RCS - Valeura Energy Inc. - Year-End 2023 Reserves and Resources

Valeura EnergyAnnouncement

20/02/2024 08:15

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RNS Number : 7472D  Valeura Energy Inc.  20 February 2024

Year-End 2023 Reserves and Resources,

Strong Growth and Value Creation

Singapore, February 20, 2024: Valeura Energy Inc. (TSX:VLE, OTCQX:VLERF)
("Valeura" or the "Company"), the upstream oil and gas company with assets in
the Gulf of Thailand and the Thrace Basin of Türkiye, is pleased to announce
the results of its third-party independent reserves and resources assessment
for its Thailand assets.

Highlights

·    Reserves increased across all fields - 29.9 MMbbl 1P, 37.9 MMbbl 2P
and 46.5 MMbbl 3P

·    1P and 2P Reserves Replacement more than double the volume of oil
produced in 2023 - 219%

·    2P net present value before tax of US$616 million and US$429 million
after tax((1))

·    Considering year end 2023 cash position of US$150.9 million, 2P net
asset value after tax of US$579 million, equating to C$7.56 per share((2))

·    More than three-fold increase in best estimate (2C) contingent
resources, on a risked basis.

 

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

(2)       Proved plus probable (2P) NPV(10) plus net cash of US$150.9
million at December 31, 2023 (cash US$150.9, debt nil), assuming C$/US$
exchange rate of 0.742, and 103.3 million shares outstanding

 

Sean Guest, President and CEO commented:

"I am very pleased to announce the results of our end 2023 reserves and
resources evaluation, which show substantial increases on all fronts, whether
expressed as volumes of barrels or dollars of value. Through our work
programme in 2023 we have replaced more than double the oil we produced,
extended the anticipated economic life of our portfolio, and recorded a
significant up-tick in NPV. This is an additional year of results that
supports our thesis that these assets will continue to deliver cashflow well
into the future.

Not only has the value of our assets increased from US$261 million at end 2022
to US$429 million at end 2023 (on a 2P after-tax NPV(10) basis), but during
the intervening calendar year, cash flow from the assets' 7.5 MMbbls((1))
production has enabled us to fully pay down our debt while also accumulating
US$151 million in cash by December 31, 2023.  Together that creates a net
asset value of US$579 million, which, based on our current shares outstanding
and foreign exchange rates, equates to approximately C$7.56 per share.

Importantly, our performance in 2023 has resulted in 1P and 2P reserves growth
at every one of our assets.  For the more mature fields, Manora and Jasmine,
our infill drilling programmes have increased reserves and extended field
life.  For the growth fields, Nong Yao and Wassana, these estimates
underscore the value potential of pursuing further development
opportunities.  2024 will serve as a proving ground for us to increase output
from the Nong Yao field, with development of the Nong Yao C accumulation
already well underway.  At Wassana, largely as a result of our appraisal work
in 2023, we have recorded a two-fold increase in 2P reserves, thereby
validating our view that the field offers substantially more oil to
commercialise than initially envisaged when we acquired the asset.

Our strategy is to continue pursuing value through growth in all its forms.
That includes working to unlock contingent resources (which have also
increased 3 ½-fold, year-on-year on a risked basis) and through an active
near-field exploration programme this year.

We take great pride in our asset base in Thailand and are pleased to have such
a high quality portfolio to continue driving further value growth for our
stakeholders."

(1)       Including amounts relating to the period January 1, 2023
through March 22, 2023, prior to completion of the Company's Gulf of Thailand
acquisition from Mubadala Energy.

Valeura commissioned Netherland, Sewell & Associates, Inc. ("NSAI") to
assess reserves and resources for all of its Thailand assets as of December
31, 2023.  NSAI's evaluation is presented in a report dated February 19, 2024
(the "NSAI 2023 Report").  This follows a previous evaluation whereby NSAI
assessed reserves and resources for the same assets as of December 31, 2022,
as disclosed in an NSAI report dated April 17, 2023 (the "NSAI 2022 Report")
and announced by the Company on April 18, 2023. Note that as the acquisition
of a portion of Valeura's Gulf of Thailand assets (Jasmine, Manora and Nong
Yao) from Mubadala Energy was only completed on March 22, 2023, the NSAI 2022
Report is used as the basis for comparison, thereby comparing to the reserves
at year end 2022 on a proforma asset basis.

 

Summary of Valeura's Aggregate Thailand Reserves and Resources as of December
31, 2023

·    Proved (1P) reserves of 29.9 MMbbls

·    1P NPV(10) of US$301.4 million before tax / US$193.9 million after
tax;

·    Proved and probable (2P) reserves of 37.9 MMbbls,

·    2P NPV(10) of US$616.4 million before tax / US$428.5 million after
tax;

·    Best estimate (2C) aggregate unrisked contingent resources of 19.9
MMbbls, or 8.9 MMbbls on a risked basis.

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

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

(Light/Medium)
(Light/Medium)
(Light/Medium)
(Heavy)
 Proved                Producing Developed      5,071            1,350            3,228           1,297           10,945
                       Non-Producing Developed  236              170              -               -               406
                       Undeveloped              1,517            220              6,738           10,048          18,522
 Total Proved (1P)                              6,823            1,740            9,965           11,345          29,872
 Total Probable (P2)                            3,599            451              2,396           1,569           8,015
 Total Proved + Probable (2P)                   10,422           2,191            12,361          12,914          37,888
 Total Possible (P3)                            4,161            533              2,405           1,551           8,651
 Total Proved + Probable + Possible (3P)        14,583           2,723            14,767          14,466          46,538

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 2023 Report, and forecast Brent crude oil
reference prices of US$78.00, US$79.18, US$80.36, US$81.79 and US$83.43 per
bbl for the years ending December 31, 2024, 2025, 2026, 2027 and 2028
respectively, with 2% escalation thereafter.  NSAI assumes cost inflation of
2% per anum.

Values estimated by NSAI assume tax loss carry-forwards associated with
ownership of the Wassana field are applied only to taxes levied in respect of
that asset, resulting in no taxes payable for the Wassana field in the 1P and
2P cases.  The remaining assets are assumed by NSAI to carry their full
statutory tax burden.

 Future Net Revenue By Field                    Before Tax NPV(10) (US$ million)
                       Jasmine                  Manora   Nong Yao  Wassana  Total
 Proved                Producing Developed      (20.8)   (0.9)     (32.8)   (88.2)   (142.7)
                       Non-Producing Developed  5.5      9.0       -        -        14.5
                       Undeveloped              13.9     1.9       265.9    147.9    429.6
 Total Proved (1P)                              (1.4)    10.0      233.1    59.7     301.4
 Total Probable (P2)                            125.6    20.5      88.7     80.3     315.0
 Total Proved + Probable (2P)                   124.2    30.5      321.8    139.9    616.4
 Total Possible (P3)                            158.5    21.6      86.6     78.5     345.3
 Total Proved + Probable + Possible (3P)        282.7    52.1      408.4    218.5    961.7

 

 Future Net Revenue By Field                    After Tax NPV(10) (US$ million)
                       Jasmine                  Manora   Nong Yao  Wassana  Total
 Proved                Producing Developed      (35.3)   (2.1)     (55.9)   (88.2)   (181.4)
                       Non-Producing Developed  3.2      9.1       -        -        12.4
                       Undeveloped              23.6     1.7       189.7    147.9    362.9
 Total Proved (1P)                              -8.4     8.8       133.8    59.7     193.9
 Total Probable (P2)                            90.2     12.4      51.8     80.3     234.7
 Total Proved + Probable (2P)                   81.8     21.2      185.6    139.9    428.5
 Total Possible (P3)                            106.6    12.5      46.9     72.3     238.4
 Total Proved + Probable + Possible (3P)        188.4    33.7      232.5    212.3    666.9

 

 

Summary of Reserves Replacement, Value and Field Life

As compared to the NSAI 2022 Report, the NSAI 2023 Report indicates an
addition of 16.4 MMbbls of proved (1P) reserves and 16.3 MMbbls of proved plus
probable (2P) reserves, after having produced 7.5 MMbbls of oil in 2023.  On
both 1P and 2P reserves, this reflects a reserves replacement ratio of 219%.

Based on the mid-point of the Company's 2024 production guidance of 21.5 -
24.5 Mbbls/d (23.0 Mbbls/d), on a 2P reserves basis as of December 31, 2023,
the Company estimates its reserves life index to be approximately 4.5 years.
Using the same production estimate and 2P reserves as of December 31, 2022,
the reserves life index was approximately 3.5 years.

The net present value of estimated future revenue after income taxes, based on
a 10% discount rate has increased between the NSAI 2022 Report and the NSAI
2023 Report from US$49.1 million to US$193.9 million on a 1P basis, an
increase of 295%.  On a 2P basis, the net present value of estimated future
revenue after income taxes, based on a 10% discount rate have increased from
US$261.0 million to US$428.5 million, an increase of 64%.

The Company estimates that, based on the 2P net present value of estimated
future revenue after income taxes, based on a 10% discount rate, plus the
Company's 2023 year-end net cash position of US$150.9 million, as disclosed on
January 16, 2024, the Company has a 2P net asset value (NAV) of US$579.4
million.  Using the current count of shares outstanding, being 103.3 million
shares and current foreign exchange rates, Valeura's NAV equates to
approximately C$7.56/share.

                                                   1P Before Tax  2P Before Tax  1P After Tax  2P After Tax
 NPV10 (US$ million)                               301.4          616.4          193.9         428.5
 Net debt at December 31, 2023 (US$ million)((1))  150.9          150.9          150.9         150.9
 Net Asset Value (US$ million)                     452.3          767.6          344.8         579.4
 Net Asset Value (C$ million)((2))                 609.6          1,034.1        464.7         780.9
 Common shares (million)((3))                      103.3          103.3          103.3         103.3
 Estimated NAV per basic share (C$ per share)      5.90           10.01          4.50          7.56

(1)       Cash at December 31, 2023 of US$150.9 million, debt nil.

(2)       C$/US$ exchange rate of 0.742

(3)       Issued and outstanding as of February 20, 2024

The NSAI 2023 Report indicates an extension in the anticipated end of field
life for all assets in Valeura's Thailand portfolio, whether evaluated on 1P
or 2P reserves as compared to the NSAI 2022 Report.

 

               2P Reserves (Gross WI)                                                                                                                End of Field Life                   2P Net Revenue (NPV(10) US$ million)
 Fields        December 31, 2022 (MMbbls)  2023 Production (MMbbls)  Additions (MMbbls)  December 31, 2023 (MMbbls)  Reserves Replacement Ratio (%)  NSAI 2022 Report  NSAI 2023 Report  December 31, 2022    December 31, 2023
 Jasmine       10.0                        (3.4)                     3.8                 10.4                        112%                            26-Jun            28-Dec            37.1                 81.8
 Manora        1.8                         (1.2)                     1.6                 2.2                         132%                            26-Jan            27-Jul            12.1                 21.2
 Nong Yao      11.2                        (2.7)                     3.9                 12.4                        147%                            27-Jul            28-Dec            145.5                185.6
 Wassana((1))  6.1                         (0.2)                     7                   12.9                        3,500%                          27-Sep            Jun-32            66.3                 139.9
 Total         29.1                        (7.5)                     16.3                37.9                        219%                                                                261.0                428.6

 

(1)       Valeura's working interest in Wassana was 89% at December 31,
2022 and 100% at December 31, 2023.

Contingent Oil Resources

NSAI assessed the Company's contingent resources for additional reservoir
accumulations and reported estimates in both 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.  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

                        (Gross WI)                         (Gross WI)
                       Unrisked (MMbbls)  Risked (MMbbls)  Unrisked (MMbbls)  Risked (MMbbls)
 Low Estimate (1C)     10.4               1.8              15.2               6.5
 Best Estimate (2C)    14.1               2.5              19.9               8.9
 High Estimate (3C)    22.1               3.9              27.9               11.6

Of the best estimate 2C contingent resources estimated in the NSAI 2023
Report, on a risked basis: 59% of the estimated volumes are light/medium crude
oil, with the remainder being heavy oil; 83% are categorised as Development
Unclarified, with the remainder being Development Not Viable.  Development
Unclarified resources have been assigned risks ranging from 25% to 63%, while
Development Not Viable resources have been assigned risks ranging from 14% to
34%.

Comparing the NSAI 2022 Report to the NSAI 2023 Report, the Company has
recorded an increase in the best estimate (2C) risked contingent resources of
more than three-fold.  Valeura's management regards this as a substantial
increase in the potential upside within its portfolio.

 

Further Disclosure and Webcast

Valeura intends to disclose a summary of the NSAI 2023 Report to Thailand's
upstream regulator later in February 2024.  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, 2023 on approximately March 13, 2024.

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.

Valeura's management team will host an investor and analyst webcast at 08:00
Calgary /15:00 London / 22:00 Bangkok on Wednesday, February 21, 2024 to
discuss its reserves and contingent resources.  The live audio and video feed
can be accessed via the link below.  Written questions may be submitted
through the webcast system or by email to IR@valeuraenergy.com
(mailto:IR@valeuraenergy.com) .

Webcast link:
https://teams.microsoft.com/l/meetup-join/19%3ameeting_NDZiODJmYjMtYTc3MS00YmFlLThhYjctNTNlOTg3MDY0ZjE0%40thread.v2/0?context=%7B%22Tid%22%3A%22a196a1a0-4579-4a0c-b3a3-855f4db8f64b%22%2C%22Oid%22%3A%22241f769c-12ae-4efc-8c14-d2e523040a83%22%2C%22IsBroadcastMeeting%22%3Atrue%2C%22role%22%3A%22a%22%7D&btype=a&role=a

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

Conference ID: 940 829 683#

Dial-in numbers:

Canada: 833-845-9589

Singapore: +65 6450 6302

Thailand: +66 2 026 9035

Türkiye: 00800142034779

UK: 0800 640 3933

USA: 833-846-5630

 

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

Auctus Advisors LLP (Corporate Broker to
Valeura)                     +44 (0) 7711 627 449
Jonathan Wright
Valeura@auctusadvisors.co.uk (mailto:Valeura@auctusadvisors.co.uk)

CAMARCO (Public Relations, Media Adviser to Valeura)  +44 (0) 20 3757 4980

Owen Roberts, Billy Clegg
Valeura@camarco.co.uk (mailto:Valeura@camarco.co.uk)

 

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, 2023.  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, 2023, as disclosed by the Company in is January 16, 2024 press
release).  NAV is expressed on a per share basis by dividing the total by
current basic shares outstanding.  NAV per share is not predictive and may
not be reflective of current or future market prices for Valeura.

"Reserves replacement ratio" is calculated by dividing the difference in
reserves between the NSAI 2023 Report and the NSAI 2022 report, plus actual
2023 production, by the assets' total production before royalties for the
calendar year 2023.

"RLI" is calculated by dividing reserves by management's estimated total
production before royalties for 2024.

"End of 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
announcement 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 development unclarified contingent 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 fo 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.

 Resources Project                                      Light and Medium Crude Oil              Chance of Development

Maturity Subclass

(%)
                                                        (Development Unclarified)
                                                                     Unrisked          Risked
                                                        Gross ((1))  Net      Gross    Net

(Mbbl)
(Mbbl)
(Mbbl)
(Mbbl)
 Contingent Low Estimate (1C) Development Unclarified   5,346        4,814    3,296    2,936    62%
 Contingent Best Estimate (2C) Development Unclarified  7,678        6,899    4,845    4,306    63%
 Contingent High Estimate (3C) Development Unclarified  10,868       9,788    6,596    5,862    61%

 

 Resources Project                                      Heavy Crude Oil                         Chance of Development

Maturity Subclass

(%)
                                                        (Development Unclarified)
                                                                     Unrisked          Risked
                                                        Gross ((1))  Net      Gross    Net

(Mbbl)
(Mbbl)
(Mbbl)
(Mbbl)
 Contingent Low Estimate (1C) Development Unclarified   4,253        4,008    1,870    1763     44%
 Contingent Best Estimate (2C) Development Unclarified  6,078        5,729    2,476    2,334    41%
 Contingent High Estimate (3C) Development Unclarified  9,331        8,794    3,284    3,095    35%

 

 Resources Project                                       Light and Medium Crude Oil              Chance of Development

Maturity Subclass

(%)
                                                         (Development Not Viable)
                                                                      Unrisked          Risked
                                                         Gross ((1))  Net      Gross    Net

(Mbbl)
(Mbbl)
(Mbbl)
(Mbbl)
 Contingent Low Estimate (1C) Development Not Viable     2,864        2,609    394      358      14%
 Contingent  Best Estimate (2C) Development Not Viable   2,692        2,444    399      362      15%
 Contingent  High Estimate (3C) Development Not Viable   3,577        3,243    537      486      15%

 

 Resources Project                                       Heavy Crude Oil                         Chance of Development

Maturity Subclass

(%)
                                                         (Development Not Viable)
                                                                      Unrisked          Risked
                                                         Gross ((1))  Net      Gross    Net

(Mbbl)
(Mbbl)
(Mbbl)
(Mbbl)
 Contingent Low Estimate (1C) Development Not Viable     2,732        2,575    972      916      36%
 Contingent  Best Estimate (2C) Development Not Viable   3,426        3,229    1,151    1,085    34%
 Contingent  High Estimate (3C) Development Not Viable   4,100        3,865    1,154    1,088    28%

 

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 news release will be commercially viable to produce.

Glossary

bbl       barrel

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
anticipated economic life of its portfolio; anticipated increase in output
from the Nong Yao field, with development of the Nong Yao C accumulation; the
view that the Wassana field offers substantially more oil to commercialise
than initially envisaged; the Company's intention to continue pursuing growth
of the assets through accessing contingent resources and through exploration;
the Company's ability to continue driving further value growth for our
stakeholders; statements related to the Company's 2024 production guidance of
21.5 - 24.5 Mbbls/d; the anticipated filing date of the Company's Annual
information Form; and that contingent resource accumulations provide a future
opportunity to access additional hydrocarbon volumes.

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.

Forward-looking information is based on management's current expectations and
assumptions regarding, among other things: political stability of the areas in
which the Company is operating; continued safety of operations and ability to
proceed in a timely manner; continued operations of and approvals forthcoming
from governments and regulators in a manner consistent with past conduct;
future drilling activity on the required/expected timelines; the prospectivity
of the Company's lands; the continued favourable pricing and operating
netbacks across its business; future production rates and associated operating
netbacks and cash flow; decline rates; future sources of funding; future
economic conditions; the impact of inflation of future costs; future currency
exchange rates; interest rates; the ability to meet drilling deadlines and
fulfil commitments under licences and leases; future commodity prices; the
impact of the Russian invasion of Ukraine; royalty rates and taxes; future
capital and other expenditures; the success obtained in drilling new wells and
working over existing wellbores; the performance of wells and facilities; the
availability of the required capital to funds its exploration, development and
other operations, and the ability of the Company to meet its commitments and
financial obligations; the ability of the Company to secure adequate
processing, transportation, fractionation and storage capacity on acceptable
terms; the capacity and reliability of facilities; the application of
regulatory requirements respecting abandonment and reclamation; the
recoverability of the Company's reserves and contingent resources; ability to
attract a partner to participate in its tight gas exploration/appraisal play
in Türkiye; future growth; the sufficiency of budgeted capital expenditures
in carrying out planned activities; the impact of increasing competition; the
ability to efficiently integrate assets and employees acquired through
acquisitions; global energy policies going forward; future debt levels; and
the Company's continued ability to obtain and retain qualified staff and
equipment in a timely and cost efficient manner. In addition, the Company's
work programmes and budgets are in part based upon expected agreement among
joint venture partners and associated exploration, development and marketing
plans and anticipated costs and sales prices, which are subject to change
based on, among other things, the actual results of drilling and related
activity, availability of drilling, offshore storage and offloading facilities
and other specialised oilfield equipment and service providers, changes in
partners' plans and unexpected delays and changes in market conditions.
Although the Company believes the expectations and assumptions reflected in
such forward-looking information are reasonable, they may prove to be
incorrect.

Forward-looking information involves significant known and unknown risks and
uncertainties. Exploration, appraisal, and development of oil and natural gas
reserves and resources are speculative activities and involve a degree of
risk. A number of factors could cause actual results to differ materially from
those anticipated by the Company including, but not limited to: the ability of
management to execute its business plan or realise anticipated benefits from
acquisitions; the risk of 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;
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.

Neither the Toronto Stock Exchange nor its Regulation Services Provider (as
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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