# Valeura Energy Inc. Q2 Results show Exceptional Financial and Operational Performance - Link: https://www.directorstalkinterviews.com/valeura-energy-inc-q2-results-show-exceptional-financial-and-operational-performance/4121259514 - Published: 2026-08-06T07:24:08+01:00 - Author: Amilia Stone **[Valeura Energy Inc](https://www.directorstalkinterviews.com/company/valeura-energy-inc/vle.to).**( [TSX:VLE](https://www.directorstalkinterviews.com/company/valeura-energy-inc/vle.to), OTCQX:VLERF) has reported its unaudited financial and operating results for the three and six month periods ended 30 June 2026. The complete quarterly reporting package for the Company, including the unaudited financial statements (the “Interim Financial Statement”) and associated management’s discussion and analysis (“MD&A”) are being filed on SEDAR+ at www.sedarplus.ca and posted the Company’s website at www.valeuraenergy.com. **Q2 Highlights** * Oil production of 2.030 million bbls, averaging 22,309 bbls/d^( (1)); * Oil sales of 2.454 million bbls; * Price realisations averaged US$105.8/bbl, resulting in revenue of US$259.8 million; * Adjusted EBITDAX of US$162.8 million^((2)), adjusted cashflow from operations of US$154.1 million^((2)), and free cash flow of US$104.7 million^((2)); * Net cash of US$316.5 million^((3)), with no debt; * Secured a formal reduction of the Manora field’s decommissioning liability, resulting in a partial release of bank guarantees, and therefore a 31% reduction in restricted cash; and * Drilled the longest horizontal lateral ever recorded in the Gulf of Thailand and also the first ever complex multi-lateral development well in Thailand, both on the Company’s Nong Yao field^((4)). **Recent Achievements** * Entered into a revolving and expandable credit facility (the “Facility”) with a credit line of up to US$75 million, and an uncommitted accordion feature of up to a further US$250 million. 1. Working interest share production, before royalties. 2. Non-IFRS financial measure or non-IFRS ratio – see “Non-IFRS Financial Measures and Ratios” section. 3. Includes restricted cash of US$15.8 million. 4. Block G11/48, 90% operated working interest. **Dr. Sean Guest, President and CEO commented:** _“From both a financial and operating perspective, Q2 2026 was an outstanding quarter._ _The combination of higher oil sales volumes and sharply higher price realisations has flowed directly through to our highest priority metrics.  We generated adjusted cash flow from operations of US$154 million^((1)), and free cash flow of US$104.7 million, enabling us to further bolster our balance sheet, which had US$316 million in cash as of 30 June 2026.  While we believe this provides meaningful financial capacity to support our growth strategy, after the end of the quarter, we’ve added even more liquidity by entering into our maiden credit facility, which can provide up to US$325 million in debt by way of an uncommitted accordion feature. _ _ __From this position of strength, we are primed and ready to pursue our growth ambitions, both through M&A and also by accelerating select organic investments including a potential option to accelerate our Wassana redevelopment project, based on construction of our new-build central processing platform proceeding comfortably ahead of schedule.  We also intend to bring our new drilling rig on contract earlier than originally envisaged, with plans to drill three new wells at Nong Yao.”_ 1. Adjusted free cash flow is a non-IFRS financial measure that does not have a standardised meaning under IFRS — see “Non-IFRS Financial Measures” section. 2. PTTEP Energy Development Company Limited, a subsidiary of PTT Exploration and Production Public Company Limited. 3. Working interest share production before royalties. **Financial and Operating Results Summary** | _ _ | **_Three months ended_** | | **_Six months ended_** | | **30 June 2026** | **30 June 2025** | **_Delta (%)_** | | **30 June 2026** | **30 June 2025** | **_Delta (%)_** | | **Oil Production^((1))** | _(‘000 bbls)_ | 2,030 | 1,949 | _+4%_ | | 4,039 | 4,095 | _-1%_ | | **Average Daily Oil Production^((1))** | _(bbls/d)_ | 22,309 | 21,412 | _+4%_ | | 22,317 | 22,625 | _-1%_ | | **Average Realised Price** | _(US$/bbl)_ | 105.8 | 67.9 | _+56%_ | | 91.5 | 73.3 | _+25%_ | | **Oil Volumes Sold** | _(‘000 bbls)_ | 2,454 | 1,902 | _+29%_ | | 3,848 | 3,783 | _+2%_ | | **Oil Revenue** | _(US$’000)_ | 259,767 | 129,264 | _+101%_ | | 352,020 | 277,345 | _+27%_ | | **Profit before income taxes** | _(US$’000)_ | 96,906 | 15,153 | _+540%_ | | 101,123 | 52,992 | _+91%_ | | **Net Income** | _(US$’000)_ | 53,137 | 5,449 | _+875%_ | | 59,049 | 19,522 | _+202%_ | | **Adjusted EBITDAX^((2))** | _(US$’000)_ | 162,832 | 62,380 | _+161%_ | | 204,459 | 149,596 | _+37%_ | | **Adjusted Pre-Tax Cashflow from Operations^((2))** | _(US$’000)_ | 162,519 | 51,259 | _+217%_ | | 184,709 | 124,870 | _+48%_ | | **Adjusted Cashflow from Operations^((2))** | _(US$’000)_ | 154,143 | 50,238 | _+207%_ | | 175,432 | 123,419 | _+42%_ | | **Operating Costs** | _(US$’000)_ | 58,271 | 43,796 | _+33%_ | | 89,709 | 82,648 | _+9%_ | | **Adjusted Opex^((2))** | _(US$’000)_ | 58,654 | 54,621 | _+7%_ | | 109,727 | 106,305 | _+3%_ | | **Operating Costs per bbl** | _(US$/bbl)_ | 28.7 | 22.5 | _+28%_ | | 22.2 | 20.2 | _+10%_ | | **Adjusted Opex per bbl^((2))** | _(US$/bbl)_ | 28.9 | 28.0 | _+3%_ | | 27.2 | 26.0 | _+5%_ | | **Adjusted Capex^((2))** | _(US$’000)_ | 53,617 | 48,935 | _+10%_ | | 109,878 | 81,834 | _+34%_ | | **Weighted average shares outstanding – basic** | _(‘000 shares)_ | 106,198 | 106,258 | _-0%_ | | 105,904 | 106,399 | _-0%_ | |  **_ _** | **_ _** | **_As at_** | | **30 June 2026** | **31 December 2025** | **_Delta (%)_** | | **Cash and cash equivalents^((3))** | _(US$’000)_ | 316,513 | 305,738 | _+4%_ | | **Adjusted net working capital^((2))** | _(US$’000)_ | 321,735 | 261,498 | _+23%_ | | **Shareholder’s equity** | _(US$’000)_ | 603,863 | 542,796 | _+11%_ | 1. Working interest share production before royalties. 2. Non-IFRS financial measure or non-IFRS ratio – see “Non-IFRS Financial Measures and Ratios” section in this MD&A. 3. Includes restricted cash. **Financial Update** The Company’s Q2 2026 financial performance reflects ongoing production operations at all four of its fields in the offshore Gulf of Thailand, and was strongly influenced by higher realised prices during the quarter as well as higher sales volumes. Valeura’s working interest share production before royalties averaged 22,309 bbls/ d, resulting in a total of 2.030 bbls produced during Q2 2026, an increase of 4% over Q2 2025.  Production was in line with the Company’s expectations for the quarter, and continues to support its production guidance outlook for the full year 2026. Oil sales totalled 2.454 million bbls during Q2 2026, which was substantially higher than production, and therefore represents a reduction in crude oil inventory, which was in a higher-than-usual position at the beginning of the quarter.  Realised prices during Q2 2026 averaged US$105.8/bbl, a 56% increase over Q2 2025, and a reflection of higher global oil benchmark prices as a result of the conflict in the Middle East. With the combination of higher oil sales and higher realised prices, Q2 2026 revenue was US$259.8 million, approximately double the Company’s Q2 2025 revenue.  Three parcels of crude oil were sold just prior to the end of Q2 2026, resulting in proceeds not being received until early Q3 2026.  These sales are included in revenue, but are not reflected in the Company’s cash position as at 30 June 2026. Valeura’s cost of operations in Q2 2026 was influenced by increases in the price of diesel, which is consumed across the Company’s portfolio and comprises a material proportion of the operating budget.  Operating costs for the quarter totalled US $58.3 million, equating to US$28.7/bbl of oil produced.  As previously disclosed, in describing its cost of ongoing operations Valeura intends to focus primarily on operating costs, which is an IFRS measure.  However, the Company continues to provide information on Adjusted opex, a non-IFRS measure^((1)), for historical comparative purposes.  To derive Adjusted opex, the Company adjusts for (1) the cost of leases, relating primarily to floating infrastructure used in its operations, which totalled US$5.9 million in Q2 2026; and (2) the capitalisation of inventory, amounting in Q2 2026 to (US$5.5) million.  These adjustments thereby result in Adjusted opex of US$58.7 million, or US$28.9/bbl of oil produced. Valeura generated adjusted cashflow from operations^((1)) of US$154.1 million in Q2 2026, approximately a three-fold increase from Q1 2025, reflecting the higher cash flow margins which were driven by higher sales volumes and higher realised prices more than offsetting increases in operating costs. Cash tax payments during Q2 2026 were US$19.2 million, relating primarily to Special Remuneratory Benefit (“SRB”) obligations arising from the Company’s 2025 production. Petroleum Income Taxes (“PITA”) accrued relating to the Nong Yao, Wassana, and Manora fields was fully offset by the application of tax loss carry-forwards.  No further PITA or SRB cash tax payments are anticipated in 2026. Valeura made cash outlays in respect of its operations and capex of US$111.9 million in Q2 2026, and generated Other Income, primarily related to its overriding royalty on the Rossukon field and interest income, of US$5.4 million.  As a result, the Company’s performance was additive to its financial position.  As at 30 June 2026, cash had increased to US$316.5 million, including restricted cash of US$15.8 million. Valeura’s adjusted net working capital^((1)) increased to US$321.7 million as of 30 June 2026, an increase of 33% from 31 March 2026, and 23% from 31 December 2025. During Q2 2026, Valeura and Thailand’s upstream regulator agreed to a reduction in the anticipated future decommissioning cost of its Manora field, to match the estimates used in deriving Valeura’s reported asset retirement obligations.  As a result, the amount of security required to be lodged with the Government of Thailand to support this future spending was reduced, thereby reducing the Company’s restricted cash while increasing its (unrestricted) cash.  In addition, cash from the oil sales, occurring in late June 2026 was not received until early in the following quarter. As a result, the Company recorded a net crude^((2)) receivable in the amount of US$42.7 million to reflect the timing of payment happening in Q3 rather than Q2 2026. 1. Non-IFRS financial measure or non-IFRS ratio – see “Non-IFRS Financial Measures and Ratios” section. 2. Excludes VAT. **Operations Update** During Q2 2026, Valeura had ongoing production operations at all of its Gulf of Thailand fields, including Jasmine, Manora, Nong Yao, and Wassana, resulting in average working interest share production before royalties of 22,309 bbls/d.  One drilling rig was on contract throughout the quarter. _Jasmine / Ban Yen_ Oil production before royalties from the Jasmine/Ban Yen field, in Licence B5/27( 100% operated interest) averaged 7,739 bbls/d during Q2 2026. Work focused on routine production operations and maintenance during the quarter and in addition, the Company began a drilling campaign on the Jasmine field in mid- June 2026.  The drilling campaign is being conducted from the Jasmine-C and Jasmine- D platforms, and includes three single-bore development wells, and a two-wellbore multi-lateral development well.  Valeura will announce well results in due course. _Nong Yao_ Oil production before royalties from the Nong Yao field, in Licence G11/48 (90% operated working interest) averaged 9,641 bbls/d during Q2 2026. Production results reflect the impact of an eight-well drilling campaign conducted during Q1 and Q2 2026.  Amongst the wells drilled was _NYA-42ST1H_ which set a new Gulf of Thailand record for the longest horizontal lateral ever drilled.  In addition, the campaign included Valeura’s first ever multi-lateral well, _NYB-02ST1_, which entailed a complex junction point from which two separate horizontal production legs were drilled.  This was the first multi-lateral with this level of complexity ever attempted in Thailand. The Company conducted a five-day planned maintenance shutdown in July 2026, which was completed safely and on budget. Engineering and construction work is progressing on the Company’s project to add four additional well slots to the Nong Yao A platform, which is on-track and is targeting readiness for drilling from the new slots in Q4 2026.  The Company intends to bring its new drilling rig on contract on approximately 01 November 2026 with a plan to drill three new wells at Nong Yao. _Wassana_ Oil production before royalties from the Wassana field, in Licence G10/48 (100% operated interest), averaged 2,781 bbls/d during Q2 2026.   No wells were drilled on the licence in Q2 2026, and no further wells are planned to be drilled from the field’s current production facility, the Mobile Offshore Production Unit (“MOPU”) _Ingenium_.  Ongoing work is oriented toward maintaining the MOPU in good working order prior to deploying a new-build CPP. Construction work on the CPP continues to progress ahead of schedule, with mechanical completion now anticipated 01 October 2026.  Given this progress, the Company is working on an option to expedite the installation of the facility, potentially leading to earlier development drilling and therefore earlier first oil than originally envisaged. _Manora_ Oil production before royalties from the Manora field, in Licence G1/48 (70% operated working interest), averaged 2,148 bbls/d during Q2 2026. Work was largely focused on routine production operations and maintenance during the quarter. In addition, the Company is preparing to drill an open water exploration well on Licence G1/48 to evaluate a potential oil accumulation within tie-back distance to the Manora platform.  Valeura intends to mobilise its contracted drilling rig to the location in August 2026, following the Jasmine drilling campaign. _Block G1/65 and B3/65_ Valeura anticipates near term approval of the Government of Thailand for a transfer of interest in Blocks G1/65 and G3/65, which will result in the Company holding a 40% working interest.  Under the terms of its agreement with PTTEP, Valeura is required to pay to PTTEP its share of back costs and a carried seismic programme, as contemplated in the agreement between Valeura and PTTEP.  As of 30 June 2026, such total was estimated as US$25.3 million (of which US$1.8 million has already been paid as a deposit). During Q2 2026, Valeura and PTTEP continued the technical and commercial work to support the final investment decision (“FID”) for a two-platform gas development in the Bussabong area of Block G3/65.  Valeura anticipates FID later in 2026.  In addition, the teams were working together to support planning the next phases of appraisal and exploration in both the G1/65 and G3/65 blocks.  This will be guided by the new 3D seismic data, for which processing has recently been completed. _Türkiye_ Valeura’s farm-in partner, Transatlantic Petroleum LLD (“Transatlantic”) has equipped the Devepinar-1 for a long-term test but continues to trouble-shoot the well’s downhole conditions to facilitate continuous gas flow. The work completed by Transatlantic has satisfied its earning requirements for the West Thrace licence and leases.  Once government approval is granted and the interest is transferred, this will result in the following holdings: Transatlantic will hold a 50% working interest, Valeura 31.5%, and Pinnacle Turkey, Inc. (“Pinnacle”) 18.5%. Valeura continues to hold 100% in the neighbouring Banarli block. A further two-year appraisal period extension has been granted by the government for the West Thrace licence, resulting in a new expiry date of 27 June 2028.  The Banarli licence was granted an extension of six months to 27 December 2026 to allow for the drilling of a commitment well by the land’s shallow rights owner.  This well has now been completed as a gas discovery and Valeura is preparing documentation for the two-year appraisal period. The East Banarli licence, which was deemed unprospective, has been returned to the government. **Guidance** Production is currently on target and Valeura is continuing to maintain the mid- point of its original full year 2026 guidance, however with the first half of the year completed, the Company is narrowing the range. Guidance on full year adjusted opex is also maintained, although the Company acknowledges that this metric is expected to be at the upper end of the range as it is influenced by the cost of diesel fuel which has recently trended above expectations as a result of the increased global price of oil and refined products. All capital projects associated with Valeura’s original 2026 work programme, and those added by way of its Revised Guidance, as announced in May 2026, remain on budget.  Should the Company reach commercial agreements to accelerate the installation of the Wassana CPP then this will increase the 2026 Capex and will also accelerate some planned 2027 Capex into 2026.  Any increase in this budget would be supported by the associated increase in production and cashflow in 2027.  The Company intends to update the market when this option is firm. | | **Original Guidance** | **Revised Guidance (May 2026)** | **_Updated Guidance (August 2026)_** | | **Production^((1))** | _(‘000 bbls)_ | 19,500 – 22,500 | 19,500 – 22,500 | _20,000 – 22,000_ | | **Adjusted opex^( (2))** | _(US$ million)_ | 190 – 220 | 190 – 220 | _190 – 220_ | | **Adjusted capex^((2)) (including exploration spend)** | _(US$ million)_ | 175 – 195 | 195 – 215 | _195 – 215_ | 1. Working interest share production before royalties. 2. Non-IFRS financial measure or non-IFRS ratio – see “Non-IFRS Financial Measures and Ratios” section. The Company intends to fund its Adjusted opex and Adjusted capex spending from ongoing cash flow.  Valeura intends to deploy financial resources from the Facility to support mergers and acquisitions, and plans to only draw from the Facility when acquisition funding is needed. Valeura Energy Inc. is a Canadian public company engaged in the exploration, development and production of petroleum and natural gas in Thailand and Türkiye. The Company is executing a growth-oriented strategy, reinvesting into its producing asset portfolio while deploying capital toward further organic and inorganic growth across Southeast Asia. Valeura is committed to delivering value-accretive growth for all stakeholders, underpinned by high standards of environmental, social and governance responsibility. Share on: