Page 13 - Euroil Week 14 2020

EurOil PROJECTS & COMPANIES EurOil
Valeura stays the course at Turkish deep gas play
TURKEY
Its partner and financier has exited the project.
LONDON-LISTED Valeura Energy has vowed to continue work at a deep gas play in western Turkey despite the withdrawal of its partner and financier, Norway’s Equinor.
Equinor informed Valeura in February that it wanted to walk away from joint appraisal of an unconventional gas formation in Turkey’s onshore Thrace Basin. The Norwegian giant has now ceded its interest in the project to Valeura and its partner, Pinnacle Turkey.
Following Equinor’s exit, Valeura is now the sole holder of the Banarli exploration licence. It also has an 81.5% interest in shallow formations at the West Thrace licence and a 63% stake in their deeper structures.
Valeura and Equinor banded together in 2016 and drilled their first well at the Banarli licence the following year, proving a gas and condensate discovery. They continued with exploration and appraisal activity at the site, with Equinor cover- ing most of the cost of this work as per the terms of its farm-in agreement. This culminated in a series of flow tests last year.
Despite Equinor’s departure, Valeura said it was still “committed” to appraising the deep play and saw “potential for significant long-term gas production.”
“Taking into account all technical data gathered to date, the company believes that further appraisal is warranted,” Valeura said in a statement. “The clear objective is to demonstrate stable commercial long-term flow potential by identifying the production
sweet spots within the play, and optimising drilling and completion techniques and asso- ciated cost.”
The initial five-year stage of the Thrace and Banarli licences is due to end on June 26, 2020. Valeura intends to apply for the first of three available two-year renewals, it said. Under their terms, the licences can be converted into pro- duction leases once commerciality is proved and development plans filed.
Valeura said it was in “excellent financial shape”, with no debt and $36mn in cash at the end of 2019. While Equinor has handled most of the financial burden, Valeura has covered its share of operational funding with revenues from shallow-gas production, which came to $10.2mn last year.
The company’s near-term plan is low-cost data collection. It aims to carry out a longer pro- duction test at the Devepinar-1 well at Banarli, at a cost of less than $100,000 per day, and gas that is flowed will be sold to Valeura’s customers. The schedule for this work is uncertain, however, because of disruptions caused by the coronavirus (COVID-19) pandemic.
Moving forward, Valeura plans to attract a new partner to the deep unconventional play to replace Equinor. It will seek one that “brings both financial and technical capability to the joint venture, for a work programme that is expected to include drilling new vertical and horizontal wells, reservoir stimulation and production test- ing productions.” ™
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