Calgary, April 28, 2023: Valeura Energy Inc. (TSX:VLE) (“Valeura” or the “Company”), the upstream oil and gas company with assets in the offshore Gulf of Thailand and the Thrace Basin of Turkey, is pleased to announce the re-start of oil production from the Wassana field and changes to its working interest in Licences G6/48 and G10/48, offshore Gulf of Thailand.
Wassana Production Re-start
On April 28, 2023 Wassana’s production was re-started, introducing crude oil into the field’s processing facilities for the first time in nearly three years. With the activation of additional wells shortly thereafter, production rates have begun ramping up. Operations are proceeding as intended, with no deviations to the Company’s safe operating parameters.
Increase in Wassana (Licence G10/48) Working Interest
Valeura’s 11% partner in Licence G10/48, Palang Sophon Limited (“PSL”), has opted to discontinue its participation in the licence. By agreement between PSL and Valeura, PSL will transfer its 11% working interest to Valeura. Accordingly, Valeura will proceed with further Wassana oil field operations on a 100% working interest basis, including its planned infill drilling campaign which is scheduled to begin in Q3 2023. In consideration, Valeura has agreed to discharge PSL of outstanding liabilities owed in connection with joint operations on the licence as well as any future liabilities associated with its past involvement in the licence.
Rossukon (Licence G6/48) Working Interest
Since its acquisition of an interest in Licence G6/48 in mid 2022, Valeura has worked diligently to assess the potential for development of the Rossukon oil field. Following consideration of the project’s tight schedule requirements and an estimated capital requirement of approximately US$100 million (gross), Valeura has opted to divest its working interest in the license to its partner Northern Gulf Petroleum (“NGP”) for a contingent cash consideration of US$5 million, payable at first oil from the Rossukon oil field, and a further 4.65% overriding royalty associated with the Company’s 43% working interest (2% of gross production) from the field thereafter.
Sean Guest, President and CEO commented:
“I am delighted to announce the re-start of production from the Wassana oil field and grateful to our team who oversaw this safe re-activation. This achievement fulfils the vision we set when we completed our acquisition of these assets in mid 2022, and our success is energised by our increased working interest in the project. Raising our sights, we are now looking with excitement toward Wassana’s upcoming growth phase as we prepare for infill drilling to start in Q3 2023, with the target of increasing field output toward approximately 5,000 bbls/d (on a 100% Valeura interest basis).
Separately, I am pleased to have arrived at an efficient way to realise potential value from Licence G6/48. Valeura will bear no risk, and no obligation for any capital costs in relation to the Rossukon oil field development and the contingent payment due to us upon first oil will effectively offset the contingent payment owed by us to the receiver upon first oil (in connection with our acquisition of the licence interest in 2022). At the same time, the arrangement provides us a long-term potential revenue stream by way of an overriding royalty.”
Valeura intends to begin immediately the administrative processes to transfer the subject licence interests.
For further information, please contact:
Valeura Energy Inc. (General Corporate Enquiries) +1 403 237 7102
Sean Guest, President and CEO
Heather Campbell, CFO
Valeura Energy Inc. (Investor Enquiries) +1 403 975 6752 / +44 7392 940495
Robin James Martin, Vice President, Communications and Investor Relations
Auctus Advisors LLP (Corporate Broker to Valeura) +44 (0) 7711 627 449
CAMARCO (Public Relations, Media Adviser to Valeura) +44 (0) 20 3757 4980
Owen Roberts, Billy Clegg
About the Company
Valeura Energy Inc. is a Canada-based public company engaged in the exploration, development and production of petroleum and natural gas in Thailand and in Turkey, and is pursuing further inorganic growth in Southeast Asia.
Advisory and Caution Regarding Forward-Looking Information
Certain information included in this news release constitutes forward-looking information under applicable securities legislation. Such forward-looking information is for the purpose of explaining management’s current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Forward- looking information typically contains statements with words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “estimate”, “propose”, “project”, “target” or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this news release includes, but is not limited to: the transfer of PSL’s 10% working interest to Valeura; the expected timing for the Wassana infill drilling programme and target production rates; and the transfer of Valeura’s working interest to NGP.
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; continued safety of operations and ability to proceed in a timely manner; continued operations of and approvals forthcoming from governments and regulators in a manner consistent with past conduct; future drilling activity on the required/expected timelines; the prospectivity of the Company’s lands; the continued favourable pricing and operating netbacks across its business; future production rates and associated operating netbacks and cash flow; decline rates; future sources of funding; future economic conditions; the impact of inflation of future costs; future currency exchange rates; interest rates; the ability to meet drilling deadlines and fulfil commitments under licences and leases; future commodity prices; the impact of the Russian invasion of Ukraine; royalty rates and taxes; future capital and other expenditures; the success obtained in drilling new wells and working over existing wellbores; the performance of wells and facilities; the availability of the required capital to funds its exploration, development and other operations, and the ability of the Company to meet its commitments and financial obligations; the ability of the Company to secure adequate processing, transportation, fractionation and storage capacity on acceptable terms; the capacity and reliability of facilities; the application of regulatory requirements respecting abandonment and reclamation; the recoverability of the Company’s reserves and contingent resources; future growth; the sufficiency of budgeted capital expenditures in carrying out planned activities; the impact of increasing competition; the ability to efficiently integrate assets and employees acquired through acquisitions; global energy policies going forward; future debt levels; 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 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, offshore storage and offloading facilities 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 and resources 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 ability of management to execute its business plan or realise anticipated benefits from acquisitions; the risk of further disruptions from the COVID- 19 pandemic; competition for specialised equipment and human resources; the Company’s ability to manage growth; the Company’s ability to manage the costs related to inflation; disruption in supply chains; the risk of currency fluctuations; changes in interest rates, oil and gas prices and netbacks; potential changes in joint venture partner strategies and participation in work programmes; uncertainty regarding the contemplated timelines and costs for work programme execution; the risks of disruption to operations and access to worksites; potential changes in laws and regulations, the uncertainty regarding government and other approvals; counterparty risk; the risk that financing may not be available; risks associated with weather delays and natural disasters; the risk associated with international activity; and the uncertainty as to whether the Rossukon oil field will be developed, resulting in the requirement for NGP to pay to Valeura contingent cash consideration of US$5 million and a further royalty thereafter. The forward-looking information included in this new release is expressly qualified in its entirety by this cautionary statement. See the most recent AIF and MD&A for a detailed discussion of the risk factors.
The forward-looking information contained in this new release is made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward-looking information contained in this new release is expressly qualified by this cautionary statement.
Additional information relating to Valeura is also available on SEDAR at www.sedar.com.
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.
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