Mr. Sean Guest reports

VALEURA ENERGY INC. ANNOUNCES FOURTH QUARTER AND YEAR-END 2023 RESULTS

Valeura Energy Inc. has released its financial and operating results for the three-month period and year ended Dec. 31, 2023.

The complete reporting package for the company, including the audited financial statements, and associated management's discussion and analysis (MD&A), and the 2023 annual information form (AIF), are being filed on SEDAR+ and posted to the company's website.

Two thousand twenty-three highlights:

• Closed the Mubadala acquisition for cash consideration of $10.4-million (U.S.), adding three producing offshore Gulf of Thailand fields to the Valeura portfolio;
• Four producing fields yielded average oil production of 20,440 bbl/d (barrels per day);
• Restarted production from the Wassana field and drilled appraisal wells which confirmed the presence of oil deeper than previously proven, leading to a potential redevelopment of the field and extension of field life beyond 2030;
• Drilling activity extended the economic life of all fields in the company's Thailand portfolio;
• Replaced more than double the volume of oil produced by all fields in 2023 -- 219 per cent through proved (1P) and proved plus probable (2P) reserves additions (reserves replacement ratio);
• Generated adjusted cash flow from operations of $152-million (U.S.);
• Fully paid off debt and had accumulated cash of $151-million (U.S.) as of Dec. 31, 2023;
• Further strengthened the balance sheet by reassessing and reducing decommissioning obligation on the balance sheet by 30 per cent to $129-million (U.S.);
• Increased 2P net present value (NPV) before tax to $616-million (U.S.) and $429-million (U.S.) after tax (at a 10 per cent discount rate);
• Considering year-end 2023 cash position, increased 2P net asset value (NAV) after tax to $579-million (U.S.), equating to $7.56 per share (assuming an exchange rate of 0.742 (Canadian: United States) and 103.3 million shares outstanding (as of Feb. 19, 2024)).

Sean Guest, president and chief executive officer, commented:

"I am very pleased to present our first full year financial results which reflect the true scale of our now-transformed business. Through the Gulf of Thailand acquisitions we completed in 2022 and 2023, and the hard work our team has performed throughout the year, Valeura has become a strongly cash-flow-generating business, with assets that are exceeding expectations on all fronts.

"Importantly, we have also created a clean and resilient balance sheet. The cash flow capacity of our assets has allowed us to rapidly pay off all debt and exit the year with $151-million (U.S.) in cash. We have also seen our decommissioning obligations drop to $129-million (U.S.), a 30-per-cent reduction from the total we reported just after closing the Mubadala acquisition. Valeura's financial position is exceptional and positions us very well for further growth.

"Drilling activity and studies performed in 2023 resulted in our independent third party reserves evaluator significantly increasing reserves volumes and value. The life of all fields was extended on the back of a reserves replacement ratio of 219 per cent. Additionally, appraisal of the Wassana field has proven more oil than previously reported, which will underpin a 2024 decision on field expansion. This increase in 2P reserves value, when coupled with our cash, generates a net asset value of over $7/share.

"The complementary nature of our assets is becoming increasingly apparent as we completed the process to merge the companies into a single organization. We reduced unit operating costs in 2023, and the team are enthusiastically seeking further synergies in cost optimization and tax efficiency as we look to 2024.

"We intend to continue to aggressively pursue value through our growth-oriented strategy, which continues to include aspirations to growth both organically and inorganically by way of mergers and acquisitions opportunities, which we continue to see in our core Southeast Asia region.

"We continue to drive safety and sustainability as a priority throughout our operations and will publish our inaugural sustainability report in the near term to articulate key performance metrics for the business in 2023. Through the sustainability report we aspire to be transparent about our performance and to create a baseline from which to measure improvement over time, so as to best assure the ongoing sustainability of our business."

Financial update

The table entitled "financial and operating results summary" shows a comparison of key financial and operating metrics for both Q4 and the full year, with the same periods in 2022. However, as Valeura established active production operations following the close of the Mubadala acquisition on March 22, 2023, the comparison with 2022 provides no insight regarding production, revenue, price realizations and taxes. Accordingly, no discussion is offered for these metrics.

The company's Q4 2023 financial performance reflects continuing oil production, which averaged 19,165 bbl/d, leading to sales of 1,987,000 bbl and generating oil revenue of $169.9-million (U.S.). Production during the quarter was primarily from the company's Jasmine, Nong Yao and Manora oil fields, with the Wassana field contributing only minor volumes due to being offline for much of Q4. The company implemented operating changes at the third party-operated storage vessel to enhance safety, and production at the Wassana field was restarted on Dec. 8, 2023. Production rates, as shown, are the company's working interest share, before royalties.

For the full year of 2023 (which effectively covers the period of March 22, 2023, through Dec. 31, 2023, during which Valeura operated the assets acquired via the Mubadala acquisition), total oil sales were 5,854,000 bbl, generating oil revenue of $493.5-million (U.S.). This equates into an average oil production rate of 20,440 bbl/d for the 285-day period from March 22, 2023, the date on which Valeura closed the Mubadala acquisition.

Valeura's average realized price for crude oil sales was $85.5 (U.S.)/bbl in Q4 2023, reflecting an average premium to the Brent crude oil benchmark of approximately $1.2 (U.S.)/bbl. For the year ended Dec. 31, 2023, Valeura's average realized price was $84.3 (U.S.)/bbl, which was a premium of $2.2 (U.S.)/bbl above the Brent crude oil benchmark. Realized prices during both Q4 and the full-year 2023 were broadly in line with the company's guidance expectation for realized prices throughout the year, being approximately on par with the Brent crude oil benchmark.

In Q4 2023, operating expenses were $49.6-million (U.S.), and adjusted opex (operating expenditures) (a non-IFRS (international financial reporting standards) measure) were $51.8-million (U.S.), or $29.4 (U.S.)/bbl on a unit basis. Q4 operating costs reflect a relatively higher volume of maintenance activity and well workovers than previous quarters, and was consistent with the company's plans and included in its 2023 guidance estimates. For the year ended Dec. 31, 2023, adjusted opex averaged $28.4 (U.S.)/bbl on a unit basis.

During Q4 2023 and full-year 2023, the company generated adjusted cash flow from operations (a non-IFRS measure) of $58.2-million (U.S.), and $137.3-million (U.S.), respectively. During Q4 2023, Valeura generated comprehensive income of $57.4-million (U.S.), compared with a comprehensive loss of $7.9-million (U.S.) in Q4 of 2022. For the full year ended Dec. 31, 2023, comprehensive income was $246-million (U.S.), compared with a comprehensive loss of $15.2-million (U.S.) for the full year ended Dec. 31, 2022.

Valeura incurred total tax expenses of $71.2-million (U.S.) during the year ended Dec. 31, 2023.

Valeura's current and non-current debt at Dec. 31, 2023, was nil, compared with $11.1-million (U.S.) at Dec. 31, 2022. During the year 2023, the company increased its debt through draws from a facility arrangement (more fully described in the AIF), then fully repaid the debt during Q4 2023.

As at Dec. 31, 2023, Valeura had cash and cash equivalents of $151.2-million (U.S.) (including restricted cash of $17.3-million (U.S.)), compared with $17.6-million (U.S.) as at Dec. 31, 2022. The change in cash position reflects the combined effect of net cash inflows as a result of closing the Mubadala acquisition just before the end of Q1 2023, and positive after-tax net cash flows from its continuing oil production business throughout the remainder of 2023.

As the company's current and non-current debt at Dec. 31, 2023, was nil, the company's Dec. 31, 2023, net cash balance was composed of only its cash and cash equivalents of $151.2-million (U.S.).

Operations update and outlook

During Q4 2023, the company had continuing production operations on its Jasmine/Ban Yen, Nong Yao and Manora oil fields. Production operations at the Wassana field remained suspended at the beginning of the quarter but resumed on Dec. 8, 2023. Aggregate working interest oil production during Q4 2023 was 19,165 bbl/d. The company had continuing operations at its Wassana field throughout the year, composed of a period of start-up preparation, active production operations, a temporary production suspension and again active production operations toward the end of the year. The company's Jasmine/Ban Yen, Nong Yao and Manora fields were in active production throughout the year, from the completion of the Mubadala acquisition onward. The average oil production from all assets since closing of the Mubadala acquisition on March 22, 2023, was 20,440 bbl/d (Valeura working interest share, before royalties). The average production for the first half of March was approximately 23,000 bbl/d.

One drilling rig was actively drilling across all of the assets for the full year.

Jasmine

Production from the Jasmine/Ban Yen oil field, in licence B5/27 (100-per-cent Valeura working interest), averaged 8,864 bbl/d during Q4 2023, and 9,269 bbl/d from March 22, 2023, to year-end. In May of 2023, the field achieved a historic milestone, having produced its 90 millionth barrel of oil. In March, 2024 (period of March 1 to March 23, 2024), production from the Jasmine/Ban Yen fields averaged 7,914 bbl/d.

During 2023, the company conducted two separate drilling campaigns on the Jasmine field, one on the Jasmine B platform, which was in progress at the time of closing the Mubadala acquisition and completed in May, 2023, and one on the Jasmine D wellhead platform from September through October, 2023. In aggregate, the company drilled 11 (gross and net) wells on the Jasmine field, with six being production-oriented development infill wells and five appraisal wells. In addition, the company conducted one well workover in 2023 on the Jasmine field.

During 2023, Valeura also completed a study into power generation and emissions efficiency opportunities at the Jasmine field, culminating in a project to install a gas turbine generator tailor-made to utilize the field's unique waste gas stream as feedstock for power generation. The project is intended to both reduce the field's greenhouse gas emissions and diesel consumption, and thus reduce operating costs.

2P gross reserves (working interest share, before royalties) at the Jasmine/Ban Yen fields increased from 10 million bbl (Mbbl) at end 2022 to 10.4 million bbl at end 2023, after having produced 3.4 million bbl during the year. This constitutes reserves replacement of 112 per cent and has resulted in a further extension to the estimated economic life of the fields to December, 2028.

The company believes that with continued infill drilling and continuing well workovers on the Jasmine/Ban Yen fields, it can reduce the effect of natural declines and continue the fields' long history of year-on-year reserves additions. Valeura's work program in 2024 calls for drilling approximately seven wells in the second half of the year, in addition to one exploration well to test the Ratree prospect.

Nong Yao

Oil production from the Nong Yao oil field, in licence G11/48 (90-per-cent Valeura working interest), averaged 6,436 bbl/d during Q4 2023 and 7,134 bbl/d from March 22, 2023, to year-end. In March, 2024 (period of March 1 to March 23, 2024), production from the Nong Yao field averaged 7,214 bbl/d.

During the year, the company conducted two drilling campaigns on the Nong Yao field, one in Q2 on the Nong Yao B wellhead platform, and one in Q4 on Nong Yao A. In aggregate, the company drilled a total of six gross wells (5.4 net). Five of the gross wells (4.5 net) were development-oriented production wells, in addition to one gross (0.9 net) appraisal well. In addition, the company conducted one well workover in 2023 on the Nong Yao field.

The overall effect of Valeura's Nong Yao drilling and well work in 2023 has been an increase in production and reserves, as well as an expansion in the perceived opportunity set for further infill drilling within the field. Proved plus probable gross reserves (working interest share, before royalties) at the Nong Yao field have increased from 11.2 million bbl at year-end 2022 to 12.4 million bbl at year-end 2023, after having produced 2.7 million bbl during the year. This constitutes 147-per-cent reserves replacement and has resulted in a further extension to the estimated economic life of the field.

Also during the year, the company conducted groundwork for the expansion of the Nong Yao oil field through development of the new field known as Nong Yao C. In 2023, the mobile offshore production unit (MOPU) T7 Shirley was refurbished and a three-kilometre pipeline was installed to connect the existing production infrastructure to the MOPU. As of the time of this release, the MOPU has been installed on site and preparation is under way for hookup, commissioning and the commencement of drilling activity. Development drilling is expected to commence in the coming weeks with a program composed of up to nine gross wells (8.1 net), being six producers and up to three water injectors. First production from the Nong Yao C extension is expected in late Q2 2024, and when fully on stream in the months thereafter, the company is targeting peak oil production rates from the greater Nong Yao field totalling approximately 11,000 bbl/d (90-per-cent Valeura working interest).

In addition to the development drilling, the company intends to drill one exploration well (0.9 net) on the nearby Nong Yao D prospect.

Manora

Oil production at the Manora oil field, in licence G1/48 (70-per-cent Valeura working interest) averaged 3,420 bbl/d during Q4 2023, and 3,336 bbl/d from March 22, 2023, to year-end. In the first part of March, 2024 (period March 1 to March 16, 2024), production from the Manora field averaged 2,946 bbl/d, after which production was suspended for a planned maintenance shutdown. At the time of this release, the planned maintenance is complete and the facility has returned to full production.

In Q2 2023, the company conducted a successful infill drilling program of three development wells (2.1 net) to commercialize bypassed oil down dip of existing wells in one of the field's deeper intervals, as well as multiple attic or bypassed accumulations in shallower reservoirs. The company also conducted one well workover during the year.

The effect of infill drilling has been an increase in production output from the Manora field, and an increase of reserves. Proved plus probably gross reserves (working interest share, before royalties) increased from 1.8 million bbl at year-end 2022 to 2.2 million bbl at year-end 2023, after having produced 1.2 million bbl during the year. This constitutes 132-per-cent reserves replacement and has resulted in a further extension to the estimated economic life of the field to July, 2027. Importantly, the results of the Manora 2023 work program indicate the potential for further development opportunities on the field. Additionally infill drilling is notionally planned for late 2024.

Wassana

Production of oil at the Wassana field, in licence G10/48 (100-per-cent Valeura working interest) started in April, 2023, and was voluntarily suspended in July as part of the company's drive to enhance safety on the field's third party-operated FSO (floating storage and offloading vessel). Production then recommenced on Dec. 8, 2023. Given the short period of 24 days of production in Q4, the company recorded an average of 445 bbl/d during the quarter, and 548 bbl/d during the full year 2023, from 93 days of total production. Daily production rates did achieve levels of over 3,000 bbl/d after both restart periods in 2023, illustrating the early potential of the asset as part of Valeura's portfolio.

In December, 2023, Valeura began an infill drilling campaign on the Wassana field, initially planned to include three production-oriented horizontal wells, and subsequently expanded to a program of five new wells and two well workovers. The last two new wells and the workovers were brought on production in the past two weeks. In March, 2024, (period of March 1 to March 23, 2024), production from the Wassana field averaged 4,930 bbl/d.

In addition to the year-end development drilling campaign, which continued into 2024, Valeura drilled two appraisal wells (gross and net) on the Wassana field in Q3 2023, and conducted three well workovers, targeting deeper portions of the reservoir. The wells were successful in proving the presence of oil deeper than previously demonstrated and, as a result, the company has commenced a review of development options to expand the field's production infrastructure, which could increase production and extend the field life beyond 2030. Valeura has commissioned a project team to select a suitable development concept for redevelopment of the field and anticipates making a final investment decision in 2024.

As a result of the 2023 appraisal drilling and studies, 2P gross reserves (before royalties) at the Wassana field have increased from 6.1 million bbl at year-end 2022 to 12.9 million bbl at year-end 2023, and the economic field life has been extended to June, 2032. The company sees potential for further reserves upside, with volumes largely dependent on the final development concept selected in 2024 for the potential redevelopment of the field.

Reserves and resources summary

The results of Valeura's third party independent reserves and resources assessment for its Thailand assets as of Dec. 31, 2023, were announced on Feb. 20, 2024. Highlights were as follows:

• Reserves increased across all fields -- 29.9 Mbbl 1P, 37.9 Mbbl 2P and 46.5 Mbbl proved plus probable plus possible (3P);
• 1P and 2P reserves replacement more than double the volume of oil produced in 2023 -- 219 per cent;
• 2P net present value before tax of $616-million (U.S.) and $429-million (U.S.) after tax;
• Considering year-end 2023 cash position of $151-million (U.S.), 2P net asset value after tax of $579-million (U.S.), equating to $7.56 per share;
• More than three-fold increase in best estimate (2C) contingent resources, on a risked basis.

Webcast

Valeura's management team will host an investor and analyst webcast at 9 a.m. Calgary time/3 p.m. London time/10 p.m. Bangkok time/11 p.m. Singapore time today, Tuesday, March 26, 2024, to discuss this announcement. The live audio and video feed can be accessed on-line. Written questions may be submitted through the webcast system or by e-mail to IR@valeuraenergy.com.

An audio-only feed of the event is available by phone using the conference ID and dial-in numbers below.

Conference ID:  770 213 036 followed by the pound key

Dial-in numbers:

• Canada: 833-845-9589;
• Singapore: 656-450-6302;
• Thailand: 662-026-9035;
• Turkey: 008-001-4203-4779;
• United Kingdom: 0-800-640-3933;
• United States: 833-846-5630.

About Valeura Energy Inc.

Valeura Energy is a Canadian public company engaged in the exploration, development and production of petroleum and natural gas in Thailand and Turkey. The company is pursuing a growth-oriented strategy and intends to reinvest into its producing asset portfolio and to deploy resources toward further organic and inorganic growth in Southeast Asia. Valeura aspires toward value-accretive growth for stakeholders while adhering to high standards of environmental, social and governance responsibility.

We seek Safe Harbor.