Page 18 - Euroil Week 28 2020

EurOil PROJECTS & COMPANIES EurOil
Turkey-focused Valeura eyes M&A market
TURKEY
Valeura is developing gas in Turkey’s onshore Thrace basin.
TURKEY-FOCUSED junior Valeura Energy says it may pursue merger and acquisition (M&A) opportunities, exploiting the current low cost of assets.
Announcing its second-quarter results, the London-listed rm said it boasted $30.7mn in cash at the end of June, which could help fund such deals. is amount is 50% more than the market price of Valeura’s shares, it said, meaning that its stock o ers “compelling value.”
Valeura, which develops gas in Turkey’s onshore race Basin, said it was currently eval- uating several inorganic growth transactions and had enlisted RBC Capital Markets for assistance.
“Management believes the conditions are favourable for inorganic growth to play a sig- ni cant role in the forward strategy, as the cur- rent market environment is generating a ow of new deal opportunities which the company is well-positioned to pursue given its enviable nancial position,” Valeura said.
Valeura produced 521 barrels of oil equiva- lent per day (boepd) in the three months end- ing June 30, down 27% quarter on quarter as a result of a slump in customer demand. is was caused by reduced industrial activity because of the coronavirus (COVID-19) pandemic and
national holidays taking place in Turkey.
e price it sold its gas at was unchanged q/q, at $220 per 1,000 cubic metres, with Valeura describing Turkey as a strong gas price mar- ket. The company currently produces its gas from shallow reservoirs, valuing this business at $23.8mn. It drilled two more shallow explora-
tion wells during the second quarter.
Valeura is also sitting on considerable upside
– an unconventional deep gas play. It undertook tests on the Devepinar-1 well targeting this play during the three-month period.
Valeura has vowed to continue work at the play, despite the withdrawal in February of its partner and nancier, Norway’s Equinor. e pair had been appraising the resource since 2016, drilling their rst well the following year.
“Taking into account all technical data gath- ered to date, the company believes that further appraisal is warranted,” Valeura said in April. “The clear objective is to demonstrate stable commercial long-term ow potential by identi- fying the production sweet spots within the play, and optimising drilling and completion tech- niques and associated cost.”
Valeura is almost certain to need a partner to take the project forward, however.™
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w w w . N E W S B A S E . c o m Week 28 16•July•2020