Star Metro - Valeura Energy Inc. Announces Türkiye Joint Venture Agreement

Dr. Sean Guest, President and CEO commented:

"Despite our strategic pivot toward the Asia-Pacific region, we have maintained our conviction that the deep gas play we discovered in northwest Türkiye offers significant potential to add value to the Company. Our drilling programme from 2017 to 2019 demonstrated that there are multiple Tcf of gas in place across Valeura's lands in a deep tight gas play. We drilled three wells into this play and tested 12 separate zones - every one of which flowed gas. It is my hope that with a reinvigorated push to test the play, we will see this evolve into a commercial success, especially when coupled with the higher European gas prices that exist today.

Valeura has a proven history of creating cost-efficient structures to pursue exploration ventures, and this Joint Venture is no different. Moreover, this agreement will result in near-term action in the field with re-entry and testing of new zones in our key Devepinar-1 well expected this quarter. With success in that testing operation, Transatlantic can fully earn a 50% working interest across the play by drilling and testing a new deep appraisal well.

We are pleased to be working again with Transatlantic, who, given their strong presence in Türkiye and proven unconventional operating credentials both in Türkiye and the United States, are well-placed to operate this next phase of the play to drive value generation for all stakeholders."

Thrace Deep Gas Play

Valeura has held various blocks and operated in Türkiye for almost 15 years. The Company continues to hold the deep rights (being below 2,500 metres or a pressure gradient of 0.6 psi/ft, whichever is shallower) in various exploration licences and production leases covering a total of 955 km² (gross) in the Thrace basin, located just west of Istanbul. For the majority of the acreage (those lands held under exploration licences), the current exploration phase expires on June 27, 2026, but discussions are underway with the government in relation to a two-year appraisal period extension.

Between 2017 and 2020, Valeura explored and discovered a ubiquitous, gas-charged, over-pressured sandstone reservoir, believed to represent a basin-centred gas play at depths of approximately 2,900 - 4,775 metres. In conjunction with its partner at the time, Equinor, it drilled the Yamalik-1, Inanli-1, and Devepinar-1 exploration wells, all which demonstrated the presence of hydrocarbons. The Company undertook hydraulic stimulation of 12 separate intervals, all which flowed gas to surface. The testing programme included one long-term test that was flowed and sold into the gas grid for approximately three months. While the drilling programme confirmed multiple Tcf of gas in place, none of the wells were declared a commercial success at that time given the flow rates and local gas price. Since the exit of Equinor from the play in Q2 2020, the assets have remained an operationally dormant part of Valeura's portfolio.

Joint Venture

Transatlantic have been operating in Türkiye since 2007 and continue to be very active in country including the announcement earlier this year of a joint venture with Continental Resources and Türkiye Petrolleri AO (Türkiye's state-owned petroleum corporation), to develop unconventional oil and gas resources in Türkiye's Diyarbakir and Thrace basins. Additionally, Transatlantic have partnered with both Valeura and Pinnacle in the Thrace basin between 2011 and 2017 as operator of the conventional gas production. Given their active operations in Türkiye, Transatlantic will serve as contract operator for the venture, with Valeura remaining the operator of record designated with the Government of Türkiye.

The Joint Venture provides an opportunity for Transatlantic to earn a 50% undivided working interest in the deep rights held by Valeura and Pinnacle through two separate operations.

Devepinar Re-Entry

Valeura drilled and hydraulically stimulated the Devepinar-1 exploration well in 2019 and conducted short-term tests of three separate intervals in the deep part of the Kesan formation at a depth of 4,660 - 4,765 metres. While gas was produced at good initial rates from all intervals, relatively high decline rates were observed that suggested the zones would not support long-term commercial flow rates. Thereafter, the Company preserved the well in a suspended state and performed extensive technical modelling work alongside its search for a new joint venture partner.

Under the terms of the Joint Venture, Transatlantic has agreed to undertake a re-entry of the Devepinar-1 well including hydraulic stimulation and testing of shallower zones in the Kesan. If the results constitute a commercial discovery, Transatlantic shall earn a 50% proportion of the working interest held by each of Valeura (currently 63%) and Pinnacle (currently 37%) in the western portion of the lands (comprised of the West Thrace Production Leases and West Thrace Exploration Licence, as defined in Valeura's Annual Information Form for the year ended December 31, 2024).

Under the terms of the Joint Venture, Transatlantic will pay 100% of the costs to re-enter the Devepinar-1 well, up to US$2 million. Any costs there above shall be shared amongst the parties, 50% Transatlantic / 31.5% Valeura / 18.5% Pinnacle. Testing operations are expected to commence in Q4 2025.

Deep Appraisal Well

Transatlantic has an option to earn an interest in the eastern portion of the lands (the Banarli Exploration Licences, as defined in Valeura's Annual Information Form for the year ended December 31, 2024) by drilling a well down to at least 4,000 metres on either the western or eastern portion of the lands. If such well results in a commercial discovery, Transatlantic shall earn a 50% proportion of the interest held by Valeura (currently 100%). Transatlantic will pay 100% of the costs up to US$8 million, and any costs there above shall be shared 50% Transatlantic / 50% Valeura.

Valeura gathered significant learnings in the earlier drilling and testing phase and its technical studies thereafter have identified a well location that could intersect the best quality known reservoir within the dry gas window of the play. Valeura postulates that this combination should improve the flow rates and minimise decline, and hence offers the best chance of yielding a commercial discovery. That well location, which is on the Banarli Exploration Licence and is known as Hanoglu-1, has already been permitted for drilling and may therefore serve as a fast-track opportunity for the deep appraisal well. However, the final decision on the well will be made in collaboration between Valeura, Transatlantic, and Pinnacle, and only after the testing of the Devepinar-1 well.

For further information, please contact:

Valeura Energy Inc. (General Corporate Enquiries)+65 6373 6940
Sean Guest, President and CEO
Yacine Ben-Meriem, CFO
[email protected]

Valeura Energy Inc. (Investor and Media Enquiries) +1 403 975 6752 / +44 7392 940495
Robin James Martin, Vice President, Communications and Investor Relations
[email protected]

Contact details for the Company's advisors, covering research analysts and joint brokers, including Auctus Advisors LLP, Canaccord Genuity Ltd (UK), Cormark Securities Inc., Research Capital Corporation, and Stifel Nicolaus Europe Limited, are listed on the Company's website at www.valeuraenergy.com/investor-information/analysts/.

About the Company

Valeura Energy Inc. is a Canadian public company engaged in the exploration, development and production of petroleum and natural gas in Thailand and in Türkiye. The Company is pursuing a growth-oriented strategy and intends to re-invest into its producing asset portfolio and to deploy resources toward further organic and inorganic growth in Southeast Asia. Valeura aspires toward value accretive growth for stakeholders while adhering to high standards of environmental, social and governance responsibility.

Additional information relating to Valeura is also available on SEDAR+ at www.sedarplus.ca.

Advisory and Caution Regarding Forward-Looking Information

Certain information included in this news release constitutes forward-looking information under applicable securities legislation. Such forward-looking information is for the purpose of explaining management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project", "target" or similar words suggesting future outcomes or statements regarding an outlook.

Forward-looking information in this news release includes, but is not limited to, the potential for the deep gas play to add value and evolve into a commercial success; the Joint Venture resulting in near-term action in the field; timing for testing operations on the Devepinar-1 well; the potential for a two-year appraisal period extension; the potential for the Hanoglu-1 location to yield the best quality reservoir within the dry gas window of the play; and potential for the location serve as a fast-track opportunity for the deep appraisal well.

Although the Company believes the expectations and assumptions reflected in such forward-looking information are reasonable, they may prove to be incorrect.

Forward-looking information is based on management's current expectations and assumptions regarding, among other things: political stability of the areas in which the Company is operating; continued safety of operations and ability to proceed in a timely manner; continued operations of and approvals forthcoming from governments and regulators in a manner consistent with past conduct; ability to achieve extensions to licences in Thailand and Türkiye to support attractive development and resource recovery; future drilling activity on the required/expected timelines; the prospectivity of the Company's lands; the continued favourable pricing and operating netbacks across its business; future production rates and associated operating netbacks and cash flow; decline rates; future sources of funding; future economic conditions; the impact of inflation of future costs; future currency exchange rates; interest rates; the ability to meet drilling deadlines and fulfil commitments under licences and leases; future commodity prices; the impact of the Russian invasion of Ukraine; the impact of conflicts in the Middle East; royalty rates and taxes; management's estimate of cumulative tax losses being correct; future capital and other expenditures; the success obtained in drilling new wells and working over existing wellbores; the performance of wells and facilities; the availability of the required capital to funds its exploration, development and other operations, and the ability of the Company to meet its commitments and financial obligations; the ability of the Company to secure adequate processing, transportation, fractionation and storage capacity on acceptable terms; the capacity and reliability of facilities; the application of regulatory requirements respecting abandonment and reclamation; the recoverability of the Company's reserves and contingent resources; future growth; the sufficiency of budgeted capital expenditures in carrying out planned activities; the impact of increasing competition; the availability and identification of mergers and acquisition opportunities; the ability to successfully negotiate and complete any mergers and acquisition opportunities; the ability to efficiently integrate assets and employees acquired through acquisitions; global energy policies going forward; international trade policies; future debt levels; and the Company's continued ability to obtain and retain qualified staff and equipment in a timely and cost efficient manner. In addition, the Company's work programmes and budgets are in part based upon expected agreement among joint venture partners and associated exploration, development and marketing plans and anticipated costs and sales prices, which are subject to change based on, among other things, the actual results of drilling and related activity, availability of drilling, offshore storage and offloading facilities and other specialised oilfield equipment and service providers, changes in partners' plans and unexpected delays and changes in market conditions. Although the Company believes the expectations and assumptions reflected in such forward-looking information are reasonable, they may prove to be incorrect.

Forward-looking information involves significant known and unknown risks and uncertainties. Exploration, appraisal, and development of oil and natural gas reserves and resources are speculative activities and involve a degree of risk. A number of factors could cause actual results to differ materially from those anticipated by the Company including, but not limited to: the ability of management to execute its business plan or realise anticipated benefits from acquisitions; the risk of disruptions from public health emergencies and/or pandemics; competition for specialised equipment and human resources; the Company's ability to manage growth; the Company's ability to manage the costs related to inflation; disruption in supply chains; the risk of currency fluctuations; changes in interest rates, oil and gas prices and netbacks; the risk that the Company's tax advisors' and/or auditors' assessment of the Company's cumulative tax losses varies significantly from management's expectations of the same; potential changes in joint venture partner strategies and participation in work programmes; uncertainty regarding the contemplated timelines and costs for work programme execution; the risks of disruption to operations and access to worksites; potential changes in laws and regulations, including international treaties and trade policies; the uncertainty regarding government and other approvals; counterparty risk; the risk that financing may not be available; risks associated with weather delays and natural disasters; and the risk associated with international activity. See the most recent annual information form and management's discussion and analysis of the Company for a detailed discussion of the risk factors.

Certain forward-looking information in this news release may also constitute "financial outlook" within the meaning of applicable securities legislation. Financial outlook involves statements about Valeura's prospective financial performance or position and is based on and subject to the assumptions and risk factors described above in respect of forward-looking information generally as well as any other specific assumptions and risk factors in relation to such financial outlook noted in this news release. Such assumptions are based on management's assessment of the relevant information currently available, and any financial outlook included in this news release is made as of the date hereof and provided for the purpose of helping readers understand Valeura's current expectations and plans for the future. Readers are cautioned that reliance on any financial outlook may not be appropriate for other purposes or in other circumstances and that the risk factors described above or other factors may cause actual results to differ materially from any financial outlook.

The forward-looking information contained in this news release is made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward-looking information contained in this news release is expressly qualified by this cautionary statement.

This news release does not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction, including where such offer would be unlawful. This news release is not for distribution or release, directly or indirectly, in or into the United States, Ireland, the Republic of South Africa or Japan or any other jurisdiction in which its publication or distribution would be unlawful.

Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this news release.

This information is provided by Reach, the non-regulatory press release distribution service of RNS, part of the London Stock Exchange. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.

SOURCE: Valeura Energy Inc.

View the original press release on ACCESS Newswire

D.Fraser--SMC