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 Turkey.


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.


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 approximately 80%.

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.


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 follow-up location.

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.


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.


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.


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.


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 release.

SOURCE Valeura Energy Inc.

For further information:

Jim McFarland, President and CEO
Valeura Energy Inc.
(403) 930-1150

Steve Bjornson, CFO
Valeura Energy Inc.
(403) 930-1151

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