Calgary, October 21, 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 partnership with Equinor, is pleased to provide results of the fourth test at the Inanli-1 well, and a summary of well results. Subsequent to the completion of this test at Inanli-1, Valeura and its partners now plan to move testing to the Devepinar-1 well where operations are expected to commence within the week.


Fourth Zone Test Results

The fourth test targeted an interval between 3681 metres and 3723 metres in the Kesan Formation, which was stimulated by placing approximately 100 tonnes of proppant into the reservoir.  The net porous sand (above 3% porosity) within this gross section is interpreted to be 37.6 metres and the average porosity was 6.8%.  Utilising artificial lift to assist in cleaning up the well, the interval was flowed for 10 days.  Average net gas rate over the flowing period was 306 Mcf/d (thousand cubic feet per day), and the rate for the final 24 hours of flow was 171 Mcf/d.  The gas from this zone was produced alongside condensate, with a condensate-gas ratio (CGR) of 23 bbls/MMcf (barrels per million cubic feet) over the total flowing period, but this was increasing over the course of the test and during the final 24 hours the rate was 97 bbls/MMcf. Water recovery was 98 bbls/d (barrels per day) over the final 24 hours of flow and was declining. The flow results of the fourth test were similar to the results of the third test between 3855 and 3925 metres.


Inanli-1 Summary

Each of the four zones tested in Inanli-1 successfully demonstrated stable gas production and the Company has seen evidence of both fracture and matrix contributions to the gas flow. While only limited zones throughout the long column were stimulated and tested, the program has met its objective to calibrate the productivity of individual reservoir intervals to the petrophysical interpretations based on drilling data, wireline logs and core. A significant amount of gas, water and condensate samples were captured during the testing and further analysis will be required to quantify and confirm hydrocarbon maturity and reservoir parameters of each zone. The Company remains optimistic that zones within the Inanli-1 well offer the potential for exploitation through horizontal drilling and potentially through comingled vertical completions.

Condensate yields and characteristics varied significantly from the deeper zones, where the condensate was very light coloured, but with low CGR on the order of 5-10 bbls/MMscf, to the upper zones where the produced condensate was light black coloured, but yielded CGRs as high as 97 bbls/MMcf.

In all four tested zones water production rates were manageable. In addition, based on salinity analysis, at the end of each flow period the produced water rates are estimated to be primarily the injected stimulation fluids and rates were still declining. In the deeper intervals tested with Test #1 and Test #2 (4176 – 4284 metres) the observed water rates imply a longer term yield of approximately 30 bbls/MMcf, which is commercially insignificant. Test #3 and Test #4 in the shallower section (3681 – 3925 metres) had higher water rates which are expected to be on the order of 250 bbls/MMcf once final laboratory analysis is available.  These finding of increased water rates at the shallower depths are consistent with the long-term comingled testing and the production logging data acquired in Yamalik-1.

The observed water production is consistent with most unconventional plays elsewhere in the world. The United States alone is producing about 50 million bbls/d of water associated with its oil and gas production and reported water disposal costs generally range between US$0.50/bbl and US$2.50/bbl. Valeura is currently testing and permitting its own water disposal wells into depleted gas fields and expects disposal costs to be closer to the lower end of the range. As an illustration, assuming a $9.00/Mcf gas price, each 1 MMcf/d of gas production would yield $7,875 of gross revenue (post royalty). Assuming a water disposal cost of $1.00/bbl, the cost of water disposal for each 1 MMcf of gas produced from the deep zones would be $30, and for the shallow zones would be $250 – approximately 0.3% to 3% of gross revenue. The cost of managing water disposal is minimal relative to the value of the produced gas in Turkey.


Forward Plan

Having successfully flowed gas from four separate intervals in this well, the Company has identified that the deeper reservoirs yield better gas flow with negligible associated water. Given this, and recognising the significant areal extent of the mapped play area, the partners have prioritised testing of the deeper zones and now plan to move to testing the Devepinar-1 well, 20 km to the west. Devepinar-1 had higher porosities throughout the objective reservoir section than seen in either Yamalik-1 or Inanli-1, and this will be the first deep well to be stimulated and tested in the western end of this basin. The Company and its partners are finalizing the test plan and equipment will commence mobilising to the Devepinar site shortly with operations expecting to commence at that location within the week.

The Company and Equinor had originally envisaged testing another shallower zone in the Inanli-1 well, However, given the results of Test #3 and Test #4 and the high condensate yields, the Company believes it is prudent to maintain the well as is, without completing the shallower zone, to ensure it is possible to re-enter the well to conduct further work in the future.


Sean Guest, President and CEO commented:

“With the completion of the fourth test interval at Inanli-1, we now feel we have a much better understanding of the vertical variability of our tight gas play.  We are particularly encouraged by the stable rates of dry gas flowed from the deeper intervals, as these results exceeded our expectations. With that in mind, we are now moving to Devepinar-1 to test the deepest intervals there. Early results from the Devepinar-1 well will allow us to commence discussions and planning for the next step of the appraisal of our play. 

We are pleased that there were no instances where fluid composition prevented gas flow in Inanli-1 and are encouraged by the very high condensate yields on this test. While more work will be required to understand the implications of this condensate in the shallow zones, we are commencing reservoir and economic modelling based on the gas test results.  Given the strong gas price realisations in Turkey and the readily accessible infrastructure through our owned gathering network, we believe there will be zones that can be economic in the longer-term.

In addition, we are very pleased that our testing program on Inanli-1 has been delivered without any health, safety or environmental incidents and that we have been able to sell most of the gas produced during the testing operations rather than flaring.”


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


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

Since Valeura was established in 2010, the Company has executed a number of transactions and currently holds interests in 20 production leases and exploration licences in the Thrace Basin of Turkey totalling 0.46 MM acres (gross) or on a net basis 0.37 MM acres of shallow rights and 0.26 MM net acres of deep rights.

Valeura is appraising an unconventional basin-centered gas accumulation (“BCGA”) play in the Thrace Basin on its deep rights, which has been evaluated by DeGolyer and MacNaughton, an independent reserves auditor, to hold, effective December 31, 2018, 10.1 Tcfe of estimated working interest unrisked mean prospective resources of natural gas, which includes 236 MMbbl of condensate.  By applying 3D seismic, modern reservoir stimulation technology and horizontal and deeper vertical well drilling, Valeura is aiming to achieve commercial scale operations from this tight gas resource.

In addition, the Company owns an extensive network of gas gathering and sales infrastructure to support direct marketing of natural gas to end users, and in Q2 2019, produced an average of 4.2 MMcf/d of natural gas from conventional gas accumulations in its shallower rights.

The Company is listed on both the Toronto Stock Exchange under VLE and on the Main Market of the London Stock Exchange under VLU.

Additional information relating to Valeura is also available on SEDAR at and on the Company’s corporate website at


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 long-term flow potential from tested zones, the potential to exploit hydrocarbons through horizontal drilling and commingled vertical completions, the infrastructure requirements for commercialization of the deep tight gas play, the cost of water disposal and the impact of water disposal costs on unit netbacks, the timing for the start of completion operations on the Devepinar-1 well, the impact of the results of the planned Devepinar-1 operations, and the ability to conduct future operations on the Inanli-1 well.  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 “prospective resources” are deemed forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions, that the prospective resources can be profitably produced in the future. Specifically, forward-looking information contained herein regarding “prospective resources” include volumes of prospective resources and the ability to finance future development and, the conversion of a portion of prospective resources into reserves.

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 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 these cautionary statements. 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.