Valeura Energy Inc (TSX: VLE/OTCQX: VLERF) is in focus at the moment, Auctus Advisors Analyst Stephane Foucaud highlights:
Wassana: strong performance and accelerated drilling programme. Cost reduction at Nong Yao
- The first two wells of the Wassana drilling programme have exceeded the company’s expectations with production from the field now over 4,000 bbl/d.
- With a third well expected to boost production further in the next few days, production from the field could be higher than the target of 4.5 mbbl/d.
- The company has decided to extend the current drilling programme at Wassana by adding two wells (from 3 to 5). These additional wells were previously expected to be drilled later in 2024. Drilling the two additional wells immediately after the first three wells could both have a positive impact on the FY24 production guidance and also be source of cost optimization.
- Valeura is acquiring the Nong Yao’s Aurora FSO for US$19 mm. The Aurora FSO is currently being leased on the field. Buying the FSO will allow Valeura to reduce its opex for the field. We have provisionally assumed payback on the investment within 24-36 months.
- We have left our production forecast for 2024 unchanged for the time being. As we incorporate the acquisition of the Aurora FSO and the resultant lower opex and revisit the mechanics of the potential tax restructuring, we re-iterate our target price of C$6.40 per share.
- We continue to anticipate that Valeura will replace an significant proportion of its production in 2023.
Valeura Energy Inc (LON:VLU) is an upstream oil & gas company, with a clear strategy to add value for shareholders. The Company has a strong balance sheet with no debt, positioning it for potential inorganic growth opportunities, and substantial upside potential through an operated deep, tight gas play.
The Company is headquartered in Calgary, Alberta, Canada, and its shares are traded on the Toronto Stock Exchange under the symbol VLE and on the London Stock Exchange under the symbol VLU.
