Valeura Energy, the upstream oil and gas company with assets in the Gulf of Thailand and the Thrace Basin of Turkey, has provided an operational update for Q3 2023.
The Company’s net working interest oil production averaged 19,961 bbls/d during Q3 2023. Production performance from continuing operations on its Jasmine, Nong Yao, and Manora oil fields was relatively unchanged from the prior quarter as the impact of recently drilled production wells has effectively offset the impact of natural declines.
Production at the Wassana oil field was offline throughout most of the quarter, following the Company’s precautionary suspension on July 7, 2023 to address safety concerns with operating practices on the third-party owned and operated floating storage and offloading vessel (“FSO”). Valeura is planning to implement a phased transition to a new sub-contractor to operate the FSO, resulting in production resuming in Q4 2023.
During the quarter, Valeura drilled a total of seven wells across its portfolio, with a 100% success rate. Drilling activity included two appraisal wells on the Wassana field which have increased the Company’s expectation for recoverable oil from the field. The Company has begun the concept selection phase of a project to expand the development of the Wassana field to realise this increased potential.
As of September 30, 2023, the Company’s net cash balance(1) had increased to US$103.4 million (vs. US$87.6 million as of June 30, 2023), after having paid petroleum income taxes (“PITA”)(2) of US$29.0 million and repaying US$21.2 million of its outstanding debt during the quarter. As of September 30, 2023, the Company’s outstanding debt(1) had been reduced to US$12.9 million.
1) Net Cash & Outstanding Debt: Are non-IFRS measures which do not have a standardised meaning prescribed by IFRS and might not be comparable to similar financial measures disclosed by other issuers. These non-IFRS measures are provided because management uses the information to a) analyse financial strength and b) manage the capital of the Company. Net cash consists of cash and cash equivalents and restricted cash less outstanding debt. Outstanding debt consists of current portion of debt and long-term debt after reversal of accounting adjustments.
2) In accordance with Thailand’s Petroleum Income Tax Act, E&P companies active in Thailand are required to provide the Thai Revenue Department estimates of net profit in respect of any of its concession interests under Thai III fiscal terms, for the current year, and remit half of the estimated annual PITA by the end of August. A final payment of PITA is due by the end of May of the following year. The Company’s interests in the Manora, Nong Yao, and Wassana concessions are governed by Thai III fiscal terms and accordingly, are subject to this treatment.
Sean Guest, President and CEO commented:
'We have had a strong operational performance across our portfolio during Q3. Our Jasmine, Nong Yao, and Manora fields all continue to demonstrate how infill drilling can sustain production rates. Meanwhile at Wassana, our appraisal wells have confirmed the potential for a larger scale of growth than previously envisaged and our team is working to select an appropriate re-development concept for the field while we prepare to resume production operations in Q4.
Our balance sheet remains robust and we are continuing to pay down debt while building cash. Even after having funded our operations and capital investments, and making cash payments of more than US$50 million toward PITA taxes and debt reduction, our net cash position has increased. We are building a highly cash generative business and establishing a solid financial foundation to support further growth.'
Valeura intends to announce its complete Q3 2023 financial and operating results during the second week of November 2023. Specific timing and webcast details will be confirmed in due course.
For further info, see: Presentation: Valeura Energy Inc. Corporate Overview (Sept 2023)
Source: Valeura Energy
