Valeura Energy Inc. (TSX:VLE), a Southeast Asian oil production and development company, has started 2025 on a strong footing. Following a stellar fourth quarter in 2024, the company’s updated operational and financial guidance suggests another year of growth and strategic execution. Canaccord Genuity Limited has reiterated its “Buy” rating on the company and raised the target price to C$9.70 from C$9.20, reflecting the firm’s robust performance and future prospects.
A Record-Breaking 2024
Valeura Energy’s Q4 2024 results marked a record-breaking performance, with production averaging 26.1 kboed and sales exceeding production due to a strategic inventory release from the end of Q3 2024. This contributed to an end-of-year cash position of $259 million, exceeding expectations and setting the stage for its ambitious 2025 plans.
“Valeura delivered an outstanding fourth quarter,” remarked Charlie Sharp, Analyst at Canaccord Genuity. “The combination of record production, robust sales, and a tax-free quarter significantly strengthened the company’s financial position heading into 2025.”
The company’s strategic share buyback programme, initiated in mid-November 2024, further highlights its confidence in its value creation, with 0.35 million shares repurchased in Q4 alone.
2025: A Year of Expansion
For 2025, Valeura aims to produce between 23-25.5 kboed while executing a broad capital expenditure programme ranging from $125 million to $150 million, alongside $11 million dedicated to exploration drilling. The company’s focus will remain on its four key offshore licences in Thailand, with significant development plans across its assets:
- Nong Yao: 11 development and appraisal wells, alongside exploration near the ‘D’ location.
- Jasmine: 13 development and appraisal wells, with additional investments in power generation and exploration at the Ratree site.
- Manora: Completion of five wells initiated in late 2024.
- Wassana: A redevelopment final investment decision (FID) expected in early Q2 2025, laying the groundwork for increased investments in 2026.
“The company’s disciplined capital allocation and comprehensive operational plans reinforce its ability to deliver production growth and maintain a strong cash flow position,” said Phil Hallam, Analyst at Canaccord Genuity.
Upgraded Valuation
The updated price target is underpinned by a risked discounted cash flow valuation, with key metrics adjusted for a 2025 Brent oil price assumption of $73 per barrel. The analysts noted Valeura’s premium pricing relative to Brent, which has recently been $2 per barrel.
Canaccord Genuity emphasised that Valeura’s continued financial prudence and strategic execution align well with its longer-term goals of enhancing field life and pursuing further inorganic growth opportunities.
Valeura Energy’s remarkable 2024 performance and focused strategy for 2025 underscore its strength in the oil and gas sector. With robust financials, strategic capital deployment, and a promising outlook, the company is well-positioned for sustained success. As Canaccord Genuity analysts Sharp and Hallam aptly summarised, Valeura’s combination of record-breaking results and strategic foresight make it a compelling investment opportunity for the year ahead.
