Highlights
Operations - Return to steady operations throughout Q3 with average production up 10% from Q2 to 615 boe/d, generating petroleum and natural gas sales revenue of
Our efforts have resulted in Valeura being in a very strong financial position, which as of
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.
Proceeds received from
BOTAS regularly posts prices and its Level-2 Wholesale Tariff benchmark is shown herein as a reference price.
Additional information and commentary on the three and nine months ended
Strategy Update
Valeura is pursuing a three-pronged strategy intended to leverage the Company's assets, financial strength, and differentiated capabilities, toward delivering shareholder value.
Conventional gas production business
Valeura's strategy has been to maximise the near-term value of its producing conventional gas business. Monetising the business via its sale to
The Company's focus is on satisfying the conditions to closing, which include regulatory approvals and governmental authorisations. Initial progress is in line with expectations, and Valeura continues to anticipate closing the deal in Q1 2021.
Inorganic growth
Valeura is actively seeking opportunities to grow its business inorganically. The Company is working with
With an increasing number of companies facing liquidity constraints and dwindling cash resources, the M&A landscape is increasingly becoming a buyers' market. As such, the Company believes conditions are favourable for inorganic growth to enable a step change in the materiality of its business, while fitting with the team's international upstream expertise.
Deep gas upside
Valeura is continuing to pursue its 20 Tcfe unrisked mean prospective resource deep, tight gas play in the
Pending the entry of a new partner, Valeura is poised to resume appraisal activities rapidly, including drilling the next appraisal well which will target the best quality reservoir encountered to date at the most optimal depth for hydrocarbon flow encountered to date in the dry gas window. Four appraisal well locations have been submitted for government approval.
Contact:
Tel: +1 403 237 7102
A boe is determined by converting a volume of natural gas to barrels using the ratio of 6 Mcf to one barrel. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Further, a conversion ratio of 6 Mcf:1 boe assumes that the gas is very dry without significant natural gas liquids. Given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilising a conversion on a 6:1 basis may be misleading as an indication of value.
Resources
Resource disclosure in this announcement is based on an independent resources evaluation as at
Advisory and Caution Regarding Forward-Looking Information
Certain information included in this new 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 new release includes, but is not limited to: the completion of the shallow sale, the total cash consideration, the Company's entitlement to contingent payments over a five-year period, the receipt of regulatory approvals and other governmental authorisations, and the anticipated closing time; statements with respect to the Company's conventional gas production business strategy, including its ability to maximise the near-term value of its producing conventional gas business through monetising the business; statements with respect to the Company's inorganic growth strategy, including its ability to identify M&A targets and the geographic area of focus; 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, the sweet spots of the play, its ability to target these sweet spots with the next appraisal well, its ability to find another partner for the play, the Company's farm-out process for the for the play continuing through Q4, 2020 at least, and its ability to resume appraisal activities rapidly thereafter and management's belief that its three-pronged strategy above has the potential to deliver shareholder value. 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: the resumption of operations following the COVID-19 pandemic; political stability of the areas in which the Company is operating and completing transactions; continued safety of operations and ability to proceed in a timely manner; continued operations of and 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; the continued favourable pricing and operating netbacks in
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: the risks of further disruptions from the COVID-19 pandemic; the risks of currency fluctuations; changes in gas prices and netbacks in
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 Announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 ('MAR'). Upon the publication of this Announcement, this inside information is now considered to be in the public domain.
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
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