CALGARY, Dec. 14 /CNW/ - Valeura Energy Inc. ("Valeura" or the "Corporation") (TSX-V: "VLE") is pleased to announce that it has executed a definitive agreement
(the "Agreement") to purchase certain non-operated producing natural gas assets (the "Assets") in Turkey owned by Edirne Enerji Petrol Arama Üretim Ve Ticaret
Limited Şirketi ("Edirne"), which is a wholly-owned affiliate of Australia-based Otto Energy
Ltd ("Otto") (Australian Securities Exchange: "OEL").
Valeura is a Canada-based public company currently engaged in the
exploration, development and production of petroleum and natural gas in
Western Canada and Turkey. The Corporation is continuing to pursue a
strategy to expand internationally to selected countries in the Middle
East and North Africa Region ("MENA"), the Mediterranean Basin and Latin America.
SUMMARY OF KEY TERMS OF AGREEMENT AND ASSETS
Purchase price including taxes of US$ 3.1 million, subject to certain
operating adjustments to be made at closing based on an effective date
of October 1, 2010.
Assets consist of a 35% interest in the Edirne Exploration License 3839
(the "Edirne Licence") in the Thrace Basin, the main natural gas producing region of Turkey.
Natural gas production from the Edirne Licence in the third quarter of
2010 was approximately 6.3 million cubic feet per day (mmcfd) (gross)
or 2.2 mmcfd net to Edirne.
Edirne realized an average gas price of US$ 7.40 per mcf in the third
quarter of 2010 reflecting the premium prices received for natural gas
production in Turkey.
Edirne's revenues from gas sales were approximately US$1.5 million in
the third quarter of 2010.
Closing is expected to occur on or about December 22, 2010, subject to
the satisfaction or waiver of certain closing conditions, including but
not limited to the waiver or expiration of all rights of first refusal
applicable to the Assets and the receipt of certain third party and
The Edirne Licence covers an area of 405 km2 (100,080 gross acres) in the Thrace Basin approximately 200 km
northwest of Istanbul near the borders with Greece and Bulgaria. An
affiliate of TransAtlantic Petroleum Ltd. operates the Edirne Licence.
Natural gas is currently produced from 11 wells that are completed in
Tertiary-aged sands in the Osmancik formation at a depth of
approximately 1,000 feet. The gas is relatively lean and requires only
dehydration and compression to meet sales specifications. The gas is
processed on a fee basis in a third party owned facility and is tied
into the Botas pipeline system located nine km from the plant. The gas
is sold to one of Turkey's largest gas and power wholesalers pursuant
to a "send and take" contract arrangement, under which sales are
nominated by the operator. Sales from the Edirne Licence began in April
2010 following completion of a two phase exploration and development
program over the past few years.
The shallow gas accumulations developed to date on the Erdine Licence
are relatively small in areal extent. Wells exhibit steep initial
declines in production rate under pressure depletion and/or water
influx analogous to the performance of many other shallow gas
reservoirs around the world. Opportunities exist on the Edirne Licence
to carry out well workovers, wellhead compression and additional
drilling to mitigate natural declines. Gas accumulations are readily
discernable as bright spots on seismic and as a result, exploration
drilling success rates in excess of 90% have been achieved. There is
good seismic coverage on the licence with more than 200 km2 of recent 3D seismic from which more than 10 prospects and leads have
been identified in the shallow (< 1,000 feet) and intermediate depth
(1,500 - 6,500 feet) horizons. Drilling costs for the shallow targets
are expected to be less than US$ 0.75 million (gross) and less than US$
2.0 million for intermediate depth targets.
In terms of additional upside, the Thrace Basin is also prospective for
deeper conventional and unconventional gas plays (e.g. tight gas and
shale gas). In parts of the basin, there are up to 30,000 feet of
tertiary-aged sediments with a number of potential exploration targets.
Other operators in the region have been pursuing tight gas plays and
deploying modern fracturing technology to achieve attractive flow
rates. The Corporation will be focusing on determining the potential
for these types of high impact plays on the Edirne Licence.
"The Otto deal is an important step in growing and diversifying
Valeura's asset base in Turkey to include premium priced natural gas in
the Thrace Basin," said Jim McFarland, President and CEO. "The assets
provide immediate cash flow and complement the oil focused exploration
and development program in southeast Turkey under the AME-GYP farm-in
deal announced on September 2, 2010, which is targeting to deliver oil
production in 2011."
"The deal also provides a window on Turkey's growing natural gas sector,
expands our network of relationships and demonstrates our commitment
and ability to expand the business in Turkey."
FORWARD LOOKING INFORMATION
This news release contains certain forward‐looking statements relating,
but not limited, to the anticipated closing date for the purchase of
the Assets; anticipated transfer of legal title to the Assets to the
Corporation; future work to determine the types of plays available on
the Edirne Licence; future transaction and operational plans and the
timing associated therewith. Forward‐looking information typically
contains statements with words such as "anticipate", "estimate",
"expect", "potential", "could", 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
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: For further information:
Jim McFarland, President and CEO
Valeura Energy Inc.
Steve Bjornson, CFO
Valeura Energy Inc.