Mr. Jim McFarland reports

VALEURA ANNOUNCES CLOSING OF THE BANARLI FARM-IN AND THE WEST THRACE DEEP RIGHTS SALE

Valeura Energy Inc. has closed the following transformational transactions:

• The farm-in for the exploration of the deep formations below approximately 2,500 metres on Valeura's 100-per-cent-owned-and-operated Banarli licences in accordance with the farm-in agreement between Corporate Resources BV, a wholly owned affiliate of Valeura, and Statoil Banarli Turkey BV, whereby Statoil can earn a 50-per-cent interest in the deep rights by investing $36-million (U.S.), of which $6-million (U.S.) is an upfront payment as a contribution to back costs incurred on the Banarli licences;
• The sale of CRBV's current 40-per-cent participating interest for $12-million (U.S.) in the deep formations below approximately 2,500 metres on certain lands in an existing joint venture (JV) with Thrace Basin Natural Gas (Turkiye) Corp. and Pinnacle Turkey Inc., in accordance with the sale and purchase agreement between CRBV and Statoil.

Valeura has now received the cash payments from Statoil of $6-million (U.S.) and $12-million (U.S.) with respect to the Banarli farm-in and the West Thrace deep rights sale, respectively.

Valeura anticipates using the above payments from Statoil, together with the $11-million raised under its underwritten private placement offering of subscription receipts, if and when released from escrow, to finance the acquisition of TBNG by Valeura Energy Netherlands BV, a wholly owned affiliate of Valeura, and to ramp up shallow gas drilling. Closing of the TBNG acquisition will require a payment of approximately $18.5-million (U.S.), after closing adjustments, and is currently expected to occur in February, 2017. This transaction will increase Valeura's participating interest in the TBNG JV to 81.5 per cent (subject to the West Thrace deep rights sale) and establishes Valeura as the operator.

The Ministry of Energy and Natural Resources of the Republic of Turkey approved the Banarli farm-in, the West Thrace deep rights sale and the TBNG acquisition on Dec. 30, 2016.

"Closing of these transformational transactions with Statoil is an exciting milestone for Valeura, which paves the way to spud the first 4,000-metre exploration well in Q1 2017 under the Banarli farm-in, funded by Statoil, targeting a deep, overpressured, basin-centred gas play that has the potential to be another game changer for Valeura," said Jim McFarland, president and chief executive officer of Valeura. "In addition, we now have the financial capacity to proceed with our planned 2017 shallow gas drilling program in the Thrace basin, which is expected to commence in February on the TBNG JV lands at the Dogu Atakoy-3 location where approvals and site preparation are already complete," adds Mr. McFarland.

About the corporation

Valeura Energy is a Canadian-based public company currently engaged in the exploration, development and production of petroleum and natural gas in Turkey.

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