Dr. Sean Guest reports

VALEURA ENERGY INC. ANNOUNCES Q4 2024 OPS & FINANCIAL UPDATE, 2025 GUIDANCE

Valeura Energy Inc. has provided an operational and financial update for Q4 2024 and its guidance outlook for 2025.

Q4 2024 highlights

• Record oil production, averaging 26,109 bbl/d in Q4 2024, resulting in full year average oil production of 22,825 bbl/d;
• 2.95 million bbl of oil sold in Q4 2024, with 8.35 million bbl for the full year 2024;
• Q4 average price realizations of $76.7 (U.S.)/bbl, resulting in Q4 revenue of $226-million (U.S.), or $679-million (U.S.) for the full year 2024;
• Cash at Dec. 31, 2024, of $259.4-million (U.S.) and no debt;
• Completion of an internal restructuring of the company's Thailand subsidiary companies, giving rise to operating and tax efficiencies from Nov. 5, 2024, onward;
• Continued success in development and appraisal drilling including completion of a five-well program on the Jasmine asset;
• Continuing strong safety performance, with no lost-time injuries in 2024;
• Recorded a 17-per-cent reduction in greenhouse gas (GHG) emissions intensity for the full year 2024, compared with the previous year;
• Repurchase of 348,400 shares in Q4 2024, following the commencement of the company's normal course issuer bid (NCIB) in mid-November, 2024.

2025 guidance highlights

• Full year oil production of 23,000 to 25,500 bbl/d;
• Capex of $125-million (U.S.) to $150-million (U.S.);
• Exploration expense of approximately $11-million (U.S.);
• Adjusted opex of $215-million to $245-million (U.S.) (of which $33-million (U.S.) relates to leases).

Dr. Sean Guest, president and chief executive officer, commented:

"I am pleased to share preliminary details of our Q4 and full year 2024 performance, which demonstrate that our business is performing as intended. We achieved all of our guidance estimates for 2024, including capex where we reduced our guidance to the low end mid-year.

"With record oil production and sales volumes in Q4, we have strengthened our cash position to $259-million (U.S.). This creates a solid platform for our company as we start 2025, which entails another ambitious work program focused on continued growth in value, funded entirely with our cash and cash flow.

"We are also publishing our guidance outlook for 2025, which underscores our ongoing commitment to add reserves to our assets and to extend the economic life of our fields.

"Having completed our corporate restructuring in Q4, our ability to generate cash flow has shifted into high gear. We will deploy resources toward adding reserves to grow the ultimate potential and life of our assets, will continue pursuing value-accretive inorganic growth, and will continue providing direct shareholder returns by way of our ongoing share buyback program."

Operations update

Oil production averaged 26.1 mbbl/d (million barrels of oil per day) during Q4 2024 (Valeura's working interest share, before royalties), an increase of 18 per cent from the prior quarter and 36 per cent over Q4 2023.

Q4 production rates benefitted from a full quarter of operations at the Nong Yao C field extension, which came on line in August, 2024. In addition, aggregate production was lifted by an infill drilling program at the Jasmine field, with the last three wells of the program coming on stream in late-November, 2024. In addition to adding new production, the Jasmine program also evaluated several secondary appraisal targets which will be the subject of further infill development drilling in due course.

Following the Jasmine infill drilling program, the company's contracted drilling rig was mobilized to the Manora field to drill a five-well program including both development and appraisal targets. The Manora drilling program is expected to conclude in February, 2025.

Financial update

Oil sales totalled 2.95 million bbl during Q4 2024, 67 per cent above the prior quarter and 48 per cent above Q4 2023. Sales were in excess of production during the quarter as a result of a larger-than-usual inventory position at the end of Q3 2024. As of Dec. 31, 2024, Valeura held crude oil in inventory of 640,000 bbl.

Oil revenue during Q4 2024 was $226-million (U.S.), up 62 per cent from the prior quarter due to higher volumes sold (an increase of approximately $90-million (U.S.)), but was also affected by lower realised prices (a decrease of approximately $3-million (U.S.)). Price realizations averaged approximately $76.7 (U.S.)/bbl during Q4 2024, equating to an approximate $2.0 (U.S.)/bbl premium to the average Brent crude oil benchmark during the period.

No taxes were paid during Q4 2024, reducing cash outflows in the quarter. As a result, the net revenue generated in Q4 2024 contributed strongly to the company's cash balance. As of Dec. 31, 2024, the company had a cash position of $259.4-million (U.S.), which includes $22.8-million (U.S.) held as restricted cash. Valeura remains debt free.

2025 guidance synopsis

Valeura forecasts average 2025 full year oil production of 23,000 to 25,500 bbl/d (working interest share, before royalties), based on continuing production operations at its four Gulf of Thailand licences and an active drilling program throughout the year.

The company continues to guide for price realizations approximately in line with the Brent crude oil benchmark price.

The company is planning total capex of $125-million (U.S.) to $150-million (U.S.) in 2025, in addition to approximately $11-million (U.S.) in planned exploration drilling. Approximately 85 per cent of the company's capex plus exploration spending is directed toward drilling, and is based on the plan of having one drilling rig on contract for the full year. The balance of planned capex is related to certain brownfield developments. Capex guidance does not include any post final investment decision (FID) costs for the Wassana redevelopment, and will be updated should the FID be approved.

Adjusted opex guidance in 2025 (a non-IFRS (international financial reporting standards) measure, as more fully described above) is $215-million (U.S.) to $245-million (U.S.), which equates to approximately $26 (U.S.)/bbl, based on the mid-point of the company's production guidance range (adjusted Opex per bbl is a non-IFRS ratio, as more fully described above). This includes the cost of leasing certain vessels as part of its ongoing operations, including the Nong Yao C MOPU, the Jasmine field's FPSO vessel, as well as FSO vessels at the Manora and Wassana fields, and a warehouse. Such leases are expected to total approximately $33-million (U.S.).

The company intends to finance its 2025 spending through cash on hand plus cash flow generated from ongoing operations, and estimates that these sources will also continue to strengthen the company's balance sheet. Valeura's financial position provides capacity for ongoing shareholder returns through share buybacks and for inorganic growth.

2025 work program

Nong Yao

Following its expansion in 2024, the Nong Yao field on licence G11/48 (90-per-cent working interest) is now the company's largest source of production, accounting for approximately 40 per cent of the company's total guidance production in 2025. The company plans to drill 11 development and appraisal wells, which will include targets drilled from each of the field's three producing facilities Nong Yao A, B and C. These wells are intended to more thoroughly sweep incremental oil from producing reservoirs, and to access additional fault blocks and reservoir layers not currently penetrated with the existing production wells.

In addition, following the company's exploration discovery in the Nong Yao D area in 2024, further seismic interpretation has identified additional follow-up exploration opportunities in the vicinity which are being further evaluated for inclusion in a future drilling program. The company's objective is to amass sufficient volumes to justify a future development.

Jasmine

On licence B5/27, the Jasmine field (100-per-cent working interest) is expected to account for approximately 35 per cent of the company's total guidance production in 2025. The company intends to drill 13 development and appraisal wells on the licence in 2025, covering the Jasmine C, Jasmine D and Ban Yen production facilities, with the primary objective of drilling new horizontal laterals into producing reservoirs to optimize the sweep of oil and thereby add reserves.

Around the end of Q1 2025 the company also plans to commission its low BTU gas generator, an innovative project which will redirect a waste gas stream to be used for power generation, thereby reducing the field's GHG (greenhouse gas) emissions intensity and reducing its reliance on diesel-fired power generation. Further projects to reduce the field's GHG emissions intensity are also being evaluated.

In addition, the company is pursuing the Ratree exploration prospect, which is farther to the south on licence B5/27. While the prospect constitutes a relatively higher-risk opportunity on the licence, success could unlock the potential for an entirely new field development. Timing for exploration wells is subject to continual optimization of the company's drilling schedule.

Manora

The Manora field, on licence G1/48 (70-per-cent working interest), is expected to account for approximately 10 per cent of the company's total guidance production in 2025. Production rates are expected to increase later in Q1 upon completion of an infill drilling program which is currently under way. The program entails five wells, including both infill development and appraisal targets. Much of the work being conducted on the Manora field represents follow-up activity to the company's successful drilling over the last two years, which has served to extend the field's economic life by several years.

Wassana

The Wassana field, on licence G10/48, is planned to account for 15 per cent of total 2025 guidance production. No new drilling activity is planned for the Wassana field in 2025.

The company is continuing to progress front end engineering and design (FEED) work in connection with a potential redevelopment of the field to commercialize the additional oil volumes discovered through appraisal and exploration drilling in 2023 and 2024. The company's 2025 capex budget currently only includes pre-FID costs for surveys, studies, and contracting and procurement. Valeura anticipates being ready for an FID approval at approximately the start of Q2 2025. The particulars of the redevelopment will define a forward work program and will ultimately determine reserves for the field as well as capex expectations. Contingent on FID approval, the company intends to publish an update to its guidance assumptions, with the expectation that the bulk of any incremental redevelopment spending is likely to occur after 2025.

Strategy

Valeura is pursuing a growth-oriented strategy, predicated on increasing the ultimate reserves recovery from its assets as a way to extend the assets' economic field life. Valeura plans to publish its third party evaluated reserves and resources estimates as of Dec. 31, 2024, in mid-February, 2025. The company also seeks to grow its portfolio through mergers and acquisition within the Southeast Asia region and is actively evaluating several such opportunities.

Valeura has prioritized generating strong cash flow as a means to further enhance its strong balance sheet and is committed to delivering direct shareholder returns by way of a continuing share buyback program.

Underpinning everything the company does is a steadfast commitment to generating value and to conducting all actions in accordance with world-class standards for operational excellence and safety.

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 in 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.

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