Valeura Energy (TSX: VLE): Potential reserves addition. Wassana redevelopment on track
• 3Q25 production averaged ~23 mbbl/d (above 2Q25 production of 21.4 mbbl/d), exiting the quarter at 24.8 mbbl/d.• Ten wells were drilled at Nong Yao, of which seven are now producing. Field output has increased from ~8 mbbl/d to ~11.6 mbbl/d as of end-September.
• Several wells indicate potential reserves upside. At Nong Yao A, the lateral extent of the H2.0 sand encountered in well NYA-40H exceeded expectations. Additional bypassed oil was identified in the shallower H2.5 and H3.0 zones.
• At Nong Yao B, appraisal well NYB-29 confirmed development potential in both the H8.0 and H8.5 sand reservoirs. These intervals will be evaluated for inclusion in future drilling campaigns.
• At Nong Yao C, well NYC-11H exceeded management’s expectations, encountering net oil pay throughout virtually all of its horizontal section.
• FY25 production is now expected at the lower end of guidance of 23–25.5 mbbl/d.
• The shares continue to offer deep value. Our net cash forecast exceeds the current market capitalization by early 2028. Recent drilling success at Bussabong (Block G3/65) suggests increasing resource potential, with Valeura holding a 40% WI post-acquisition. The processing of newly acquired 3D seismic may further enhance the prospectivity of G1/65 and G3/65. FID could be taken in 2026.
• The redevelopment of Wassana continues to be expected to reach first oil in 2Q27.
• We maintain our target price of C$12.70 per share.
Financials
Valeura held US$248 mm in cash at the end of September. Three September liftings, amounting to US$36.7 mm are expected to be received in mid-October, leading to an adjusted cash position in excess of US$280 mm. Price realizations were at a US$2.52 premium to Brent.
Valuation
Excluding any contribution from G1/65 and G3/65 our Core NAV and ReNAV for Valeura are ~C$10.40 per share and C$12.50 per share respectively. We forecast that Valeura will hold in excess of US$300 mm in net cash at YE25. This represents over 50% of the current market cap.
Valeura Energy is engaged in the exploration, development and production of petroleum and natural gas in Turkey and Western Canada. As of Dec 31 2010, proven gross reserves for light and medium oil was 116 thousand barrels (net reserves of 104 thousand barrels); proven gross reserves for heavy oil was 10 thousand barrels (net reserves of 9 thousand barrels); proven gross reserves for natural gas was 1,047 million cubic feet (net reserves of 938 million cubic feet); and proven gross reserves for natural gas liquids was 26 thousand barrels (net reserves of 19 thousand barrels).
Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector.
The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy.
Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors.
Auctus provides Corporate Broking, Equity Research and Investment Banking services.
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