Calgary, April 6, 2020: Valeura Energy Inc. (TSX:VLE, LSE:VLU) (“Valeura” or the “Company”), the upstream natural gas company focused on the Thrace Basin of Turkey, announces an increase in its working interest in the Banarli and West Thrace exploration licenses and re-affirms its commitment to appraisal of its deep unconventional gas play.


  • Working interest in the deep play increases to 100% in the Banarli exploration licences, and 63% in the West Thrace exploration licence and production leases
  • Management and Directors remain committed to the deep play and believe that further appraisal is warranted
  • Intend to re-start production from the Devepinar-1 well with a longer-term production test than was previously conducted
  • Data sharing and cooperation arrangements with other operators in the region initiated
  • Enviable financial position, with no debt and approximately $36 million of cash at year-end 2019
  • Seeking an additional partner to participate in the deep unconventional play

Working interest doubled

Valeura announced on February 4, 2020 that its joint venture partner Equinor Turkey B.V. (“Equinor”) intended to discontinue participation in the deep unconventional gas appraisal programme.  Equinor elected to relinquish their interests under the terms of the joint operating agreements (“JOAs”) between the parties, and as such their working interests and rights transfer to the remaining parties, Valeura and Pinnacle Turkey Inc. (“PTI”), at no cost.

On April 2, 2020 the Government of Turkey provided notice that it has approved the transfer of Equinor’s working interests and rights to Valeura and PTI. This doubles Valeura’s working interest in the deep play.  In the Banarli exploration licences, Valeura will hold 100%, and in the West Thrace exploration licence and production leases the Company will increase its holdings to 63% of the deep rights.  Ownership in shallow rights is unchanged (100% at Banarli and 81.5% at West Thrace) and Valeura remains operator of all of the blocks.

Having completed the exit of Equinor from all of the blocks, the Company will now apply for the first extension to the Banarli and West Thrace exploration licences.  Exploration licences in Turkey have an initial 5-year phase followed by up to three 2-year phases, for a maximum of 11 years, prior to being converted to production leases. The first 5-year phase of these three exploration licences ends on June 26, 2020, and the first extension phase would then extend until June 26, 2022.

Committed to the play

Valeura remains committed to the appraisal of the deep play, as the management and directors continue to see the potential for significant long-term gas production.  Taking into account all technical data gathered to date, the Company believes that further appraisal is warranted.  The clear objective is to demonstrate stable commercial long-term flow potential by identifying the production sweet spots within the play, and optimising drilling and completion techniques and associated cost.

Valeura also recognises that the play is at an early phase of its life cycle and will ultimately require more drilling and testing.  Of the 11 deep wells that have penetrated the deep gas play to date, only the most recent three of these have been subjected to stimulation and production testing, all which resulted in gas flowing to surface.  This yields a drilling density of 0.02 wells per 1,000 acres over the approximately 450,000 acres play area, which is extremely low compared to proven North American unconventional basins, which generally have well densities ranging between 5 and 50 wells per 1,000 acres.

Fit-for-purpose near-term plan

The data that has been acquired through drilling and testing has increased the Company’s understanding of the subsurface and these learnings are pointing to new areas for appraisal. Valeura has been encouraged by identifying deep zones with dryer gas where hydrocarbon maturity, reservoir quality, saturation and natural fracturing are all improved.  Short-term production testing from these deepest zones suggest that they may have the potential to be economically developed.

In the near term, Valeura will focus its efforts on low cost data collection while it plans the next part of the appraisal programme. The Company intends to re-start production from the Devepinar-1 well with a longer-term production test than was previously conducted.  The Company expects testing will cost only a few thousand dollars per day, compared with just under $100,000 per day incurred during the earlier testing campaign when a larger complement of personnel and equipment conducted the stimulation and testing operation. All produced gas during testing will be sold to Valeura’s customers.  Timing for this operation is currently uncertain given the cascading effect of the ongoing Covid-19 global pandemic.

The Company also recognises the importance of gathering as much data as possible about the scope of the deep unconventional gas play. Valeura has initiated data sharing and cooperation arrangements with other operators in the region to benefit from the collective learnings gathered through all deep wells drilled in the basin.  The Company anticipates no material spending associated with these arrangements.

Partnering for the long-term

Valeura is in excellent financial shape, with no debt and approximately $36 million of cash at year-end 2019.  While management sees this as an enviable position, they recognise that the substantial potential of the deep, unconventional gas play justifies an ongoing and extensive work programme.

The Company will seek an additional partner to participate in the deep unconventional play.  The target will be a partner who brings both financial and technical capability to the joint venture, for a work programme that is expected to include drilling new vertical and horizontal wells, reservoir stimulation, and production testing operations.

Until such a partner is in place, the Company anticipates only minimal capital spending towards the deep play and a focus on fit-for-purpose data collection, as noted above.

Sean Guest, President and CEO commented:

“We are doubling our interest in the deep play and reaffirming our conviction that this presents an opportunity to add substantial value. The character of our business will evolve to ensure we have the resources and the longevity to see through a meaningful ongoing appraisal programme.  In the near term, we will be cautious with our spending and creative when it comes to opportunities to learn more from our existing well stock and from our neighbouring operators.  There are exciting days ahead for Valeura and its shareholders.”

Annual and Special Meeting Arrangements

In light of public health recommendations to reduce social gatherings to curtail the spread of the Covid-19 pandemic, Valeura will defer its Annual and Special Meeting, which had previously been scheduled for May 13, 2020.  Alternate meeting arrangements will be communicated in due course.


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

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  demonstrate stable long-term flow potential from its deep gas play; the intent to restart production from the Devepinar-1 well for a longer-term production test; the capture and sale of gas through Valeura’s sales pipeline network to generate revenue for the Company; the intent to apply for license extensions, the ability to achieve data sharing and cooperation arrangements with other operators, and the expected scope of the forward appraisal programme.

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: the ability to continue safe operations at the Company’s worksites in light of the COVID-19 pandemic, including the implementation and effectiveness of preventive measures;  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; 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, including the ability to meet the timelines to drill two commitment wells in the current term of the West Thrace exploration licence; the ability to achieve the first two-year extension of the exploration licences at Banarli and West Thrace; 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 plans are in part based upon anticipated costs and sales prices, the actual results of drilling, testing and related activity, availability of drilling, reservoir stimulation and other specialised oilfield equipment and service providers, 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 the impact of COVID-19 on the Company’s operations, including the potential shutdown of government offices and processing of government applications, the potential shutdown of various businesses and activities in Turkey that may impact drilling, testing and other operations and identification of a potential case at one of the Company’s worksites; 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.