TIDMVLU
RNS Number : 2118X
Valeura Energy Inc.
26 April 2019
VALEURA PROVIDES AN OPERATIONS UPDATE
Drilling Success, Stimulation Programme Agreed, Focus on
Flow-Testing
Calgary, April 26, 2019: Valeura Energy Inc. (TSX:VLE, LSE:VLU)
("Valeura" or the "Company"), the upstream natural gas producer
focused on appraising and developing an unconventional gas
accumulation in the Thrace Basin of Turkey in partnership with
Equinor, is pleased to provide an operations update concerning its
Basin Centered Gas Accumulation ("BCGA") appraisal programme.
Highlights
-- Devepinar-1 drilled to 4,796 metres with clear indications of
over-pressured gas throughout the 1,066 metre gross column in the
Teslimkoy and Kesan Formations
-- Inanli-1 pressure measurements confirm the well is
significantly over-pressured, and the reservoir stimulation and
testing programme is expected to commence in late May
-- With 11 vertical wells now demonstrating high-pressure gas
around the basin, the focus for data acquisition and operations is
shifting to continued stimulation and production testing of drilled
wells
Sean Guest, President and CEO Commented:
"We are encouraged by the preliminary results we have seen from
drilling and logging Devepinar-1. The data supports our play
mapping and confirms that reservoir and over-pressured gas are
present some 20 kilometres away from the Yamalik-1 and Inanli-1
wells.
At this stage, we have nearly a dozen wells across the basin
that demonstrate the presence of over-pressured gas and a laterally
continuous objective reservoir. This basin is almost a half million
acres in size and our recent penetrations have drilled up to a mile
of continuous gross gas column. The scale of the resource is
significant, and while we have a very good understanding of the
basin's geology and the presence of over-pressured gas, we have as
yet only partially stimulated and flow tested one exploration well,
Yamalik-1. Our near-term focus is shifting squarely to production
testing multiple zones across our new wells to understand the gas
flow characteristics of our reservoir both vertically and
laterally."
Devepinar-1
The Devepinar-1 appraisal well was drilled safely to 4,796
metres, approximately 500 metres deeper than originally planned due
to significant gas shows and faster drilling penetration rates. The
top of the objective reservoir was encountered at 3,730 metres and
the gross 1,066 metres of the Teslimkoy and Kesan Formations is
interpreted to be gas-bearing down to the total depth of the well.
During drilling operations, formation gas was circulated to surface
and flared several times, and much of the deep drilling operation
was conducted with mud weights in excess of 0.78 psi/ft to manage
gas inflow.
The well met all of its drilling objectives and most
significantly, confirms the presence of over-pressured, gas-bearing
reservoir at the western flank of the mapped BCGA fairway. The log
data and the higher penetration rates both indicate that the
porosity at Devepinar-1 is higher when compared to the Inanli-1 and
Yamalik-1 wells at similar depths. These results greatly increase
the Company's understanding of the lateral extent of the reservoir
and occurrence of over-pressure related to the Company's basin-wide
play mapping. The Devepinar-1 well has multiple zones of interest
with the best zones of interest being located in the upper Kesan
Formation, as they were in the previously drilled wells.
High-grading of potential intervals of interest is now underway,
in advance of developing a reservoir stimulation programme, jointly
with the Company's partners.
The well was operated by Valeura, with costs shared
proportionately based on the working interest share of each partner
(Valeura 31.5%). Despite the well being drilled deeper than
anticipated, drilling and logging operations were conducted below
budget. The well is currently being cased and will be left in a
state ready for testing and completion.
Inanli-1
The Inanli-1 completion programme commenced with a diagnostic
fracture injectivity test ("DFIT") to confirm high downhole
pressures interpreted from mud weights during drilling. This is a
critical step to ensure, among other things, surface equipment for
the completion programme is appropriately pressure-rated to ensure
safe operations. The lowest DFIT at 4,813 metres confirms a
pressure gradient of 0.809 psi/ft (significant over-pressure), in
line with observations made at Yamalik-1. A second extended DFIT is
currently being conducted on a specific completion zone to
establish formation fracture stimulation parameters and pore
pressure prior to commencing reservoir stimulation operations. In
accordance with the DFIT results, suitable equipment rated for up
to 15,000 psi has been sourced internationally and is being
imported to Turkey. The Company anticipates all equipment will be
on site for the first fracture stimulation operations later in May
2019.
The overall goal of the Inanli-1 completion programme is to
selectively test key intervals in the approximately 1,600 metre
reservoir section and to provide definitive, longer term flow
results for each interval. Given the significant vertical interval,
the completion has been tailored to test the deepest naturally
fractured intervals (initial zones to be completed) to the
shallower sweet spots (later in the programme). The programme is
designed to include up to 10 fracs in as many as five separate flow
zones and will incorporate more sophisticated flow tracing and
longer flow periods than the Yamalik-1 completion. In service of
this longer test programme, the Company has constructed a pipeline
to the location so that gas can be captured through Valeura's local
infrastructure and sold to customers.
The costs for the Inanli-1 stimulation and testing will be fully
carried by Equinor and will complete their earning obligations
under the Banarli farm in agreement.
Near-term operations focus
Valeura and Equinor have now built a strong understanding of the
geology of the BCGA play and the presence of over-pressured gas,
based on 11 vertical well penetrations, including Yamalik-1,
Inanli-1, Devepinar-1, and eight other legacy wells. The two recent
wells have both demonstrated that the over-pressured gas extends
down to almost 5,000 metres and that seismic data can be used to
help predict natural fracturing ahead of drilling.
With a formidable body of new geologic knowledge, appraisal
wells that are 20 kilometres apart, and up to a mile of vertical
objective reservoir to evaluate, Valeura and Equinor believe the
right next step is to focus operations on better understanding the
rocks' flow characteristics with the objective to demonstrate
commercial flow rates, rather than drilling another vertical well
at this time. Accordingly, the KCA Deutag drilling rig will be
released. Over the coming months, the completions of the Inanli-1
and Devepinar-1 wells will provide critical data on reservoir zones
at varying depths, pressures, fracture density, hydrocarbon
maturities and reservoir quality. These flow data will then be used
to select the next drilling locations, and to determine whether
there are zones that should be considered as early horizontal
development well targets.
About Valeura Energy
Valeura Energy Inc. is a Canada-based public company engaged in
the exploration, development and production of petroleum and
natural gas in Turkey.
Since Valeura was established in 2010, the Company has executed
a number of transactions and currently holds interests in 20
production leases and exploration licences in the Thrace Basin of
Turkey totalling 0.46 MM acres (gross) or on a net basis 0.37 MM
acres of shallow rights and 0.26 MM net acres of deep rights.
Valeura is appraising an unconventional basin-centered gas
accumulation play in the Thrace Basin on its deep rights, which has
been evaluated by DeGolyer and MacNaughton to hold, effective
December 31, 2018, 10.1 Tcfe of estimated working interest unrisked
mean prospective resources of natural gas, which includes 236 MMbbl
of condensate. By applying 3D seismic, modern reservoir stimulation
technology and horizontal and deeper vertical well drilling,
Valeura is aiming to achieve commercial scale operations from this
tight gas resource.
In addition, the Company owns an extensive network of gas
gathering and sales infrastructure to support direct marketing of
natural gas to end users, and in 2018, produced an average of 4.3
MMcf/d of natural gas from conventional gas accumulations in its
shallower rights.
Additional information relating to Valeura is also available on
SEDAR at www.sedar.com and on the Company's corporate website at
www.valeuraenergy.com.
For further information please contact:
Valeura Energy Inc. (General and Investor Enquiries) +1 403 237 7102
Sean Guest, President and CEO
Steve Bjornson, CFO
Robin Martin, Investor Relations Manager
Contact@valeuraenergy.com, IR@valeuraenergy.com
GMP First Energy (Financial Adviser and Corporate Broker) +44 (0) 20 7448 0200
Jonathan Wright, Hugh Sanderson
Canaccord Genuity Limited (Joint Corporate Broker) +44 (0) 20 7523 8000
Henry Fitzgerald-O'Connor, James Asensio
CAMARCO (Public Relations, Media Adviser) +44 (0) 20 3757 4980
Owen Roberts, Billy Clegg, Monique Perks, Thayson Pinedo
Valeura@camarco.co.uk
Oil and Gas Advisories & Definitions
Prospective resources are those quantities of petroleum
estimated, as of a given date, to be potentially recoverable from
undiscovered accumulations by application of future development
projects. Prospective resources have both an associated chance of
discovery and a chance of development.
There is no certainty that any portion of the prospective
resources will be discovered. If a discovery is made, there is no
certainty that it will be developed or, if it is developed, there
is no certainty as to the timing of such development or that it
will be commercially viable to produce any portion of the
prospective resources.
Please see the Company's annual information form for the year
ended December 31, 2018, which is available under Valeura's issuer
profile on SEDAR at www.sedar.com, for more information with
respect to the Company's prospective resources, including details
regarding risked estimates.
Forward-Looking Statements and Cautionary Statements
This news release contains certain forward-looking statements
and information (collectively referred to herein as
"forward-looking information") including, but not limited to: the
characteristics and objectives of the Inanli-1 completion
programme; Valeura's intent to frac and production test the
Inanli-1 well; the timing to commence fracking and testing
operations; that Equinor will complete their earning obligations
under the Banarli farm in agreement; the assessment of the
resources in the test formations; the potential of the Company's
unconventional basin-centered gas accumulation play in the Thrace
Basin; and the Company's intention to achieve commercial scale
operations. Forward-looking information typically contains
statements with words such as "anticipate", estimate", "expect",
"target", "potential", "could", "should", "would" or similar words
suggesting future outcomes. The Company cautions readers and
prospective investors in the Company's securities to not place
undue reliance on forward-looking information, as by its nature, it
is based on current expectations regarding future events that
involve a number of assumptions, inherent risks and uncertainties,
which could cause actual results to differ materially from those
anticipated by the Company.
Statements related to "prospective resources" are deemed
forward-looking statements as they involve the implied assessment,
based on certain estimates and assumptions, that the prospective
resources can be profitably produced in the future. Specifically,
forward-looking information contained herein regarding "prospective
resources" include volumes of prospective resources and the ability
to finance future development and, the conversion of a portion of
prospective resources into reserves.
Forward-looking information is based on management's current
expectations and assumptions regarding, among other things:
continued political stability of the areas in which the Company is
operating; continued safety of operations and ability to proceed in
a timely manner; continued operations of and approvals forthcoming
from the Turkish government and regulators in a manner consistent
with past conduct; future seismic and drilling activity on the
expected timelines; the continued favourable pricing and operating
netbacks in Turkey; future production rates and associated
operating netbacks and cash flow; decline rates; future sources of
funding; future economic conditions; future currency exchange
rates; the ability to meet drilling deadlines and other
requirements under licenses and leases; and the Company's continued
ability to obtain and retain qualified staff and equipment in a
timely and cost efficient manner. In addition, the Company's work
programmes and budgets are in part based upon expected agreement
among joint venture partners and associated exploration,
development and marketing plans and anticipated costs and sales
prices, which are subject to change based on, among other things,
the actual results of drilling and related activity, availability
of drilling, fracking and other specialised oilfield equipment and
service providers, changes in partners' plans and unexpected delays
and changes in market conditions. 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 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: the risks of currency
fluctuations; changes in gas prices and netbacks in Turkey;
uncertainty regarding the contemplated timelines and costs for the
deep evaluation; the risks of disruption to operations and access
to worksites, threats to security and safety of personnel and
potential property damage related to political issues or civil
unrest in Turkey; potential changes in laws and regulations, the
uncertainty regarding government and other approvals; counterparty
risk; risks associated with weather delays and natural disasters;
and the risk associated with international activity. The
forward-looking information included in this news release is
expressly qualified in its entirety by this cautionary statement.
The forward-looking information included herein is made as of the
date hereof and Valeura assumes no obligation to update or revise
any forward-looking information to reflect new events or
circumstances, except as required by law. See the AIF for a
detailed discussion of the risk factors.
Additional information relating to Valeura is also available on
SEDAR at www.sedar.com.
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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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