Calgary, November 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 in partnership with Equinor, is pleased to report its financial and operating results for the three month and nine month period ended September 30, 2019.



  • Safety – The Company achieved a milestone of 893 days of continuous operations without a lost time incident;
  • Testing operations at Inanli-1 resulted in stable gas flow rates at all four stimulated zones. Stimulation and testing operations have begun at the Devepinar-1 well;
  • Production from conventional operations averaged 531 boe/d in Q3, 2019, down 19% from Q3 2018 due to natural declines and customer holiday shutdowns;
  • Price realisations were strong, averaging $9.64/Mcf in Q3 2019, 45% higher than Q3 2018;
  • Netbacks averaged $33.04/boe in Q3 2019, 40% higher than Q3 2018;
  • Net working capital increased to $52.8 million at end Q3 2019 as a result of a net increase in the Company’s cash position to $51 million;
  • Operating conditions in country remained favourable for the industry;
  • USD reporting – The Company intends to transition to reporting its financial results in US dollars, starting with its year-end 2019 results.

Valeura’s primary focus is on flow testing the significant interpreted gas columns encountered in its new appraisal wells to demonstrate the extent and potential commerciality of the Company’s Basin Centered Gas Accumulation (“BCGA”) estimated to hold 10 Tcfe (286 BCM) of mean unrisked prospective natural gas resources, including 236 MMbbl (32 MMTonnes) of condensate, net to Valeura. Stimulation and production testing is being conducted on a zone-by-zone basis to provide definitive flow characteristics that can be used to calibrate the petrophysical data, core data and hydrocarbon shows encountered during drilling operations. Identifying zones that sustain gas flow and that could therefore be amenable to commercial-scale drilling and hydraulic stimulation will underpin the work programme for the next stage of appraisal.

In addition, the Company continues to produce natural gas from its shallow conventional play, and is evaluating opportunities to enhance value, including activities such as additional well workovers and new drilling. The Company’s production yields strong operating netbacks, most recently in excess of $33/boe, which both generates operating income for the business, and underscores the long-term potential value of the Company’s unconventional gas resource.


Sean Guest, President and CEO commented:

“I am pleased with our third quarter performance as operating conditions in country remained favourable for the industry and as our testing programme of our deep gas appraisal continued as planned. Encouragingly, all zones tested to date flow gas and we are at the cusp of the next exciting phase of our stimulation and testing programme alongside partner Equinor, with operations now underway at the Devepinar-1 well.

At the same time, it is important to highlight to everyone the strength of our Company. Valeura has over $50 million of cash and holds no debt. We continue to generate positive cash flow from ongoing production, and in addition carry 2P reserves of 7.4 million boe; valued at $88 million as of our last external audit. Financial returns associated with our production and reserves continue to improve with strong netbacks of over $33/boe due to Turkey’s attractive fiscal terms and gas price realisations of nearly $10/Mcf. 

Valeura offers investors tremendous value, including a stable-cash generating business from our shallow production with access to substantial potential upside as we continue with operations to demonstrate the commerciality of our deep gas play and its 10 Tcfe of mean unrisked prospective natural gas resources.”


Financial and Operating Results Summary

Three Months Ended September 30, 2019 Three Months Ended June 30, 2019 Nine Months Ended September 30, 2019 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018
(thousands of CDN$ except share amounts)
Petroleum and natural gas revenues 2,860 3,265 10,005 2,401 8,819
Adjusted funds flow (1) 1,363 1,034 2,851 (430) 576
Net loss from operations (219) (2,148) (5,437) (2,647) (6,846)
Exploration and development capital 1,068 4,081 10,831 2,739 4,741
Banarli Farm-in proceeds (2) (1,930)
Net working capital surplus 52,787 52,272 52,787 56,337 56,337
Cash 50,957 50,581 50,957 56,522 56,522
Common shares outstanding
Share trading
Crude oil (barrels (“bbl”)/d) 18 13 8
Natural Gas (one thousand cubic feet (“Mcf”)/d) 3,078 4,202 3,917 3,931 4,448
boe/d 531 700 666 655 749
Average realised price
Crude oil ($ per bbl)
Natural gas ($ per Mcf)


Average Operating Netback ($ per boe) (1) 33.04 28.55 31.69 23.63 23.91
See the Company’s 2019 Management’s Discussion and Analysis for the three and nine months ended September 30, 2019 and 2018 filed on SEDAR for further discussion.
  • The above table includes some 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.
  • Proceeds received from Equinor to complete spending commitment for Phase 2 of the Banarli Farm-in.are recorded in the financial statements as a reduction of exploration and evaluation assets.

Net petroleum and natural gas sales in Q3 2019 averaged 531 boe/d which was 19% lower than Q3 2018. Production was 24% lower when compared to Q2 2019, as a result of natural declines and planned shutdowns by most customers during Turkish national holidays in August. This production does not include the volumes produced during the testing of the Inanli-1 well.

Production revenue in Q3 2019 was $2.9 million, an increase of 19% over Q3 2018, and a decrease of 12.4% from Q2 2019. This reflects lower production volumes during the quarter, partly offset by higher realised prices. Price realisations in Q3 2019 averaged $9.64/Mcf, an increase of 45% over Q3 2018 and an increase of 13% over Q2 2019. The higher prices are the result of a period of relative stability in the value of the Turkish Lira coupled with the BOTAS reference price increase on August 1, 2019 of 15%.

Exploration and development capital spending was modest in Q3 2019 ($1.1 million) as most operational activity was focused on the Inanli-1 well stimulation and testing programme, where Equinor funded 100% of the cost of operations.

As of September 30, 2019, the Company had a net working capital surplus of $52.8 million compared to $52.3 million at June 30, 2019. Working capital increased as a result of increases in the Company’s cash position associated with funds flow from production.


Testing Programme Summary

During Q3, the Company’s main focus was on stimulation and testing of the Inanli-1 well which was funded by Equinor.  In total, four intervals were stimulated and tested.  During clean-up operations, and while utilising gas lift to recover fluids, all four zones produced gas at stablised rates. The flow data acquired has enabled the Company to identify trends in fluid composition across the vertical column accessed.  These data are being analysed in conjunction with petrophysical and core data acquired during drilling operations to further correlate results and continue refining the forward appraisal programme. Operations on the Inanli-1 well were suspended in late October 2019, and the well has been left in a state so as to enable potential re-entry in the future to conduct additional work.

The Company is now focusing its attention on building an understanding of the lateral continuity of the play, and accordingly, has moved test equipment to the Devepinar-1 well, 20 km to the west of Inanli-1.  Stimulation and testing operations are underway, and the Company will share flow results in due course. This programme is being funded by Equinor (50%), Valeura (31.5%) and Pinnacle Turkey (18.5%).

The results of testing from the Company’s deep wells, taken together with core and petrophysical data, will inform the forward work programme for 2020 and beyond.  The Company’s goal remains to identify those zones which offer the best opportunity for further targeted appraisal work, so as to demonstrate the potential for commerciality of the play. Accordingly, Valeura is conducting scenario planning for its next appraisal steps and will disclose its 2020/2021 work programme once the testing operations are complete and the data have been analysed.

In all its activities, including its ongoing stimulation and testing programme, the Company adheres to high standards of environmental, social, and governance stewardship, and believes protecting the health and safety of all those affected by its business is paramount to its sustainability.


US Dollar Reporting

Valeura intends to transition to US dollar reporting for future financial results, starting with its results as at and for the year ending December 31, 2019. The Company believes this change will put it more in line with typical practice for its internationally-focused peer companies, and particularly those listed on multiple stock exchanges.  Past financial results will be restated along with its year-end 2019 results for comparative purposes.


Webcast and Conference Call

Valeura’s management team will host an investor and analyst conference call and question session at 09:00 (Calgary) / 11:00 (Toronto) / 16:00 (London) today, Wednesday November 13, 2019.

Interested listeners can connect via live webcast or dial-in conference call, as indicated below.  Please register approximately 15 minutes prior to the start of the call.

Event title: Valeura Third Quarter 2019 Results Conference Call

Webcast link:  
Calgary dial-in: +1 587 880 2171
Toronto dial-in: +1 416 764 8688
North America toll-free: +1 888 390 0546
UK toll-free: +44 0800 6522435

The complete quarterly reporting package for the Company, including financial statements and associated management’s discussion and analysis (“MD&A”), will be filed on SEDAR at and posted on the Company’s website at


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 BCGA play in the Thrace Basin on its deep rights, which has been evaluated by DeGolyer and MacNaughton 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 Q3 2019, produced an average of 3.1 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


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


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.

Use of Unrisked Estimates

The unrisked estimates of prospective resources referred to in this news release 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. See the 2018 AIF for details regarding risked estimates. 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.

Prospective Resources

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.

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.

Please see the AIF, which is available under Valeura’s issuer profile on SEDAR at, for more information with respect to the Company’s prospective resources, including details regarding risked estimates.

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 extent of the Devepinar-1 completion and testing programme;  the Company’s ability to use the results from the current programme to understand the flow characteristics and fluid compositions of the rock across the wide depth range of the BCGA; the potential re-entry and additional testing of the Inanli-1 well; the Company’s priorities with respect to its work programme; the assessment of the resources in the test formations; the potential of the Company’s unconventional basin-centered gas accumulation play in the Thrace Basin and the potential to achieve commercial scale operations; the long-term potential value of the Company’s unconventional gas resource; the value and potential upside of Valeura to investors; the Company’s scenario planning for its next appraisal steps following the stimulation and testing campaign; and Valeura’s intention to transition to US dollar reporting for future financial results.

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 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.