Calgary, January 15, 2020: 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, provides a trading update for the year ended December 31, 2019. This is in advance of the Company’s full financial and operating results due to be announced on March 12, 2020.
As of December 31, 2019, the Company was in a strong financial position, with a net working capital surplus of approximately US$37 million (CDN$48 million).
Fourth quarter 2019 production averaged 646 boe/d, comprised of gas produced from the Company’s ongoing conventional programme. This is an increase of 22% over the prior quarter, and a demonstration of how the Company’s shallow gas work programme of well workovers and recompletions can offset natural declines.
Valeura’s shallow gas play provides a reliable stream of production and cash flow. Price realisations were relatively stable throughout 2019, averaging US$7.40/Mcf (CDN$9.82/Mcf) in Q4 2019. Revenues increased in Q4 2019 due to a combination of higher production and gas prices, and were more than sufficient to cover the operating costs and all of the G&A costs of the Company.
Deep gas appraisal
Valeura remains encouraged by the potential for its deep gas play. Every deep well stimulation to date in the Thrace basin has successfully resulted in gas flowing to surface. Technical evaluation and reservoir modelling work is ongoing with joint venture partners incorporating all of the new data acquired through the recent drilling and the testing operations. This work is expected to extend through the next one to two months and will be used to define the forward appraisal programme for the deep play in 2020. The Company expects to communicate its 2020 work programme and capital expenditure outlook later in Q1.
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, 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 timing to complete the technical evaluation of the deep gas play appraisal to date with partners and to communicate its 2020 work programme and capital expenditure outlook for 2020.
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, including the future 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: uncertainty regarding ultimate joint partner decisions regarding the future work programmes; 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.