Valeura Energy (TSX: VLE): Wassana production restart
• Through advanced underwater inspection, including magnetic particle inspection, Valeura has concluded that the observed anomaly (a crack within a weld) on the Wassana MOPU is superficial, and accordingly does not constitute a risk to the structural integrity of the facility.• Valeura has begun the process of restarting production operations and anticipates achieving pre-suspension oil production rates of ~5,000 bbl/d within a week.
• Valeura is looking to accelerate the redevelopment of the Wassana field. FID continues to be expected in 2024. First production for the redevelopment could be in 2026.
• We are now including production at Wassana from mid 3Q24 (no production in 2024 previously).
• We re-iterate our target price of C$9.30 per share.
• The story continues to be about strong free cashflow generation, reserves growth and exploration upside.
Valuation and financials
Our Core NAV and ReNAV are now respectively ~C$7.30 per share and C$9.70 per share. We estimate the company will hold ~US$255 mm at YE24 (US$235 mm previously). This represents >65% 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.
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