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SINGAPORE - Valeura Energy Inc. (TSX:VLE, OTCQX:VLERF) announced Friday it has entered into a farm-in agreement with PTT Exploration (OTC:PEXNY) and Production Plc to acquire a 40% interest in Blocks G1/65 and G3/65 in the offshore Gulf of Thailand.
The agreement will expand Valeura’s gross acreage position in Thailand from 2,623 km² to 22,757 km², positioning the company adjacent to some of Thailand’s largest producing gas fields and Valeura’s existing oil fields.
The blocks contain 15 oil and gas discoveries, supported by 27 wells that have encountered oil and gas pay, according to the company’s press release statement.
Under the terms of the agreement, Valeura will pay 40% of actual back costs, amounting to $14.7 million through June 30, 2025. These costs include a recently completed four-well drilling program, geological studies, PSC signature bonuses, and administrative costs incurred since March 2023.
Valeura will also carry PTTEP on additional seismic acquisition of approximately 165 km² on Block G3/65, capped at $3.7 million gross.
The blocks are governed by Production Sharing Contracts with Thailand’s Ministry of Energy, which include a 10% royalty on gross revenue, provisions for cost recovery up to 50% of gross revenue, and profit sharing at 50% government/50% contractor. Corporate income tax on contractor net profit is 20%.
The PSCs provide for a six-year exploration period requiring eight wells to be drilled and 800 km² of 3D seismic to be acquired before May 2029, with a possible three-year extension.
Fields developed under the PSC regime receive a 20-year production period, with a potential 10-year extension.
The transaction requires approval from the Government of Thailand to close.
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