Valeura Energy (TSX: VLE): Beyond a simple production story

• FY25 production, YE25 reserves, and YE25 net cash positions have already been disclosed. Since the beginning of the conflict in Iran, the Dubai benchmark has outpaced Brent price with a current premium of US$40-50/bbl. Given the fiscal terms in Thailand, this has important positive implications for Valeura’s cashflow.
• Valeura’s portfolio also contains several meaningful sources of upside that could be accelerated in the context of the current high oil price. We expect materially improved visibility over the coming months.
• FID on the initial Bussabong development (Valeura WI: 40%) could be taken in 2Q26 with 2 platforms, each developing ~50 bcf (100 bcf total) and producing ~30 mmcf/d per platform (60 mmcf/d combined) with overall net capex of ~US$50 mm. Using a domestic gas price of US$8/mcf and US$1/mcf NPV, this equates to an unrisked NAV of ~C$0.50/sh net to Valeura (C$0.25 per platform). Additional platforms could follow.
• The start-up of Wassana currently expected in 2Q27 could be brought forward. Valeura is also evaluating an extension of its drilling campaign (which was initially planned to include just 8 months of drilling in 2026), and is adding four additional well slots at Nong Yao A at a net cost of ~US$7 mm. With the new slots planned to be ready in November, this could accelerate drilling, with the new wells adding 1–2 mmbbl.
• Results from the ongoing 3D seismic over Nong Yao NE are expected in late 2026. These could unlock new exploration opportunities; we currently assume ~5 mmbbl of prospective resources. The company also plans to drill two exploration wells in 2026 across Manora DEF, Jasmine North, or the southern Wassana area. We assume ~5 mmbbl of prospective resources per target (we assume 1 in 3 chance of success).
• We are increasing our target price from C$15 to C$17.00/sh (in line with our new ReNAV) to reflect (1) one quarter of very high oil price with US$40/bbl premium to Brent and (2) the incremental upside associated with the 2026 activity set. This continues to be based on our ReNAV using US$70/bbl Brent from 2027 onward. Given its balance sheet and the nature of its portfolio, Valeura is well placed to benefit from higher oil price. At US$80/bbl and US$90/bl, our ReNAV would be C$20/sh and in excess of C$23/sh, respectively.

Valuation
Our risked upside now incorporates value for an initial two‑platform development at Bussabong, to which we assign a 75% chance of development, pending confirmation. We also include a smaller contribution for a potential four‑platform expansion case, risked at 25%. In addition, our ReNAV now reflects the value of the FY26 exploration programme and the four additional wells at Nong Yao A. Our updated ReNAV stands at C$16.92/sh, based on US$76/bbl Brent in 2026 and US$70/bbl afterwards.