CALGARY, Dec. 17, 2015 /CNW/ - Valeura Energy Inc. ("Valeura" or the "Corporation") (TSX: VLE) is pleased to announce encouraging drilling results and the commencement of completion and testing operations on its initial two exploration wells Bati Gurgen-1 and Yayli-1 on its 100% owned and operated Banarli licences in the Thrace Basin of Turkey. In anticipation of further positive results, equipment procurement, pipeline right of way agreements and the finalization of gas marketing arrangements have continued to advance targeting first gas sales from Banarli by the end of January 2016. The Energy Market Regulatory Authority in Turkey has also granted the Corporation's Turkish affiliate a natural gas wholesale marketing licence to facilitate sales from Banarli.
"We are encouraged by the initial exploration drilling results, which are supported by extensive wireline logging analysis, and we are expecting positive confirmatory flow testing results in the coming weeks", said Jim McFarland, President and Chief Executive Officer. "A further operational update will be provided in early January. Banarli has the potential to provide a significant boost to our net sales volumes in the first quarter of 2016, given the leverage of our 100% ownership position at Banarli."
"The estimated final cost of US$5.5 million for this initial two well exploration drilling, completion, testing and tie-in program at Banarli is being fully funded from cash on hand and operating cash flow, leaving our balance sheet debt free."
BANARLI DRILLING RESULTS (VALEURA OPERATED, 100% WORKING INTEREST)
Bati Gurgen-1 Well
The Bati Gurgen-1 exploration well (Valeura 100% working interest) was spudded on November 10, 2015 with the Viking I-27 rig to test the Osmancik and Mezardere formations in a separate structural closure along the same fault trend as the Gurgen-1 discovery well (Valeura 40% working interest) located approximately 3.0 kilometres to the southeast on the joint venture lands acquired from Thrace Basin Natural Gas (Turkiye) Corporation ("TBNG") and Pinnacle Turkey Inc. ("PTI") (the "TBNG-PTI JV").
The Bati Gurgen-1 well was drilled in 11 days to a measured depth of 2,735 metres into the top of the Teslimkoy member of the Mezardere formation. Based on positive log evaluation results, including formation pressure and fluid mobility testing, the Bati Gurgen-1 well was cased to a measured depth of 2,729 metres and the drilling rig was released on November 26.
The completion and flow testing program for the well commenced on December 9 and will initially include further cased-hole evaluation of the tight gas potential in the Mezardere formation followed by the main completion of shallower, conventional stacked sands in the Osmancik formation.
The Yayli-1 exploration well (Valeura 100% working interest) was spudded on December 1, 2015 with the Viking I-27 rig to test the Osmancik and Mezardere formations in a separate structural closure located 2.2 kilometers northwest of and along the same fault trend as the Bati Gurgen-1 well.
The Yayli-1 well was drilled in 11 days to a measured depth of 2,914 metres to evaluate a thicker section of the Teslimkoy member. Mud weights and log results indicate that the Mezardere formation is over-pressured below approximately 2,500 metres in both the Bati Gurgen-1 and Yayli-1 wells. Based on positive log evaluation results, the Yayli-1 well was cased to total depth. Rig release is expected on December 18.
Completion and testing of the well is expected to commence in early January following release of the service rig from the Bati Gurgen-1 well.
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.
ADVISORY AND CAUTION REGARDING FORWARD-LOOKING INFORMATION
This news release contains certain forward-looking statements including, but not limited to: expected final costs to drill, complete, test and tie-in the Bati Gurgen-1 and Yayli-1 wells at Banarli and expected positive flow testing results; the ability to negotiate a transportation and marketing arrangement with the TBNG-PTI JV partners to tie-in any successful wells at Banarli; the availability of operating cash flow and the ability to finance development from existing cash and operating cash flow; tieing-in new wells and getting these on-stream; and, the timing, estimated costs and ability to fund each of the foregoing. Forward-looking information typically contains statements with words such as "anticipate", "estimate", "expect", "target", "potential", "could", "should", "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. Statements related to "reserves" or "contingent resources" are deemed forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources can be profitably produced in the future.
Forward-looking information is based on management's current expectations and assumptions regarding, among other things: continued political stability of the areas in which the Corporation is operating and completing transactions; continued operations of and approvals forthcoming from the GDPA in a manner consistent with past conduct; future seismic, drilling, fracking and re-completion activity on the expected timelines; the prospectivity of the Banarli licences; future production rates, capital efficiencies and associated cash flow; future capital and other expenditures (including the amount and nature thereof); future sources of funding; future economic conditions; and, future currency and exchange rates; and, the Corporation's continued ability to obtain and retain qualified staff and equipment in a timely and cost efficient manner. 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. Exploration, appraisal, and development of oil and natural gas reserves are speculative activities and involve a significant degree of risk. A number of factors could cause actual results to differ materially from those anticipated by the Corporation including, but not limited to: uncertainty associated with future flow testing results on the Bati Gurgen-1 and Yayli-1 wells; risks associated with the oil and gas industry (e.g. operational risks in exploration, inherent uncertainties in interpreting geological data, and 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); uncertainty regarding the sustainability of initial production rates and decline rates thereafter; uncertainty regarding the availability of drilling rigs and equipment and the ability to address technical drilling challenges; uncertainty regarding the state of capital markets; uncertainty regarding the amount of operating cash flow; the risks of disruption to operations and access to worksites, threats to security and safety of personnel and potential property damage related to political issues, terrorist attacks, insurgencies or civil unrest; the risks of increased costs and delays in timing related to protecting the safety and security of Valeura's personnel and property; the risk of fluctuations in commodity pricing and BOTAS reference prices (denominated in Turkish Lira); the risk of fluctuations in foreign exchange rates, particularly the Turkish Lira; the uncertainty associated with negotiating with third parties in countries other than Canada; the risk of partners having different views on work programs and potential disputes among partners and service providers; the uncertainty regarding government and other approvals; potential changes in laws and regulations; risks associated with weather delays and natural disasters; 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. See Valeura's 2014 AIF for a detailed discussion of the risk factors.
Additional information relating to Valeura is also available on SEDAR at www.sedar.com
Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this news release.
SOURCE Valeura Energy Inc.
For further information: Jim McFarland, President and CEO, Valeura Energy Inc., (403) 930-1150, [email protected]; Steve Bjornson, CFO, Valeura Energy Inc., (403) 930-1151, [email protected], www.valeuraenergy.com