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Valeura Energy Inc. Announces Trading Update
CALGARY, CANADA / ACCESSWIRE / July 13, 2020 / Valeura Energy Inc. (TSX:VLE)(LSE:VLU) (" Val...
About this update from Valeura Energy Inc.
[{"type":"text","content":"Valeura Energy Inc. Announces Trading UpdateCALGARY, CANADA / ACCESSWIRE / July 13, 2020 / Valeura Energy Inc. (TSX:VLE)(LSE:VLU) (\"Valeura\" or the \"Company\"), the upstream natural gas company focused on the Thrace Basin of Turkey, provides a trading update for the three-month period ended June 30, 2020. This is in advance of the Company's full financial and operating results which will be announced on August 12, 2020.Value PropositionAs of June 30, 2020, the Company was in a strong financial position, with no debt and a cash balance of US$30.7 million. Spending during the second quarter related to drilling two shallow exploration commitment wells and conducting testing operations on the Devepinar-1 well in the deep gas play. The Company continues to manage its capital and operating costs aggressively to protect Valeura's strong net cash position.The Company's cash value is over 50% higher than its current market capitalisation, which is approximately US$20.0 million1. As a result, management believes Valeura shares offer compelling value based on:Cash of US$30.7 million at June 30, 2020;A producing conventional shallow gas business in a strong gas price market with externally evaluated NPV10 of US$23.8 million at December 31, 2019, based on after-tax value of 1P reserves;Upside value attributable to its unconventional deep gas play; andThe expectation that inorganic opportunities such as mergers and acquisitions will play a role in the Company's growth, as the Company seeks to leverage its strong financial position.Ongoing production operationsSecond quarter 2020 production averaged 521 boe/d, comprised primarily of gas produced from the Company's ongoing conventional shallow gas programme. This is a decrease of 27% over the prior quarter, reflecting lower natural gas demand from its customer base due to the combined impact of a reduction in local industrial activity in light of the COVID-19 pandemic and national holidays in Turkey. Toward the end of the quarter, economic activity and gas demand had begun to ramp up as Turkey's lockdown restrictions reduced, resulting in production increasing by 40% in June, compared to the lower rates experienced in May.Price realisations in the second quarter were effectively unchanged from the first quarter on a Turkish Lira basis and averaged US$6.24 per thousand cubic feet (\"Mcf\"), r...