Wassana Production Re-start and Change to Working Interests
Monday 1 May 2023
Valeura Energy Inc. (TSX:VLE) (“Valeura” or the “Company”), the upstream oil and gas company with assets in the offshore Gulf of Thailand and the Thrace Basin of Turkey, is pleased to announce the re-start of oil production from the Wassana field and changes to its working interest in Licences G6/48 and G10/48, offshore Gulf of Thailand.
Wassana Production Re-start
On April 28, 2023 Wassana’s production was re-started, introducing crude oil into the field’s processing facilities for the first time in nearly three years. With the activation of additional wells shortly thereafter, production rates have begun ramping up. Operations are proceeding as intended, with no deviations to the Company’s safe operating parameters.
Increase in Wassana (Licence G10/48) Working Interest
Valeura’s 11% partner in Licence G10/48, Palang Sophon Limited (“PSL”), has opted to discontinue its participation in the licence. By agreement between PSL and Valeura, PSL will transfer its 11% working interest to Valeura. Accordingly, Valeura will proceed with further Wassana oil field operations on a 100% working interest basis, including its planned infill drilling campaign which is scheduled to begin in Q3 2023. In consideration, Valeura has agreed to discharge PSL of outstanding liabilities owed in connection with joint operations on the licence as well as any future liabilities associated with its past involvement in the licence.
Rossukon (Licence G6/48) Working Interest
Since its acquisition of an interest in Licence G6/48 in mid 2022, Valeura has worked diligently to assess the potential for development of the Rossukon oil field. Following consideration of the project’s tight schedule requirements and an estimated capital requirement of approximately US$100 million (gross), Valeura has opted to divest its working interest in the license to its partner Northern Gulf Petroleum (“NGP”) for a contingent cash consideration of US$5 million, payable at first oil from the Rossukon oil field, and a further 4.65% overriding royalty associated with the Company’s 43% working interest (2% of gross production) from the field thereafter.
Sean Guest, President and CEO commented:
“I am delighted to announce the re-start of production from the Wassana oil field and grateful to our team who oversaw this safe re-activation. This achievement fulfils the vision we set when we completed our acquisition of these assets in mid 2022, and our success is energised by our increased working interest in the project. Raising our sights, we are now looking with excitement toward Wassana’s upcoming growth phase as we prepare for infill drilling to start in Q3 2023, with the target of increasing field output toward approximately 5,000 bbls/d (on a 100% Valeura interest basis).
Separately, I am pleased to have arrived at an efficient way to realise potential value from Licence G6/48. Valeura will bear no risk, and no obligation for any capital costs in relation to the Rossukon oil field development and the contingent payment due to us upon first oil will effectively offset the contingent payment owed by us to the receiver upon first oil (in connection with our acquisition of the licence interest in 2022). At the same time, the arrangement provides us a long-term potential revenue stream by way of an overriding royalty.”