TIDMVLU
RNS Number : 0234Z
Valeura Energy Inc.
20 January 2022
VALEURA ENERGY
TRADING UPDATE
Calgary, January 20, 2022 : Valeura Energy Inc. (TSX:VLE,
LSE:VLU) (the "Company" or "Valeura"), an upstream oil and gas
company with deep tight gas assets in the Thrace Basin of Turkey,
is pleased to provide a trading update.
Financial Position and Royalty
As of December 31, 2021, Valeura had no debt and held cash and
cash equivalent resources totalling US$40.8 million, before
accounting for anticipated receivables relating to Q4 2021. Upon
selling its shallow gas producing business in Turkey in May 2021,
Valeura retained a royalty on ongoing production to capture
potential price upside for the benefit of shareholders. The Company
has been notified by the buyer that it will receive a total of
US$780,000 in royalty payments for Q4 2021. Further, Valeura
expects that it will ultimately receive total royalty payments of
US$2.5 million under this arrangement, representing the maximum
possible royalty payment under its contractual arrangements with
the buyer, and that based on current gas prices and estimated
production, the remainder of this amount should be fully recovered
by the end of 2022.
During 2021, Valeura reshaped its organisation structure and
downsized to best support its forward strategy, resulting in a
significant reduction in corporate costs. In Q4 2021, the combined
effect of reduced ongoing corporate costs together with anticipated
royalty payments resulted in net cash consumption of just over
US$400,000 for that quarter.
Strategy
Valeura's 20 Tcfe unrisked mean prospective resource deep tight
gas appraisal play in Turkey remains a core part of the Company's
portfolio and represents a significant source of potential long
term value. Given the continued historically high gas prices in
Europe and Turkey, Valeura has resumed its search for a suitable
farm-in partner for the tight gas appraisal play and has re-engaged
a London-based advisor to assist in the search. The Company
believes securing a partner is the most prudent first step before
committing significant capital to the next phase of appraisal
drilling. Valeura is poised to resume deep drilling operations
rapidly upon securing a partner, with several locations in the
advanced permitting stage.
As a result of the ongoing COVID-19 situation in Turkey, local
regulators have extended both the current phase of exploration
licences and the timeline to fulfil licence commitments, including
drilling obligations, by one year. The current phase of the
Company's exploration licences will now expire on June 27, 2023,
after which the Company has the option to apply for two additional
two-year exploration periods. In particular, this extension
provides additional flexibility with respect to Valeura's
obligations to drill two Banarli exploration wells and one West
Thrace exploration well to maintain its deep gas rights, meaning
the Company will have no material capital commitments until mid
2023.
In the nearer-term, Valeura intends to leverage its strong
financial position toward growing by way of mergers and
acquisitions ("M&A"). The collective international experience
of the Company's management and board defines a broad focus area,
including jurisdictions with significant deal flow and expected
relatively low competition for assets. Valeura is actively pursuing
several M&A opportunities, targeting near-term production and
cash flow, plus follow-on investment opportunities to enable
mid-term growth. The Company is currently in discussions on several
opportunities, and will disclose further details on these
transactions in due course as appropriate.
For further information please contact:
Valeura Energy Inc. (General and Investor Enquiries) +1 403 237 7102
Sean Guest, President and CEO
Heather Campbell, CFO
Robin Martin, Investor Relations Manager
Contact@valeuraenergy.com , IR@valeuraenergy.com
Auctus Advisors LLP (Corporate Broker) +44 (0) 7711 627 449
Jonathan Wright
Valeura@auctusadvisors.co.uk
CAMARCO (Public Relations, Media Adviser) +44 (0) 20 3757 4980
Owen Roberts, Billy Clegg, Monique Perks, Hugo Liddy
Valeura@camarco.co.uk
Resources
Resource disclosure in this announcement is based on an
independent resources evaluation as at December 31, 2018 conducted
by DeGolyer and MacNaughton in its report dated March 13, 2019,
which was 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 ang Gas
Activities, as adjusted to reflect Equinor's withdrawal in Q1 2020.
Prospective resources are those quantities of petroleum estimated,
as of a given date, to be potentially recoverable from undiscovered
accumulations by application of future development projects.
Prospective resources have both an associated chance of discovery
and a chance of development. The unrisked estimates of prospective
resources referred to in this announcement have not been risked for
either the chance of discovery or the chance of development. There
is no certainty that any portion of the prospective resources will
be discovered. If a discovery is made, there is no certainty that
it will be developed or, if it is developed, there is no certainty
as to the timing of such development or that it will be
commercially viable to produce any portion of the prospective
resources. Additional resources information is included in the
Company's annual information form for the year ended December 31,
2018.
Advisory and Caution Regarding Forward-Looking Information
Certain information included in this news release constitutes
forward-looking information under applicable securities
legislation. Such forward-looking information is for the purpose of
explaining management's current expectations and plans relating to
the future. Readers are cautioned that reliance on such information
may not be appropriate for other purposes, such as making
investment decisions. Forward-looking information typically
contains statements with words such as "anticipate", "believe",
"expect", "plan", "intend", "estimate", "propose", "project",
"target" or similar words suggesting future outcomes or statements
regarding an outlook. Forward-looking information in this news
release includes, but is not limited to: the Company's expectations
regarding the anticipated amount and timing of royalty payments in
respect of Q4 2021 and by the end of 2022; the Company's
anticipated amount of net cash consumption in Q4 2021; statements
with respect to the Company's deep tight gas play strategy,
including management's belief that the play represents a material
value proposition for shareholders, its ability to find another
farm-in partner for the play, and its ability to resume appraisal
drilling rapidly upon securing a partner; and statements with
respect to the Company's inorganic growth strategy, including its
ability to leverage its strong financial position and identify
M&A targets. In addition, statements related to "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:
stability of gas prices and production from the shallow assets used
to determine the amount of the royalty payments; approvals
forthcoming from the Turkish government in a manner consistent with
past conduct; future drilling activity on the required/expected
timelines; the prospectivity of the Company's lands, including the
deep potential; future economic conditions; future currency
exchange rates; the ability to meet drilling deadlines and other
requirements under licences and leases; the ability to attract a
new partner in the deep play; the ability to identify attractive
merger and acquisition opportunities to support growth; and the
Company's continued ability to obtain and retain qualified staff
and equipment in a timely and cost efficient manner.. 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 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: reduction in gas prices
or production from the shallow assets that impacts the amount of
the royalty payments; inability to secure a new partner for the
deep play and execute potential M&A transactions; inability to
meet drilling deadlines to hold licences; the risks of further
disruptions from the COVID-19 pandemic; the risks of currency
fluctuations; uncertainty regarding the contemplated timelines and
costs for the deep evaluation; potential changes in laws and
regulations, the uncertainty regarding government and other
approvals; counterparty risk or payment risk for the royalty; and
the risk associated with international activity. The
forward-looking information included in this news release is
expressly qualified in its entirety by this cautionary statement.
See the AIF for a detailed discussion of the risk factors.
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.
Additional information relating to Valeura is also available on
SEDAR at www.sedar.com .
This Announcement contains inside information as defined in EU
Regulation No. 596/2014, part of UK law by virtue of the European
Union (Withdrawal) Act 2018, and is in accordance with the
Company's obligations under Article 17 of that Regulation.
This announcement 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 announcement 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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END
TSTSFAEEUEESEEF
(END) Dow Jones Newswires
January 20, 2022 02:00 ET (07:00 GMT)
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