• Natural Gas News

    Canadian Valeura Posts 1Q Loss, Encouraged by 2019 Outlook

Summary

Extensive testing of most recent Turkish wells planned for 2Q and 3Q.

by: Dale Lunan

Posted in:

Natural Gas & LNG News, Americas, Europe, Corporate, Financials, News By Country, Canada, Turkey

Canadian Valeura Posts 1Q Loss, Encouraged by 2019 Outlook

Canadian junior producer Valeura Energy said May 9 it had a C$3.07mn loss from operations in 1Q 2019 but is looking forward to upcoming tests on its latest Thrace Basin wells in Turkey that it expects will prove the commerciality of its basin centred gas accumulation (BCGA) project there.

At the company’s annual general meeting in Calgary, CEO Sean Guest noted that Valeura’s results from ongoing conventional operations were “very strong” in 1Q 2019, and included a realised natural gas price of C$9.20/’000 ft3 and operating netbacks above C$33/boe.

“These metrics underscore the value of gas in Turkey and bolster our view of the significant value of our unrisked 10 trillion ft3 unconventional gas resource in the Thrace Basin, where we are partnered with Equinor,” Guest said.

Valeura ended the quarter with a net working capital surplus of C$56.1mn and expects to exit this year with about C$40mn in working capital, after a “significant” 2019 work program that includes extensive testing of its two most recent wells in the BCGA program, Inanli-1 and Devepinar-1.

Inanli-1 intersected a gross gas column of 1,615 metres, while the gas column in Devepinar-1, 20 kilometres away and on the west flank of the BCGA play area, was measured at 1,066 metres, with better porosity than in other wells.

Valeura says it will stimulate and fracture test a minimum of eight zones in Devepinar-1 and Inanli-1 during the second and third quarter, with an option to increase the number of zones to 12 if the initial tests are positive.

“For such testing in the vertical wells, initial production rates are less critical,” Valeura said, as it believes “future initial production rates and ultimate recoveries per well will be greatly increased with horizontal drilling and multi-stage stimulation.”

Demonstrating sustained flow – regardless of flow rate – from a single zone, it said, will “greatly increase” the chance of commercial development of the BCGA resource, which has been evaluated at 10.1 trillion ft3 on an unrisked mean prospective resource basis. Included in the resource evaluation is some 236mn barrels of condensate.