Canada NewsWire
CALGARY, May 10, 2017
/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
CALGARY, May 10, 2017 /CNW/ - Valeura Energy Inc. ("Valeura" or the "Corporation") (TSX: VLE) is pleased to report highlights of its unaudited financial and operating results for the three month period ended March 31, 2017, completion of a series of transformational transactions and an imminent start of deep drilling operations. The complete quarterly reporting package for the Corporation, including the unaudited financial statements and associated management's discussion and analysis ("MD&A"), has been filed on SEDAR at www.sedar.com and posted on the Corporation's website at www.valeuraenergy.com.
"We are very proud of our success in closing a complex series of transactions in the first quarter," said Jim McFarland, President and Chief Executive Officer. "These transactions have reset the business and positioned us with the operational control and financial capacity to move forward with a new growth plan for the Corporation focused on our shallow gas base business and exploration for a potential high impact, basin-centered gas play in the Thrace Basin.
"In our shallow gas business, our efforts have now shifted to operational execution. Our target is to maintain a continuous drilling program underpinned by a relentless focus on safe operations, production growth, improved capital efficiency and reduced unit operating costs and G&A. We expect to shortly spud the second well in our planned shallow gas drilling program in 2017 before the end of May under a new multi-well drilling contract.
"At Banarli, I am delighted to report that commencement of drilling is imminent at Yamalik-1, the first deep exploration well under the Banarli Farm-in with our partner Statoil," adds McFarland.
Q1 2017 RESULTS AND SUBSEQUENT DEVELOPMENTS AT A GLANCE
(See below for definitions and advisories)
TRANSACTIONAL HIGHLIGHTS
TBNG Acquisition
Subsequent West Thrace Deep Rights Sale
OPERATIONAL HIGHLIGHTS
TBNG JV and Banarli Shallow Gas Program
Banarli Deep Exploration Program
FINANCIAL HIGHLIGHTS
Funds Flow From Operations |
Three Months Ended | ||
March 31, 2017 |
March 31, 2016 | ||
Funds flow from (used in) operations |
(2,883) |
1,969 | |
Less transaction related items: |
|||
Transaction costs |
918 |
- | |
Realized foreign exchange loss |
1,604 |
- | |
Current tax |
1,120 |
- | |
Operations income |
759 |
1,969 |
Table 2 Financial and Operating Results Summary (1)
(thousands of Canadian dollars, except share and per share amounts, and as otherwise stated) |
Three Months March 31, 2017 |
Three Months December 31, 2016 |
Three Months March 31, 2016 | ||
Financial (CDN$ except share and per share amounts) |
|||||
Petroleum and natural gas revenues |
3,088 |
3,508 |
4,328 | ||
Funds flow from (used in) operations (1) |
(2,883) |
915 |
1,969 | ||
Net income (loss) from operations |
(2,001) |
(3,189) |
(992) | ||
Exploration and development capital expenditures |
1,932 |
536 |
2,704 | ||
Acquisitions |
21,450 |
- |
- | ||
Dispositions |
(22,315) |
- |
- | ||
Net working capital surplus |
8,122 |
3,786 |
6,467 | ||
Cash |
5,760 |
1,987 |
3,726 | ||
Common shares outstanding |
|||||
Basic |
73,148,321 |
58,519,321 |
57,906,135 | ||
Diluted |
79,062,821 |
63,433,821 |
63,696,135 | ||
Share trading |
|||||
High |
1.00 |
1.15 |
0.83 | ||
Low |
0.63 |
0.81 |
0.60 | ||
Close |
0.68 |
0.95 |
0.68 | ||
Operations |
|||||
Production |
|||||
Crude oil (bbl/d) |
3 |
12 |
9 | ||
Natural Gas (Mcf/d) |
4,825 |
4,699 |
4,697 | ||
boe/d (@ 6:1) |
807 |
795 |
792 | ||
Average reference price |
|||||
Brent ($/bbl) |
71.28 |
65.17 |
46.47 | ||
BOTAS Reference ($ per Mcf) (2) |
7.12 |
8.09 |
10.26 | ||
Average realized price |
|||||
Crude oil ($ per bbl) |
72.83 |
63.67 |
39.75 | ||
Natural gas - Turkey ($ per Mcf) |
7.06 |
7.96 |
10.05 | ||
Average Operating Netback |
|||||
($ per boe @ 6:1) (1) |
28.62 |
33.43 |
45.85 |
Notes: |
|
(1) |
The above table includes non-IFRS measures, which may not be comparable to other companies. Funds flow from operations is calculated as net income (loss) for the period adjusted for non-cash items in the statement of cash flows. Operating netback is calculated as petroleum and natural gas sales less royalties, production expenses and transportation costs. See MD&A for further discussion. |
(2) |
Boru Hatlari ile Petrol Tasima Anonim Sirketi ("BOTAS") owns and operates the national crude oil and natural gas pipeline grids in Turkey and purchases the majority of Turkey's natural gas imports. BOTAS regularly posts prices and its Level-2 wholesale tariff is shown herein as a reference price. See the 2016 Annual Information Form for further discussion. |
2017 OUTLOOK
The Corporation is currently targeting a capital expenditure program of $15 to 16 million (net) in 2017 directed entirely to the shallow gas business. The Corporation has the flexibility to control the pace of spending since it is now the operator of the TBNG JV. The capital program is expected to include drilling of up to seven wells (gross) in the shallow formations on the TBNG JV lands and Banarli licences, targeting to deliver 2017 exit rate net sales of approximately 1,500 boe/d.
(See advisories below regarding outlook disclosures)
ANNUAL GENERAL MEETING WEBCAST
Valeura's Annual and Special Meeting of Shareholders will he held on May 11, 2017 at 9:00 AM MST in the Northcote Room at the Bow Valley Square Conference Centre, Level 3, Bow Valley Square 2, 202-6th Ave. S.W., Calgary, Alberta.
Please visit the following link to view the webcast of the proceedings, including a presentation by Jim McFarland, President and Chief Executive Officer at the end of the meeting.
ABOUT THE CORPORATION
Valeura Energy Inc. is a Canada-based public company currently engaged in the exploration, development and production of petroleum and natural gas in Turkey.
OIL AND GAS ADVISORIES
When used herein, the term "boe" means barrels of oil equivalent on the basis of one boe being equal to one barrel of oil or natural gas liquids, or 6,000 cubic feet of natural gas. Barrel of oil equivalent may be misleading, particularly if used in isolation. A boe conversion ratio of 6.0 Mcf to 1.0 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
ADVISORY AND CAUTION REGARDING FORWARD-LOOKING INFORMATION
This news release contains certain forward-looking statements and information (collectively referred to herein as "forward-looking information") including, but not limited to: the Corporation's 2017 work program, operational plans (drilling) on the TBNG JV lands and Banarli licences, expected capital expenditures, target exit sales rate, expected price realizations and expected operating netbacks; timing for spudding the Yamalik-1 well; the expected timeline and cost to drill the Yamalik-1 deep exploration well; the expected commencement of the 3D seismic program under the Banarli Farm-in and the estimated scope and cost; the ability to satisfy the conditions for closing the Subsequent West Thrace Deep Rights Sale, including securing Turkish government approvals for the transfer of the licence interests; the ability to close the Subsequent West Thrace Deep Rights Sale and the expected timing; the expected payment of US$3 million on the closing of the Subsequent West Thrace Deep Rights Sale; the prospectivity of the shallow formations on the TBNG JV lands and Banarli licences; the ability to maintain a continuous drilling program; the ability to fulfill the commitment program of spudding of one additional shallow well on the West Thrace lands by late June 2017; the availability of operating cash flow and the ability to finance development from existing cash, expected funds from closing of the Subsequent West Thrace Deep Rights Sale and operating cash flow; tying-in new wells and getting these on-stream; the timing, estimated costs and ability to fund the planned 2017 shallow gas program; the planned drilling and seismic program in 2017 for the Banarli Farm-in and the timing thereof; and the potential for a basin-centered gas accumulation play. Forward-looking information typically contains statements with words such as "anticipate", estimate", "expect", "target", "potential", "could", "should", "would" or similar words suggesting future outcomes. The Corporation cautions readers and prospective investors in the Corporation's securities to not place undue reliance on forward-looking information, as by its nature, it is based on current expectations regarding future events that involve a number of assumptions, inherent risks and uncertainties, which could cause actual results to differ materially from those anticipated by the Corporation.
Forward-looking information is based on management's current expectations and assumptions regarding, among other things: political stability of the areas in which the Corporation is operating and completing transactions, and in particular the aftermath of the July 2016 failed coup attempt in Turkey and April 2017 constitutional referendum; continued safety of operations and ability to proceed in a timely manner; the ability to close the Subsequent West Thrace Deep Rights Sale; continued operations of and approvals forthcoming from the Turkish government in a manner consistent with past conduct; future seismic and drilling activity on the expected timelines; the prospectivity of the TBNG JV lands and Banarli licences, including the deep potential; the continued favourable pricing and operating netbacks in Turkey; future production rates and associated operating netbacks and cash flow; future sources of funding; future economic conditions; future currency exchange rates; the ability to meet drilling deadlines and other requirements under licences and leases; and the Corporation's continued ability to obtain and retain qualified staff and equipment in a timely and cost efficient manner. In addition, the Corporation's work programs and budgets are in part based upon expected agreement among joint venture partners and associated exploration, development and marketing plans and anticipated costs and sales prices, which are subject to change based on, among other things, the actual results of drilling and related activity, availability of drilling, fracing and other specialized oilfield equipment and service providers, changes in partners' plans and unexpected delays and changes in market conditions. Although the Corporation believes the expectations and assumptions reflected in such forward-looking information are reasonable, they may prove to be incorrect.
Forward-looking information involves significant known and unknown risks and uncertainties. Exploration, appraisal, and development of oil and natural gas reserves are speculative activities and involve a significant degree of risk. A number of factors could cause actual results to differ materially from those anticipated by the Corporation including, but not limited to: the risks of delay or not obtaining Turkish government approvals in a timely manner for the transfer of licence interests or satisfying other conditions for closing the Subsequent West Thrace Deep Rights Sale, in light of the July 2016 failed coup attempt in Turkey and its aftermath, and the April 2017 constitutional referendum; the risks of currency fluctuations; changes in gas prices and netbacks in Turkey; uncertainty regarding the contemplated timelines to resume the shallow gas drilling program, start the Banarli 3D seismic acquisition and complete the drilling of the Yamalik-1 well, and the estimated costs for these programs; the risks of disruption to operations and access to worksites, threats to security and safety of personnel and potential property damage related to political issues, terrorist attacks, insurgencies or civil unrest in Turkey; political stability in Turkey, including potential changes in Turkey's constitution, political leaders or parties or a resurgence of a coup or other political turmoil; the uncertainty regarding government and other approvals; potential changes in laws and regulations; risks associated with weather delays and natural disasters; the risk associated with international activity; and, the uncertainty regarding the ability to fulfill the drilling commitment on the West Thrace lands. The forward-looking information included in this news release is expressly qualified in its entirety by this cautionary statement. The forward-looking information included herein is made as of the date hereof and Valeura assumes no obligation to update or revise any forward-looking information to reflect new events or circumstances, except as required by law. See Valeura's 2016 AIF for a detailed discussion of the risk factors.
Any financial outlook or future oriented financial information in this news release, as defined by applicable securities legislation, has been approved by management of Valeura, including, but not limited to, the expected acquisition metrics of the TBNG Acquisition. Such financial outlook or future oriented financial information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes.
Additional information relating to Valeura is also available on SEDAR at www.sedar.com
Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this news release.
SOURCE Valeura Energy Inc.
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