Valeura Energy “a cash flow generating business with substantial growth opportunities”

Valeura Energy Inc (TSX:VLE), the upstream oil and gas company with assets in the offshore Gulf of Thailand and the Thrace Basin of Turkey, has provided a business update, its guidance outlook for the full year 2023 and the results of its third-party independent reserves and resources assessment for its Thailand assets.

Sean Guest, President and CEO commented:

“Following our recently completed acquisition of Gulf of Thailand assets from Mubadala Energy, I am pleased to present Valeura as a cash flow generating business with substantial growth opportunities centered on our strategy of ongoing value generation. 

Our global portfolio includes assets which held 2P reserves of 29.1 million barrels of oil, as independently evaluated at December 31, 2022, in addition to an assessed unrisked best estimate 2C contingent resource total of 14.1 million barrels of oil in Thailand, plus our prospective resource in Turkey.  This underscores the substantial value potential of Valeura and highlights the significant running room within our portfolio to continue pursuing the target of reserves replacement.  Our focus will always revolve around delivering safe and reliable operations, in a responsible and sustainable way, geared toward cash generation and growth to create deeper value for shareholders.”

Update on Closing the Mubadala Acquisition

On December 6, 2022, Valeura announced a transformational Gulf of Thailand acquisition from Mubadala Energy, which was subsequently completed on March 22, 2023 (the “Mubadala Acquisition”).  All net economic benefits accumulated by the Mubadala Acquisition assets from an effective date of September 1, 2022, were included with the acquired entity.  Over that approximately seven-month period, the acquired assets’ oil production averaged 20,600 barrels per day (“bbls/d”), on a net working interest basis, generating aggregate revenue of US$363 million, resulting in an average of approximately US$30 million in pre-tax cash flow per month, in line with the Company’s previously published expectation.1,3 

At completion of the Mubadala Acquisition on March 22, 2023, the acquired entity held cash and cash equivalent resources of approximately US$243 million.  After accounting for, among other things, the impact of inventories, accounts payable, and tax liabilities, the increase in Valeura’s adjusted net working capital position as a result of the Mubadala Acquisition is estimated to be approximately US$105 million.2,3 

The Company intends to release its interim consolidated financial and operating results for the three month period ended March 31, 2023 on May 11, 2023.  Production from the acquired assets in Q1 2023 was 20,475 bbls/d and capital spending was approximately US$34 million, on a net working interest basis.  The Company’s Q1 2023 results will report a portion of these amounts relating to the period from completion of the Mubadala Acquisition through the end of the reporting period (from March 22, 2023 through March 31, 2023).

Notes to reader:

1) Pre-tax cash flow is a non-IFRS measure that represents the cash generated by the assets excluding taxes paid and allows management to assess the cash generative capacity of the business as well as  operating and financial performance.  It is calculated as revenue, less royalties, less operating costs, including lease costs. The nearest IFRS measure is cash flow from operations, which management estimates as US$135 million, adjusted to add back current tax of US$91 million, and deducting lease payments of US$14 million, resulting in US$212 million, or approximately US$30 million per month.

2) Adjusted net working capital is a non-IFRS measure calculated as current assets (cash, receivables, prepaids and deposits and inventory) less current liabilities excluding current lease liabilities (payables, accrued payables and taxes payable.)  Current lease liabilities consists predominantly of liabilities related to lease contracts associated with the Floating Production Storage and Offloading (“FPSO”) and Floating Storage and Offloading (“FSO”) vessels for the producing licences, which the Company views as operating costs.  Current lease liabilities were approximately US$18 million at completion. Fair Value adjustments were made to inventory, in accordance with IFRS at the completion date.  For all other working capital balances, carrying value approximates fair value.  The nearest IFRS measure is working capital, being current assets of US$390 million less non-cash current liabilities of US$303 million, adjusted for current lease liabilities of US$18 million, resulting in US$105 million.

3) Pre-tax cash flow and adjusted net working capital are preliminary management estimates based on data available as of the date hereof and are subject to customary financial statement procedures by the Company and its auditors.

2023 Guidance Outlook

Valeura anticipates total capital spending in 2023 of US$180 – 200 million.  In keeping with the acquired assets’ long history of reserves replacement through ongoing activity, much of the capital spending is directed toward infill drilling on producing fields, and is forecast to result in aggregate full year oil production of 20,000 – 22,300 bbls/d.  This assumes the start of production at the Wassana field in May 2023 in addition to continued ongoing production operations at the Jasmine, Manora, and Nong Yao fields.   Operating cost guidance in 2023 is US$220 – 240 million, which, at the mid-point of the production guidance range, equates to approximately US$30/bbl.

Category2023 Guidance (Full Year)
Production20,000 – 22,300 bbls/d
Price realisationsApproximately equivalent to the Brent crude oil benchmark
Operating costs*US$220 – 240 million
Capital spendingUS$180 – 200 million

* Includes FPSO and FSO lease costs

The Company intends to fund its operating costs and capital spending through cash generated from ongoing operations.  For clarity, all production, operating costs, and capital spending estimates provided above relate to the full calendar year 2023, and accordingly, include amounts relating to the period prior to completion of the Mubadala Acquisition.


Valeura intends to re-invest into its producing fields, with the bulk of its spending directed toward drilling new wells and working over existing wellbores to access additional reservoir sands.  The Company is planning a total of 21 new or recompleted wellbores in 2023, seven of which, were drilled or completed in Q1 2023.

Valeura’s re-investment efforts are directed toward a mix of growing aggregate production rates where possible (including through infill drilling at the Wassana field), while mitigating the impact of natural production declines elsewhere (such as the Jasmine and Manora fields).  Throughout its operations the Company seeks to extend the economic life of its producing fields, as evidenced by recent drilling successes at the Manora field, which is the most mature asset in the Company’s portfolio, and has seen its life expectancy further prolonged into at least 2025. 

Oil production in 2023 is forecast to average 20,000 – 22,300 bbls/d.  The production range is largely defined by the sequencing of drilling activity across the portfolio, which the Company continually seeks to optimise, and timing for the Wassana infill drilling programme, which is currently scheduled to start with the arrival of a drilling rig in early Q3 2023.


Valeura intends to invest approximately US$75 million toward the development of the Nong Yao C accumulation, with spending spread over the 2023 and 2024 period.  The 2023 component of this development programme entails installation of a Mobile Offshore Production Unit (“MOPU”) facility, which is currently under construction and anticipated to mobilise to the field in Q4 2023, with development drilling starting thereafter.  The Company anticipates drilling the first four of a total of nine development wells in 2023.  First oil from the Nong Yao C development is planned for Q1 2024 and ultimately is expected to contribute to a net increase in Nong Yao oil production up to a target rate of approximately 11,000 bbls/d in 2024. 

Valeura’s guidance estimates and Contingent Resources summary below do not currently include any spending or production relating to the Rossukon oil field development on Licence G6/48.  The Company will provide additional clarity on the Rossukon oil field in due course.


The Company is seeking a farm-in partner to participate in the next phase of exploration and appraisal on its tight gas play in the Thrace basin of Turkey.  Until such time as a suitable partner arrangement has been agreed, Valeura intends to focus its efforts on maintaining the Thrace basin assets in good standing and has not dedicated material capital spending to the play in 2023.     

Further Growth

While Valeura’s immediate focus is on safe, reliable delivery from its existing portfolio, the Company remains focused on growth.  This includes the potential to grow further through the mergers and acquisitions market within the Southeast Asia region.

Reserves and Resources

Valeura is pleased to report the results of an independent third-party reserves and resources assessment pertaining to its assets acquired through the Mubadala Acquisition.  The reports, dated April 17, 2023, were prepared for Valeura by Netherland, Sewell & Associates, Inc. (“NSAI”) to assess reserves and resources in Licences B5/27 containing the Jasmine and Ban Yen oil fields, G1/48 containing the Manora oil field, and G11/48 containing the Nong Yao oil field, as of December 31, 2022 (the “NSAI Reports”).  As these assets have been continually producing during the interim period from January 1, 2023 to the completion of the Mubadala Acquisition on March 22, 2023, an aggregate of 1,650 thousand barrels (“Mbbls”) of reserves presented herein were produced by the previous operator.  Additionally, the results of the successful drilling on the Jasmine field in the interim period are not evaluated, nor included in the reserves.

Reserves and resources in the NSAI Reports are in addition to the Company’s previously disclosed reserves and resources on Licence G10/48 containing the Wassana oil field, as disclosed by the Company on March 31, 2023.

Unless otherwise noted, reserves and resources estimates are presented on a before royalties, working interest basis.

Summary of Valeura’s Aggregate Thailand Reserves and Contingent Resources

·    Proved (1P) reserves of 20,671 Mbbl of oil;

·    Proved and probable (2P) reserves of 29,106 Mbbl of oil, with an estimated future net revenue after income taxes of US$261 million, using a discount rate of 10%;

·    Best estimate (2C) unrisked development unclarified contingent resources of 14,124 Mbbl or 2,500 Mbbl on a risked basis. 

Net Present Values of Future Net Revenue Based on Forecast Prices and Costs

Net present values of future net revenue from oil reserves are based on cost estimates as of the date of the NSAI Report, and forecast Brent crude oil reference prices of US$84.67, US$82.34, US$80.68 and US$81.04 per bbl for the years ending December 31, 2023, 2024, 2025 and 2026, respectively, with 2% escalation thereafter.  Values are presented on an after tax basis and assume tax loss carry-forwards associated with ownership of the Wassana field are applied only to taxes relating to that asset, resulting in no taxes payable for the Wassana field.  The remaining assets are assumed by NSAI to carry their full statutory tax burden.

Contingent Oil and Gas Resources, Development Unclarified

Contingent resources for additional reservoir accumulations are heavy crude oil and light/medium crude oil gas classified as “Development Unclarified” and carry an assessed chance of development ranging from 15% to 20%.  These accumulations provide a future opportunity to access additional hydrocarbon volumes.


Valeura Energy’s management team will host an investor and analyst webcast at 09:00 Calgary / 16:00 London / 22:00 Bangkok today, April 18, 2023, to discuss its guidance outlook for 2023.  The live audio and video feed can be accessed via the link below.  Written questions may be submitted through the webcast system or by email to

Webcast link:

An audio only feed of the event is available by phone using the Conference ID and dial-in numbers below.

Conference ID: 908 105 644#

Dial-in numbers:

Canada: 833-845-9589
Singapore: +65 6450 6302
Thailand: +66 2 026 9035
Turkey: 00800142034779
UK: 0800 640 3933
USA: 833-846-5630

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