Valeura Energy Inc. (TSX: VLE, OTCQX: VLERF) (“Valeura”), 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;
- Oil production of 21.1 mbbls/d 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; and
- Cash and net cash balance as of June 30, 2024 of US$146.8 million, with no debt.
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.”
