Canada-based Valeura Energy recently announced that its Nong Yao C extension, which began production in mid-August 2024, has significantly increased output from the Nong Yao field, located offshore Thailand. The extension boosted production by 66%.
In early August, the company wrapped up drilling operations at the Nong Yao C extension, which is part of its 90% working interest in the Nong Yao field. The operations included six planned horizontal development wells, a water injection well, and an additional appraisal well that was successfully completed. By August 15, 2024, the first wells were brought onstream, with the rest following shortly after. The seventh well, completed as a producer, was also brought online.
This new development resulted in a notable rise in output, with production rates averaging 11.6 mbbls/d in the final week of the third quarter of 2024. Before the extension started, production was at 7.0 mbbls/d. Valeura highlighted that this improvement reflects the company’s working interest share.
The company shared that the drilling program at Nong Yao C exceeded their expectations. Costs were around 25% below the initial budget, largely due to more efficient drilling, while maintaining strict safety standards.
Earlier in 2024, just before the start of the third quarter, Valeura temporarily suspended production at its 100%-owned Wassana field. This was done as a precautionary measure while the company investigated a potential risk to the production facility’s structural integrity. After thorough inspections, it was confirmed that the facility was in a safe condition, and production resumed in early August.
At the Jasmine field, Valeura commenced the drilling of two horizontal infill development wells on the Jasmine A platform in late August 2024. Both wells achieved their objectives. The 41H well encountered a reservoir compartment full of oil, with no apparent bottom aquifer, while the 42H well revealed a mixed-phase/oil pay zone. Both wells were completed and brought into production, delivering a combined initial output of 1,050 bbls/d, based on a three-day average.
Drilling operations at the Jasmine field have progressed efficiently. Once the two infill wells were drilled, the contracted rig was temporarily demobilised for scheduled inspection and maintenance. The rig has since returned to Jasmine and resumed drilling, with plans to complete three additional infill wells.
For the Manora field, Valeura revised its work schedule to include additional drilling, without increasing its capital budget. This revision was possible due to faster drilling operations throughout 2024. The company expects to mobilise the drilling rig to its 70%-owned Manora field by the end of the year. There, a five-well infill drilling and appraisal programme will begin. In the meantime, production operations at Manora, using existing wells, continue to progress as planned.
Valeura President and CEO Sean Guest provided insight into the company’s performance during the third quarter of 2024, noting the company’s financial strength and production gains. Valeura generated $139 million in revenue during the quarter, selling 1.8 million barrels of oil. The company ended the quarter with a cash balance of $156 million, no debt, and an inventory of 1.2 million barrels of oil. Two liftings totalling 0.51 million barrels were completed just after the quarter ended, and the revenue from those will be recorded in the fourth quarter.
Guest also highlighted the success of the Nong Yao C development in boosting production rates. Valeura’s average working interest share oil production for September was 26.4 mbbls/d, a 23% increase over the second quarter of 2024. Looking ahead, the company expects production to remain in the 25 mbbls/d range for the rest of the year, aligning with their full-year guidance.
Valeura Energy Inc (TSX:VLE) is an upstream oil & gas company, with a clear strategy to add value for shareholders. The Company has a strong balance sheet positioning it for potential inorganic growth opportunities in the near/medium-term, and substantial longer-term upside potential through an operated deep, tight gas play.
