Valeura Energy, the upstream natural gas company focused on the Thrace Basin of Turkey, reports its financial and operating results for the three month period ended March 31, 2020.
The complete quarterly reporting package for the Company, including financial statements and associated management’s discussion and analysis ('MD&A'), are being filed on SEDAR at www.sedar.com and have been posted on the Company’s website at www.valeuraenergy.com. All dollar amounts are in US dollars unless otherwise stated.
Financial and Operating Results Highlights
- Maintained gas production operations in light of the COVID-19 pandemic by implementing measures to protect the health and well-being of Valeura personnel and contractors;
- Valeura net Q1 2020 average production increased to 716 boe/d, up 11% from Q4 2019;
- Average realised Q1 2020 gas prices unchanged on a Turkish Lira basis versus the prior quarter, equivalent to $7.08/Mcf, down 5% from Q4 2019;
- Revenue in Q1 2020 of $2.8 million, an increase of 6% over the prior quarter;
- Operating netback of $24.95/boe in Q1 2020, up 2% from Q4 2019;
- Net working capital surplus at March 31, 2020 of $34.1 million, including cash of $32.6 million;
- Valeura’s interest in the Thrace deep rights doubled effective April 2, 2020, following the Government of Turkey approval for the transfer of Equinor’s working interest to Valeura and partner Pinnacle Turkey Inc.;
- Successfully drilled two commitment wells on the West Thrace Exploration Licence with preliminary indications of hydrocarbons in both wells;
- All Valeura lands remain in good standing with no unsatisfied work commitments; and
- The Company is exploring the potential for mergers and acquisitions to grow its portfolio, capitalising on the current market environment.
Valeura remains committed to safe ongoing operations and has taken precautious both to protect the well-being of its staff and to sustain its ongoing production and revenue generation in Turkey. At the same time, the Company continues to pursue appraisal of the deep unconventional gas play and following the doubling of its working interest after Equinor’s exit and is commencing the process to seek a new partner for the play. The Company’s strong financial position, with an end-Q1 2020 working capital surplus of $34.1 million and no debt, affords it significant flexibility to support its strategy to extract maximum value from both its shallow conventional production and deep unconventional plays in the Thrace basin of Turkey.
Sean Guest, President and CEO commented:
'Keeping our people safe is our highest priority, and we are taking direction from public health authorities and medical professionals on how to both remain safe and continue operations. Our Q1 2020 results are an example of how even in the face of substantial new challenges due to the COVID-19 pandemic, we can maintain our health and safety record while continuing critical operations to maintain the supply of gas to our customers. By having direct control of the value chain all the way from the wellhead to the customer, coupled with pricing that has not been influenced by the recent sharp decline in crude oil prices, our shallow gas business is fundamentally well-positioned to remain resilient in these times.
'At the same time, we remain committed to our deep, tight gas play, and are commencing the process of securing a new partner to participate in an ongoing appraisal work programme. In the near term we will continue to work toward more low-cost data collection, including plans to resume long-term production testing at Devepinar-1.
'Valeura remains in a strong financial position, with a gas production asset that generates cash flow even in times of economic turmoil, and significant option value on a potentially very large unconventional gas play. We will continue to closely monitor economic conditions in Turkey, and to course-correct our operations as required to protect our ongoing revenue generation. With appropriate safeguards in place, we are well positioned to ride out the current economic turmoil and expect to emerge strong.'
Source: Valeura Energy