Valeura Energy (TSX: VLE): Restarting Wassana
• Production at Wassana has restarted, in line with management’s guidance.• The drilling rig will be mobilized to Wassana in the coming days to drill three horizontal production wells. These wells are targeting deeper intervals. These zones have been partially developed in the past.
• Production from Wassana is expected to increase to >4,000 bbl/d including these three new wells.
• While this was expected, this is welcome news.
• We expect Valeura will post a strong 4Q23 given that there will be no cash tax payment during the quarter while the company might benefit from an additional lifting.
• 2024 is expected to be a year of production growth and we anticipate that Valeura will have replaced a large proportion of the reserves produced in 2023.
• In 2024, Valeura will also drill wells targeting reserve adds including at Wassana North, Jasmine and Nong Yao.
• Pending details on the FY24 guidance expected mid-January, we re-iterate our target price of C$6.40 per share. We view the recent sell off as a buying opportunity.
Valuation
Our ReNAV is unchanged at ~C$6.10 per share. YE24 estimated net cash (>US$460 mm) represents ~1.65x the current market cap of the company.
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.