success installing production tubing; the ability to production test the Devepinar -1 well on a commingled basis; the ability to conduct such production under rate-controlled conditions; and, to measure long-term flow stability based on rate-controlled commingled production testing.
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 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: 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.