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SINGAPORE - Valeura Energy Inc. (TSX:VLE, OTCQX:VLERF), an energy company with a 100% interest in the offshore Wassana field within Licence G10/48 in the Gulf of Thailand, has announced its final investment decision (FID) to redevelop the field. The company expects the project to significantly enhance shareholder value by increasing production and extending the field’s life.
The redevelopment plan includes the construction of a new central processing platform (CPP) to optimize the recovery of resources across the block. The project is forecasted to bring first oil by the second quarter of 2027, with peak production estimated at 10,000 barrels per day, more than tripling the current output.
An increase in Wassana’s proved plus probable (2P) reserves to 20.5 million barrels is anticipated, which represents an addition of approximately 18 million barrels compared to projections with existing infrastructure. The redevelopment is also set to extend the field’s life to 2043, adding 16 years to its operation.
The company has allocated an estimated $120 million for investment in facilities over the next two years, with $40 million planned for 2025 and the remainder in 2026. This investment is fully funded from Valeura’s balance sheet.
Dr. Sean Guest, President and CEO of Valeura, expressed confidence in the project’s economic resilience, highlighting an estimated 40% internal rate of return at $60 per barrel Brent oil prices, and a payback period of 18 months. He also noted the project’s potential for further growth through a ’hub and spoke’ model, which could tie in satellite oil accumulations already discovered around the Wassana field.
The Wassana field currently operates via a Mobile Offshore Production Unit (MOPU) with an expected end-of-life by the end of 2027. The new CPP is designed to replace the MOPU and enable more extensive drilling to maximize recoverable reserves.
Thai Nippon Steel Engineering & Construction Corporation Ltd has been selected for the Engineering, Procurement, Construction, and Commissioning of the new facility. More than 80% of the facility’s capital expenditure is under fixed price commitments.
Valeura has commissioned Netherland, Sewell & Associates, Inc. (NSAI) to reassess the Wassana field reserves and contingent resources, with the NSAI Wassana FID Report indicating an after-tax net present value (NPV10) for the field’s 2P reserves at $218.2 million.
In light of the redevelopment, Valeura has updated its 2025 guidance, revising its Adjusted Capex to $165 - $185 million for the full year. Free Cash Flow guidance, based on Brent oil prices between $65 - $85 per barrel, is projected at $80 - $195 million.
The company’s financial strategy remains focused on funding its operations through cash reserves and operational cash flow, with the aim of maintaining a strong balance sheet to support further growth initiatives.
This article is based on a press release statement from Valeura Energy Inc.
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