Valeura Energy (TSX: VLE): Expect very material cashflow in 2Q26
• 1Q26 production averaged 22.3 mbbl/d, broadly in line with our 23 mbbl/d forecast.• Liftings occurred only in January and February, resulting in inventories rising from ~0.62 mmbbl at YE25 to ~1.23 mmbbl as of 31 March 2026.
• This timing effect limited reported revenue to US$92.3 mm in 1Q26, but we expect a significant revenue uplift in 2Q26 as inventories unwind. Notably, 0.68 mmbbl were lifted in April at very strong prices.
• From mid March until the declaration of cease fire in Iran, crude sold into Asia currently realises a premium of ~US$30–40/bbl to Brent. Assuming US$120/bbl realised price on the April lifting would imply a revenue contribution of more than US$80 mm in 2Q26.
• In response to the high oil price environment, Valeura is evaluating increased capex to accelerate reserves monetisation.
• Key near‑term catalysts include FID on the initial Bussabong development (Valeura WI: 40%). The initial development project is likely to be comprised of two platforms, each developing ~50 bcf (100 bcf total) and producing ~30 mmcf/d per platform (60 mmcf/d combined), with net capex of ~US$50 mm. The area offers substantial running room with multiple additional platform locations. We value each platform at C$0.25 per share.
• Two exploration wells are also planned for 2026, targeting prospects across Manora DEF, Jasmine North, and the southern Wassana area.
• We reiterate our C$17 per share target price, based on our ReNAV using US$70/bbl Brent from 2027 onward.
• At US$80/bbl and US$90/bbl, our ReNAV would increase to C$20 per share and above C$23 per share, respectively.
Valuation
We view the share price weakness, following the declaration of a ceasefire in Iran, as an opportunity. At US$80/bbl Brent, we estimate that year‑end 2029 net cash would be almost equivalent to the company’s current market capitalization.
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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