Calgary, April 14, 2020: Valeura Energy Inc. (TSX:VLE, LSE:VLU) (“Valeura” or the “Company”), the upstream natural gas company focused on the Thrace Basin of Turkey, provides an update on its ongoing production operations.
Valeura’s operations in Turkey are continuing, with Q1 2020 production averaging 706 boe/d, an increase of 9% over Q4 2019. Realised gas prices were unchanged versus the prior quarter on a Turkish Lira basis, but down 4% from Q4 2019 on a US dollar basis to US$7.08/Mcf reflecting a sharp increase in the value of the US dollar towards the end of the quarter. Petroleum and natural gas sales revenue for Q1 2020 was US$2.8 million, an increase of 6% over the prior quarter.
Recently, in light of the global COVID-19 pandemic, economic activity in Turkey has begun to slow down, resulting in reduced gas demand from some of Valeura’s light industrial customers. This reduced demand has been managed primarily by curtailing third-party gas throughput, and imposing only minimal reductions to Valeura’s equity gas production. Valeura’s recent gas production has averaged approximately 75-80% of the Q1 2020 average rate.
Valeura is adhering to advice provided by local and international health authorities regarding social distancing and increased hygiene practices. As a result, most of the Company’s production operations are able to proceed normally, however the Company has suspended non-critical field work, including workovers and redevelopment of existing wells, and has implemented work-from-home arrangements wherever possible. The Company still anticipates completing its two shallow wells in the West Thrace licence in Q2, but will continue to conduct its operations in accordance with expert medical guidance and government directives related to COVID-19.
Sean Guest, President and CEO commented:
“Maintaining our high standards of health, safety, and environmental protection takes on a special meaning in the current context. We recognise the need to implement new measures including social distancing and increased hygiene, and encourage everyone to do likewise. At the same time, we will not compromise on safety-critical staffing as we continue to meet the needs of our customers in Turkey.
“Even with the effects of the COVID-19 pandemic in the latter half of the quarter, our first quarter performance increased relative to Q4 and is a continuing demonstration of how we can optimise our production operations. Looking forward, we will undoubtedly face headwinds as this unprecedented turmoil unfolds, but we will continue to always adhere to the best medical and safety advice to protect the health of our staff.”
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 ability for most of the Company’s production operations to proceed normally, the anticipated completion of its two shallow wells in the West Thrace license and the conduct of its operations in accordance with medical advice and government directives.
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; future 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, including the ability to meet the timelines to drill two commitment wells in the current term of the West Thrace exploration licence; 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, are in part based upon 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, 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; the potential shutdown of various businesses and activities in Turkey that may impact drilling, testing and other operations; the identification of a potential COVID case at one of the Company’s worksites; changes to expert medical guidance and government directives;; 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.