Nong Yao Infrastructure and Wassana Drilling Update
CALGARY, AB / ACCESSWIRE / February 13, 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 Turkey, is pleased to announce the mobilisation of a Mobile Offshore Production Unit ("MOPU"), destined for its Nong Yao field, and to provide an update on development drilling at the Wassana field, offshore Thailand.
- MOPU TSeven Shirley being mobilised to the Nong Yao field (90% working interest), in preparation for development of the Nong Yao C accumulation, first oil expected late Q2 2024;
- Valeura purchasing the Nong Yao field's floating storage and offloading vessel ("FSO") Aurora for US$19 million, providing greater operational flexibility and cost optimisation; and
- Wassana field (100% working interest) development drilling programme being expanded to five horizontal wells, first two wells have resulted in field output increasing to more than 4,000 bbls/d.
Nong Yao Infrastructure
The MOPU TSeven Shirley has departed its shipyard at Qing Dao, China and is now enroute to Valeura's Nong Yao field (90% working interest) in the Gulf of Thailand. Upon arrival, the MOPU will be connected to the pipeline that has been already installed from the existing Nong Yao field infrastructure, and will serve as the wellhead production platform for the Company's Nong Yao C field development. Following hook-up and commissioning work, Valeura intends to conduct an initial drilling programme of up to nine development wells (six producers and three water injectors). First production from the Nong Yao C extension is expected in late Q2 2024, and when fully on stream in the months thereafter, the Company is targeting peak production rates from the greater Nong Yao field totalling approximately 11,000 bbls/d (90% working interest share).
The TSeven Shirley is a new-build MOPU, based on a jack-up drilling rig hull, and customised to suit the requirements of the Nong Yao C accumulation. The MOPU includes a 12 slot well bay, total design fluid capacity of 20,000 bbls/d and water injection design capacity of 10,000 bbl/d. Valeura has agreed to charter the MOPU for an initial term of five years, with provisions for extension thereafter.
Separately, Valeura has exercised its purchase option to acquire the Nong Yao field's FSO Aurora, which it had previously leased from the seller, a member of the Omni Offshore Terminals group. Purchase price for the vessel is US$19 million, to be funded with the Company's cash resources upon completion of the transaction, anticipated in June 2024. Given the pending expansion of the field and potential future developments, Valeura anticipates that owning, as opposed to leasing the FSO will provide operational flexibility and allow the Company to optimise operating expenses.
Wassana Drilling Update
Valeura is currently executing a development drilling programme on its Wassana field (100% working interest), and in light of favourable initial results, has opted to expand the scope of the programme from three horizontal wells to five. All three wells drilled so far have encountered their targets in line with expectations. The first two wells have been tested and, in their first seven days of production, resulted in total field output increasing to more than 4,000 bbls/d. The third well will be brought online in the coming days. Management believes strong proven deliverability from the initial wells may result in an upward revision to its production expectations from the field.
The Company intends to continue drilling on the Wassana field, to a total of five wells, after which the rig will mobilise to the Nong Yao field to begin Nong Yao C development drilling.
Sean Guest, President and CEO of Valeura commented:
"I am pleased to see our team achieve this key milestone in further development of the Nong Yao field. With the deployment of new infrastructure to the field, excitement is building around the development of the Nong Yao C accumulation, which is a major component of our production growth plan for 2024, which we anticipate will elevate our share of Nong Yao production to 11,000 bbls/d. In addition, having the TSeven Shirley MOPU on site provides another platform for us to pursue further appraisal and exploration work in the greater Nong Yao area. At the same time, we are always mindful of the efficiency of our operations and see the purchase of the Nong Yao FSO a key step in controlling forward operating costs, thereby contributing to a further potential extension of the field's economic life.
Separately, the Wassana field continues to surprise to the upside. When we first acquired the asset, we envisaged that it would take five additional wells to develop the deeper reservoir intervals and to achieve rates of 4,500 bbls/d. With having demonstrated over 4,000 bbl/d with just the first two horizontal wells, and a third to be brought onstream shortly, we are raising our expectations for the potential of the field in the near term. Notably, this success is in advance of the larger-scale redevelopment we are now considering for the Wassana field. The concept select phase of the Wassana re-development project is progressing well, and we anticipate taking an investment decision later this year.
Across our portfolio, we continue to find appealing opportunities for organic growth, as we continue in our strategy to deliver value through growth in all forms."
For further information, please contact:
Valeura Energy Inc. (General Corporate Enquiries) +65 6373 6940
Sean Guest, President and CEO
Yacine Ben-Meriem, CFO
Valeura Energy Inc. (Investor Enquiries) +1 403 975 6752 / +44 7392 940495
Robin James Martin, Vice President, Communications and Investor Relations
Auctus Advisors LLP (Corporate Broker to Valeura) +44 (0) 7711 627 449
CAMARCO (Public Relations, Media Adviser to Valeura) +44 (0) 20 3757 4980
Owen Roberts, Billy Clegg
About the Company
Valeura Energy Inc. is a Canada-based public company engaged in the exploration, development and production of petroleum and natural gas in Thailand and in Turkey. 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.
Initial Production Rates
Initial production rates included in this news release, particularly those short in duration, may not necessarily be indicative of long-term performance or of ultimate recovery. Readers are cautioned that short-term rates should not be relied upon as indicators of future performance of these wells and therefore should not be relied upon for investment or other purposes. Certain of the results provided herein should be considered preliminary.
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: timing for the Nong Yao C development drilling programme and for first production; target peak production rates from the greater Nong Yao field to approximately 11,000 bbls/d (90% working interest share); timing to complete the acquisition of the FSO Aurora and the Company's intention to fund the acquisition with cash resources; the potential for future developments at the Nong Yao field; the anticipated reduction in operating expenses and time to pay back the acquisition price of the FSO Aurora; the expansion of the Wassana field development drilling programme to five wells; the potential to further extend the Nong Yao field's economic life; timing to take an investment decision on the Wassana re-development project; the belief that strong proven deliverability from the initial wells may result in an upward revision to its production expectations from the Wassana field; and the ability to continue to find appealing opportunities for organic growth across the portfolio. 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 Turkey; 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.
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SOURCE: Valeura Energy Inc.
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