Valeura Energy Profile
Valeura Energy Inc. engages in the exploration, development, and production of oil and natural gas in Turkey.
The company conducts its operations at the Thrace Basin through its wholly owned subsidiaries Corporate Resources B.V. (CRBV) and Valeura Energy (Netherlands) B.V. (VENBV) and VENBV’s wholly owned subsidiary, Thrace Basin Natural Gas Turkiye Corporation (TBNG).
The company’s operations are focused on the Thrace Basin in the northwest of Turkey. Its operations are focused on the Thrace Basin in the northwest of Turkey. As of December 31, 2019, the company held working interests in 20 production leases and exploration licences covering approximately 0.46 million gross acres (0.37 million net acres of shallow rights and 0.26 million net acres of deep rights).
The Thrace Basin assets include an 81.5% working interest in the shallow rights and deep rights of 11 production leases in the South Thrace Lands; an 81.5% (shallow rights) working interest and 31.5% (deep rights) working interest in three production leases and one exploration licences in the West Thrace Lands; and a 100% (shallow rights) and a 50% (deep rights) working interest in the Banarli Licences. In addition, the company holds a 35% working interest in three other production leases (Edirne, Turkey).
The company is pursuing shallow conventional, normally pressured natural gas and deep unconventional tight gas. For the deeper Mezardre, Teslimkoy and Kesan Formations, the company has also used a combination of vertical and horizontal drilling and fracking to develop these tight, but still normally pressured gas resources.
The company’s primary producing assets are located in the South Thrace Lands and the West Thrace Lands (the TBNG JV Lands). In the South Thrace Lands, the company holds 11 production leases encompassing 170,735 gross acres. The company is the operator of the South Thrace Lands and holds an 81.5% working interest in the shallow rights and deep rights.
As of December 31, 2019, in the West Thrace Lands, the company held three production leases and one exploration license encompassing 102,012 gross acres. The company’s 31.5% working interest in deep rights is held by TBNG, and the company’s 81.5% working interest in shallow rights is jointly held by TBNG (as to 41.5%) and CRBV (as to 40%). Equinor Turkey B.V. (as to 50%) and Pinnacle Turkey, Inc. (PTI) (as to 18.5%) hold the remaining working interest in the deep rights, and PTI holds the remaining 18.5% working interest in the shallow rights. The company is the operator of the West Thrace Lands, which are subject to joint operating agreements.
The company holds two exploration licences in the Banarli Lands encompassing 133,840 gross acres. As of December 31, 2019, the company held a 100% working interest in the shallow rights and 50% working interest in the deep rights through CRBV. Equinor Turkey B.V. holds the other 50% working interest in the deep rights. Rights are subject to joint operating agreements and the Banarli Farm-In and the company is the operator.
The company’s wholly-owned subsidiary, VENBV, holds a 35% working interest in three production leases in Edirne encompassing 49,883 gross acres. Petrogas (a subsidiary of TransAtlantic Petroleum) operates and holds the remaining 65% working interest. In 2019, the company applied to the Republic of Turkey’s General Directorate of Mining and Petroleum Affairs to transfer its 35% working interest to the operator.
Petroleum Sales
The company has 81.5% ownership of, and operates, its own natural gas gathering grid and export lines directly to its customers. Natural gas is delivered directly to approximately 55 regional industrial purchasers. The company has individual sales contracts with these clients with prices referenced to the BOTAS Level 2 Wholesale (Processing) gas price (BOTAS Reference Price). The company produces a small amount of oil and condensate. The company’s natural gas infrastructure is underutilised and has the capacity to handle approximately 50 million cubic feet per day.
Shallow Conventional Gas
Gas sales in 2019 averaged 3,907 thousand cubic feet per day and oil and natural gas liquids sales totalled 9 barrel per day per day. In addition, the company installed 12 plunger lift pumpsto recover liquids and further stimulate gas flow.
Deep Unconventional Gas Play
The company identified the potential for an unconventional gas play very early in its entry into the Thrace Basin and acquired the Banarli Exploration Licences in 2013.
From October 2018 through January 2019, the company drilled two further appraisal wells. The company’s activity in 2019 centered around gathering data from the Inanli-1 and Devepinar-1 wells.
The company’s major properties are the TBNG JV Lands and Banarli Licences both situated in the Thrace Basin. The company also holds interests in three production leases at Edirne in the Thrace Basin which is considered a minor property. In total the company’s land holdings as of December 31, 2019 consisted an onshore area of approximately 456,470 gross acres (approximately 373,588 net acres from surface to 2,500 metres and approximately 255,662 net acres below 2,500 metres) all in Turkey. All of the company’s 2019 production was from the Thrace Basin.
As of December 31, 2019, the TBNG JV Lands entailed 14 production leases and one exploration licence comprising an onshore area of approximately 272,747 gross acres (approximately 222,289 net acres from surface to 2,500 metres and approximately 171,283 net acres below 2500 metres). Nine of the 14 production leases and the exploration licence on the TBNG JV Lands are new production leases and an exploration licence that were converted under the New Petroleum Law.
As of December 31, 2019, the Banarli Licences entailed two exploration licences comprising an onshore area of approximately 133,840 gross acres (approximately 133,840 net acres from surface to 2,500 metres and approximately 66,920 net acres below 2,500 metres). The Banarli Licences are new exploration licences that were converted under the New Petroleum Law.
As of December 31, 2019, the Edirne Lands entailed three production leases comprising an onshore area of approximately 49,883 gross acres (approximately 17,459 net acres). The Edirne production leases are new production leases that were converted under the New Petroleum Law.
Strategy
The company focuses on growing its established natural gas business in Turkey, which has significant upside potential and benefits from high natural gas prices.
