Valeura Energy Announces First Quarter 2021 Results

Source: 5/13/2021, Location: Europe

Valeura Energy Inc., an upstream oil and gas company with assets in the Thrace Basin of Turkey, reports its unaudited financial and operating results for the three month period ended March 31, 2021.

- Financial position – Cash position of US$29.4 million at March 31, 2021, expected to increase to approximately US$44 million, upon completion of the shallow gas business sale;
- Operations – Average Q1 production of 684 boe/d;
- Shallow sale – All regulatory approvals have been received and currently working on final closing matters;
- Growth – Progress on inorganic growth opportunities is expected to increase in the near term with the closing of the sale of the shallow conventional gas business; and
- Deep play – Continuing efforts to farm out an interest in the Company’s 20 Tcfe unrisked mean prospective resource deep, tight gas play. No material near term cost outlay required to maintain the leases in good standing.

Sean Guest, President and CEO commented:
“Having received all regulatory approvals for the sale of our shallow gas assets, we are now focused on closing matters and we expect the deal to complete in the coming weeks. With the anticipated sale proceeds of US$15.5 million, subject to normal closing adjustments, plus our March 31 cash balance of US$29.4 million, we are in an opportune position to access meaningful inorganic growth opportunities. Importantly, closing of this sale will solidify Valeura’s cash position and removes uncertainty in our negotiations with potential counterparties.

“At the same time, our efforts to find a suitable partner for our deep tight gas appraisal play are continuing, and we believe the 20 Tcfe unrisked mean prospective resource in this play will serve to generate value for shareholders in the longer term.”

Strategy Update
Valeura’s strategy is progressing as planned, with the Company pursuing a three-pronged approach described below to leverage the Company’s gas assets, financial strength, and differentiated capabilities, toward delivering shareholder value.

Conventional Gas Production Business Sale
The Company is in the final stages of monetising its conventional gas business by its sale to TBNG Limited (the “Sale Transaction”). All government consents required to complete the Sale Transaction have now been granted and closing is anticipated within the coming weeks. Upon closing, Valeura will receive cash consideration of US$15.5 million, subject to normal closing adjustments based on the economic effective date of July 1, 2020. Thereafter, Valeura will be entitled to royalty payments over a five-year period, tied to local gas prices, and ranging in total from a minimum of US$1.0 million and a cap of US$2.5 million.

Inorganic Growth
Valeura is in a strong financial position, with US$29.4 million in cash resources at the end of Q1, expected to grow to approximately US$44 million upon completion of the Sale Transaction. Valeura’s strong balance sheet, coupled with its internationally experienced management team and board, orients the Company well to grow by way of mergers and acquisitions (“M&A”). Valeura and its advisors have observed an improvement in the overall ability to transact inorganic opportunities in 2021, with greater stability returning to the upstream industry. The Company continues to be actively engaged in bidding and negotiating on inorganic growth opportunities, focusing on deals that will generate cash flow in the near term coupled with further growth through reinvestment.

Closing of the Sale Transaction will allow the management team to focus on progressing negotiations with other companies on potential M&A deals. It also clarifies Valeura’s value, asset base and ability to fund acquisitions, thereby facilitating negotiations.

Deep Gas Play Farmout
Valeura views its deep, unconventional tight gas play in the Thrace Basin (the “Deep Gas Play”) as a core constituent of its portfolio and believes this play to be a material source of potential long-term value for shareholders. Its three exploration licences in the core of the Deep Gas Play are valid up to June 27, 2022, and under Turkey’s licence terms, the Company has the ability to maintain these assets for up to approximately five more years through work programme commitments, which do not require material near term cost outlays, prior to converting the exploration licences to longer term production leases.

Valeura is pursuing a plan to farm out a portion of its interest in the Deep Gas Play. While as of today, no agreement has been reached, as commodity prices are recovering, the Company anticipates an increase in appetite for opportunities of this type, and believes the Thrace Basin presents an appealing proposition, particularly as more companies are expressing a preference for gas-oriented opportunities and the potential for material upside. In the meantime, Valeura has no significant immediate capital commitments on the Deep Gas Play.

Russia >>  6/22/2021 - 2021 Update
- Gross production currently 2,289 bopd.


Argentina >>  6/21/2021 - Echo Energy, the Latin American focused upstream oil and gas company, is pleased to provide an operational update regarding its Santa Cruz Sur assets,...

Norway >>  6/18/2021 - Operator Aker BP and the partners in Skarv (Equinor, Wintershall Dea and PGNiG) report that production has started from Grasel in the Skarv area, four...
Norway >>  6/18/2021 - Preliminary production figures for May 2021 show an average daily production of 1 860 000 barrels of oil, NGL and condensate. Total gas sales were 8.7...

Norway >>  6/17/2021 - New wells at Valemon will extend profitable operations at Heimdal, which is processing gas from Valemon. The Heimdal partners have now decided to exte...
Gabon >>  6/16/2021 - Tullow Oil plc (Tullow) issues the following statement from its CEO, Rahul Dhir, ahead of its Annual General Meeting (AGM). Due to Covid-19 restrictio...

Gulf Oil and Gas
Copyright © 2021 Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.