RCS - Valeura Energy Inc. - Record Reserves and Resources at Year-End 2024

Canaccord GenuityAnnouncement

13/02/2025 08:15

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RNS Number : 9974W  Valeura Energy Inc.  13 February 2025

Record Reserves and Resources at Year-End 2024:

2P Reserves Replacement Ratio of 245%

 

Singapore, February 13, 2025: Valeura Energy Inc. (TSX:VLE, OTCQX:VLERF)
("Valeura" or the "Company") is pleased to announce the results of its
third-party independent reserves and resources assessment as at year-end 2024.

 

Highlights

·    Record high year-end reserves: 32 MMbbl proved (1P), 50 MMbbl proved
plus probable (2P) and 60 MMbbl proved plus probable plus possible (3P)
reserves;

·    2P reserves replacement ratio of 245% even after annual production
increase of 12%;

·    2P reserves and end of field life ("EOFL") increased at every field;

·    2P reserves net present value before tax of US$934 million and US$752
million after tax((1));

·    Considering year-end 2024 cash position of US$259 million, Company net
asset value ("NAV") is US$1,012 million, equating C$13.6 per common
share((2));

·    Contingent resources((3)) of 48 MMbbl, more than double the total at
end 2023; and

·    Decommissioning costs significantly reduced through engineering
studies and increased EOFL to beyond 2030.

 

(1)   Discounted at 10% (NPV(10))

(2)   Proved plus probable (2P) NPV(10) after tax plus cash of US$259.4
million (no debt), using US$/C$ exchange rate of 1.435, and 106.65 million
common shares outstanding, as at December 31, 2024

(3)   Unrisked 2C (best estimate) contingent resources

 

Dr. Sean Guest, President and CEO commented:

"I am pleased to announce the results of our end 2024 reserves and resources
evaluation, which shows again that our aggressive work programme can increase
the ultimate potential of our fields and add value to our Company. In our
second full year of operations we have again added more than double the
reserves we produced, achieving a 2P reserves replacement ratio of 245%. This
is a significant feat, considering we also increased production by 12%
relative to 2023.

We also added to the ultimate potential of our portfolio, with all Thailand
fields now having an economic field life lasting beyond 2030.  Since taking
over these assets, we have added at least four additional years of production
life to each field.  This means more years of future cash flow and is
therefore a prime example of one key element of our strategy in action -
driving further organic growth.

The net asset value of our business is now over US$1 billion - a record high,
equating to more than C$13.6 per common share.  This is based on our 2P after
tax NPV(10) increasing by 76% year-on-year, coupled with a new record year-end
cash position.

In addition to discovering volumes through the drill bit and aggressively
working to build our understanding of the intricate subsurface environment,
various other financial and engineering studies have also added value.  Our
field abandonment costs have been reduced further through updated engineering
studies which are benchmarked to actual abandonment operations in the Gulf of
Thailand.  The effect of this, combined with extended field life across the
portfolio, is expected to reduce our Asset Retirement Obligation ("ARO") on
our balance sheet by more than 50% since we first assumed operatorship of
these assets.

We are relentless in our pursuit of value and we remain focussed on allocating
capital efficiently.  Moreover, we see exciting reserves-adding opportunities
ahead through the potential Wassana field redevelopment, as well as through
ongoing infill development and appraisal drilling across the portfolio, and
the selective exploration targets we will pursue this year.

At the same time, inorganic growth remains a key part of our strategy, and we
are actively evaluating several opportunities to assess fit with our strict
screening criteria."

 

Valeura commissioned Netherland, Sewell & Associates, Inc. ("NSAI") to
assess reserves and resources for all of its Thailand assets as of December
31, 2024.  NSAI's evaluation is presented in a report dated February 13, 2025
(the "NSAI 2024 Report").  This follows previous evaluations conducted by the
same firm for December 31, 2023 (the "NSAI 2023 Report") and December 31, 2022
(the "NSAI 2022 Report").

 

 

Oil and Gas Reserves by Field Based on Forecast Prices and Costs

 

                                                Gross (Before Royalties) Reserves, Working Interest Share (Mbbl)
 Reserves by Field                              Jasmine          Manora           Nong Yao         Wassana        Total

(Light/Medium)
(Light/Medium)
(Light/Medium)
(Heavy)
 Proved                Producing Developed      5,268            1,370            6,541            2,894          16,073
                       Non-Producing Developed  703              433              153              242            1,531
                       Undeveloped              4,713            705              3,742            5,490          14,650
 Total Proved (1P)                              10,684           2,509            10,436           8,626          32,255
 Total Probable (P2)                            6,108            848              6,500            4,297          17,753
 Total Proved + Probable (2P)                   16,792           3,357            16,936           12,923         50,008
 Total Possible (P3)                            3,647            718              4,297            1,027          9,689
 Total Proved + Probable + Possible (3P)        20,440           4,075            21,233           13,950         59,697

 

 

Summary of Reserves Replacement, Value, and Field Life

 

As compared to the NSAI 2023 Report, the NSAI 2024 Report indicates an
addition of 2.4 MMbbl of proved (1P) reserves and 12.1 MMbbl of proved plus
probable (2P) reserves, after having produced 8.4 MMbbl of oil in 2024.  This
reflects a 1P reserves replacement ratio of 128% and a 2P reserves replacement
ratio of 245%.

 

Based on the mid-point of the Company's 2025 production guidance of 23.0 -
25.5 Mbbl/d (24.25 Mbbl/d), on a 2P reserves basis as of December 31, 2024,
the Company estimates its reserves life index ("RLI") to be approximately 5.6
years.  Using the same 2025 production estimate and 2P reserves as of
December 31, 2023 and December 31, 2022, the RLI was approximately 4.3, and
3.3 years, respectively.

 

The net present value of estimated future revenue after income taxes, based on
a 10% discount rate has increased between the NSAI 2023 Report and the NSAI
2024 Report from US$193.9 million to US$358.6 million on a 1P basis, an
increase of 85%.  On a 2P basis, the net present value of estimated future
revenue after income taxes, based on a 10% discount rate has increased from
US$428.5 million to US$752.2 million, an increase of 76%.

 

The Company estimates that, based on the 2P net present value of estimated
future revenue after income taxes in the NSAI 2024 Report, based on a 10%
discount rate, plus the Company's 2024 year-end cash position of US$259.4
million, as disclosed on January 8, 2025, the Company has a 2P net asset value
("NAV") of US$1,011.6 million.  Using the year-end count of common shares
outstanding (being 106.65 million) and foreign exchange rates, Valeura's NAV
equates to approximately C$13.6/share.

 

                                                    1P NPV(10)             2P NPV(10)             3P NPV(10)
                                                    Before Tax  After Tax  Before Tax  After Tax  Before Tax  After Tax
 NPV(10) (US$ million)                              360.7       358.6      933.9       752.2      1,339.1     990.2
 Cash at December 31, 2024 (US$ million)((1))       259.4       259.4      259.4       259.4      259.4       259.4
 Net Asset Value (US$ million)                      620.1       618.0      1,193.3     1,011.6    1,598.5     1,249.6
 Common shares (million)((2))                       106.65      106.65     106.65      106.65     106.65      106.65
 Estimated NAV per basic share (C$ per share)((3))  8.3         8.3        16.1        13.6       21.5        16.8

 

(1)   Cash at December 31, 2024 of US$259.4 million, debt nil

(2)   Issued and outstanding common shares as of December 31, 2024

(3)   US$/C$ exchange rate of 1.435 as at December 31, 2024

 

The NSAI 2024 Report indicates a further extension in the anticipated end of
field life for all assets in Valeura's Thailand portfolio, as compared to the
NSAI 2023 Report.

 

           Gross (Before Royalties) 2P Reserves, Working Interest Share                                          End of Field Life                   2P NPV(10) After Tax (US$ million)
 Fields    December 31, 2023  2024 Production  Additions      December 31, 2024  Reserves Replacement Ratio (%)  NSAI 2023 Report  NSAI 2024 Report  December 31, 2023   December 31, 2024

(MMbbl)
(MMbbl)
(MMbbl)
(MMbbl)
 Jasmine   10.4               (2.9)            9.2            16.8               324%                            Dec 2028          Aug 2031          81.8                163.9
 Manora    2.2                (0.9)            2.1            3.4                223%                            Jul 2027          Apr 2030          21.2                45.7
 Nong Yao  12.4               (3.1)            7.7            16.9               245%                            Dec 2028          Dec 2033          185.6               416.1
 Wassana   12.9               (1.4)            1.5            12.9               102%                            Jun 2032          Dec 2035          139.9               126.6
 Total     37.9               (8.4)            20.5           50.0               245%                                                                428.5               752.2

 

Valeura has demonstrated two consecutive years of growth in both aggregate 2P
reserves and the associated after-tax 2P NPV(10) value.

 

           Gross (Before Royalties) 2P Reserves,                    2P NPV(10) After Tax

Working Interest Share (MMbbl)
(US$ million)
 Fields    December 31, 2022  December 31, 2023  December 31, 2024  December 31, 2022  December 31, 2023  December 31, 2024
 Jasmine   10.0               10.4               16.8               37.1               81.8               163.9
 Manora    1.8                2.2                3.4                12.1               21.2               45.7
 Nong Yao  11.2               12.4               16.9               145.5              185.6              416.1
 Wassana   6.1                12.9               12.9               66.3               139.9              126.6
 Total     29.1               37.9               50.0               261.0              428.5              752.2

 

The NSAI 2024 Report does not assume a new redevelopment concept for the
Wassana field and therefore does not include potential upside volumes
associated with the Company's contemplated redevelopment.  Valeura is
targeting readiness for a final investment decision ("FID") in early Q2 2025.
 Should the Company opt to proceed with the redevelopment, management
anticipates a higher production profile, with longer field life than is
currently reflected in the NSAI 2024 Report.

 

 

Net Present Values of Future Net Revenue Based on Forecast Prices and Costs

 

Net present values of future net revenue from oil reserves are based on cost
estimates as of the date of the NSAI 2024 Report, and forecast Brent crude oil
reference prices of US$75.58, US$78.51, US$79.89, US$81.82, and US$83.46 per
bbl for the years ending December 31, 2025, 2026, 2027, 2028, and 2029,
respectively, with 2% escalation thereafter.  NSAI assumes cost inflation of
2% per annum.  Price realisation forecasts for each field are based on the
Brent crude oil reference prices above, and adjusted for oil quality, and
market differentials.

 

Based on Valeura's revised corporate structure, as modified by the
reorganisation completed in November 2024, values estimated by NSAI assume a
combined, single tax filing for all of the Company's Thai III fiscal
concessions, covering the Wassana, Nong Yao, and Manora fields.   The Jasmine
field, being a Thai I fiscal concession, is outside this scope.

 

All estimated costs associated with the eventual decommissioning of the
Company's fields are included as part of the calculation of future net
revenue, specifically within the Proved Producing Developed category.

 

 

                                                Before Tax NPV(10) (US$ million)
 Future Net Revenue by Field                    Jasmine  Manora   Nong Yao  Wassana  Total
 Proved                Producing Developed      (124.7)  (27.6)   146.2     (160.7)  (166.8)
                       Non-Producing Developed  35.3     27.9     7.0       16.2     86.4
                       Undeveloped              93.6     7.9      108.1     231.5    441.0
 Total Proved (1P)                              4.2      8.2      261.3     87.0     360.7
 Total Probable (P2)                            217.4    39.1     204.5     112.3    573.3
 Total Proved + Probable (2P)                   221.5    47.3     465.8     199.3    933.9
 Total Possible (P3)                            168.8    29.6     150.7     56.1     405.1
 Total Proved + Probable + Possible (3P)        390.3    76.9     616.5     255.4    1,339.1

 

 

                                                After Tax NPV(10) (US$ million)
 Future Net Revenue by Field                    Jasmine  Manora   Nong Yao  Wassana  Total
 Proved                Producing Developed      (131.4)  (27.6)   146.2     (160.7)  (173.4)
                       Non-Producing Developed  33.9     27.9     7.0       16.2     85.1
                       Undeveloped              99.6     7.9      108.1     231.5    447.0
 Total Proved (1P)                              2.1      8.2      261.3     87.0     358.6
 Total Probable (P2)                            161.8    37.4     154.8     39.6     393.6
 Total Proved + Probable (2P)                   163.9    45.7     416.1     126.6    752.2
 Total Possible (P3)                            96.7     20.4     93.3      27.6     238.0
 Total Proved + Probable + Possible (3P)        260.6    66.1     509.3     154.2    990.2

 

 

Asset Retirement Obligations

 

During 2024, the Company conducted extensive engineering studies into the
eventual decommissioning of its fields.  These studies utilised costs
benchmarked to current decommissioning activities underway elsewhere within
the Gulf of Thailand.  Valeura's work since acquiring the assets in early
2023 has resulted in a reduction of 32% in the anticipated cost to
decommission the assets (US$ real basis).

 

In addition, the significant extensions to the economic life of all of the
Company's fields means the timing for decommissioning expenditure has shifted
further into the future.  The combined effect is estimated to be a material
reduction in the ARO liability to be shown on the Company's balance sheet.
 While the final ARO is still to be reviewed by the Company's auditor,
management estimates that the ARO as at December 31, 2024 will have been
reduced by approximately 35% from year-end 2023 and more than 50% relative to
the Company's first estimate upon assuming operatorship of the Thai portfolio
in Q1 2023.

 

 

Resources

 

NSAI assessed the Company's contingent resources of its Thailand assets for
additional reservoir accumulations and reported estimates in the NSAI 2024
Report, the NSAI 2023 Report, and the NSAI 2022 Report.  Contingent resources
are heavy crude oil and light/medium crude oil, and are further divided into
two subcategories, being Development Unclarified and Development Not Viable
(see oil and gas advisories).  Each subcategory is assigned a percentage
risk, reflecting the estimated chance of development.  Aggregate totals are
provided below.

 

 Contingent Resources  NSAI 2022 Report                                      NSAI 2023 Report                                      NSAI 2024 Report

Gross (Before Royalties) Working Interest Share
Gross (Before Royalties) Working Interest Share
Gross (Before Royalties) Working Interest Share
                       Unrisked (MMbbl)           Risked (MMbbl)             Unrisked (MMbbl)           Risked (MMbbl)             Unrisked (MMbbl)           Risked (MMbbl)
 Low Estimate (1C)     10.4                       1.8                        15.2                       6.5                        29.4                       9.2
 Best Estimate (2C)    14.1                       2.5                        19.9                       8.9                        48.4                       13.5
 High Estimate (3C)    22.1                       3.9                        27.9                       11.6                       72.1                       18.0

 

Comparing the NSAI 2023 Report to the NSAI 2024 Report, the Company has
recorded an increase in the best estimate (2C) unrisked contingent resources
of 143%.

 

The Company last completed an independent assessment of its prospective
resources in Türkiye, effective December 31, 2018, which is available under
Valeura's issuer profile on SEDAR+ at www.sedarplus.com
(http://www.sedarplus.com) .  Valeura has no reserves or contingent resources
associated with its properties in Türkiye.

 

 

Further Disclosure and Webcast

Valeura intends to disclose a summary of the NSAI 2024 Report to Thailand's
upstream regulator later in February 2025.  Thereafter, the Company will
publish its estimates of reserves and resources in accordance with the
requirements of National Instrument 51-101 - Standards of Disclosure for Oil
and Gas Activities along with its annual information form for the year ended
December 31, 2025, on approximately March 26, 2025.

 

Valeura's management team will host an investor and analyst webcast at 08:00
Calgary / 15:00 London / 22:00 Bangkok / 23:00 Singapore on Thursday, February
13, 2025 to discuss its reserves and contingent resources.  Please register
in advance via the link below.

 

Registration link:
 https://events.teams.microsoft.com/event/a527dbad-61ff-47b1-8330-a10c28cfd2ee@a196a1a0-4579-4a0c-b3a3-855f4db8f64b
(https://events.teams.microsoft.com/event/a527dbad-61ff-47b1-8330-a10c28cfd2ee@a196a1a0-4579-4a0c-b3a3-855f4db8f64b)

 

As an alternative, an audio only feed of the event is available by phone using
the Conference ID and dial-in numbers below.

 

Thailand: +66 2 026 9035,,817613646#

Singapore: +65 6450 6302,,817613646#

Canada: (833) 845-9589,,817613646#

Türkiye: 0800 142 034779,,817613646#

United States: (833) 846-5630,,817613646#

United Kingdom: 0800 640 3933,,817613646#

 

Phone conference ID: 817 613 646#

 

 

For further information, please contact:

Valeura Energy Inc. (General Corporate Enquiries)
   +65 6373 6940

Sean Guest, President and CEO

Yacine Ben-Meriem, CFO
Contact@valeuraenergy.com (mailto:Contact@valeuraenergy.com)

Valeura Energy Inc. (Investor and Media Enquiries)
    +1 403 975 6752 / +44 7392 940495
Robin James Martin, Vice President, Communications and Investor Relations
IR@valeuraenergy.com (mailto:IR@valeuraenergy.com)

Contact details for the Company's advisors, covering research analysts and
joint brokers, including Auctus Advisors LLP, Canaccord Genuity Ltd (UK),
Cormark Securities Inc., Research Capital Corporation, and Stifel Nicolaus
Europe Limited, are listed on the Company's website at
www.valeuraenergy.com/investor-information/analysts/
(http://www.valeuraenergy.com/investor-information/analysts/) .

 

About the Company

Valeura Energy Inc. is a Canadian public company engaged in the exploration,
development and production of petroleum and natural gas in Thailand and in
Türkiye. The Company is pursuing a growth-oriented strategy and intends to
re-invest into its producing asset portfolio and to deploy resources toward
further organic and inorganic growth in Southeast Asia. Valeura aspires toward
value accretive growth for stakeholders while adhering to high standards of
environmental, social and governance responsibility.

Additional information relating to Valeura is also available on SEDAR+ at
www.sedarplus.ca (http://www.sedarplus.ca) .

 

Oil and Gas Advisories

Reserves and contingent resources disclosed in this news release are based on
an independent evaluation conducted by the incumbent independent petroleum
engineering firm, NSAI with an effective date of December 31, 2024. The NSAI
estimates of reserves and resources were prepared using guidelines outlined in
the Canadian Oil and Gas Evaluation Handbook and in accordance with National
Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities. The
reserves and contingent resources estimates disclosed in this news release are
estimates only and there is no guarantee that the estimated reserves and
contingent resources will be recovered.

This news release contains a number of oil and gas metrics, including "NAV",
"reserves replacement ratio", "RLI", and "end of field life" which do not have
standardised meanings or standard methods of calculation and therefore such
measures may not be comparable to similar measures used by other companies.
Such metrics are commonly used in the oil and gas industry and have been
included herein to provide readers with additional measures to evaluate the
Company's performance; however, such measures are not reliable indicators of
the future performance of the Company and future performance may not compare
to the performance in previous periods.

"NAV" is calculated by adding the estimated future net revenues based on a 10%
discount rate to net cash, (which is comprised of cash less debt) as of
December 31, 2024.  NAV is expressed on a per share basis by dividing the
total by basic common shares outstanding. NAV per share is not predictive and
may not be reflective of current or future market prices for Valeura.

"Reserves replacement ratio" for 2024 is calculated by dividing the difference
in reserves between the NSAI 2024 Report and the NSAI 2023 Report, plus actual
2024 production, by the assets' total production before royalties for the
calendar year 2024.

"RLI" is calculated by dividing reserves by management's estimated total
production before royalties for 2025.

"End of field life" is calculated by NSAI as the date at which the monthly net
revenue generated by the field is equal to or less than the asset's operating
cost.

Reserves

Reserves are estimated remaining quantities of commercially recoverable oil,
natural gas, and related substances anticipated to be recoverable from known
accumulations, as of a given date, based on the analysis of drilling,
geological, geophysical, and engineering data, the use of established
technology, and specified economic conditions, which are generally accepted as
being reasonable. Reserves are further categorised according to the level of
certainty associated with the estimates and may be sub-classified based on
development and production status.

Proved reserves are those reserves that can be estimated with a high degree of
certainty to be recoverable. It is likely that the actual remaining quantities
recovered will exceed the estimated proved reserves.

Developed reserves are those reserves that are expected to be recovered from
existing wells and installed facilities or, if facilities have not been
installed, that would involve a low expenditure (e.g., when compared to the
cost of drilling a well) to put the reserves on production.

Developed producing reserves are those reserves that are expected to be
recovered from completion intervals open at the time of the estimate. These
reserves may be currently producing or, if shut in, they must have previously
been on production, and the date of resumption of production must be known
with reasonable certainty.

Developed non-producing reserves are those reserves that either have not been
on production, or have previously been on production, but are shut in, and the
date of resumption of production is unknown.

Undeveloped reserves are those reserves expected to be recovered from known
accumulations where a significant expenditure (e.g., when compared to the cost
of drilling a well) is required to render them capable of production. They
must fully meet the requirements of the reserves classification (proved,
probable, possible) to which they are assigned.

Probable reserves are those additional reserves that are less certain to be
recovered than proved reserves. It is equally likely that the actual remaining
quantities recovered will be greater or less than the sum of the estimated
proved plus probable reserves.

Possible reserves are those additional reserves that are less certain to be
recovered than probable reserves. It is unlikely that the actual remaining
quantities recovered will exceed the sum of the estimated proved plus probable
plus possible reserves. There is a 10% probability that the quantities
actually recovered will equal or exceed the sum of the estimated proved plus
probable plus possible reserves.

The estimated future net revenues disclosed in this news release do not
necessarily represent the fair market value of the reserves associated
therewith.

The estimates of reserves and future net revenue for individual properties may
not reflect the same confidence level as estimates of reserves and future net
revenue for all properties, due to the effects of aggregation.

Contingent Resources

Contingent resources are those quantities of petroleum estimated, as of a
given date, to be potentially recoverable from known accumulations using
established technology or technology under development, but which are not
currently considered to be commercially recoverable due to one or more
contingencies. Contingencies are conditions that must be satisfied for a
portion of contingent resources to be classified as reserves that are: (a)
specific to the project being evaluated; and (b) expected to be resolved
within a reasonable timeframe.

Contingent resources are further categorised according to the level of
certainty associated with the estimates and may be sub‐classified based on a
project maturity and/or characterised by their economic status. There are
three classifications of contingent resources: low estimate, best estimate and
high estimate. Best estimate is a classification of estimated resources
described in the Canadian Oil and Gas Evaluation Handbook as the best estimate
of the quantity that will be actually recovered; it is equally likely that the
actual remaining quantities recovered will be greater or less than the best
estimate. If probabilistic methods are used, there should be at least a 50
percent probability that the quantities actually recovered will equal or
exceed the best estimate.

The project maturity subclasses include development pending, development on
hold, development unclarified and development not viable. The contingent
resources disclosed in this news release are classified as either development
unclarified or development not viable.

Development unclarified is defined as a contingent resource that requires
further appraisal to clarify the potential for development and has been
assigned a lower chance of development until commercial considerations can be
clearly defined. Chance of development is the likelihood that an accumulation
will be commercially developed.

Conversion of the development unclarified resources referred to in this news
release is dependent upon (1) the expected timetable for development; (2) the
economics of the project; (3) the marketability of the oil and gas production;
(4) the availability of infrastructure and technology; (5) the political,
regulatory, and environmental conditions; (6) the project maturity and
definition; (7) the availability of capital; and, ultimately, (8) the decision
of joint venture partners to undertake development.

The major positive factor relevant to the estimate of the contingent
development unclarified resources referred to in this news release is the
successful discovery of resources encountered in appraisal and development
wells within the existing fields. The major negative factors relevant to the
estimate of the contingent development unclarified resources referred to in
this news release are: (1) the outstanding requirement for a definitive
development plan; (2) current economic conditions do not support the resource
development; (3) limited field economic life to develop the resources; and (4)
the outstanding requirement for a final investment decision and commitment of
all joint venture partners.

Development not viable is defined as a contingent resource where no further
data acquisition or evaluation is currently planned and hence there is a low
chance of development, there is usually less than a reasonable chance of
economics of development being positive in the foreseeable future. The major
negative factors relevant to the estimate of development not viable referred
to in this news release are: (1) current economic conditions do not support
the resource development; and (2) availability of technical knowledge and
technology within the industry to economically support resource development.

If these contingencies are successfully addressed, some portion of these
contingent resources may be reclassified as reserves.

Of the best estimate 2C contingent resources estimated in the NSAI 2024
Report, on a risked basis: 74% of the estimated volumes are light/medium crude
oil, with the remainder being heavy oil; 77% are categorised as Development
Unclarified, with the remainder being Development Not Viable.  Development
Unclarified 2C resources have been assigned an average chance of development
for the four fields ranging from 30% to 50% depending on oil type, while 2C
Development Not Viable resources have been assigned an average chance of
development ranging from 16% to 17%.

 

 Resources Project                                      Light and Medium Crude Oil                          Chance of Development (%)

Maturity Subclass
(Development Unclarified)
                                                                      Unrisked                  Risked
                                                        Gross (Mbbl)  Net (Mbbl)  Gross (Mbbl)  Net (Mbbl)
 Contingent Low Estimate (1C) Development Unclarified   8,267         7,334       3,108         2,742       38%
 Contingent Best Estimate (2C) Development Unclarified  14,178        12,538      4,227         3,728       30%
 Contingent High Estimate (3C) Development Unclarified  21,072        18,644      5,289         4,673       25%

 

 Resources Project                                      Heavy Crude Oil                                     Chance of Development (%)

Maturity Subclass
(Development Unclarified)
                                                                      Unrisked                  Risked
                                                        Gross (Mbbl)  Net (Mbbl)  Gross (Mbbl)  Net (Mbbl)
 Contingent Low Estimate (1C) Development Unclarified   7,807         7,358       4,045         3,813       52%
 Contingent Best Estimate (2C) Development Unclarified  10,641        10,029      5,325         5,018       50%
 Contingent High Estimate (3C) Development Unclarified  14,524        13,689      6,560         6,182       45%

 

 Resources Project                                     Light and Medium Crude Oil                          Chance of Development (%)

Maturity Subclass
(Development Not Viable)
                                                                     Unrisked                  Risked
                                                       Gross (Mbbl)  Net (Mbbl)  Gross (Mbbl)  Net (Mbbl)
 Contingent Low Estimate (1C) Development Not Viable   11,294        10,502      1,694         1,575       15%
 Contingent Best Estimate (2C) Development Not Viable  21,539        19,965      3,652         3,319       17%
 Contingent High Estimate (3C) Development Not Viable  33,503        30,964      5,363         4,802       16%

 

 Resources Project                                     Heavy Crude Oil                                     Chance of Development (%)

Maturity Subclass
(Development Not Viable)
                                                                     Unrisked                  Risked
                                                       Gross (Mbbl)  Net (Mbbl)  Gross (Mbbl)  Net (Mbbl)
 Contingent Low Estimate (1C) Development Not Viable   2,069         1,950       310           293         15%
 Contingent Best Estimate (2C) Development Not Viable  2,091         1,971       341           321         16%
 Contingent High Estimate (3C) Development Not Viable  3,003         2,830       815           768         27%

The NSAI estimates have been risked, using the chance of development, to
account for the possibility that the contingencies are not successfully
addressed.  Due to the early stage of development for the development
unclarified resources, NSAI did not perform an economic analysis of these
resources; as such, the economic status of these resources is undetermined and
there is uncertainty that any portion of the contingent resources disclosed in
this new release will be commercially viable to produce.

Glossary

bbl                   barrels of oil

Mbbl                thousand barrels of oil

MMbbl             million barrels of oil

 

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 Company's belief that it has added to the ultimate potential of its
portfolio; the anticipated economic life of its portfolio; expectations
regarding future cash flow; the expectation that ARO on its December 31, 2024
balance sheet will indicate a reduction of approximately 35% versus December
31, 2023 and more than 50% since first assuming operatorship of its assets;
business objectives and targets; organic and inorganic growth opportunities;
the anticipated end of life for Valeura's Thailand assets; the potential for
adding reserves through the Wassana field redevelopment as well as through
ongoing infill development, appraisal drilling, and exploration targets;
statements related to the Company's 2025 production guidance of 23.0 - 25.5
Mbbl/d; estimates of the Company's RLI; timing for FID readiness on the
potential Wassana field redevelopment; management's anticipation of a higher
production profile with longer field life from the Wassana field, should it
opt to proceed with the redevelopment; forecast Brent crude oil reference
prices; assumption of a single tax filing; estimated costs for the eventual
decommissioning of its fields; the intention to disclose a summary of the NSAI
2024 Report to Thailand's upstream regulator; the anticipated filing date of
the Company's annual information form along with its estimates of reserves and
resources; and the timing of the investor and analyst webcast.

In addition, statements related to "reserves" and "resources" are deemed to be
forward-looking information as they involve the implied assessment, based on
certain estimates and assumptions, that the resources can be discovered and
profitably produced in the future.

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 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;
ability to achieve extensions to licences in Thailand and Türkiye to support
attractive development and resource recovery; 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; the impact of conflicts in the Middle East; royalty rates
and taxes; management's estimate of cumulative tax losses being correct;
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 availability and
identification of mergers and acquisition opportunities; the ability to
successfully negotiate and complete any mergers and acquisition opportunities;
the ability to efficiently integrate assets and employees acquired through
acquisitions; global energy policies going forward; international trade
policies; 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 disruptions from public health emergencies and/or
pandemics; 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; the
risk that the Company's tax advisors' and/or auditors' assessment of the
Company's cumulative tax losses varies significantly from management's
expectations of the same; 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, including international treaties and trade policies; 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; and the risk associated with international activity.
See the most recent annual information form and management's discussion and
analysis of the Company for a detailed discussion of the risk factors.

Certain forward-looking information in this news release may also constitute
"financial outlook" within the meaning of applicable securities legislation.
Financial outlook involves statements about Valeura's prospective financial
performance or position and is based on and subject to the assumptions and
risk factors described above in respect of forward-looking information
generally as well as any other specific assumptions and risk factors in
relation to such financial outlook noted in this news release. Such
assumptions are based on management's assessment of the relevant information
currently available, and any financial outlook included in this news release
is made as of the date hereof and provided for the purpose of helping readers
understand Valeura's current expectations and plans for the future. Readers
are cautioned that reliance on any financial outlook may not be appropriate
for other purposes or in other circumstances and that the risk factors
described above or other factors may cause actual results to differ materially
from any financial outlook.

The forward-looking information contained in this news 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 news
release is expressly qualified by this cautionary statement.

 

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an offer to buy securities in any jurisdiction, including where such offer
would be unlawful. This news release is not for distribution or release,
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South Africa or Japan or any other jurisdiction in which its publication or
distribution would be unlawful.

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that term is defined in the policies of the Toronto Stock Exchange) accepts
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