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    Valeura to Exit Shallow Turkish Gas


Valeura wants to raise funds for merger and acquisition activity and to further appraise its undeveloped deep tight gas play in Turkey.

by: Joe Murphy

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Valeura to Exit Shallow Turkish Gas

Canadian junior Valeura Energy has agreed to sell its producing shallow conventional gas business in Turkey's onshore Thrace basin to a private UK-registered company called TBNG Ltd for $15.5mn, it said on October 20.

Valeura is looking to raise cash to fund potential merger and acquisition (M&A) activity, and to further appraise its undeveloped deep tight gas play in Turkey, which it estimates to hold 20 trillion ft3 (566bn m3) in unrisked mean prospective resources. Its net cash position came to $31mn at the end of September. The deal is expected to close in the first quarter of 2021, pending regulatory and governmental approvals and other conditions being met.

"Our objective has been to maximise the value of these mature assets, and today's monetisation agreement is a key step towards accomplishing that goal," Valeura CEO Sean Guest said in a statement. "We have re-tooled Valeura into a lean, shrewd, debt-free machine, focused on value growth.  To that end, the other pillars of our strategy remain unchanged."

Valeura is seeking near to mid-term M&A opportunities to "add significant growth potential", while also continuing its focus on Turkey, Guest said. It also wants to attract a partner with technical and commercial expertise to take its deep gas play project forward, following the departure of Norway's Equinor earlier this year.

Besides the $15.5mn cash payment, the deal will also provide Valeura with royalty fees over a five-year period tied to local gas prices, ranging from at least $1mn to a cap of $2.5mn. TBNG's shareholders are Ian Hannam, the founder of London-based investment bank Hannam & Partners, along with TNBG's management team.