Valeura Energy: Unlocking New Potential in Thailand – Auctus Advisors

Valeura Energy
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Valeura Energy Inc. (TSX: VLE/OTCQX: VLERF) continues to strengthen its position as a leading upstream operator in Thailand, with significant production and resource expansion plans. A recent investor visit to its operations showcased the company’s depth of expertise, strong local partnerships, and vast untapped potential. Auctus Advisors reaffirms its target price of C$13 per share, highlighting Valeura’s upside potential in the region.

Expanding Operations and Expertise

The investor visit underscored three key advantages for Valeura:

  1. Experienced Leadership – Greg Kulawski, Valeura’s Chief Operating Officer, brings extensive experience from Shell, where he held roles such as Deputy CEO of Sakhalin Energy and Global Vice President of Safety.
  2. Strong Partnerships – The company maintains robust relationships with Thai authorities and its key partner, PTTEP, Thailand’s largest oil and gas producer.
  3. Significant Asset Base – With assets offering more than initially expected, Valeura is well-positioned to grow its reserves and production.

As one of Thailand’s largest crude oil producers, Valeura accounts for nearly 30% of the country’s total crude oil production (81 mbbl/d in 2024). Its operations in the Gulf of Thailand continue to deliver steady growth, with current production at 22,825 bbl/d and an expectation to maintain 20-25 mbbl/d until at least 2039.

Strong Development and Exploration Upside

Valeura’s Wassana redevelopment project remains on track for a final investment decision (FID) in early Q2 2025, with first oil expected by early 2027. The redevelopment involves a new 10 mbbl/d oil production platform, significantly enhancing production from Wassana’s FY24 level of 3.6 mbbl/d. This development could also unlock additional resources in two satellite fields to the north and south of Wassana.

Exploration activities remain a priority, with the Ratree prospect in the Jasmine field set for drilling around mid-2025. With prospective resources ranging from 3.4 to 41.9 mmbbl (mid-case: 19.4 mmbbl), a successful discovery could justify a standalone development.

Enhanced Recovery and Reserve Growth

Advancements in seismic modeling, downhole water management technology, and precision geosteering suggest that Valeura’s recovery factor could increase to 60%, significantly enhancing reserves. According to Auctus Advisors’ analyst Stephane Foucaud, “Recent well performance suggests that a recovery factor of up to 60% could be achieved, with over 80% sweep efficiency. This could lead to further increases in reserves.”

With a history of 200% reserve replacement, Valeura is expected to extend the production plateau well beyond 2033, further increasing the company’s long-term value.

Financial Strength and Valuation

Valeura maintains a solid financial outlook, with forecasted free cash flow neutrality at US$42/bbl and expected net cash of US$510-725 million by YE26 at oil prices between US$65-85/bbl. The company’s net asset value (NAV) estimates include:

  • Core NAV: C$10.41/sh
  • ReNAV: C$12.82/sh
  • Exploration Upside (Ratree included): C$18.86/sh

Auctus Advisors remains confident in Valeura’s growth trajectory, maintaining its C$13.00 per share target price, which implies a potential 80% return from current levels.

Valeura Energy is poised for long-term success with a well-structured growth plan, enhanced resource recovery, and solid financial positioning. With upcoming milestones such as the Wassana FID and Ratree drilling, investors can expect continued positive developments.

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