CALGARY, Jan. 24 /CNW/ - Valeura Energy Inc. ("Valeura" or the "Corporation") (TSX-V: "VLE") is pleased to provide an update of its operational activities in
ALTINAKAR-1 WELL DRILLING
The Corporation's first exploration well in Turkey, Altinakar-1 on
Licence 2674 in the Karakilise area, is currently drilling at a depth
of approximately 1,670 ft (509 m). The well is targeting light oil in
the Bedinan formation at a depth of approximately 8,200 ft (2,500 m)
and is being drilled on a 1.9 km2 tilted fault block prospect defined on new 2D seismic shot by Valeura
in the fourth quarter of 2010. The Corporation is targeting to complete
drilling and evaluation by late March. Valeura is funding 100% of the
US$4.0 million turnkey cost for drilling as part of the Phase I earning
program under the previously announced farm-in agreement with Aladdin
Middle East Ltd. and Guney Yildizi Petrol Uretim Sondaj, Muteahhitlik
ve Ticaret A.S. (collectively "AME-GYP").
If the Altinakar-1 well is successful, it is expected that regulatory
approval could be secured for a three year extension to the term of
Licence 2674, which would enable further evaluation of more than 10
undrilled prospects and leads identified in the Bedinan formation from
the new 2D seismic.
KARAKILISE-1 WELL RECOMPLETED AS OIL PRODUCER
The Karakilise-1 well in Licence 2677 has been recompleted as an oil
producer from the Mardin formation. The well is currently being pumped
and is producing 30 to 35 bopd of light oil at a water-cut of
The well was recently reactivated aimed at establishing producibility
and extending the licence term. It was originally drilled in 2003 and
produced approximately 50,000 bbls of light oil from the Mardin before
it was deepened in 2006 to the Bedinan formation in an unsuccessful
deep test. The well was subsequently suspended.
As part of its Phase I earning program, Valeura funded 100% of the
US$0.6 million cost to perforate bypassed Mardin pay below the original
perforations to re-establish production. The results are expected to be
sufficient to secure regulatory approval for a three year extension to
the term of Licence 2677 to enable further evaluation of the licence.
The Corporation has identified more than 10 exploration leads in the
Mardin formation on legacy 2D seismic.
340 KM 2D SEISMIC PROGRAM COMPLETED
The Corporation has completed the acquisition of approximately 340 km of
new 2D seismic on selected areas in Karakilise Licences 2674, 2677 and
2678 and Rubai Licences 2598, 2599 and 2600. Valeura funded 100% of the
cost at Karakilise (approximately US$2.7 million net) and 50% at Rubai
(approximately US$0.7 million net) as Phase I earning expenditures.
At Karakilise, approximately 227 km of new 2D seismic identified more
than 10 prospects and leads in the Bedinan formation on Licence 2674
and provided the seismic control to firm the Altinakar-1 well location.
These prospects and leads are located in a Bedinan play fairway, a new
play concept in southeast Turkey, which extends into the adjoining
licence to the east where light oil was discovered in the Bedinan at
the Arpetepe field in 2008.
At Rubai, approximately 54 km of new 2D seismic was acquired in Licences
2598 and 2599 over the Ogunduk prospect. The seismic was designed to
define a drilling location up-dip from an earlier heavy oil discovery
in the Mardin formation at the NE Ogunduk-1 well, which was drilled in
2009 in an interpreted flank position on the structure. The NE
Ogunduk-1 well was recently recompleted and tested, confirming
producibility of 30 to 50 bopd of heavy oil at a high water cut. The
well is currently suspended pending confirmation of plans to drill a
In Licence 2600, the Corporation acquired approximately 40 km of new 2D
seismic over the Bostanci lead underlying a large surface anticline
located at the juncture of the border with Syria and Iraq, and 19 km of
new 2D seismic over the Cizre lead.
Seismic processing and interpretation of the Rubai area seismic is
nearing completion aimed at defining two to three potential exploration
drilling locations targeted for 2011 on the Rubai licences.
PHASE I EARNING PROGRAM UNDER AME-GYP FARM-IN NEARING COMPLETION
To date, the Corporation has paid cash calls of US$6.3 million to
AME-GYP against committed program and Valeura study work already
completed or underway, which represents total committed expenditures
for Valeura of approximately US$8.9 million. This compares to the Phase
I earning commitment of US$8.8 million under the AME-GYP farm-in
agreement, which earns the Corporation a 25% interest in the Kahta
production lease and three Karakilise exploration licenses and a 14.95%
interest in five Rubai exploration licences.
The Corporation is evaluating whether to exercise its option to proceed
to Phase II of the earning program and to increase its interests on a
sliding scale basis linked to investment. If the Corporation proceeds
with Phase II, the first significant investment would be expected to
involve funding 50% of the cost of a well on one of the Rubai licences
which will need to be spudded by the end of March 2011, which was
extended from previous disclosure. At the request of the operator, a
90-day extension of the petroleum district drilling requirement at
Rubai was granted by the GDPA regulatory authority on December 24,
2010, which provides additional time to integrate all of the new
seismic data prior to spudding any potential well by March 24, 2011.
Spudding of at least one additional well would be required by the end
of June 2011 to hold the most prospective acreage at Rubai.
If Valeura chooses to proceed and fully complete Phase II by the end of
2011, which would require a total Phase I and Phase II investment of
US$17.6 million across all of the leases and licences, the Corporation
could earn a 50% interest at Kahta and Karakilise and a 29.9% interest
at Rubai. It is anticipated that Phase II would involve funding up to
an additional three gross wells (2.0 net) and up to 60 km2 of new 3D seismic over the Kahta heavy oil field.
EDIRNE ASSET ACQUISITION EXPECTED TO CLOSE BY END FEBRUARY 2011
The previously announced US$3.1 million Edirne producing asset
acquisition is expected to close by the end of February 2011, following
the Corporation's registration of its branch office in Ankara, Turkey,
which is well-advanced. The effective date of this acquisition from
Otto Energy Ltd is October 1, 2010. A key condition for closing has
been satisfied with the receipt of a waiver on a right of first refusal
held by an affiliate of TransAtlantic Petroleum Ltd., the operator of
the Edirne Licence.
The assets include a 35% interest in the 100,080 acre (gross) Edirne
Licence 3839 in the Thrace Basin of northwest Turkey. Gross production
of premium-priced natural gas from the licence was approximately 6.3
mmcfd (gross) or 2.2 mmcfd (net) in the third quarter of 2010 at an
average realized price of US$7.40 per mcf. Current production rates are
in the range of 5.7 to 6.0 mmcfd (gross).
A work program and budget review for the Edirne licence was held with
the operator in Istanbul on January 20, 2011 and it is expected that a
firm plus contingent budget of up to US$4.0 million (net) will be
proposed for 2011 for drilling, workovers and wellhead compression,
subject to formal partner approval.
OTHER BUSINESS DEVELOPMENT OPPORTUNITIES BEING PURSUED
The Corporation is continuing to pursue other producing asset
acquisitions and farm-ins in Turkey to build the oil and gas portfolio
and remains encouraged by the opportunities available.
In other developments in the region, the Corporation submitted a joint
bid with Svenska Petroleum Exploration A.B. for a large exploration
block on the border with Turkey in Syria's December 2010 licensing
round. Valeura was approved to participate as a non-operating partner
by the Syrian Ministry of Petroleum and Mineral Resources and is
participating in the bid as a 30% partner. There may be other bidders
competing for the same exploration block and it is not expected that
results will be announced before late February or later.
ABOUT THE CORPORATION
Valeura Energy Inc. is a Canada-based public company currently engaged
in the exploration, development and production of petroleum and natural
gas in Turkey and Western Canada. The Corporation is continuing to
pursue a strategy to expand internationally in Turkey and to other
selected countries in the Middle East and North Africa region, the
Mediterranean Basin and Latin America.
This news release contains certain forward‐looking statements relating,
but not limited, to the Corporation's plans and expectations associated
with: the completion of the Phase I earning requirement in the AME-GYP
farm-in and the anticipated extent of, expenditures associated with and
timing of a Phase II earning program; the anticipated closing date for
the Edirne acquisition; the anticipated regulatory approval required to
transfer of legal title to the earned and acquired interests in the
lands associated with the AME-GYP farm-in and the Edirne acquisition
and the establishment of the Turkish branch; the work programs and
budgets for the Corporation's assets in Turkey; achieving regulatory
approval to extend the licence terms of selected Karakilise and Rubai
licences (including License 2674); the timing and results of the
bidding round in Syria; and, operational plans and the timing
associated therewith. Forward‐looking information typically contains
statements with words such as "anticipate", "estimate", "expect",
"potential", "could", "would" or similar words suggesting future
outcomes. The Corporation cautions readers and prospective investors in
the Corporation's securities to not place undue reliance on
forward‐looking information as by its nature, it is based on current
expectations regarding future events that involve a number of
assumptions, inherent risks and uncertainties, which could cause actual
results to differ materially from those anticipated by the Corporation.
Forward-looking information is based on management's current
expectations and assumptions regarding, among other things, the
Corporation's growth strategies, plans for and results of future
transactions, results of future seismic programs; future drilling
activity, future capital and other expenditures (including the amount,
nature and sources of funding thereof), future economic conditions,
future currency and exchange rates, continued political stability of
the areas in which the Corporation is anticipating completing
transactions, the Corporation's continued ability to obtain and retain
qualified staff and equipment in a timely and cost efficient manner and
the receipt of all necessary approvals for transactions. In addition,
budgets are based upon the Corporation's current acquisition plans and
exploration plans and anticipated costs, both of which are subject to
change based on, among other things, the actual results of
acquisitions, drilling activity, unexpected delays and changes in
market conditions. Although the Corporation believes the expectations
and assumptions reflected in such forward-looking information are
reasonable, they may prove to be incorrect.
Forward‐looking information involves significant known and unknown risks
and uncertainties. A number of factors could cause actual results to
differ materially from those anticipated by the Corporation including,
but not limited to, risks associated with the oil and gas industry
(e.g. operational risks in exploration; inherent uncertainties in
interpreting geological data; changes in plans with respect to
exploration or capital expenditures; the uncertainty of estimates and
projections in relation to costs and expenses and health, safety and
environmental risks), the risk of commodity price and foreign exchange
rate fluctuations, the uncertainty associated with negotiating with
third parties in countries other than Canada, the uncertainty regarding
competitive bidding rounds and timing of results, the uncertainty
regarding government and other approvals and the risk associated with
international activity. The forward‐looking information included in
this news release is expressly qualified in its entirety by this
cautionary statement. The forward‐looking information included herein
is made as of the date hereof and Valeura assumes no obligation to
update or revise any forward‐looking information to reflect new events
or circumstances, except as required by law.
Additional information relating to Valeura is also available on SEDAR at
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this news
SOURCE Valeura Energy Inc.
For further information:
Jim McFarland, President and CEO
Valeura Energy Inc.
Steve Bjornson, CFO
Valeura Energy Inc.