Earnings call transcript: Valeura Energy’s Q1 2025 sees strategic growth

Valeura Energy Inc. reported its Q1 2025 earnings, highlighting strategic growth initiatives and operational updates. The company experienced a slight decrease in production compared to Q4 2024 but showed a year-over-year increase. Valeura’s stock price closed at $25.53, reflecting strong momentum with a 20.31% year-to-date return. According to InvestingPro analysis, the company appears undervalued based on its Fair Value model, with an impressive overall Financial Health score of 3.28 out of 5, rated as "GREAT." The company’s forward guidance remains optimistic with plans for significant investments and expansions.

Key Takeaways

• Production decreased from Q4 2024 but increased year-over-year.
• Adjusted pre-tax and after-tax free cash flow reached $74 million.
• Strategic projects in Southeast Asia are set to double production.
• Stock price decreased by 3.32% post-earnings announcement.
• Forward guidance includes major capital expenditures and potential M&A activities.

Company Performance

Valeura Energy’s overall performance in Q1 2025 showed resilience despite a slight dip in production from the previous quarter. The company maintained strong year-over-year production growth with revenue increasing 11.45% and increased its margins to approximately 50%. The strategic focus on optimizing assets and exploring new opportunities in Southeast Asia positions Valeura as a leading independent producer in the Gulf of Thailand. For detailed analysis and additional insights, check out the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 top stocks with expert analysis and actionable intelligence.

Financial Highlights

• Realized oil price: $79 per barrel
• Adjusted pre-tax and after-tax free cash flow: $74 million
• Margin increase to approximately 50%
• Cash balance reduced due to a $40 million accelerated tax payment

Outlook & Guidance

Valeura Energy projects a total capital expenditure of $120 million for 2025, with $40 million allocated for the current year. The company forecasts free cash flow between $65 million and $85 million and continues to focus on organic growth and potential mergers and acquisitions. The final investment decision for the Wissana redevelopment is expected to more than double production and significantly reduce operating costs by 2027.

Executive Commentary

CEO Sean Guest emphasized the company’s strategic direction, stating, "We want to be doing these deals that make a real change in the size of the company." He also highlighted the progress in Thailand, noting, "We still see more that we can do here. Things are going very well in Thailand."

Risks and Challenges

• Potential volatility in oil prices could impact revenue.
• Execution risks associated with large-scale projects like Wissana redevelopment.
• Regulatory and geopolitical uncertainties in Southeast Asian markets.
• Dependence on successful exploration and development to maintain growth momentum.
• Financial risks related to potential debt financing for future acquisitions.

The company’s strategic initiatives and financial performance underscore its potential for growth, with a clear focus on expanding its footprint in Southeast Asia and optimizing existing operations. Trading at a P/E ratio of 14.77 and maintaining healthy profit margins, Valeura demonstrates strong fundamentals. InvestingPro subscribers gain access to over 30 additional financial metrics, exclusive ProTips, and comprehensive valuation models to make more informed investment decisions.

Full transcript - Valeura Energy Inc (VLE) Q1 2025:

Robin Martin, VP Investor Relations and Communications, Valeura Energy: Well, since there’s dead silence, I’m gonna start speaking while we get the camera started. Thanks for joining for the Bulleura Energy twenty twenty five AGM. My name is Robin Martin.

I’m vice president investor relations and communications. Before we get started, just a quick safety briefing. There are no fire drills scheduled for today. So if we hear the alarm that is the real deal, we’ll exit through the main doors of the petroleum club, turn to the right, and the petroleum club staff will be there to direct us where to where to assemble. Before I hand over to Tim to start the AGM, I’ll note that we’re recording today’s event as well, and we’ll make a replay available on our website later today.

So with that, over to you, Tim.

Tim Merchant, Chairman of the Board of Directors, Valeura Energy: Thank you, Robin. Good afternoon, everybody. It’s now exactly 04:00, and I ask that this meeting come to order. My name is Tim Merchant, and I’m the chairman of the board of directors of Valeura Energy. I will act as the chair for today’s meeting.

On behalf of Valeura, I welcome you to the meeting, and I would also like to welcome those shareholders and others who are listening to the live audio webcast. Before we proceed with the formal business of today’s meeting, I’d like to introduce the directors and the management of Valeura who are all present here today. I would ask that each stand momentarily when I call their name so we can remember what you look like. First, our directors, Tim Chapman, Anna Green, Russell Hiscock, Lina Lee, and Sean Guest, who, as many of you will know, is also our president and CEO. From the management team, we have, Yassine Ben Miriam, our CFO, Greg Kolowski, who I forgot to introduce last year, so a double welcome for Greg.

Okay. Kelvin Tang, who is the executive vice president of corporate general counsel and the corporate secretary, and Robin Martin, who you’ve met as our VP communications and investor relations. For this meeting, Kelvin Tang will act as a secretary, and I will, appoint the representatives of Computershare Trust Company of Canada, as the, the scrutineers. The notice calling this meeting a form of proxy and a mailing request form was sent to those and those who requested the printed copies of information circular were mailed to all registered shareholders on 04/07/2025. The declaration of mailing is available for inspection by any shareholder, and I would ask that the secretary, file a copy of such with the minutes.

I’ve been advised by the scrutineers that the quorum has been met for this meeting. The scrutineers report is available for inspection by any shareholder should you require bedtime reading, and I will ask that the secretary file a copy with the minutes. With that said, I declare that the meeting is regularly called and properly constituted the transaction of business today. For convenience, we’ve decided to divide the meeting into two parts. The first part will deal with the formal business of the meeting, and the second part will consist of a presentation by Sean Guest, our president and CEO, on the operations of Valeura.

And that will be followed by questions from registered shareholders and proxy holders. To facilitate the timely completion of the exciting formal business, arrangements have been made with certain shareholders to move and second the resolutions to be considered. The votes will be conducted by way of ballot. If you are a registered shareholder and have not already submitted a form of proxy or a proxy holder and you have not received a ballot, please identify yourself to the scrutineers and a ballot will be provided for you. I have been informed that no such individuals are present.

The first item of business is the presentation of the 2024 audited financial statements of Valeura and the auditor’s report thereon. The financial statements are available on SEDAR plus and have been sent to those shareholders who have requested copies. The next item of business is the appointment of the auditors. May I please have please have a motion for such business?

Unidentified Shareholder/Board Member, Valeura Energy: Mister chair, I move that Deloitte and Chouche LLP Singapore be appointed as auditors of Valero to hold office until the close of the next annual meetings or until successors have been successor have been appointed. At such remuneration is determined by the board.

Tim Merchant, Chairman of the Board of Directors, Valeura Energy: Is there a seconder?

Robin Martin, VP Investor Relations and Communications, Valeura Energy: Mister chair, I second the motion.

Tim Merchant, Chairman of the Board of Directors, Valeura Energy: Any discussion? As previously stated, the approval of the orders of the corporation will be voted on by way of a ballot. If you have not received a ballot, please identify yourself to the scrutineers. I’m advised by the scrutineers that the motion has been carried by the necessary majority. Accordingly, I declare this motion to be carried.

The next item of business is the election of the directors. Ballora has nominated eight directors and did not receive any nominations from shareholders in accordance with the bylaws. Accordingly, I will now receive the corporation’s director nominations.

Robin Martin, VP Investor Relations and Communications, Valeura Energy: Mister chair, I nominate the following for election as directors of Valeura, William Sean Guest, Timothy r Marchant, James d McFarland, Russell j Hiscock, Timothy n Chapman, Lina Lee, Anna Green, and Charlem Chai Mahajesiri.

Tim Merchant, Chairman of the Board of Directors, Valeura Energy: Now may I have a motion for such business?

Unidentified Shareholder/Board Member, Valeura Energy: Mister chair, I move that the corporation directors nominees be elected as directors of Valuro to hold office until the close of the next annual meeting or until their successors are elected or appointed.

Tim Merchant, Chairman of the Board of Directors, Valeura Energy: Is there a secondary? Mister Chao, I second the motion. Thank you. In accordance with Valeura’s majority voting policy, the directors will be elected individually by way of ballot. For a nominee to be elected as a director, he or she must receive a majority of the votes cast in favor of his or her election.

If you have not received a ballot, please identify yourself to the scrutineers. The scrutineers advise me that each director nominee has received greater than 50% of the votes cast in favor of his or her election as required by our majority voting policy. Accordingly, I declare the motion carried and that each nominee has been elected as a director. That concludes the formal business of the meeting. I now declare the formal part of the meeting, terminated, and thank you all for attending.

Now the formality with the formality is completed, Sean Guest, president and CEO, will update, Allura’s operations. If you’ve got any questions, at the end of the presentation, for those who are here in the room, we ask that you raise your hand and, be wait to be acknowledged and handed a microphone, and then begin your question by identifying yourself and indicating whether you are registered shareholder or proxy holder. For those online, you can submit typed questions through the q and a function. Sean, over to you.

Sean Guest, President and CEO, Valeura Energy: Thank you very much, Tim. Maybe before we start, one more introduction of a director of the company, James McFarlane. You wanna introduce yourself? Just to say I’m having to make that correction again next year. But, look, first off, thank you all very much for coming to the meeting and for tuning in here with us.

It’s it’s a pleasure to be back here and to be able to tell this story to you guys and really have a look at where we’re going. So you would have seen today that we actually put out two press releases. One of them was our quarterly financial results following up in the board meeting yesterday, but the other one was the final investment decision to proceed with the Wissana redevelopment. So with the presentation today, I’ll go through just a bit of a reminder of where we’ve kind of come from and where we’ve got to over the past couple of years. What is the strategy of the company?

Then talk a little bit about the q one results, and then a little more detail on Wissana because this is quite a exciting project for us. And just really looking at the extension that we’re able to add to this field is very good. And really then tie this to what we’re seeing in the reserves additions, the share price additions, and where we’re looking at the company going. So if we go a couple slides forward. And, again, this is a slide from our corporate presentation you will have seen.

But it’s really it was just over two years ago that we concluded the deal with Mubadala, which really set us up as a significant producer in the Gulf Of Thailand. And when we did that deal, that’s really what we were recognized for was the ability to go have gone out and done that highly accretive deal. And just our timing was right with the the pressures you saw in ESG coming out of COVID to go after those assets, and that worked out extremely well. But more important than having done that deal is really what we’ve done with the assets since. Because when we took them over, there was a belief that, look, there’s a couple of years of production there.

There’ll be good cash flows, but there’s significant abandonment. But we’re really, we’ve taken what was a reserve life index when we took it over just over three years. And now with what we’ve got today, we’re almost we’re just under seven years and have done that just in the two years since we’ve taken over. It’s a belief in the assets, a belief in the geology, and these would work. And then it’s really the team that we have and their ability to deliver in country and deliver in the drilling program, deliver in the reserves additions, a very high quality team.

And that’s allowed us to really build up the cash flow in the company, continue to add to the reserves, continue to extend those field flights, and that’s what’s driven the share price as we move forward. Now when we look down, we also see we still believe that there’s more consolidation to do. We still believe that we can really be the leading independent in this region. Now we look at deals. We look at a lot, but the value that’s been returned to you as shareholders over the past few years has come from these assets and the delivery there.

So we are looking at other deals. We expect to have some announcements. We see lots of things that we can do. But I really wanna point out that this the value growth that has come has been related to the assets. So just the next slide.

And that’s looking at, you know, that share price as you see it there. You know, we jumped up to $2 when we did the deals, but that was really doing the deals. It’s really the change from 2 up to about $8 now that’s on the back of the assets. And we only have to look back to the beginning of last year where we are trading in the 3 to $4 range. We haven’t done any deals in the past year, and yet now we’ve and more than doubled the share price since that time.

Right? So it’s something we’re extremely pleased with the assets. And what I can tell you is actually we’re even seeing that the assets we expected to do well with these assets, but we’re even seeing what we’ve been able to do in Thailand is even exceeding the expectations that we had a couple of years ago, and we’re seeing more opportunities in this region as well. So, you know, it’s not we’re we can be picky with the deals. We can decide the right time to do the deal that’s right for us because these assets keep delivering for you.

K. Next slide. And it’s just a, you know, a quick point again to bring it back to the strategy here. We do believe in growth. We are doing some share buybacks now, you know, because returning some of that capital to shareholders.

But, really, the value we wanted to deliver to you is through growth. And we’ve seen the organic assets are doing extremely well. They’re that foundation of cash that are continuing to come into the company. And a lot of that is underpinned by the team, the operational excellence, and that we’re able to bring big company procedures, work into it to make sure that these assets continue to deliver that cash. But again, I don’t want people to think that we’re not focused still on the inorganic, because especially in times like this where you see drops in the share price in that, we expect opportunities can open up in this area for us to expand in that region.

Okay. Next slide. So a quick summary of q one. We can see that, you know, production is is down a little bit from q four, but, again, on a year basis, we’re up on that production. The main thing you’ll notice is that the liftings that we did in Q1 were actually lower than the production level.

And as we’ve always pointed out, that’ll happen. In Q4 we had higher liftings than we did on production. This term we had lower liftings, so you had lower revenues related to those liftings. But again, it’s all oil that’s in the boats, and it does get sold. So over time, it averages out.

Realized price in Q1 was still very good at just under $79 a barrel. And then you can really see there the key point on this slide to point out is when you go through the oil revenue, then you get the EBITDA. But it’s looking at those two numbers, adjusted pretax free cash flow, and then looking at the adjusted tax flow after tax, and essentially, they’re identical. And this is, as you’ll note, we did that corporate restructuring, which we got completed last year to be able to access the tax losses that existed in the Wausana field and apply those across Nong Yao and Menorah. And this is the first quarter where you’re really seeing the effects of that come through.

Now our cash, down a little bit, and I’ll talk a bit about this in a minute. That was really due to that tax restructuring. We had to make a tax payment early. Our tax payments are normally lumpy. You make one in May and another one in August.

But because of that restructuring last year in November, we had to accelerate that tax payment for 2024, and that’s why you actually see that we’re down a little bit in cash this quarter. But the adjusted working capital is rising. Next slide. So just working that from the cash flow bridge, again, you can see the revenue there. Royalties come off the top, OpEx, g and a.

And then that key point, as we were saying, is really the two, the pretax and the after tax cash flow being identical at 74,000,000. And that’s really leading to a margin increase. So we’re looking at really 50% margin from these barrels right now, which is extremely good for us on the back of that tax consolidation. Next slide. And then the cash bridge is how do we go from the $2.59 at the end of the year?

Well, obviously, the adjusted cash flow was up from the production that we had, and you can see that was $42,000,000 But just a working capital adjustment down of 18,000,000 And then you can see that single tax payment that we had to make of just under $40,000,000 which really what brought us down in that quarter. But it does mean we’ll be looking at less taxes in the next quarter. And we did have NTIB there of about $5,000,000 Okay. So that’s a Q1 story. Now going on just to the assets.

Next slide. So Menorah Field, we did some drilling there. That’s come on and is producing. We’re doing some more seismic reprocessing to really decide on where we might go with the next round of drilling program. Jasmine, the rig is after it left Menorah, most of the drilling since then has actually been on Jasmine Field, which has been working on a number of the different platforms there looking to build up the production.

Couple of key things there. We have got that low BTU gas generator now installed, and we expect, hopefully, by the end of this month, that’ll be commissioned. Idea there was significant reduction in the emissions from the Jasmine field as you’re burning this low BTU gas. Right? And then that offsets the amount of diesel you need.

You lower the OpEx. So a project we expect to pay back in less than two years. The other one there, people have been talking a lot about, we have this true exploration well coming up called Rattray. The rig is arriving on-site, so we expect drilling to start fairly shortly. So we should get the results of that preliminary results even this month or into next month on that drilling.

So that is happening. And we see some more after our oil discovery at Nong Yao last year, we expect to follow-up on some more drilling in that area in the near future. Now Wassana, this is the one that we had the announcement on, and maybe I’ll just jump to the next slide and talk about that. So the first is to tell a bit of a story and just a reminder for people.

When Chris Energy had this asset and they drilled the discovery well at Wasana, they found oil in a shallower stratigraphy. Right? And it was quite a small amount, but you could make it work with a small mopu that they brought in. But this thing was really designed for a small amount of oil and a short reserve life. Now they then when they drilled after that, they found much more oil down deep.

And all of sudden what you found was a situation where you have a facility that is not optimized. And to give you an idea, the oil split that we see now between that shallow oil they developed the field on and the full field now that shallow oil is only about 25% of the oil we expect to recover. The majority of that oil is much larger and is down in this deeper section. So you now have a facility that was installed that doesn’t have the capacity, doesn’t have the capability to drill enough wells, is quite high OpEx cost as well, and we know it’s really getting to the end of its life, and we’re limping it along. And that’s why we really a year and a half ago we did the appraisal, demonstrated the oil in the subsurface, and went into a concept select for the best way to redevelop this field, looking at do you just replace the moku, do you put in a new facility.

So next slide. So the decision we’ve gone with is a whole new platform that we’re going to install out there. And you can see it coming out in the reserves with instead of 2027 abandonment, we’re now looking at 02/1943 on this field. So this isn’t a field where you really look at that you can put in a mopu with a short life. You need something that can last out there well beyond 02/1940 and towards 02/1950.

So that’s a huge change for the field. You need that processing capacity to be able to handle more oil and, in fact, more water. And then, you know, well, the simple way I like to describe this thing is that what we’re doing with this facility is we’re gonna be able to more than double the production from this field, and we’re gonna more than half the operating cost of the field. So that means you’re just getting much more high value barrels being produced, much more resilient, low breakeven cost, and pushing out the life of the field. And that’s really what we’re gonna have here, and that’s what’s delivered from if you just use this MOPU, we would recover 2,500,000 barrels.

This facility now the reserve auditor has given us 20.5. So you’re getting 18,000,000 more barrels of access just with this facility and that long life extension. So the last point to make with it too is that it then allows you to tie back other facilities to this location. And this is exactly what we see in our Nong Yao facility. We’re just duplicating it there.

Next slide. And actually, that’s really the point here is by installing this facility, we’ll open up an ability to drill over more of the field, access more of these layers. But importantly, it’s now 24 well slots, higher processing capacity, lower power requirements. You’re gonna drop that OpEx to the same level we’re currently getting from Nong Yao, which is kind of in the mid teens, 12, 16 dollars a barrel. It’s the same concept.

It’s just this is step one. Whereas on Nong Yao, we had step one, we did another platform, and then we installed another field last year. So this is really the start of the development of Wessona. K. Last point, Don, is, you know, the contractor we selected to build the facility, the jacket that is tying up on steel, Excellent contractors that have been there for forty years doing these platforms in the Gulf Of Thailand, and obviously, you know, sub under Nippon Steel, which is a very well known large company.

Next slide. So just looking at facilities costs and what we mean by that from the jacket, the whole processing facility on the top, the pipelines that’s required to really go off to the FSO for the storage of the oil, All of those costs come in at about $1.20. And then the wells, the first phase of drilling, we’re planning 17 wells in total, 16 horizontal development wells and one water injector. Now the cost for the wells now, we currently see it about 4,800,000.0 per horizontal well, but we are seeing a drop in rig costs in that in the current oil price environment. So we use that number for our economics, but we do see opportunities here that if the oil prices stay a bit low, that we actually could be looking at lower cost for those wells once we get to drilling them at the start of 2027.

And that’s really the plan right now is you know, to cart start cutting steel in our facility in July to install the jacket in this platform by the end of next year, so 2026, to be ready to start drilling the wells in January of twenty seven. And that can have us producing oil pretty well exactly two years from now we should have the oil. And then by the second half of twenty seven, with the Mopu still producing a bit and this producing over 7,500 barrels a day, that’s what gets us to 10,000 barrels a day in the second half of twenty twenty seven. Okay. Next slide.

Yeah. So just making that key point again. So for Wausana, we’re really taking 2,500,000 barrels that you could recover with this mopu up to 20.5. Incrementally, you see from the reserves auditor, NSAI, the value they report on that is $218 so that’s an increase from what we had at year end. But then putting that into our portfolio, it takes us from at the end of last year we had 50,000,000 barrels of reserves, so up to over 57, and that’s what gets you to just under seven years of reserve life index.

So the NAV of the company increasing $8.44 plus our cash, it just continues to step up the value of the company with this FID. And we saw that with a number of the analysts today actually increasing their target price on the company by about $1 Next slide. Yeah. So just making that final point that so this is the start of what we’re planning to do in Wausana. So we’ve got the fields here.

These reserves, the central field, should go out to 2,043, but you’re looking at two, three years kind of plateau of the oil. But then we already have enough oil discovered to the north at Nirame to tie that back to add more plateau and to extend the life further. In Majora, down in the South, there is discovered oil down there. We’re currently reprocessing all the seismic there to be ready to do drilling. And what we’re looking for is once we get this thing up and producing, where’s the next satellite we’re gonna go to?

Is it gonna be the South, is it gonna be the North? We have optionality. But the platform is being designed with two risers that’ll bring the oil from two separate satellites up. So this is really the next stage, and that’s where you see the comparison to Nong Yao. K.

Next slide. So just on the guidance, the only change in the guidance that we’re currently putting in is really obviously, the CapEx has gone up a bit with this facility. So of a hundred and 20,000,000 total CapEx, about $40,000,000 of that should be spent this year. So that obviously increases it. Now I will make a statement that with oil price where it is, the team we’ve got in Thailand has been going through and looking at areas where we can actually be looked to reduce some of the costs in our currently producing fields.

But we’ll make more announcements on that, I expect, as we go forward in the year. And obviously then adding that CapEx in, then you really look at your free cash flow prediction, that actually brings that down a bit for the year. But still looking at that range from 65 up to 85, you can still see very healthy free cash flow coming from the company in that period. And the last slide. So really, this is just bringing it back to this NAV and how we keep stepping it up, and it’s this is what’s really driving the increase in share prices.

You know, when we look back just having done the deal, we had a NAV of about $4, and we’re trading at about, I think, about 2 at that time. And then we’re just continuing to add to that NAV through the company through a delivery of cash, adding to the reserves and the future production of the company, increase it every year, and then the share price has just been chasing it as we move along. And we still see more that we can do here. Things are going very well in Thailand, good relationships there, and we see other opportunities that we can be expanding in that region. So for us it’s a very exciting time.

It’s been a really good run. We’re looking forward to how the next year is gonna go, and we hope we can deliver more value to you all. So thank you very much for coming out and for listening in today. At that point, questions?

Robin Martin, VP Investor Relations and Communications, Valeura Energy: Okay. So, Sean, don’t go anywhere. We’ll take q and a from the room if anyone is keen to ask a question. Oh, come on. Okay.

And while I hand the microphone over, I will remind the online well Yeah. I’ll I’ll give you the microphone anyway so the online can hear it.

Sean Guest, President and CEO, Valeura Energy: Okay. Quick update. Yep.

Robin Martin, VP Investor Relations and Communications, Valeura Energy: The question was what’s happening in Turkey. And sorry, Sean, just to interrupt. For the online audience, if you’d like to ask a question, you can type it in using the q and a feature in Teams. What’s happening in Turkey?

Sean Guest, President and CEO, Valeura Energy: Yeah. So, you know, we’ve maintained those those assets in Turkey. It’s been a quiet time over there, but we did get last year. You know, we got the extension from the government, and then they gave us another year on force measures. So we have those blocks in this phase up until the middle of next year, so just over a year from now.

And there is still an appraisal period that’s open for us there. So we’ve you know, with the getting that kinda locked in, there has been some more interest that’s kinda come in. So we’re kind of in discussions with some people, and we’ll see whether that leads to something in the near future. So it’s not dead. There is some interest.

Obviously, we’ve been following the news with Turkey too. We’ve actually seen some other deals that have got done there and kinda following what’s going on.

Robin Martin, VP Investor Relations and Communications, Valeura Energy: Okay. Thanks for that. Question came in from the online audience. Congratulations on the FID at Wassana. Given the cash requirements of the project during 2025 and 2026, do you expect there to be any changes in your organic growth plans pardon me, your inorganic growth plans?

Will target acquisitions be more limited or smaller in scope?

Sean Guest, President and CEO, Valeura Energy: The simple answer is no. And it is one thing. We’ve done a lot of work since April 2, Liberation Day, with the board. We’ve had a lot of going through with let’s look at the company. Let’s look at our cash position.

Let’s look at running this at $50 flat for the next three years to really look at the company and what we have available to us. And then we kinda look at, okay. What can we do with that? And in actual fact, what we see is we still maintain the flexibility to be able to do other deals. Some of the bigger deals we have been looking at, we continue to follow-up on.

Right? It’s a bit of a challenging time, though, when you have this volatility. It’s not an optimal time to see deals being done. People tend to be a little cautious till they see, you know, is the price gonna be low? Is anyone in stress?

But, we continue to work on those. But, no, we don’t see that it does constrict us at all.

Robin Martin, VP Investor Relations and Communications, Valeura Energy: Okay. I’ll switch to a couple of questions related to that that came in in advance of the meeting. Which other areas are you looking at besides Thailand?

Sean Guest, President and CEO, Valeura Energy: Yeah. So as we said, still lots in Thailand. Key other countries after that would be Malaysia would be one we’re very interested in. And then, again, looking at Indonesia, Vietnam, and what we’ve always said is kind of a watching brief on Australia. I’ve always loved liked the geologists that have worked Australia a lot.

A number of us said we kind of have we kinda know the region, but we’re still watching how things are gonna go in Australia at this point in time.

Robin Martin, VP Investor Relations and Communications, Valeura Energy: Okay. And another question in the same vein. How important is gas as part of your growth plans given the volatility we’re seeing in the prices of oil?

Sean Guest, President and CEO, Valeura Energy: Yeah. We would really like to actually bring some gas in, and I’ve kinda mentioned this before. A lot of us, our background is more like Shell Woodside, which is big offshore gas projects. So it’d be very comfortable bringing some gas into it, and we do see some opportunities for that coming up. But as noted also, it’s a bit of a natural hedge.

You’re probably getting less per barrel equivalent, but in actual fact it’s paid out longer term contracts, less susceptible to this variation we’re seeing in Brent. So we do see that as a target we’d like to bring in more gas besides the ESG factor of lower emission.

Robin Martin, VP Investor Relations and Communications, Valeura Energy: Okay. We do have more online questions, but I’ll just pause there and ask if there’s more from the room. Let me bring you the microphone.

Tim Merchant, Chairman of the Board of Directors, Valeura Energy: I’m a registered shareholder. If you’re interested in gas, would offshore India not be a place to look as well in?

Sean Guest, President and CEO, Valeura Energy: No. Not yeah. I have it past lives, different careers. We’ve had a look at that, but it’s not really in our target area. There’s kind of a, you know, a band of countries that we’re most interested in and remain focused on that.

Robin Martin, VP Investor Relations and Communications, Valeura Energy: Any other questions from the room? Okay. We’ll go to another online question then. On the Wausana redevelopment, how quickly could you expand Wassana to start tying in one of the satellite developments?

Sean Guest, President and CEO, Valeura Energy: Yeah. I can I can just tell you my view? My CEO might disagree, but my view is the moment you have this thing producing, so you’re kind of talking middle of twenty seven, you should be really starting to look at the Concept Select to make sure you’re ready to go with the next next facility. So we could see it coming on fairly quickly after that. But we’re you really wanna tie these things to how’s my plateau behaving to try and maintain the production level, total production at a very similar level as you move forward.

So you don’t wanna drop down and then develop things and bring these have these gaps. So we really look at trying to maintain the production at a similar level as long the plateau as long as you can.

Robin Martin, VP Investor Relations and Communications, Valeura Energy: Okay. Just another couple questions here. When it comes to inorganic growth, are you looking at deals only to be paid for with cash, or are you considering other financing means such as debt or equity?

Sean Guest, President and CEO, Valeura Energy: Yes. Definitely, we look on the debt side, and there’s been quite a bit of discussion going on in that area. And that’s really our preference is to look at that first, is debt. We don’t really see that we would look at equity, especially in the current environment, to go out and raise any equity. So our focus does remain on debt.

And some of the opportunities that we’re looking at, especially cash flowing opportunities, you are able to get quite a significant amount of debt towards the deal.

Robin Martin, VP Investor Relations and Communications, Valeura Energy: Okay. And one last question from the online audience. What are you doing to tell the Valeura story to more audiences?

Sean Guest, President and CEO, Valeura Energy: Yeah. So, you know, we’ve kinda started now that we have this news out. We’re starting a bit of a marketing, so we’ll be on the road here around North America for the next week and a half back over into The UK. We’ve been actually doing some marketing over in Asia as well, so we’re trying to keep that communication very live.

Robin Martin, VP Investor Relations and Communications, Valeura Energy: Great. Last chance for any other questions from the room? All right. Well, with that, I’ll just remind the online audience that we are available anytime. You can reach us with the email addresses and contact information on the website.

And with that, over to you to wrap up, Sean.

Sean Guest, President and CEO, Valeura Energy: Again, reiterating that message. We’re very pleased with what we’ve been able to do over the past couple of years and the value add. It’s a lot of it linked to the quality of the team on a good set of assets, and that’s where we believe there’s still a lot more we can do here. M and A is still part of the strategy, but, it we’re gonna determine the right deal for us at the right time. And what we’re looking for are things that are, again, transformational.

We wanna be doing these deals that make a real change in the size of the company. Thank you very much.

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