Valeura Energy (TSX: VLE): Entering a phase of cash build-up after large tax payment made.
• 2Q23 production was 22,097 bbl/d, near our forecast of 22.8 mbbl/d.• Drilling operations at the Manora oil field are currently in the final stages of a three-well programme. The rig will then move to the Wassana field later this month.
• Valeura has paid US$178.1 mm in tax during 2Q23 in line with the our expectations. This amount reflects tax due on 2022 profit in Thailand. A further US$25-30 mm is due to be paid in August.
• Following the tax payment, Valeura held US$121.6 mm in cash and US$30.7 mm of debt at the end of June. We also anticipate that the company is carrying an important non-cash working capital surplus.
• With the large 2022 tax payment now made, we anticipate Valeura’s cash will start to build up. At US$78/bbl over 2H23 and 2024, we forecast that the company could hold >US$160 mm in net cash at YE23 (slightly above the current market cap) increasing to ~US$360 mm at YE24 (~2.5x the current market cap).
• Pending the publication of the 2Q23 financial results, our target price of C$6.00 per share (close to our ReNAV) is unchanged. We continue to believe that the confirmation that the ~US$300 mm of tax losses associated with Wassana could be applied to the other fields could be a rerating event. It would materially offset the tax bill due in relation to profits made in 2023.
Valuation
Our Core NAV and ReNAV respectively stand at C$5.50 and C$5.70 per share. Our Core NAV and ReNAV @ US$78/bbl Brent flat are C$4.35 per share and C$4.55 per share.
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.