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    Valeura Sees Stronger Prices, Netbacks in 2018

Summary

Third deep well in Thrace Basin continuing to drill.

by: Dale Lunan

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Valeura Sees Stronger Prices, Netbacks in 2018

Valeura Energy, a Canadian junior with operations in Turkey’s Thrace Basin, said March 14 it realised higher gas prices and improved netbacks in 2018, although gas production was off 24% year-on-year due to natural reservoir declines.

Net loss from operations improved modestly in 2018, to C$7.12mn (US$5.3mn) from $8.38mn in 2017. In 4Q 2018, net loss from operations was C$634,000, down from C$946,000 in 4Q 2017.

Valeura’s average realised natural gas price in 4Q 2018 was C$9.06/’000 ft3, up from C$6.61 in 4Q 2017, while the average realised price for 2018 was C$7.54/’000 ft3, up from C$6.98 in 2017. Average operating netback improved to C$25.79/boe in 2018 from C$23.76/boe in 2017.

“Our financial results from 2018 reflect the high value of gas in Turkey and reiterates why we have built a portfolio of scale in this optimally located market,” Valeura CEO Sean Guest said. “With prices continuing to track the broader European markets, we have seen price realisations of more than $9/’000 ft3, and coupled with our focus on managing production costs, we generated strong operating netbacks of $32.48/boe in Q4.”

Natural gas production in 2018 averaged 4.26mn ft3/day in 2018, down from 5.66mn ft3/day in 2017, reflecting natural declines in producing conventional reservoirs, but improved near year-end as a result of workover activities on the company’s shallow conventional wells.

Work on Valeura’s basin centred gas accumulation (BCGA) project is continuing in 2019, the company said. The third well in the program, Devepinar-1, has been drilled to its intermediate casing depth of 3,375 metres and is being readied for logging.

At Yamalik-1, the first well drilled in the BCGA program, zonal analysis using a production logging tool will start in the coming weeks, while at Inanli-1, a diagnostic fracture injectivity test will be conducted in the coming weeks to assist in planning for reservoir stimulation and testing operations in 2Q 2019.