Valeura Energy (TSX: VLE): Production boost and likely reserves increase at Manora
• Valeura has drilled three new production wells and two appraisal wells at Manora. Four of these wells are now online, boosting production from 2,144 bbl/d to 2,866 bbl/d.• The results of the A35 and A36 appraisal wells have derisked 3-5 potential future drilling targets. The associated resources were not included in the YE24 reserves estimates and are likely to be booked as reserves, extending the field's life.
• The A38 well was completed with an innovative downhole autonomous inflow control device to manage water vs. oil production. This device is expected to reduce operating expenses and decrease water management. Valeura plans to continue using this technology, which it has already been deploying in most of its new-drill horizontal wells for some time.
• The rig will now dill multiple wells at Jasmine before drilling the Ratree prospect (unrisked NAV of C$2.49 per share). The rig is currently not expected to return to Manora before 2026.
• While Manora represents only ~10% of Valeura's production, the results of the campaign showcase the company's business model, where low-cost drilling can rapidly add production and reserves, extend the production plateau, and delay decommissioning.
• We re-iterate our target price of C$13 per share. We see the current share price weakness as an opportunity. Upcoming catalysts include taking FID on the redevelopment of Wassana, which is expected to boost the company’s reserves.
Valuation
Pending further visibility on the potential additional reserves at Manora our Core NAV of C$10.41 per share and ReNAV of C$12.83/sh are unchanged. Excluding the re-development capital expenditure for Wassana, we forecast that Valeura will hold ~US$370 mm in net cash at YE25, which is over 70% 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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.