Valeura Energy (TSX: VLE): Another strong quarter. FY25 guidance re-iterated
• 2Q25 production was 21.4 mbbl/d, which is very close to our forecast (~22 mbbl/d).• The company reported a net cash position of US$241.9 mm at end-June, significantly above our expected US$210 mm. This reflects both the timing of capital expenditures across 2025 and continued strong operating performance.
• Despite a high oil inventory level of 0.93 mmbbl at end-June (vs. 0.89 mmbbl at end-March), the free cash flow was ahead of our expectations. For reference, YE24 inventory stood at 0.64 mmbbl; a reversion to that level (~–0.3 mmbbl) would imply a cash uplift of ~US$19 mm at current Brent pricing. Notably, a 0.24 mmbbl parcel was sold immediately post-quarter on 1 July.
• The FY25 production guidance of 23-25.5 mbbl/d has been re-iterated.
• We have raised our 2025 production estimate from ~23.7 mbbl/d to 24 mbbl/d, and - factoring in the stronger net cash position - increased our target price from C$12.30 to C$12.70 per share.
Valuation
• Our 2P NAV is now C$10.67 per share with a ReNAV of C$12.75 per share. Our unrisked NAV for the company’s low and medium 2C contingent resources is ~C$3.10 per share, including C$0.97 per share at Wassana, C$1.00 per share at Nong Yao and C$0.93 per share at Jasmine.
• Assuming that oil inventory reverts to ~0.60 mmbbl (in line with YE24), we forecast a net cash position of ~US$310 mm at YE25 —representing roughly 58% of the current market capitalization. Excluding exploration spending and any M&A activity, we forecast that YE27 net cash will be above the company’s 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.