RCS - Valeura Energy Inc. - Q4 2024 Ops & Financial Update, 2025 Guidance

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08/01/2025 08:15

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RNS Number : 5529S  Valeura Energy Inc.  08 January 2025

Q4 2024 Operations and Financial Update and 2025 Guidance

Singapore, January 8, 2025: Valeura Energy Inc. (TSX:VLE, OTCQX:VLERF)
("Valeura" or the "Company") is pleased to provide an operational and
financial update for Q4 2024 and its guidance outlook for 2025.

 

Q4 2024 Highlights

·    Record oil production, averaging 26,109 bbls/d in Q4 2024, resulting
in full year average oil production of 22,825 bbls/d((1));

·    2.95 million bbls of oil sold in Q4 2024, with 8.35 million bbls for
the full year 2024;

·    Q4 average price realisations of US$76.7/bbl, resulting in Q4 revenue
of US$226 million, or US$679 million for the full year 2024;

·    Cash at December 31, 2024 of US$259.4 million, and no debt;

·    Completion of an internal restructuring of the Company's Thailand
subsidiary companies, giving rise to operating and tax efficiencies from
November 5, 2024 onward;

·    Continued success in development and appraisal drilling including
completion of a five well programme on the Jasmine asset;

·    Ongoing strong safety performance, with no lost time injuries in
2024;

·    Recorded a 17% reduction in greenhouse gas ("GHG") emissions
intensity for the full year 2024, compared to the previous year; and

·    Repurchase of 348,400 shares in Q4 2024, following the commencement
of the Company's normal course issuer bid ("NCIB") in mid-November 2024.

 

2025 Guidance Highlights

·    Full year oil production of 23,000 - 25,500 bbls/d((1));

·    Capex of US$125 - 150 million;

·    Exploration Expense of approximately US$11 million; and

·    Adjusted Opex of US$215 - 245 million (of which US$33 million relates
to leases)((2)).

 

 

(1) Working interest share production, before royalties.

(2) Adjusted Opex is a non-IFRS financial measure which does not have a
standardised meaning prescribed by IFRS.  The most directly comparable
financial measure to Adjusted Opex is operating expenses.  The measure
differs from operating expenses by including the leases that are associated
with operations, such as bareboat contracts for key operating equipment
including Floating Storage and Offloading vessels ("FSOs"), Floating
Production, Storage and Offloading vessels ("FPSOs"), Mobile Offshore
Production Units ("MOPUs"), and warehouses, and adjusting for non-cash
items.  Management uses Adjusted Opex to analyse cash generation and
financial performance of the Company. Adjusted Opex per bbl is a non-IFRS
financial ratio and is calculated by dividing Adjusted Opex by the mid-point
of the Company's production guidance range for the applicable period.

 

 

Dr. Sean Guest, President and CEO commented:

"I am pleased to share preliminary details of our Q4 and full year 2024
performance, which demonstrate that our business is performing as intended.
We achieved all of our guidance estimates for 2024, including Capex where we
reduced our guidance to the low end mid-year.

With record oil production and sales volumes in Q4, we have strengthened our
cash position to US$259 million.  This creates a solid platform for our
Company as we start 2025, which entails another ambitious work programme
focussed on continued growth in value, funded entirely with our cash and cash
flow.

We are also publishing our guidance outlook for 2025, which underscores our
ongoing commitment to add reserves to our assets and to extend the economic
life of our fields.

Having completed our corporate restructuring in Q4, our ability to generate
cash flow has shifted into high gear.  We will deploy resources toward adding
reserves to grow the ultimate potential and life of our assets, will continue
pursuing value-accretive inorganic growth, and will continue providing direct
shareholder returns by way of our ongoing share buyback programme."

 

Operations Update

Oil production averaged 26.1 mbbls/d during Q4 2024 (Valeura's working
interest share, before royalties), an increase of 18% from the prior quarter
and 36% over Q4 2023.

 

Q4 production rates benefitted from a full quarter of operations at the Nong
Yao C field extension, which came online in August 2024.  In addition,
aggregate production was lifted by an infill drilling programme at the Jasmine
field, with the last three wells of the programme coming onstream in late
November 2024.  In addition to adding new production, the Jasmine programme
also evaluated several secondary appraisal targets which will be the subject
of further infill development drilling in due course.

 

Following the Jasmine infill drilling programme, the Company's contracted
drilling rig was mobilised to the Manora field to drill a five-well programme
including both development and appraisal targets.  The Manora drilling
programme is expected to conclude in February 2025.

 

 

Financial Update

Oil sales totalled 2.95 million bbls during Q4 2024, 67% above the prior
quarter and 48% above Q4 2023.  Sales were in excess of production during the
quarter as a result of a larger-than-usual inventory position at the end of Q3
2024.  As of December 31, 2024, Valeura held crude oil in inventory of 0.64
million bbls.

 

Oil revenue during Q4 2024 was US$226 million, up 62% from the prior quarter
due to higher volumes sold (an increase of approximately US$90 million), but
was also affected by lower realised prices (a decrease of approximately US$3
million).  Price realisations averaged approximately US$76.7/bbl during Q4
2024, equating to an approximate US$2.0/bbl premium to the average Brent crude
oil benchmark during the period.

 

No taxes were paid during Q4 2024, reducing cash outflows in the quarter.  As
a result, the net revenue generated in Q4 2024 contributed strongly to the
Company's cash balance.  As of December 31, 2024 the Company had a cash
position of US$259.4 million, which includes US$22.8 million held as
restricted cash.  Valeura remains debt free.

 

 

2025 Guidance Synopsis

Valeura forecasts average 2025 full year oil production of 23,000 - 25,500
bbls/d (working interest share, before royalties), based on continuing
production operations at its four Gulf of Thailand licences and an active
drilling programme throughout the year.

 

The Company continues to guide for price realisations approximately in line
with the Brent crude oil benchmark price.

 

The Company is planning total capex of US$125 - 150 million in 2025, in
addition to approximately US$11 million in planned exploration drilling.
Approximately 85% of the Company's capex plus exploration spending is directed
toward drilling, and is based on the plan of having one drilling rig on
contract for the full year.  The balance of planned capex is related to
certain brownfield developments.  Capex guidance does not include any post
Final Investment Decision ("FID") costs for the Wassana redevelopment, and
will be updated should the FID be approved.

 

Adjusted Opex guidance in 2025 (a non-IFRS measure, as more fully described
above) is US$215 - 245 million, which equates to approximately US$26/bbl,
based on the mid-point of the Company's production guidance range (Adjusted
Opex per bbl is a non-IFRS ratio, as more fully described above).  This
includes the cost of leasing certain vessels as part of its ongoing
operations, including the Nong Yao C MOPU, the Jasmine field's FPSO vessel, as
well as FSO vessels at the Manora and Wassana fields, and a warehouse.  Such
leases are expected to total approximately US$33 million.

 

The Company intends to fund its 2025 spending through cash on hand plus cash
flow generated from ongoing operations, and estimates that these sources will
also continue to strengthen the Company's balance sheet.  Valeura's financial
position provides capacity for ongoing shareholder returns through share
buybacks and for inorganic growth.

 

 

2025 Work Programme

Nong Yao

Following its expansion in 2024, the Nong Yao field on Licence G11/48 (90%
working interest) is now the Company's largest source of production,
accounting for approximately 40% of the Company's total guidance production in
2025.  The Company plans to drill 11 development and appraisal wells, which
will include targets drilled from each of the field's three producing
facilities Nong Yao A, B, and C.  These wells are intended to more thoroughly
sweep incremental oil from producing reservoirs, and to access additional
fault blocks and reservoir layers not currently penetrated with the existing
production wells.

 

In addition, following the Company's exploration discovery in the Nong Yao D
area in 2024, further seismic interpretation has identified additional
follow-up exploration opportunities in the vicinity which are being further
evaluated for inclusion in a future drilling programme.  The Company's
objective is to amass sufficient volumes to justify a future development.

 

Jasmine

On Licence B5/27, the Jasmine field (100% working interest) is expected to
account for approximately 35% of the Company's total guidance production in
2025.  The Company intends to drill 13 development and appraisal wells on the
licence in 2025, covering the Jasmine C, Jasmine D, and Ban Yen production
facilities, with the primary objective of drilling new horizontal laterals
into producing reservoirs to optimise the sweep of oil and thereby add
reserves.

 

Around the end of Q1 2025 the Company also plans to commission its low BTU gas
generator, an innovative project which will redirect a waste gas stream to be
used for power generation, thereby reducing the field's GHG emissions
intensity and reducing its reliance on diesel-fired power generation.
Further projects to reduce the field's GHG emissions intensity are also being
evaluated.

 

In addition, the Company is pursuing the Ratree exploration prospect, which is
further to the South on Licence B5/27.  While the prospect constitutes a
relatively higher-risk opportunity on the licence, success could unlock the
potential for an entirely new field development.  Timing for exploration
wells is subject to continual optimisation of the Company's drilling schedule.

 

Manora

The Manora field, on Licence G1/48 (70% working interest) is expected to
account for approximately 10% of the Company's total guidance production in
2025.  Production rates are expected to increase later in Q1 upon completion
of an infill drilling programme which is currently underway.  The programme
entails five wells, including both infill development and appraisal targets.
Much of the work being conducted on the Manora field represents follow-up
activity to the Company's successful drilling over the last two years, which
has served to extend the field's economic life by several years.

 

Wassana

The Wassana field, on Licence G10/48 is planned to account for 15% of total
2025 guidance production.  No new drilling activity is planned for the
Wassana field in 2025.

 

The Company is continuing to progress front end engineering and design
("FEED") work in connection with a potential redevelopment of the field to
commercialise the additional oil volumes discovered through appraisal and
exploration drilling in 2023 and 2024.  The Company's 2025 capex budget
currently only includes pre-FID costs for surveys, studies and contracting and
procurement.  Valeura anticipates being ready for an FID approval at
approximately the start of Q2 2025.  The particulars of the redevelopment
will define a forward work programme and will ultimately determine reserves
for the field as well as capex expectations.  Contingent on FID approval, the
Company intends to publish an update to its guidance assumptions, with the
expectation that the bulk of any incremental redevelopment spending is likely
to occur after 2025.

 

 

Strategy

Valeura is pursuing a growth-oriented strategy, predicated on increasing the
ultimate reserves recovery from its assets as a way to extend the assets'
economic field life. Valeura plans to publish its third-party evaluated
reserves and resources estimates as of December 31, 2024 in mid-February 2025.
The Company also seeks to grow its portfolio through mergers and acquisition
within the Southeast Asia region and is actively evaluating several such
opportunities.

 

Valeura has prioritised generating strong cash flow as a means to further
enhance its strong balance sheet and, is committed to delivering direct
shareholder returns by way of an ongoing share buyback programme.

 

Underpinning everything the Company does is a steadfast commitment to
generating value and to conducting all actions in accordance with world-class
standards for operational excellence and safety.

 

 

 

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) .

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 ability to realise operating and tax efficiencies from November 5,
2024 onward as a result of the internal restructuring; anticipated 2025 full
year oil production rates; anticipated capex and exploration expenses in 2025;
anticipated 2025 Adjusted Opex and the proportion thereof relating to leases;
the Company's ability to fund its 2025 work programme with cash and cash flow;
increased ability to generate cash flow as a result of the corporate
restructuring; continuing to provide direct shareholder returns by way of the
Company's share buyback programme; the Jasmine field's secondary appraisal
targets becoming the subject of further infill development drilling in due
course; conclusion of the Manora drilling programme in February 2025;
forecasted 2025 price realisations being approximately in line with the Brent
crude oil benchmark price; having one drilling rig on contract for the full
year 2025; the Company's intent to update capex guidance should the Wassana
redevelopment FID be approved; cash on hand plus cash flow generated from
operations providing the capacity for ongoing shareholder returns while
continuing to strengthen the Company's balance sheet; the proportion of
production expected from each of the Company's assets; the allocation of capex
to each of the Company's assets; the specific components of the Company's 2025
work programme and the timing thereof, including - at Nong Yao, drilling 11
development and appraisal wells, drilling two further exploration wells, - at
Jasmine, drilling 13 development and appraisal wells, commissioning  a low
BTU gas generator to reduce the field's GHG emissions intensity and reduce
reliance on diesel, drilling the Ratree exploration prospect, - at Manora,
drilling five infill development and appraisal targets, - at Wassana,
progressing redevelopment FEED studies toward readiness for FID approval; the
potential for success at the Ratree prospect to unlock an entirely new field
development; the Company's ability to increase the ultimate reserves recovery
from its assets as a way to extend the assets' economic field life; timing to
publish third-party evaluated reserves and resources estimates; and the
ability to grow its portfolio through mergers and acquisitions and the
evaluation of such potential opportunities.  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;
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;
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; 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, 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 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.

This news release 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 news release 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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that term is defined in the policies of the Toronto Stock Exchange) accepts
responsibility for the adequacy or accuracy of this news release.

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