Valeura Energy Inc Announces Q1 2019 financial and operating results

CALGARY, AB / ACCESSWIRE / May 9, 2019 / Valeura Energy Inc. (TSX:VLE, LSE:VLU) ("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 ongoing conventional 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 view of the significant value of our unrisked 10 Tcfe unconventional gas resource in the Thrace Basin, where we are partnered with Equinor.

We continued to build on our understanding of the geology of the BCGA play by appraisal drilling which substantiated our belief that the highly over-pressured sandstone interval extends vertically down to nearly 5,000 metres and laterally out to the far western flank of the play fairway. Our confidence in our ability to map and predict the gas in place has greatly increased, and we now fully turn our focus to a detailed production testing programme to identify the flow properties of the many different zones we have encountered.

Financially, we remain in an excellent position and we expect to exit the year with approximately $40 million in working capital after the significant 2019 work programme. Furthermore, we enter Q2 2019 with a clear forward plan to evaluate the commerciality of the play together with our partner Equinor."

Financial and Operating Results Summary

Table 1 Financial and Operating Results Summary

Notes:

See the MD&A filed on SEDAR for further discussion.

1. 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.
2. 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.