Calgary, June 28, 2018: Valeura Energy Inc. (TSX:VLE) (“Valeura” or the “Company”) is pleased to provide an operations update concerning its Basin Centered Gas Accumulation (“BCGA”) appraisal program, in the Thrace basin of Turkey.
“Major contracts and regulatory approvals are in place and well operations are about to begin,” commented Sean Guest, President and CEO, “We have developed a definitive program to appraise the BCGAand the team is excited to return to active operations.”
The Company’s plan for the Yamalik-1 well remains intact. Equipment, including a snubbing rig and a production test unit, will start arriving on location in the first week of July 2018, with well operations expected to begin the week thereafter. The objective is to drill out the existing plugs in the well to allow for a comingled test from all eight frac’ed intervals. Valeura is then planning to immediately tie-in the well to the Company-owned production facilities via a new pipeline which is nearing completion. Tie-in will allow for gas sales and long-term testing.
Valeura has obtained all land permitting and regulatory approvals to begin operations on Inanli-1, the first BCGA appraisal well. Construction of the well location is expected to commence in July 2018, followed by mobilization of the drilling rig to the site in August 2018 and spud of the well in September 2018.
The Inanli-1 location is approximately 6 km to the north-east of Yamalik-1 and is designed to be drilled to a depth of 5,000 m. This is approximately 800 m deeper than Yamalik-1 which stopped drilling while still within an overpressured gas column. Given the deeper total depth, Valeura expects the well will extend the proven gas column, which would then increase gas volumes in the DeGolyer and MacNaughton external resource report released on February 6, 2018, which attributed 10.1 trillion cubic feet of estimated unrisked mean prospective resources of natural gas including 236 MMbbls of condensate to Valeura’s working interest of the BCGA.
Results from Inanli-1 can be expected around late November 2018 given the significant coring and data acquisition currently planned for the well. Assuming the well is successful, it will be frac’ed, tested and tied into the Company’s sales facilities to maximize technical data collection. The costs of Inanli-1 will be carried by Statoil Banarli Turkey B.V. (now referred to as “Equinor” following the Statoil’s recent name change), and will complete Equinor’s earning obligations under the Banarli farmout agreement.
Valeura and its partner Equinor plan to drill two additional appraisal wells. The newly-acquired 3D seismic data is being used to select optimal drilling locations so as to optimally delineate the BCGA play. The two wells are planned to be drilled in a continuous sequence immediately following Inanli-1.
For further information please contact:
Sean Guest, President and CEO
Valeura Energy Inc.
Steve Bjornson, CFO
Valeura Energy Inc.
About the Company
Valeura Energy Inc. is a Canada-based public company currently engaged in the exploration, development and production of petroleum and natural gas in Turkey.
Oil and Gas Advisories and Resource Definitions
The prospective resources estimates provided herein are estimates only and there is no guarantee that the estimated prospective resources will be recovered.There is no certainty that any portion of the unconventional prospective resources estimated herein will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the unconventional prospective resources evaluated.Please see the Company’s Annual Information Form for the year ended December 31, 2017 (the “AIF”), which is available under Valeura’s issuer profile on SEDAR at www.sedar.com, for more information with respect to the Company’s prospective resources.
“natural gas” is defined as Conventional Natural Gas product type as per National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities.
“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 change of discovery and a change of development.
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 timing of the arrival of a snubbing rig and a production test unit and the resumption of operations at Yamalik-1; the objectives of the appraisal program objective at Yamalik-1; the construction of a new pipeline and the timing thereof; the timing to tie-in and conduct a long term production test and achieve natural sales from the Yamalik-1 well; the timing of construction of the well location, rig mobilization and spudding of the Inanli-1 well; the drilling and targeted depth of the Inanli-1 well and the timing thereof; the timing to tie-in and conduct a long term production test and achieve natural sales from the Inanli-1 well; and the drilling of two additional wells as part of the BCGA appraisal program and the timing thereof. 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” may include estimated volumes of prospective resources and the ability to finance future development.
Forward-looking information is based on management’s current expectations and assumptions regarding, among other things: political stability of the areas in which the Company is operating and completing transactions, and in particular the aftermath of the July 2016 failed coup attempt in Turkey and the April 2017 constitutional referendum; continued safety of operations and ability to proceed in a timely manner; continued operations of and approvals forthcoming from the Turkish government in a manner consistent with past conduct; future seismic and drilling activity on the expected timelines; the prospectivity of the deep BCGA and shallow gas plays on the TBNG joint venture lands and Banarli licences; the continued favourable pricing and operating netbacks in Turkey; future production rates and associated operating netbacks and cash flow; future sources of funding; future economic conditions; future currency exchange rates; the ability to meet drilling deadlines and other requirements under licences 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 programs 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, fracing and other specialized 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. 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 for the timelines and costs for the deep evaluation in 2018 and 2019; 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, terrorist attacks, insurgencies or civil unrest in Turkey; political stability in Turkey, including potential changes in Turkey’s constitution, political leaders or parties or a resurgence of a coup or other political turmoil; the uncertainty regarding government and other approvals; counterparty risk; potential changes in laws and regulations; risks associated with weather delays and natural disasters; the risk associated with international activity; and, the uncertainty regarding the ability to fulfil the drilling commitment on the West Thrace lands. 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.
Additional information relating to Valeura is also available on SEDAR atwww.sedar.com
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