CALGARY, AB / ACCESSWIRE / May 9, 2019 / Valeura Energy Inc. VLEVLU)) ("Valeura" or the "Company"), the upstream natural gas producer focused on appraising and developing an unconventional gas accumulation play in the Thrace Basin of Turkey in partnership with Equinor, is pleased to report its financial and operating results for the three month period ended March 31, 2019.
The complete quarterly reporting package for the Company, including financial statements and associated management's discussion and analysis ("MD&A"), have been filed on SEDAR at www.sedar.com and posted on the Company's website at www.valeuraenergy.com. All dollar amounts are in CDN$ unless otherwise stated.
Highlights from Q1 2019 and Subsequent Events
- Average realised gas price of $9.20/Mcf, up 1.5% from Q4 2018;
- Average production of 768 boe/d, increased 23.3% from Q4 2018;
- Operating netback of $33.64/boe, up 3.6% from Q4 2018;
- Net working capital surplus of $56.1 million at March 31, 2019;
- Significant progress drilling to de-risk 10 Tcfe of gas resource, net to Valeura:
- Completed drilling the Inanli-1 appraisal well in January 2019 down to 4,885 metres encountering a 1,615 metre column of indicated over-pressured gas;
- Drilled the Devepinar-1 appraisal well to a total depth of 4,796 metres in April 2019 after drilling a 1,066 metre gross column of indicated over-pressured gas; and
- Completed an additional listing of the Company's common shares in the United Kingdom, with trading having commenced on the London Stock Exchange on April 25, 2019, under the ticker symbol VLU.
The Company's focus for Q2 and Q3 2019 activities will be on testing the flow potential of the long indicated gas columns intersected in its new wells as part of a process to de-risk the commerciality of its 10 Tcfe (286 BCM) of gas resource including 236 MMbbl (32 MMTonnes) condensate, net to Valeura. The stimulation and production testing will be conducted on a zone by zone basis to provide more definitive flow characteristics and to measure gas and condensate properties. Identifying the zones that yield sustained gas flow will be critical to demonstrate the commerciality of the Company's Basin Centred Gas Accumulation (the "BCGA") play and will underpin the next stage of appraisal and the forward work program.
Sean Guest, President and CEO commented:
"Our first quarter results from ongoingconventional operations were very strong, including realised prices above$9/Mcf and operating netbacks above $33/BOE.These metrics underscore the value of gas in Turkey and bolster our viewof the significant value of our unrisked 10 Tcfe unconventional gas resource inthe Thrace Basin, where we are partnered with Equinor.
We continued to build on our understandingof the geology of the BCGA play by appraisal drilling which substantiated ourbelief that the highly over-pressured sandstone interval extends verticallydown to nearly 5,000 metres and laterally out to the far western flank of theplay fairway. Our confidence in ourability to map and predict the gas in place has greatly increased, and we nowfully turn our focus to a detailed production testing programme to identify theflow properties of the many different zones we have encountered.
Financially, we remain in an excellentposition and we expect to exit the year with approximately $40 million inworking capital after the significant 2019 work programme. Furthermore, we enter Q2 2019 with a clear forwardplan to evaluate the commerciality of the play together with our partnerEquinor."
Financialand Operating Results Summary
Table 1 Financial and Operating ResultsSummary
| Three Months Ended March 31, 2019 | Three Months Ended December 31, 2018 | Three Months Ended March 31, 2018 |
Financial (thousands $ except share and per share amounts) |
|
|
|
Petroleum and natural gas revenues | 3,880 | 3,150 | 3,469 |
Adjusted funds flow (used) (1) | 454 | 3,078 | 545 |
Net loss from operations | (3,070) | (634) | (2,435) |
Exploration and development capital | 5,682 | 3,282 | 874 |
Banarli Farm-in | (1,930) | - | - |
Net working capital surplus | 56,060 | 59,520 | 58,824 |
Cash | 63,847 | 62,380 | 56,899 |
Common shares outstanding Basic Diluted | 86,584,989 |
86,232,988 90,831,655 | 83,675,321 |
Share trading VLE High Low Close | 3.99 |
4.81 2.34 3.21 | 8.27 |
Operations |
|
|
|
Production |
|
|
|
Crude oil (barrels ("bbl")/d) | 20 | 8 | 15 |
Natural Gas (one thousand cubib feet ("Mcf")/d) | 4,488 | 3,689 | 5,066 |
BOE/d (@ 6:1) | 768 | 623 | 859 |
Average reference price Brent ($ per bbl) BOTAS Reference ($ per Mcf) (2) | 83.89 |
89.56 9.18 | 84.56 |
Average realised price Crude oil ($ per bbl) Natural gas ($ per Mcf) | |
104.41 9.06 | 82.61 |
Average Operating Netback ($ per BOE @ 6:1) (1) | 33.64 | 32.48 | 25.34 |
Notes:
See the MD&A filed on SEDAR for further discussion.
- The above table includes non-IFRS measures, which may not be comparable to other companies. Adjusted funds flow is calculated as net income (loss) for the period adjusted for non-cash items in the statement of cash flows. Operating netback is calculated as petroleum and natural gas sales less royalties, production expenses and transportation.
- Boru Hatlari ile Petrol Tasima Anonim Sirketi ("BOTAS") owns and operates the national crude oil and natural gas pipeline grids in Turkey and purchases the majority of Turkey's natural gas imports. BOTAS regularly posts prices and its Level-2 Wholesale Tariff benchmark is shown herein as a reference price. See the Company's 2018 annual information form (the "2018 AIF") filed on SEDAR for further discussion.
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SOURCE: Valeura Energy Inc.
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