Valeura Energy Inc.: Second Quarter 2024 Results

SINGAPORE, Aug. 08, 2024 (GLOBE NEWSWIRE) — Valeura Energy Inc. (TSX: VLE, OTCQX: VLERF) (“Valeura” or the “Company”), reports its unaudited financial and operating results for the three and six month periods ended June 30, 2024. 

Q2 2024 Highlights

• Adjusted cashflow from operations of US$65.7 million⁽¹⁾;
• Oil production of 21.1 mbbls/d⁽²⁾ and oil sales of 1.9 million bbls;
• Average realised price of US$87.7/bbl, generating revenue of US$164.0 million;
• Adjusted EBITDAX of US$99.6 million⁽¹⁾; and
• Cash and net cash balance as of June 30, 2024 of US$146.8 million^(1),(3), with no debt.

^{(1)   Non-IFRS financial measure or non-IFRS ratio – see “Non-IFRS Financial Measures and Ratios” section below. 
(2)   Working interest share production, before royalites. 
(3)   Includes restricted cash of US$17.3 million.}

Recent Achievements

• Restart of production from the Wassana field, following thorough inspection of the production facility’s underwater components, with production rates now ramped up to pre-suspension levels;
• Completion of drilling operations on the Nong Yao C development, which was completed under budget, and with all wells having encountered their objectives as planned in addition to successfully appraising several additional zones;
• Mechanical completion of the Nong Yao C production facility, with final assurance checks and certification underway in preparation for first production in August 2024;
• Narrowing of full-year production guidance range estimate and reiteration of opex and pricing expectations, but with reduced capex; and
• Receipt of the prestigious 2024 EIA Monitoring Award from Thailand’s Office of Natural Resources and Environmental Policy and Planning in respect of three of the Company’s fields.

Sean Guest, President and CEO of Valeura commented:

“I am pleased to share details of our Q2 2024 performance, which includes ongoing strong cash generation of US$65.7 million, up 37% from the previous quarter. 

This performance follows near-record quarterly revenue of US$164 million based on 1.9 million barrels in oil sales achieving a premium to the Brent oil benchmark of US$2.8/bbl, meaning average price realisations of US$87.7/bbl.  With strong margins, we are continuing to contribute to our balance sheet.  We ended the quarter with US$147 million in cash on hand, even after having substantial cash outflows during the quarter for taxes, the important purchase of the Nong Yao field’s floating storage and offloading vessel, and final contingent payments in relation to our 2022 acquisition from KrisEnergy.

While the operating characteristics of our business remain strong, we are constantly mindful of safety and sustainability, and will not compromise on making tough decisions when required.  At the end of Q2 we opted to suspend production at our Wassana field to fully investigate a perceived structural threat to the production facility.  As reported last week, we were pleased to confirm that the anomaly is superficial in nature, and as a result, we have resumed production operations, with volumes now back at pre-suspension levels.  I feel this response reflects our overall commitment to ensuring the sustainability of our business, a sentiment which is further bolstered by our receipt of the 2024 EIA Monitoring Award.

I’m also pleased to report that we are very close to being able to start up production at our Nong Yao C development, which is our largest growth project this year. We have drilled the planned six horizontal development wells, plus an appraisal well on a new target, and one water injection well.  While final results of the wells will only be known once they are on production, we have been pleased with drilling performance, and expect to demonstrate that the drilling programme has met all its technical expectations and has come in under budget.  In addition to the development targets, the drilling programme has successfully appraised one additional target, and has identified at least two further zones which may form the basis for future infill drilling.  The production facility at Nong Yao C is in the final stages of certification for oil production, which we intend to achieve in August 2024.

With half the year 2024 completed, we have also narrowed our guidance assumptions and are forecasting lower spending on capex, while at the same time we expect to deliver more wells than contemplated by the original guidance.  Given the optionality in our portfolio, we have tailored our work to increase production where possible, and are able to maintain our full-year production guidance despite the recent downtime at the Wassana field and the expectation of first oil from Nong Yao C occurring slightly later than our initial forecast.  Our business continues to deliver substantial optionality along with strong cash flow, and we are maintaining our laser focus on delivering value through growth.”

Q2 2024 Performance Summary Table

^{(1)   Working interest share production, before royalites. 
(2)   Non-IFRS financial measure or non-IFRS ratio – see “Non-IFRS Financial Measures and Ratios” section below.}

Financial Update

The Company’s Q2 2024 financial performance was influenced by higher revenue, driven by both more oil volumes sold during the quarter, and higher realised prices. 

Oil production averaged 21.1 mbbls/d during Q2 2024 (Valeura’s working interest share, before royalties), a decrease of 4% from the prior quarter.  Production was stable throughout the quarter and benefitted from the impact of infill wells drilled at the Wassana field in Q1 2024 and two infill wells at Nong Yao drilled in Q2 2024, however most drilling activity during Q2 2024 did not have an immediate impact on production, as the drilling activity mostly consisted of either exploration wells or development of the Nong Yao C accumulation, which is expected to come on production in August 2024.  All of the Company’s four fields were in production throughout the majority of the quarter, with the Wassana field’s production being suspended on June 28, 2024.

Despite slightly lower average production, oil sales totalled 1.87 million bbls during Q2 2024, which was 6% higher than Q1 2024.  Additionally, at the end of the quarter, the Company held crude oil inventory of 0.92 million bbls, 5% higher than the previous quarter-end’s 0.88 million bbls.  All of the Company’s oil production is held in floating vessels before being sold and the Company has crude oil inventory on hand at all times. 

Price realisations averaged US$87.7/bbl during Q2 2024, reflecting a US$2.8/bbl premium over the Brent crude oil benchmark average price.  Premiums increased due to deliberate actions on the Company’s part, in particular the Company’s work to find more lucrative local markets for its heavier crudes.  The Company has no hedging arrangements in place in respect of its crude oil sales. 

The resulting oil revenue during Q2 2024 was US$164.0 million, a 10% increase over Q1 2024, reflecting increased oil sales, coupled with higher realised prices. 

Operating expenses during Q2 2024 were US$41.7 million, relatively unchanged from the US$41.8 million recorded in Q1 2024.  Adjusted opex during Q2 2024 was US$54.2 million⁽¹⁾, or US$28.3/bbl on a per barrel basis, an 8% increase over Q1 2024 as a result of lower production rates, and more planned activities in the quarter. 

Valeura generated adjusted EBITDAX of US$99.6 million⁽¹⁾ in Q2 2024, approximately 12% higher than Q1 2024, due primarily to higher oil sales revenue. Adjusted cashflow from operations was US$65.7 million, up 37 % from the previous quarter.

During Q2 2024, the Company paid taxes of US$83.4 million, relating primarily to the full year 2023 in respect of its Jasmine field, and second half 2023 in relation to its other fields, but also included payment of an US$11.3 million tax obligation on the Company’s Thai assets, relating to a reassessment made in respect of the 2018/2019 time frame, which was before the effective date of Valeura’s acquisition of its Thai assets.  The Company is currently communicating with the former owner of the assets and is intent on pursuing all potential remedies in relation to these historic tax payments.    

As of June 30, 2024, Valeura had cash and cash equivalents of US$146.8 million, including restricted cash of US$17.3 million, compared to US$193.6 million as of March 31, 2024.  This follows a quarter involving above-normal outflows of US$109 million, comprised primarily of cash tax payments, the US$19.0 million purchase of the Nong Yao floating storage and offloading (“FSO”) vessel, final contingent payments totalling US$7.0 million under the 2022 KrisEnergy acquisition, as well as adjusted capex of US$30.6 million⁽¹⁾ and US$5.2 million spent on exploration.

Valeura had an adjusted net working capital surplus of US$144.2 million⁽¹⁾ at June 30, 2024, versus US$141.9 million at March 31, 2024.    

^{(1)   Adjusted opex, adjusted EBITDAX, adjusted capex, and adjusted net working capital are non-IFRS measures which are more fully described in the “Non-IFRS Financial Measures and Ratios” section of this news release.}

Operations Update

During Q2 2024, the Company had ongoing production operations on all of its Gulf of Thailand fields including the Jasmine, Nong Yao, Manora, and Wassana fields.  One drilling rig and one workover rig were under 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 7.4 mbbls/d during Q2 2024, a decrease of 3% from Q1 2024.  No wells were drilled on Licence B5/27 in Q2 2024, but Valeura began a six-well workover campaign, with two well workovers being completed by end of the quarter.    

An infill drilling programme on the Jasmine field is planned to commence immediately with the imminent release of the drilling rig from Nong Yao C, and will include five development wells intended to increase production volumes as well as up to two appraisal wells to assess potential future development targets.  Valeura is continually optimising its drilling schedule, and still anticipates drilling the Ratree exploration prospect, on Licence B5/27 in due course, while constantly seeking to maximise value through its drilling operations.

Nong Yao

At the Nong Yao field, in Licence G11/48 (90% operated working interest), Valeura’s working interest share of oil production before royalties averaged 6.3 mbbls/d during Q2 2024, which represents a decrease of 14% from Q1 2024.  This reflects planned downtime for construction work and modifications in connection with tying in the Nong Yao C mobile offshore production unit (“MOPU”) to the field’s pre-existing infrastructure.  Following the work, and with production contributions from the two infill wells drilled from the Nong Yao A facility, oil production at Nong Yao has increased to an average of 7.6 mbbls/d for July 2024 (average working interest share rate before royalties).

Following infill wells, drilling operations focused on the new Nong Yao C development for the remainder of the quarter.  To date, Valeura has drilled the six planned horizontal development wells, with reservoir intervals encountered in line with expectations, one appraisal well which was successful and will be converted to a seventh production well, and one water injection well.  Two of the development wells were also extended to test appraisal targets, with both being successful and forming an early basis for potential future infill drilling.  Even with the expanded scope of the drilling programme to include appraisal work, the Company anticipates that the Nong Yao C drilling programme has been delivered approximately 25% under budget. The drilling rig is being released from the Nong Yao field imminently, and will mobilise to the Jasmine field next. 

The Company is in the final stages of preparing the Nong Yao C production facility to receive oil for the first time, and anticipates achieving full operational readiness and first production in August 2024.  Nong Yao C is planned to be Valeura’s single biggest source of organic production growth in 2024, and will increase oil production from the greater Nong Yao area to peak rates of approximately 11 mbbls/d (Valeura’s working interest share, before royalties).

During Q2 2024, the Company also completed its purchase of the Nong Yao FSO vessel for US$19.0 million.  Valeura anticipates that the change to owning, rather than leasing, the FSO will yield a reduction in operating expenses going forward. 

Wassana

Oil production at the Wassana field, in Licence G10/48 (100% operated interest), averaged 4.7 mbbls/d (before royalties), an increase of 18% over Q1 2024.  The increase was largely driven by production contributions from new infill wells drilled in Q1 2024, which increased production rates to approximately 5.0 mbbls/d near the end of Q2 2024. 

As part of planned maintenance and asset integrity assurance work, the Company conducted a thorough inspection of the underwater components of the Wassana field’s MOPU in June 2024.  Thereafter, Valeura implemented a precautionary suspension of production operations at the field starting on June 28, 2024 and lasting for approximately five weeks, while investigating a potential structural anomaly with one of the steel jack-up legs.  The anomaly was ultimately determined to be superficial in nature, enabling the safe restart of production operations on August 2, 2024 and production rates have now ramped up to pre-suspension levels.  

Separately, Valeura has begun front end engineering and design work for the potential redevelopment of the Wassana field.  The Company is targeting to be ready for a final investment decision on the project in early Q1, 2025, with an ultimate goal of more fully commercialising the Wassana field’s reserves and resources and extending the economic life of the Wassana field well beyond 2030. 

Manora

At the Manora field, in Licence G1/48 (70% operated working interest), Valeura’s working interest share of oil production before royalties averaged 2.7 mbbls/d, a decrease of 9% from Q1 2024.  No wells were drilled on Licence G1/48 during Q2 2024, but the Company conducted two well workovers.   

Following on from the successful drilling in 2023, the Company has now planned further drilling opportunities on the Manora field, which are expected to further extend the field’s life. Given efficiencies in the drilling operations to date in 2024, Valeura expects to accelerate the drilling of three infill development wells plus two appraisal wells, to commence in Q4 2024, following infill drilling on the Jasmine field. 

Environmental Monitoring Award

Valeura is committed to ensuring the sustainability of its business, and aspires toward world class standards for environmental responsibility, social wellbeing, and governance.  The Company was recently awarded the 2024 EIA Monitoring Award from Thailand’s Office of Natural Resources and Environmental Policy and Planning.  This reflects the Company’s strong performance with regard to its environmental monitoring activities and reporting under its formal Environmental Impact Assessment, in respect of its Nong Yao, Manora, and Ban Yen fields.  Further details on the Company’s commitment to sustainability can be found in Valeura’s inaugural Sustainability Report, which is available on the Company’s website.

Guidance Update

Valeura has revisited its guidance estimates and has adjusted its outlook to reflect year-to-date performance and expectations for the remainder of the year.

Oil production expectations remain largely unchanged but have been narrowed to a range of 22,000 – 24,000 bbls/d.  In the Company’s estimation, the impact of deferring production as a result of the precautionary suspension at the Wassana field is offset by demonstrated stronger-than-plan potential rates from the field, when in full operation.  In addition, the Company’s drilling programme to date has included two infill development wells at Nong Yao A, which were drilled earlier than planned in the year, and serve to offset the later start of first oil from the Nong Yao C development than originally planned.  The Company feels its portfolio offers substantial optionality to adjust work programmes to compensate for unanticipated deferrals of production.  For this reason, the drilling schedule remains subject to ongoing optimisation.

The Company now anticipates total capital spending of US$135 – 145 million, a slight downward revision.  Over 85% of the capex is associated with drilling operations, and as the Company has a drilling rig  on contract for the full year, the capex budget is therefore largely fixed.  However, given an efficient drilling operations performance to date, additional wells from the Manora campaign are now expected to be realised in 2024 for essentially the same full-year drilling budget.   

The Company’s opex and price realisation guidance is re-affirmed. For opex, management expects the combined effects of increases due to higher costs of diesel and the additional costs associated with the advanced underwater inspection at the Wassana field to be largely offset by strong underlying operational performance and reductions in connection with owning, rather than leasing, the Nong Yao FSO.  On pricing, while recent price realisations have somewhat exceeded management’s expectations, the Company considers long-term price performance in forecasting to be more in line with its guidance. 

Exploration expense remains unchanged at approximately US$8 million.  To date, Valeura has drilled three exploration wells.  All were successful and as a result there was additional spending for enhanced data acquisition to support future appraisal and development planning.  The Company continually seeks to optimise its drilling schedule to maximise value, and as a result, future refinements may have a bearing on the ultimate exploration expense recorded.

^{(1)   Working interest share production, before royalites. 
(2)   Represents adjusted opex which is a non-IFRS financial measure – see “Non-IFRS Financial Measures and Ratios” section below. 
(3)   Represents adjusted capex which is a non-IFRS financial measure – see “Non-IFRS Financial Measures and Ratios” section below.}

Webcast

Valeura’s management team will host an investor and analyst webcast on Friday, August 9, 2024 at 08:30 Calgary / 15:30 London / 21:30 Bangkok / 22:30 Singapore to discuss today’s announcement.  The live audio and video feed can be access via the link below.  Written questions may be submitted through the webcast system or by email to IR@valeuraenergy.com.

Webcast link: https://teams.microsoft.com/l/meetup-join/19%3ameeting_MzNiOTRmNzMtZTY2Mi00YzMxLWE3YzItNGUzMzIxY2VmMzdj%40thread.v2/0?context=%7B%22Tid%22%3A%22a196a1a0-4579-4a0c-b3a3-855f4db8f64b%22%2C%22Oid%22%3A%22241f769c-12ae-4efc-8c14-d2e523040a83%22%2C%22IsBroadcastMeeting%22%3Atrue%2C%22role%22%3A%22a%22%7D&btype=a&role=a  

An audio only feed of the event is available by phone using the Conference ID and dial-in numbers below.

Conference ID: 169 700 916#

Dial-in numbers:

Canada: 833-845-9589
Singapore: +65 6450 6302
Thailand: +66 2 026 9035
Turkey: 00800142034779
UK: 0800 640 3933
USA: 833-846-5630

For further information, please contact:

Contact details for the Company’s advisors, covering research analysts and joint brokers, including Auctus Advisors LLP, Canaccord Genuity Ltd (UK), Cormark Securities Inc., Research Capital Corporation, and Stifel Nicolaus Europe Limited, are listed on the Company’s website at www.valeuraenergy.com/investor-information/analysts/.

About the Company

Valeura Energy Inc. is a Canadian public company engaged in the exploration, development and production of petroleum and natural gas in Thailand and in Türkiye.  The Company is pursuing a growth-oriented strategy and intends to re-invest into its producing asset portfolio and to deploy resources toward further organic and inorganic growth in Southeast Asia.  Valeura aspires toward value accretive growth for stakeholders while adhering to high standards of environmental, social and governance responsibility.

Additional information relating to Valeura is also available on SEDAR+ at www.sedarplus.ca.

Non-IFRS Financial Measures and Ratios

This news release includes references to financial measures commonly used in the oil and gas industry such as adjusted EBITDAX, adjusted net working capital, adjusted cashflow from operations, adjusted opex, and adjusted capex which are not generally accepted accounting measures under International Financial Reporting Standards (“IFRS Accounting Standards”) and do not have any standardised meaning prescribed by IFRS Accounting Standards and, therefore, may not be comparable with similar definitions that may be used by other public companies. Management believes that adjusted EBITDAX, adjusted net working capital, adjusted cashflow from operations, adjusted opex, and adjusted capex are useful supplemental measures that may assist shareholders and investors in assessing the financial performance and position of the Company. Non-IFRS financial measures should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS Accounting Standards.

Adjusted EBITDAX is a non-IFRS financial measure which does not have a standardised meaning prescribed by IFRS Accounting Standards. This non-IFRS financial measure is included because management uses the information to analyse the financial performance of the Company. Adjusted EBITDAX is a non-IFRS and non-standardised variant of EBITDAX, adjusted to remove non-cash items as well as certain non-recurring costs including severance payments and other one-off items in relation to the Company’s recent acquisitions.  Adjusted EBITDAX is calculated by adjusting profit (loss) for the year before other items as reported under IFRS to exclude the effects of other income, exploration, special remuneratory benefit (“SRB”), finance income and expenses, transaction costs, and depreciation, depletion and amortisation, restructuring and other costs, and certain non-cash items (such as impairments, foreign exchange, unrealised risk management contracts, reassessment of contingent consideration, and share-based compensation) and gains or losses arising from the disposal of capital assets. In addition, other unusual or non-recurring items are excluded from Adjusted EBITDAX, as they are not indicative of the underlying financial performance of the Company.

Adjusted opex and adjusted opex per bbl: are a non-IFRS financial measure and a non-IFRS financial ratio, respectively, which do not have standardised meanings prescribed by IFRS Accounting Standards. This non-IFRS financial measure and ratio are included because management uses the information to analyse cash generation and financial performance of the Company. Operating cost represents the operating cash expenses incurred by the Company during the period including the leases that are associated with operations, such as bareboat contracts for key operating equipment, such as FSOs, FPSOs, and warehouses. Adjusted opex is calculated by effectively adjusting non-cash items from the operating cost and adding lease costs.

Adjusted opex is divided by production in the period to arrive at adjusted opex per bbl. Valeura calculates adjusted opex per barrel, a non-IFRS measure, to provide a more consistent indication of the cost of field operations.  Adjusted opex, as opposed to operating expenses, excludes the impacts of non-recurring, non-cash items such as prior period adjustments, and adds back lease costs in relation to FSOs, FPSOs, and other facilities.

Adjusted cashflow from operations: is a non-IFRS financial measure which does not have a standardised meaning prescribed by IFRS Accounting Standards. This non-IFRS finance measure is included because management uses the information to analyse cash generation and financial performance of the Company. Adjusted cashflow from operations is calculated using two methods which generate the same figures: a) by subtracting from oil revenues, royalties, adjusted opex, general and administrative costs which are adjusted for non-recurring charges (generating the Adjusted Pre-tax Cashflow), and accrued PITA taxes and SRB expenses, and b) to enhance and facilitate to the reader a reconciliation of this non-IFRS measure, the Company also presented the adjusted cash flow from operations by calculating from cash generated from (used in) operating activities in the consolidated statement of cash flows, adjusting with non-cash items, adjusted opex, general and administrative costs which are adjusted for non-recurring charges (generating the Adjusted Pre-tax Cashflow), and accrued PITA tax and SRB expenses.

Adjusted cashflow from operations is divided by production in the period to arrive at adjusted cashflow from operations per bbl. Valeura calculates Adjusted cashflow from operations per barrel, a non-IFRS measure, to provide a more consistent indication of cashflow generated from operations by the Company.Debt and Net cash: are non-IFRS financial measures which do not have a standardised meaning prescribed by IFRS Accounting Standards. These non-IRFS financial measure are provided because management uses the information to a) analyse financial strength and b) manage the capital structure of the Company.  These non-IFRS measures are used to ensure capital is managed effectively in order to support the Company’s ongoing operations and needs. Net working capital and adjusted net working capital: are non-IFRS financial measures which do not have a standardised meaning prescribed by IFRS Accounting Standards. These non-IFRS financial measures are included because management uses the information to analyse liquidity and financial strength of the Company. Adjusted net working capital is calculated by adding back current leases liability to net working capital.

The leases are associated with operations, such as bareboat contracts for key operating equipment, such as FSOs, FPSOs, and warehouses which are included in the Company’s disclosed adjusted opex (and adjusted opex guidance). Management believes the adjusted net working capital provides a useful data point to the reader to ascertain the business’ next-twelve-months surplus or deficit capital requirement. It is also a data point that management uses for cash management. Adjusted capex is a non-IFRS measure which does not have a standardised meaning prescribed by IFRS Accounting Standards. Management uses this non-IFRS measure to analyse the capital spending of the Company, and assess investments in its assets. Adjusted Capex is defined as the addition in capital expenditure for drilling, brownfield, and other property, plant & equipment.

For details of the reconciliations of the above non-IFRS financial measures and ratios with IFRS financial measures, please refer to the Management’s Discussion and Analysis (“MD&A”) for the period ended June 30, 2024, available on the Company’s website and SEDAR+.

Advisory and Caution Regarding Forward-Looking Information

Certain information included in this news release constitutes forward-looking information under applicable securities legislation. Such forward-looking information is for the purpose of explaining 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, such as making investment decisions. Forward-looking information typically contains statements with words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “estimate”, “propose”, “project”, “target” or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this news release includes, but is not limited to: the Company’s continued focus on safety and sustainability; the Company’s intention to maintain a strong balance sheet; timing to mobilise the drilling rig to Nong Yao C, timing for first oil, and target rates from the development; the Company’s anticipated higher production in the second half of 2024; the Company’s anticipated lower spending on capex for 2024; the Company’s intent to pursue all potential remedies in respect of the historic tax payments; the Company’s plan for drilling on Jasmine comprising approximately five infill development wells and drilling on the Ratree exploration prospect; the investment thesis, that the Company’s assets offer opportunities to push field economic lives into the future; the Company’s strengthening financial position resulting in being better prepared to grow its business; the expectation to bring on the new Nong Yao A wells in the coming days; the Company’s expectation that the Nong Yao C drilling programme has been delivered approximately 25% under budget; timing of release and the anticipated next location of the drilling rig; the Nong Yao FSO vessel acquisition resulting in more operational flexibility and reduced opex; the Company’s expectations of returning sustained production to pre-suspension levels on the Wassana field and the timing thereof; timing to complete the final investment decision on the Wassana field redevelopment; expectations that well workovers on the Manora field will offset recent production declines; the Company’s expectation that a Manora drilling campaign will be included in the drill sequence in late 2024 or early 2025; and the Company’s revision of its guidance outlook for 2024. In addition, statements related to “reserves” are deemed to be forward-looking information as they involve the implied assessment, based on certain estimates and assumptions, that the resources can be discovered and profitably produced in the future.

Forward-looking information is based on management’s current expectations and assumptions regarding, among other things: the ability to fully identify and execute infill drilling opportunities in its fields; the ability to achieve regulatory and partner approvals for a new development plan in the Wassana oil field; the accuracy of the independent engineering evaluation of the reserves and contingent resources attributable to the Company’s four licences in the offshore Gulf of Thailand prepared by Netherland, Sewell and Associates Inc, with a preparation date of February 19, 2024, effective December 31, 2023; the ability to successfully pursue further opportunities in Thailand and achieve synergies including utilisation of tax losses; the ability to extend the Thrace Basin exploration licences beyond their current expiry dates; the ability to identify attractive M&A opportunities to support growth; the Company’s ability to operate the properties in a safe, environmentally responsible, efficient and effective manner; future sources of funding; future economic conditions; the ability to manage costs related to inflation; the ability of the Company to execute its strategy; the Company’s ability to effectively manage growth; political stability of the areas in which Valeura is operating and completing transactions; the success of the Deep Gas Play; the ability of the Company to satisfy the drilling and other requirements under its licences and leases; continued operations of and approvals forthcoming from the governments and regulators in a manner consistent with past conduct; future seismic and drilling activity on the required/expected timelines; the prospectivity of the Company’s lands; the continued favourable pricing and operating netbacks across its business; future production rates and associated operating netbacks and cash flow; Valeura’s forecast for 2024 full year oil production; the commencement of drilling on the Nong Yao C accumulation and the expected timing thereof; Valeura’s planned capex for 2024; Valeura’s opex guidance for 2024; Valeura’s anticipated exploration expense for 2024; the Company’s ability to fund its 2024 spending through cash on hand and cash flow generated from ongoing operations; the Company’s intention to maintain a strong balance sheet, in support of its grown-oriented strategy; the ability to reach agreement with partners; the ability of the Company to maintain its directors, senior management team and employees with relevant experience; the ability of the Company to successfully manage the political and economic risks inherent in pursuing oil and gas opportunities in Thailand and Türkiye; field production rates and decline rates; the ability of the Company to secure adequate product transportation; the impact of increasing competition in or near the Company’s plays; the ability of the Company to obtain qualified staff, equipment and services in a timely and cost-efficient manner to develop its business and execute work programmes; the timing and costs of pipeline, storage and facility construction and expansion; future oil and natural gas prices; currency, exchange and interest rates; the ability of the Company to maintain effective internal controls over financial reporting; the regulatory framework regarding royalties, taxes and environmental matters; the ability of the Company to successfully market its oil and natural gas products; the ability to successfully manage the political and economic risks inherent in pursuing oil and gas opportunities in foreign countries; the state of the capital markets; and the ability of the Company to obtain financing on acceptable terms. Although the Company 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 and resources are speculative activities and involve a degree of risk. A number of factors could cause actual results to differ materially from those anticipated by the Company including, but not limited to: risks associated with the failure to realise transaction and anticipated benefits related to M&A; risks associated with the management of growth; risks associated with acquisitions, dilution and availability of debt; risks resulting from the Company’s dependence on its directors, senior management team and employees with relevant experience; risks associated with the management of key local relationships; the risks of currency and interest rate fluctuations and hedging; risks associated with rising inflationary pressures;  risks associated with estimates of reserves and resources; risks associated with the value of the Deep Gas Play in Türkiye; counterparty and partner risk; risks associated with the Company’s reliance on third party service providers; operational risks with aging assets; risks relating to internal controls over financial reporting; risks relating to the use of foreign subsidiaries by the Company; income tax risks; risks relating to public health crises, including a pandemic; risks relating to the Company’s dependence on other operators of assets and joint venture partners; risks relating to the geopolitical situation in eastern Europe; exploration, development and production risks; offshore operational risks relating to Thailand; risks relating to the availability of drilling, hydraulic stimulation and other equipment and access; risks relating to the revocation or expiration of exploration licences, production leases and other licences, leases and permits; risks relating to the Company’s insurance and indemnities; risks relating to the Company’s operations and the environment, and the potential for compliance, clean-up or other costs; risks relating to compliance with environmental laws and regulations; climate change risks; risks relating to title to assets; risks relating to the number of laws and regulations applicable to the oil and gas industry; price volatility, markets and marketing risks; access to debt and equity markets risks; competition risks; operational, hazards and unexpected disruptions risks; foreign operations risks; government rules and regulations risks; bribery and corrupt practices risks; and risks relating to the Common Shares. See the most recent annual information form and management’s discussion and analysis of the Company for a detailed discussion of the risk factors.

Certain forward-looking information in this news release may also constitute “financial outlook” within the meaning of applicable securities legislation. Financial outlook involves statements about Valeura’s prospective financial performance or position and is based on and subject to the assumptions and risk factors described above in respect of forward-looking information generally as well as any other specific assumptions and risk factors in relation to such financial outlook noted in this news release. Such assumptions are based on management’s assessment of the relevant information currently available, and any financial outlook included in this news release is made as of the date hereof and provided for the purpose of helping readers understand Valeura’s current expectations and plans for the future. Readers are cautioned that reliance on any financial outlook may not be appropriate for other purposes or in other circumstances and that the risk factors described above or other factors may cause actual results to differ materially from any financial outlook. The forward-looking information contained in this new release is made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward-looking information contained in this new release is expressly qualified by this cautionary statement.

This announcement does not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction, including where such offer would be unlawful. This announcement is not for distribution or release, directly or indirectly, in or into the United States, Ireland, the Republic of South Africa or Japan or any other jurisdiction in which its publication or distribution would be unlawful.

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.

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