RCS - Valeura Energy Inc. - Another Year of Record Results in 2024
25/03/2025 08:15
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RNS Number : 0342C Valeura Energy Inc. 25 March 2025
Another Year of Record Results in 2024
Singapore, March 25, 2025: Valeura Energy Inc. (TSX:VLE, OTCQX:VLERF)
("Valeura" or the "Company") reports its financial and operating results for
the three month period and year ended December 31, 2024.
The complete reporting package for the Company, including the audited
financial statements and associated management's discussion and analysis
("MD&A") and the 2024 annual information form ("AIF"), are being filed on
SEDAR+ at www.sedarplus.ca (http://www.sedarplus.ca) and posted to the
Company's website at www.valeuraenergy.com (http://www.valeuraenergy.com) .
2024 Operational Highlights
· Production increased by 12% year-over-year to 22,825 bbls/d((1)) on
the back of a full year of drilling operations and development of the Nong Yao
C Field;
· 100% success rate in exploration and appraisal activities with
discoveries at Niramai, Wassana North, and Nong Yao D;
· Company's first full year of operations completed with no significant
health, safety, or environment incidents; and
· Reduced greenhouse emissions intensity by approximately 20% compared
to 2023 baseline.
2024 Financial Highlights
· Generated revenue of US$679 million, with average price realisation
of US$81/bbl;
· Delivered Adjusted EBITDAX of US$378 million((2)) and adjusted
cashflow from operations of US$273 million((2));
· Strengthened the balance sheet with record high year-end cash
position of US$259 million((3)) and zero debt;
· Reduced asset retirement obligation ("ARO") by 54% since assuming
operatorship in Q1, 2023;
· Completed internal restructuring to optimise operational and financial
aspects of the Thai III petroleum concessions; and
· Implemented share buyback programme through a Normal Course Issuer
Bid for up to 10% of the public float.
2024 Reserves 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;
· Delivered 2P reserves replacement ratio of 245%, even after
production increase of 12%;
· Increased 2P reserves and extended the end of field life ("EOFL") at
every field;
· Grew 2P net present value (NPV(10)) before tax to US$934 million and
US$753 million after tax((4));
· Considering year-end 2024 cash position, increased 2P net asset value
after tax to US$1,012 million, equating to C$13.6 per share((5)); and
· Doubled contingent resources to 48 MMbbls compared to year-end
2023((6)).
(1) Working interest share production before royalties.
(2) Non-IFRS financial measure or non-IFRS ratio - see "Non-IFRS
Financial Measures and Ratios" section in the Company's MD&A.
(3) Includes restricted cash of $22.8 million.
(4) Discount rate 10%.
(5) Proved plus probable (2P) NPV10 plus net cash at December 31,
2024, assuming $/C$ exchange rate of 1.435, and 106.65 million shares
outstanding as of December 31, 2024.
(6) Unrisked best estimate (2C) contingent resources.
Dr. Sean Guest, President and CEO commented:
"Our first full year of operations in Thailand were a success across all areas
of our business and a trophy for value creation. We have attained record
production, record cash flow, and replaced nearly 2.5x the reserves we
produced, all while continuing to strengthen our financial position. Our
business is stronger and has a longer line of sight than ever before.
Continued drilling throughout 2024 added 20 new production wells, including
those we drilled to develop the new Nong Yao C field, making Nong Yao the
largest and most profitable asset in our portfolio. We've also had success
with the drill bit on both appraisal and exploration which has significantly
increased the number of future development well locations. This successful
drilling, combined with detailed reservoir studies has resulted in a 32%
increase in 2P reserves to 50 million bbls. Moreover, the economic life of
each of our fields has moved further into the future, such that all fields are
now expected to remain economic beyond 2030.
We are focussed relentlessly on value, and with the combination of an increase
in the net present value of our 2P reserves, and the record cash position of
US$259 million at year-end, the net asset value of our business is now more
than one billion US dollars. On a per share basis, that equates to over
C$13/share, meaning an investment in Valeura's shares continues to represent
an excellent value proposition.
In addition to growing both the value and longevity of our existing portfolio,
we continue to pursue several other avenues for growth, including exciting
exploration opportunities, and potential merger and acquisition targets."
Financial and Operating Results Summary
Three months ended Year ended
December 31, 2024 December 31, 2023 Delta December 31, 2024 December 31, 2023 Delta
Oil Production((1)) ('000 bbls) 2,403 1,763 +36% 8,354 5,825 43%
Average Daily Oil Production((1)) (bbls/d) 26,109 19,165 +36% 22,825 20,440((2)) +12%
Average Realised Price (US$/bbl) 76.7 85.5 (10%) 81.3 84.3 (4%)
Oil Volumes Sold ('000 bbls) 2,948 1,987 +48% 8,349 5,854 +43%
Oil Revenue (US$'000) 226,148 169,909 +33% 678,794 493,457 +38%
Net Income (US$'000) 213,983 23,480 +811% 240,797 244,313 (1%)
Adjusted EBITDAX((3)) (US$'000) 132,402 96,679 +37% 377,985 230,672 +64%
Adjusted Pre-Tax Cashflow from Operations((3)) (US$'000) 133,612 88,326 +51% 356,627 238,661 +49%
Adjusted Cashflow from Operations((3)) (US$'000) 107,134 56,023 +107% 272,641 152,375 +79%
Operating Expenses (US$'000) 55,607 49,622 +12% 186,407 180,192 +3%
Adjusted Opex((3)) (US$'000) 54,668 51,818 +6% 214,891 165,077 +30%
Operating Expenses per bbl (US$/bbl) 18.9 25.0 (25%) 22.3 30.9 (28%)
Adjusted Opex per bbl((3)) (US$/bbl) 22.8 29.4 (22%) 25.7 28.3 (9%)
Adjusted Capex((3)) (US$'000) 38,870 30,374 +28% 134,258 103,733 +29%
Weighted average shares outstanding - basic ('000 shares) 106,955 102,652 +4% 105,778 99,227 +7%
As at Comparison
December 31, 2024 December 31, 2023 %
Cash & Cash equivalents((4)) (US$'000) 259,354 151,165 +72%
Adjusted Net Working Capital((3)) (US$'000) 205,735 118,143 +74%
Shareholder's Equity (US$'000) 528,283 284,178 +86%
(1) Working interest share production before royalties.
(2) Average daily oil production of 20,440 bbls/d represents the
average production from closing of the Mubadala Acquisition on March 22, 2023
to December 31, 2023 (285 days).
(3) Non-IFRS financial measure or non-IFRS ratio - see "Non-IFRS
Financial Measures and Ratios" section in the Company's MD&A.
(4) Includes restricted cash of US$22.8 million at December 31,
2024 and restricted cash of US$17.3 million at December 31, 2023.
Financial Update
The Company's Q4 2024 oil production averaged 26,109 bbls/d (working interest
share before royalties), representing a 36% increase from Q4 2023. Full year
2024 oil production averaged 22,825 bbls/d, 12% higher than 2023. This
growth was primarily driven by production from the Wassana field, which was
not in production for most of 2023 and the Nong Yao C development, which came
online in August 2024. Oil sales for Q4 2024 were 2.9 million bbls, compared
to 2.0 million bbls in Q4 2023. For the full year 2024, oil sales totalled
8.4 million bbls, up 43% from 5.8 million bbls in 2023. The increase is due
to higher production rates in 2024, coupled with the fact that in 2023 the
Company had only 285 days of production operations (following closing of the
Mubadala acquisition on March 22, 2023).
The Company generated Q4 2024 revenue of US$226.1 million, a 33% increase from
Q4 2023. Full year 2024 revenue was US$678.8 million, representing a 38%
increase from 2023. Q4 2024 price realisations averaged US$76.7/bbl,
achieving a US$2.0/bbl premium to the Brent benchmark. Full year 2024 price
realisations averaged US$81.3/bbl, reflecting a US$0.5/bbl premium to Brent.
Valeura reported Q4 2024 Adjusted EBITDAX (a non-IFRS measure which is more
fully described in the "Non-IFRS Financial Measures and Ratios" section of the
MD&A) of US$132.4 million, up 37% from Q4 2023, while full year 2024
Adjusted EBITDAX increased 64% to US$378.0 million.
The Company demonstrated improved operational efficiency with Q4 2024 Adjusted
Opex (a non-IFRS measure which is more fully described in the "Non-IFRS
Financial Measures and Ratios" section of the MD&A) of US$22.8/bbl, down
from US$29.4/bbl in Q4 2023. Full year 2024 Adjusted Opex decreased to
US$25.7/bbl from US$28.3/bbl in 2023. Operating expenses for Q4 were
US$18.9/bbl compared to US$25.0/bbl in Q4 2023, and US$22.3/bbl for the full
2024 versus US$30.9/bbl in 2023. These improved unit costs were driven
primarily by increased production from the low-cost Nong Yao field, which has
become the Company's largest production source.
Valeura incurred total petroleum tax income and special remuneratory benefit
tax of US$68.3 million and US$29.2 million respectively during the full year
2024, compared to US$71.2 million and US$15.1 million in the previous
year. The Company stands to benefit from a more efficient tax structure in
2025 as a result of the corporate restructuring which was completed in
November 2024. This will result in Petroleum income tax loss carry-forwards
that were previously associated with only the Wassana asset now being applied
to all of the Company's Thai III petroleum concessions, being Wassana, Nong
Yao, and Manora.
The Company recorded Net income for the year of US$240.8 million following the
recognition of deferred tax assets from the tax consolidation.
As of December 31, 2024, Valeura had a strong cash position of US$259.4
million, including US$22.8 million in restricted cash. The Company continues
to operate with no current or non-current debt. Valeura remains
well-positioned for both organic reinvestment opportunities and potential
strategic acquisitions.
Operations Update and Outlook
During Q4 2024, the Company had ongoing production operations on all of its
Gulf of Thailand fields, comprised of the Jasmine, Nong Yao, Manora, and
Wassana fields. The Company has had one drill rig working continuously on
contract since Q1 2023 full-time.
Oil production averaged 26.1 mbbls/d during Q4 2024 (Valeura's working
interest share, before royalties).
Jasmine/Ban Yen
Oil production before royalties from the Jasmine/Ban Yen field, in Licence
B5/27 (100% operated interest) averaged 8.5 mbbls/d during Q4 2024, an
increase of 12% from Q3 2024. Increased production rates reflect the
start-up of five new wells drilled as part of an infill drilling programme,
with the last three wells 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.
Although the Jasmine field is the most mature asset in the Company's
portfolio, ongoing drilling success underscores the field's ability to
continue serving as a key source of cash generation for the business. The Q4
Jasmine drilling results have been included in the Company's reserves
evaluation for the year-ended December 31, 2024, and contributed to a further
extension in the field's economic life, which on a 2P reserves basis, now
lasts into mid 2031.
In February 2025 the drill rig returned to the Jasmine field where it has
begun executing a seven-well infill campaign. In total 10 development and
appraisal wells are currently planned for the Jasmine field in 2025 and one
exploration well at the Ratree prospect. In addition, a workover rig is
currently operating on the field completing two workovers.
The low-BTU gas generator was delivered to the Jasmine B platform in Q1 2025
and is expected to be commissioned and operational in Q2 2025. This creates
an opportunity to significantly reduce greenhouse gas emissions from this
platform as well as to reduce operating costs by using a waste gas stream for
power generation.
Nong Yao
At the Nong Yao field, in Licence G11/48 (90% operated working interest),
Valeura's working interest share production before royalties averaged 11.1
mbbls/d, an increase of 18% from Q3 2024. Q4 production rates benefitted
from a full quarter of operations at the Nong Yao C field extension, which
came online in August 2024.
Performance from Nong Yao C is continuing in line with the Company's
expectations. The Nong Yao field is now the Company's largest source of
production. In addition, it also has the Company's lowest per unit Adjusted
Opex and its oil fetches a premium to the Brent benchmark. As a result, Nong
Yao is the Company's most cash generative asset.
In 2025, nine development wells are planned across the three Nong Yao
platforms. This programme is expected to commence in late Q2 2025.
Wassana
Oil production at the Wassana field, in Licence G10/48 (100% operated
interest), averaged 4.3 mbbls/d (before royalties), an increase of 55% over Q3
2024. The increase reflects the effect of a full quarter of normal
operations at the field, as compared to Q3 2024, during which the Company
conducted a one-month precautionary suspension of production while performing
underwater inspection work. There was no drilling on the Wassana field in Q4
and no further drilling is planned at this location for 2025.
Valeura has completed the front end engineering and design work for the
potential redevelopment of the Wassana field. Detailed contracting and
procurement work commenced in late Q4 2024 to validate cost assumptions for
the project. Valeura expects to consider a final investment decision in
early Q2 2025.
Manora
At the Manora field, in Licence G1/48 (70% operated working interest),
Valeura's working interest share of oil production before royalties averaged
2.2 mbbls/d, a decrease of 11% from Q3 2024. During Q4, the Company began a
five-well infill drilling campaign on the Manora field, including both
production-oriented infill development wells and appraisal targets. The
programme was completed in Q1 2025 and for the month of March to date, working
interest share production before royalties has averaged 2.9 mbbls/d. In
addition, several appraisal targets were evaluated, giving rise to between
three and five potential future drilling targets, which will be further
evaluated for inclusion in a future drilling programme.
Türkiye
The Company had no active operations in Türkiye during Q4 2024, however it
continues to hold an interest in a potentially large deep gas play in the
Thrace basin in the northwest part of the country. In 2024 the Company
received official confirmation that it's leases and licences covering the play
had been extended into 2025, and more recently the Company was granted an
additional one-year extension, bringing the expiry date to June 27, 2026.
Following the current period, Valeura may apply for a further two-year
extension for appraisal purposes, and has engaged the government in
discussions to that effect.
The Company believes the Thrace basin deep gas play could be a source of
significant value in the longer term. Valeura intends to farm out a portion
of its interest to a new partner in order to jointly pursue the next phase of
appraisal work.
Reserves and Resources Summary
The results of Valeura's third-party independent reserves and resources
assessment for its Thailand assets as of December 31, 2024 were announced on
February 13, 2025. Below are summary tables associated with the reserves.
Summary of Reserves Replacement, Value and Field Life
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
Summary of NPV and NAV
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
Webcast
Valeura's management team will host an investor and analyst webcast at 08:00
Calgary / 14:00 London / 21:00 Bangkok / 22:00 Singapore on Wednesday, March
26, 2025 to discuss today's announcement. Please register in advance via the
link below.
Registration link:
https://events.teams.microsoft.com/event/aa5e4d6a-cb5f-46da-ab85-0976e3600c84@a196a1a0-4579-4a0c-b3a3-855f4db8f64b
(https://events.teams.microsoft.com/event/aa5e4d6a-cb5f-46da-ab85-0976e3600c84@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,,922648874#
Singapore: +65 6450 6302,,922648874#
Canada: (833) 845-9589,,922648874#
Türkiye: 0800 142 034779,,922648874#
United States: (833) 846-5630,,922648874#
United Kingdom: 0800 640 3933,,922648874#
Phone conference ID: 922 648 874#
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 profitability of the Nong Yao asset, relative to rest of the Company's
portfolio; the increase in the number of future development well locations;
the estimated net asset value of the Company; the belief that an investment in
Valeura's shares represents an excellent value proposition; Valeura's
expectation that it will benefit from a more efficient tax structure as a
result of the corporate restructuring; the inclusion of appraisal-led drilling
targets in further infill development drilling programmes; the ability for
Jasmine to continue serving as a key source of cash generation; timing to
commission the low-BTU gas generator and to reduce greenhouse gas emissions
and operating costs; planned drilling and well workovers in 2025; timing to
consider a final investment decision on the Wassana field redevelopment
project; and the Company's belief that the Thrace basin deep gas play could be
a source of significant value in the longer term. 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.
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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