Earnings call transcript: Valeura Energy’s Q2 2025 sees production boost, stock dips

Valeura Energy reported its Q2 2025 earnings, showcasing significant production increases and strategic developments. The stock, currently trading at $27.94, fell 4.26% in post-earnings trading, despite strong financial performance and a notable year-to-date return of 30%. According to InvestingPro analysis, Valeura appears undervalued based on its Fair Value assessment, suggesting potential upside for investors.

Key Takeaways

• Production increased by 8% to 23,200 barrels per day.
• Revenue reached $129 million with a realized price of $67.90 per barrel.
• Cash reserves grew by 65% year-on-year, totaling $242 million.
• Valeura Energy remains debt-free.
• Strategic expansion in Southeast Asia continues with new investments and partnerships.

Company Performance

Valeura Energy’s Q2 2025 performance was marked by robust production and financial growth. The company reported an average production of 21.4 thousand barrels per day, with a significant increase to 23,200 barrels per day by the end of the quarter. This growth aligns with the company’s strategic focus on enhancing operational efficiency and expanding its footprint in Southeast Asia. With an impressive financial health score of 3.36 (rated as GREAT by InvestingPro), minimal debt-to-equity ratio of 0.03, and substantial cash reserves, the company maintains a strong financial position. The stock trades at an attractive EV/EBITDA multiple of 3.92x, suggesting efficient capital deployment.

Financial Highlights

• Revenue: $129 million, driven by increased production and favorable oil prices.
• EBITDAX: $62 million, reflecting strong operational performance.
• Cash: $242 million, a 65% increase year-on-year.
• Adjusted working capital: $262 million.

Outlook & Guidance

Valeura Energy has outlined a positive outlook, with production expected to be weighted towards the second half of 2025. The company is investing approximately $40 million in the Wassana project, which is expected to add significant production capacity by 2027. Additionally, Valeura is exploring mergers and acquisitions in Southeast Asia to capitalize on the region’s growth potential.

Executive Commentary

CEO Sean Guest emphasized the company’s strategic focus, stating, "We’ve created now a full life cycle company within Thailand." He also highlighted the company’s commitment to Southeast Asia, saying, "We remain very focused on Southeast Asia." CFO Yassine Benmeriam noted the company’s strong net asset value, implying a share price of around 14.84 Canadian dollars.

Risks and Challenges

• Execution risk in new projects like Wassana redevelopment.
• Potential market volatility affecting oil prices and demand.
• Geopolitical risks in Southeast Asia impacting operations.
• Managing cost inflation despite 80% fixed-price contracts on Wassana.

Q&A

During the earnings call, analysts inquired about the company’s M&A strategy and the progress of the Wassana project. Management confirmed a continued focus on mergers and acquisitions, despite the recent farm-in with PTTP, and reassured investors about cost management and production targets.

Full transcript - Valeura Energy Inc (VLE) Q2 2025:

Robin Martin, Vice President, Investor Relations and Communications, Valeura Energy: Hi, everyone, and thanks for joining for this Valeura Energy webcast. Today, we’re discussing the news we released earlier today, our Q2 twenty twenty five results, as well as commentary on the recent farm in announcement. My name is Robin Martin, Vice President, Investor Relations and Communications. Joining me on this call are Sean Guest, our CEO Yassine Benmeriam, our CFO and Greg Kalowski, our COO. We’re recording the event today, 08/07/2025, and we’ll make a replay available through our YouTube channel and website later today.

Running order for the event, we’re going to start with prepared remarks by Sean, Greg and Yassine, followed by a Q and A session. For that portion, it’ll guide us through. Options for asking a question are you can press the raise button in Teams, which will indicate to me that you’d like to ask a live question, in which case I’ll make your microphone available. You can press the Q and A button to type a question question to us or you can email us using irvalurainergy dot com. So with that, Sean, go ahead and unmute your microphone, and I’ll hand over to you.

Sean Guest, CEO, Valeura Energy: Thanks, Robin. If you could just step forward a couple slides, just pass the disclaimer slide, let people review that at their leisure to the first slide we’ve got. Yeah. Thanks very much, and thanks for everyone joining us here today. Last month, in late July, I was actually up in Bangkok for about ten days straight on some business.

And as I kind of reflected back on that, I was thinking, you know, the the reason for that trip and a lot of the businesses doing at that time was really more related to the longer term future of Valour in Thailand. Now I know a lot of the time when we’re talking to you, we’re very much focused and remain so on the cash flow, on the near term value add. But really all of that trip I was up there was very much focused on the longer term value, not what are we going to do in the next year or two years, but what is Valeura going to be doing in Thailand in the next five to ten years? Obviously, one of the key elements is we finished the negotiation at that time of the deal with PTTP, the strategic farm in that we announced in late July. And at that time I was up there as well with Koon Mantry, the CEO of PTTP, and we did that announcement there.

Another reason I was up there was we actually had a whole exploration workshop within the company, really looking at the all the acreage we now had, the whole of the Gulf Of Thailand as to where are the opportunities for the future of the company. And then finally, the other thing was we went out with a group of us from the company out to Tynepont Steel’s yard. And they’ve started the construction of the Wissana platform now, and it was just really good to go out there for the first official steel cutting and to look forward to that this facility is extending the field life out to 43 and really allowing even the future development tiebacks there. So really, was that focus on the longer term view and the change we’ve made in the company. I’m not just looking at that cash flow immediately, but how do we great this company to grow into the future.

So I’ll start with a bit of information on the strategic farm in. I’ll then hand over to Greg for a couple of slides on with in Q2, we took the FID on Wausana. And then finally over to Yassine to really talk about the details of the Q2 financial results and to bring us to conclusion there. But what’s really nice is looking at the share price as well, we see the good uptick we really got in that strategic deal with PTTP, and that’s why I’ll focus on that quite a bit. Just looking at some of the market data on that, one thing to note in recent times is we’ve actually seen Bailey Gifford, who’s been a long term supporter and one of our biggest shareholders, actually increase her position over the past month.

Okay, Robin. Next slide, please. So the deal with PTTP. Now PTTP are the largest oil and gas operator in Thailand. They are the largest acreage holder in The Gulf Of Thailand.

They are really the leading player within Thailand. For us, it’s a great honor to really be able to do a deal with them and come in across a lot of their exploration acreage there. So we’ll be getting a 40% position with them still holding a 60% position and operatorship of the blocks. Now we do know through a year or two of discussions with them that they really do see us as a natural oil operator in The Gulf, whereas they are very much focused on the gas. And that’s why they see the value that we could bring to the party was really in what we’re doing with the oil operation, what we’re doing in extending field life in the oil fields.

But for us, what it actually brings is that diversity of bringing gas opportunities into the portfolio. And I really want to emphasize here that what we like about these blocks too is that they’re right up against producing infrastructure and that’s both gas infrastructure operated by PTTP as well as our oilfield, Nong Yao, down in the South. So it’s not that we’re looking at exploration blocks that we see bringing on first production in five or ten years. There are existing discoveries in these blocks. There’s been new wells drilled that have actually had discoveries.

So we see quickly able to convert what is exploration acreage into cash flow in these areas. And then as PSCs, the strength that then comes to you is that you’re in a cost recovery realm, so your further exploration that is all able to be cost recovered against that existing production and cash flow that you’ve got. The entry cost for us is really largely at ground floor. Paying them we estimate as of June 30 it was $14,700,000 net. We would pay for the back cost and that includes the cost of getting into the blocks, but also it includes four wells that have recently been drilled.

The one element of carry we have in there is that we will carry PTTP on some extra three d seismic that we’ve requested to be acquired right next to our Nong’yao field. So you can see a grill expansion in the acreage position and access to gas that can be immediately tied back as well as in future long term exploration prospectivity. And it’s just activity has already commenced. Wells have been drilled, three d seismic should start to be acquired in the coming weeks. And we know that the PTT team are already starting to work up some development potential in the two blocks.

Next slide. So this is a block to the North G1. And one of the things I’d like to point out, and Robin kind of illustrated this to me, he said to give people in Canada on the amount of land we have here, this block would extend from Calgary up to Edmonton and beyond average, I think it’s about thirty, thirty five kilometers wide. That is a huge swath of acreage immediately next to a major producing hydrocarbon province. But you can see the initial focus areas that you here reference are the Jaramjuri South gas discovery area.

And while it’s a gas discovery area, are also oil discoveries in there, and you’ve got a mixed phase of production happening around that. So we know that PTTP are looking for the opportunity of platforms that may not just be producing gas but may be producing mixed phase gas back as that’s able to be handled at the producing facilities around there. So three wells have been drilled in there, and we’re obviously quite excited about getting into look at those with PTTP. The southern area, Marchetti Musubah oil prospect area, now that’s immediately around what is the Rasakhan oilfield. With the experience that we and Chris Energy who we acquired have around that area, we already have a worked up portfolio of oil prospects in that area.

But we’re going out to expand the three d around that to obviously then come with a complete set of oil prospects around that area that could be tied back. So we really expect drilling there once you have the seismic in kind of late ’twenty six at the earliest or into ’twenty seven. And the next slide. Robin, again, just to illustrate the size, I think on this block Robin’s description was this one would extend from Calgary down to The U. S.

Border. So again, gives you just the vast size we have there. And up in the northern corner you can see our producing Nong Yao Field. In the bright yellow, the field’s in there. And we’ll look to acquire seismic really to the Northeast of that.

We know there’s an existing undeveloped discovery called Ubon that exists to the Northeast, and we believe there could be an oil fairway there. So we want to really work up that new three d to look for us on what will be the next phase of development for Nong Yao. Will we go down to the South where we’ve had the Nong Yao D discovery next, or is it more perspective and better to actually go to the Northeast? And then looking down towards the South of the block, that major gas field that stretches along the eastern edge is the Bangkok field. I think currently what it is producing of just under a Bcf a day of gas.

To put that in context, I think that would be about a third of the total production for The UK area. So a lot of production there. There are a number of gas discoveries within the block. And obviously we’ve had a recent well drilled that was a gas discovery. So we’ll see with PTTP what we work up there is looking at tiebacks that could be planned immediately there and how that develops in the future.

Okay, next slide. So this is a slide we’ve showed in our corporate deck on the portfolio quite a bit when we just had the producing fields. And really without going into detail on it, what I wanted to emphasize now is when you look at the northern fields in manure and jasmine, we’ve talked many times that these are late life or midlife fields. We’re really managing a slow decline on these fields to extend the life. We have the other two fields, Nong Yao, Wissana down in the South.

We showed last year a new development on the Nong Yao field to expand that, and we’re currently drilling on that field. So that field still has expansion and obviously as does Wausana with the new FID we’ve taken. But the addition of the two exploration blocks bring two elements. One, we see more near field development that we can bring on there. So again, bringing exploration blocks into cash flow, but then that longer term future of exploration.

So what we’ve done is really created now a full life cycle company within Thailand with late life production, mid life growing production, new development and exploration into the future. And just looking at that package, if we were to step back three years ago when we stepped into Thailand, this really would have been our objective as to where we wanted to take it. We’ve demonstrated the cash flow from the producing assets, building that foundation of cash, and now we’re starting to expand that into the future of not just two, three, four years of production, but looking out in production late 2030s towards 02/1940. So with that, I’ll hand over to Greg to just talk a bit about Wassaena.

Greg Kalowski, COO, Valeura Energy: Thanks very much, Sean, and hello, everyone. So, yes, let me just share a few points on Wassana redevelopment. First of all, just as a reminder of of what this project is designed to to achieve, it really is about exploiting the significant volumes in the ground of oil that we have now confirmed in the Botsana license that go well beyond what can be recovered with this existing relatively old moko. And so we’re building a new central processing platform with a higher capacity of 62,000 barrels per day that at plateau in the ’27 should be producing the field should be producing around 10,000 barrels of oil per day Relative to a no further action scenario with just the old facility, it adds 18,000,000 barrels of recoverable reserves, so they are now included in our revised year end reserves for restate for ’20 ’24. It extends the life of the field by another seventeen years, to 2043.

And it brings very, very strong economics. With unit OpEx, expect on plateau in the range of twelve to sixteen dollars per barrel. So that’s very much comparable to the best that the field we have at the moment, which is which is Nongiao. Very strong IRR around 40% and a payback in eighteen months. And all that is just the main central development.

The way the field is designed the facility is designed is such that we can tie in satellite developments from the volumes that we already have confirmed in the north and in the south of the field. And, obviously, you you would expect that economics of those incremental developments are are very strong, and they would further extend the life of that license. So that’s the objective of the project. Project is on track. We have just achieved around 20% aggregate progress.

We have placed the purchase orders for all of the major packages, so generators, pumps, main pieces of steel, and construction is already underway. So, Robin, if we could go to the next slide. This just gives you a few pictures from the ceremony of the first steel cutting that Sean was referring to. And I guess, you know, what what I would really highlight is that what we see so far with the project progress with tiny bond steel really very much validates the high confidence we have with this contractor and and validates the selections we have made. They have over forty years of track record in the Gulf Of Thailand.

They are, these days, building over 10 platforms for the guy of Gulf Of Thailand for multiple platforms. And so we very much look forward to smooth, progress further with this project and bringing it, on time, to first oil in ’27. So if you go to the next slide, Robin so just again, as a as as a reminder, I think you have seen this story about ongoing extensions of the of the field life and reserves replacement that we have been able to achieve. And and Wassa redevelopment is is really now a standout in terms of additional seventeen years of field life. And overall, this now brings our reserve life index for Valora to just under seven years, for two p reserves.

Now with that, let me hand over to Yassine for, q two results.

Yassine Benmeriam, CFO, Valeura Energy: Thanks, Greg. Greetings, everyone. Let me walk you through Valora’s financial performance for the second quarter of of two thousand and twenty five. It has been another quarter of robust cash flow from operations, continued investment in growth, disciplined execution in our project, and importantly, well further strengthening of our balance sheet as you can see on the stream on the screen. Our production for the quarter averaged 21.4.

This was in line with our internal expectation and plans, and this represent the lowest production for the quarter, for this year, for this planned year. And the current production I’m happy to report that the current production has already increased to 23,200 barrels per day, which represent around 8% increase from the numbers that you have in front of me. We’ve lifted and sold 1,900,000 bottles and had a realized price of 69 67.9. The realized price was lower than the previous quarter, and that’s effectively in line with or mirrors what we’ve seen in the broader mark market globally. Importantly, it’s worth highlighting that our crude still commanded premium to both Brent and Dubai, and we’re very pleased to see that premium still continuing even in low price environment.

On the cost side, OpEx remained stable at 55,000,000 for the quarter, Though on a unit basis, the OpEx per bottle was will be recorded at $28, which is which is an increase compared to the last quarter and even to our guidance. However, we have to look at it from a perspective that this quarter, we had the lowest production compared to last quarter and indeed even expectation in terms for the full year. We expect these numbers to to go to the right on the right side in the next few quarters. We invested around 49,000,000 of CapEx during the quarter, of which 11,000,000 was associated with the Wassana redevelopment. As as you are aware, we’ve taken we took FID on Wassana in in this quarter.

And as Craig has mentioned, it’s now under execution and indeed slightly ahead of schedule thus far. This has led to to a revenue of around 129,000,000, and we recorded an EBITDAX of 62,000,000 during this quarter. Look, I’ll I’ll talk a little bit more on the cash flow from operation later on. But looking at the balance sheet, the balance sheet continued to be strong and keep strengthening. As you can see on the street the screen, our cash increased to 242,000,000 during the at the end of this quarter, which remarkably represent a 65% increase compared to last year.

And equally as well, one impressively, I guess, an adjusted cash flow from an adjusted working capital, which we recorded at 262. You know, the balance sheet the strengthening of the balance sheet to a certain extent mirror the share price performance over the last twelve months, and then the increase of a 100% in share price. Now looking at the next slide, please, Robin. Thank you. Now looking at the cash flow bridge, I mentioned, before the, you know, the quarter’s cash generating remains strong.

It has been driven by the high margin bottles that we have and also with the low fiscal burdens, which have resulted in a robust adjusted in a robust adjusted cash flow from operation of around 52,000,000, and indeed, a free cash you know, an adjusted cash flow from operation post tax of 51,000,000. Now during this quarter, we accrued we didn’t accrue any PTAL tax liability, and this is the effect of the tax consolidation that we’ve done late last year. So those far, have used during the quarter, we have used 20,000,000 of those available tax losses. Also worth noting that the timing of the lifting and the sales tend tend to be you know, have led to a modest inventory buildup during the quarter to up to close to 930, 30,000 barrels. And now this inventory is available for sales as a subsequent quarter then support indeed the strong revenue visibility heading in second half of the year.

Next slide, please, Robin. As I mentioned, we exited the quarter with 242,000,000 in cash. And net cash position, again, no debt on the balance sheet. The adjusted working capital, as I mentioned earlier on, around 262,000,000. During this quarter, we’ve paid 16,000,000 of of taxes from the previous year.

That’s the 2,024 taxes. And we also allocated around 4,300,000.0 to n s to NCIB and anti dilution measures. These anti dilution measures is really the monetization on the cashing out of options and PSUs and RSUs to avoid the dilutions ultimately to the shareholders. We also allocated around 4,000,000 for exploration during this quarter, and this is really primarily related to the Ruchi well on Jasmine. Now even at the even during a quarter when we had, you know, the lowest planned production, a tax payment, you know, strong investment in growth, you can see that liquidity position continue to be to improve, which reflect ultimately the underlying strength of profitability of our business.

Next slide, please, Robin. Now with q two behind us and a strong production already in place, we can read in front of the guidance for 2,025. Our production, as I mentioned earlier on, is profile production profile is weighted to the second half of the year, and the recent wrap up into in production to 23,200 barrels per day confirmed that trajectory. We’re also on track on terms of capital plans and including approximately the 40,000,000 of CapEx allocated to the Wassana FID, and indeed as well in terms of, like, you know, our our drilling overall. It’s worth highlighting that, like, you know, for the purpose of our presentation here, we have combined the CapEx and exploration into one bucket, and that’s why you might see the difference compared to previous announcements we’ve made.

Focus right now is still on development journey for the remainder of ’25, giving the large sorry. It’s worth highlighting apologies. It’s worth highlighting that, like, out of these CapEx and exploration expenses, we do not include the g one and g three farming cost at this point in time. We will only do so once the transaction has closed. So subject to closing the transaction this year, we will come back with another guidance if it happens.

Next slide, please, Robin. I I think you’ve seen this before, but just, you know, as an overlay overall. I mean, I it’s worth highlighting, as Sean said earlier on. Since we took over these assets, these Thai assets, you know, Valora has delivered enough compound annual growth rate around 80%. Our current NAV, as you can see on the screen, you know, implies, you know, share price of around 14.84 Canadian dollars per share.

What is also which is in line with with the brokers NAV consensuses of 13, and indeed even the the implied peer range ranging range range of around 13 to $17 Canadian dollars per share. We believe that the discount that you can see currently between our NAV and our you know, how our peers trades and even our brokers consensus NAV remains significant. And I think the team here, we are working quite hard to trying to close that gap that gap by just keep on delivering. And I guess with that, I’ll hand back to Sean.

Sean Guest, CEO, Valeura Energy: So just in in conclusion, at this point, I think we’re on to the q and a session. So I’ll give it back to Robin just to lead that.

Robin Martin, Vice President, Investor Relations and Communications, Valeura Energy: Sure. Thanks, Sean. We’ve had a bunch of questions come in related to M and A. And just for efficiency, I’m going to combine some of these together. First question being given the extended acreage with the PTTP farm in, do you expect that any future M and A would be further out now given that capital will be required for this as well as the Lassana redevelopment?

Sean Guest, CEO, Valeura Energy: Yeah, good question. What I can say is that when we took the Wausana FID back in May, and that was just a month after Liberation Day and all the uncertainty that was kind of hinging on the market, the sharp decline in oil prices, we spent quite a bit of time sitting with the Board and really going through the cash position we had, the cash flows we had and even looking at a low oil price environment. Now at that time, we were also almost certain we’d be able to land this deal with PTTP, and we included in that both the cost of the exploration, the farm in, but also even looking at potential developments in that area. We were very confident even at a low oil price around $50 that we’d still be able to manage all of that and even have some cash available for M and A. So no, I don’t see that there’s any delay in our M and A plans because of this.

We’re very pleased to get this deal done because of what it’s done in Thailand. But no, we still remain very focused on M and A.

Robin Martin, Vice President, Investor Relations and Communications, Valeura Energy: And another question on that note. Where specifically are you looking for M and A opportunities? Is it exclusively Thailand? Is it within Southeast Asia? Is there chance you’d look further?

And specifically, one question is, are you looking at somewhere as perspective as far away as the Falkland Islands perhaps?

Sean Guest, CEO, Valeura Energy: No. For anyone who knows, that would be a conflict of interest for me. So, no, we’re not looking at the Falkland Islands. No. We remain very much focused on Southeast Asia.

That’s where that’s where our business is. That’s where our strength is. Obviously, right now, all of us, we’re actually the three of us are spread around and looking at different opportunities in different areas at this point in time. So we remain focused on looking at Malaysia, Indonesia, Brunei, Vietnam as key areas as well as even keeping an eye down in Australia. But very much focused over in these time zones over here in Southeast Asia.

We just see so much potential for growth, so much energy demand, and a great number of opportunities. And skills were you know, areas where we can apply our skills of a lot of late life fields where we believe we can extend extend the assets.

Robin Martin, Vice President, Investor Relations and Communications, Valeura Energy: And what’s the prospectivity for a large transformational gas deal in the works?

Sean Guest, CEO, Valeura Energy: Look, was just trying to decide with the word gas in there. We remain looking at transformational deals. We again, we would gas or oil, to us, we’re ambivalent. We will look at both of them. We would like to bring gas in.

But no, we’ve said that we are still looking at those opportunities. We’ve obviously seen some real changes coming even within Thailand. Deals we saw announced of Chevron able to conclude their deal with Hess, which had really locked up a lot of asset deals. Immediately following on that Hess sold or then Chevron sold a major asset just south of our G3 block to PTTP. So you’re seeing deal flow starting to happen.

I know that some of these things are coming off.

Robin Martin, Vice President, Investor Relations and Communications, Valeura Energy: We have a specific question on that note as well, Sean. Any changes in the M and A landscape that you perceive after Chevron’s takeover of Hess? Has has that changed the M and A landscape?

Sean Guest, CEO, Valeura Energy: No. The the only thing I’d emphasize, I don’t believe it changes it at all. I still think, you know, these companies have their strategic plans globally as to what they’d like to do. I think largely they’ve been working with them. It’s just a matter of you can get kind of stuck when you’re locked in a major deal that you don’t know if it’s gonna close or not.

So hopefully, the ability of Hess and Chevron to conclude that deal will announce some deal flow to come and some sales processes to come out of that for both Hess and Chevron assets.

Robin Martin, Vice President, Investor Relations and Communications, Valeura Energy: Great. I’m just going to pause there and remind everyone listening in that if you wanted to ask a live question, please click on that raise your hand button and there’ll be a queue for me to unmute your microphone. On that note, we’ve had, a few people ask to ask a live question, and we’ll go to those now. Charlie Sharp, I’m going to allow your microphone. And when you’re ready, you can unmute and, go ahead and ask a live question.

You there, Charlie?

Sean Guest, CEO, Valeura Energy: Can you hear me? Can you hear me? Yes.

Robin Martin, Vice President, Investor Relations and Communications, Valeura Energy: We can.

Charlie Sharp, Analyst: Lovely. Thank you very much. And thanks for the presentation. Really appreciate it. That was very helpful.

Two questions very briefly, if I may. One one is around Wassana. And what are the critical path items that you see in terms of delivery of the timing of first oil and then the capacity for the field to deliver that 10,000 barrels a day in the ’27? In other words, you know, what what what are the main risks that you see to to those items? And then secondly, it’s helpful on the the the the two new licenses and the potential.

Obviously, it’s huge and lots of different things to go for in its early days. Do you feel comfortable in providing some sort of indication of of where these four particular targets that you’ve described? What what sort of size they might be?

Sean Guest, CEO, Valeura Energy: Greg, do you wanna speak to the Wasonic question first?

Greg Kalowski, COO, Valeura Energy: Yeah. Hi, Charlie. So I think in terms of the the critical parts for project delivery, you know, some of them go through major equipment purchases of things like generators, which which typically have relatively long lead times. That’s why we have placed some of these orders early, and that’s why I I did make that point that all of these packages have now been ordered and are, you know, well within the required dates for delivery on-site. Right?

So so, again, I would overall just reemphasize I you know, I have a lot of confidence that we can and will deliver this project on time.

Charlie Sharp, Analyst: That’s great. Thanks. And the and the 10,000 barrels a day, is is that that just a question of the number of wells that you drill?

Greg Kalowski, COO, Valeura Energy: Yeah. So so so that’s that’s our, yeah, expected kind of production level coming off of a sequence of of development wells and going into the ’27. So, again, you know, we’ve we’ve got quite a lot of data on Wasson. Obviously, we’ve got 18 producing wells right now. So so, again, you know, I believe our production expectations are well calibrated to to what we already know about the field.

Charlie Sharp, Analyst: That’s great. Thank you.

Sean Guest, CEO, Valeura Energy: Yeah. So, Charlie, you’re asking on volumes. And obviously, a step we’ll go through is working those up, and I expect we’ll actually go through an external reserve audit so we’re able to kind of speak of those numbers and provide those out to the market once we get in there, get into the data and we’re officially in the block. It’s rough guidance. Think what I can say is what you’re talking, Nithya, you’re talking of the 10 to tens of MMBOEs in each kind of areas where kind of our view sits right now on those.

Obviously, something down in the South like Busavong, you may see that increase as drill and find more gas and start to extend it. But that’s kind of currently our view now.

Charlie Sharp, Analyst: Very helpful. Thank you.

Robin Martin, Vice President, Investor Relations and Communications, Valeura Energy: Just to stay on topic, and maybe follow on Charlie’s questions, a couple of type questions that are related to that. First on Wassana, can you comment on any cost inflation at the Wassana redevelopment?

Greg Kalowski, COO, Valeura Energy: Yeah. It’s a it’s a good question. Now with with the way we’ve set up contracts for delivery of of this project, well over 80% of the of the total cost is in fixed price commitment. So, again, the high confidence that we can manage cost within within the numbers we have advertised, right, which was a 120,000,000 for the for the facility all in with tie ins, pipelines, etcetera.

Robin Martin, Vice President, Investor Relations and Communications, Valeura Energy: Okay. And following on another, of those that line of questions, what remains to be done to, at the two discoveries on on the blocks with PTTP? Is this just desktop work, or do we require further further drilling?

Sean Guest, CEO, Valeura Energy: So, no. Look, we’ll obviously we have to get together with PTTP. They’re working up based on the existing discoveries and the new wells, looking at where you can justify putting in platforms platform or platform. So obviously, we’ll see how many of those they come forward as that word progresses over the time. So at this time, all we’re hearing from them as we’ve started our first meetings with them is that they are looking at potentially sufficient hydrocarbons to put in platforms in each block.

So we’ll see what numbers come back. But again, it’s a bit early at this stage to kind of say that.

Robin Martin, Vice President, Investor Relations and Communications, Valeura Energy: Okay. We’ll go to another live question now from David Round. David, I’ve allowed your microphone. You can go ahead and unmute.

David Round, Analyst: Right. Right. I think I’m unmuted. Sorry. There’s a bit of a lag there.

Two for me, please. Firstly, back on the new acreage, obviously, nonoperated for a change. So just wondering if that was something that you’re happy with, had to get comfortable with, given the the speed of activity, I guess, is out of your hands. Would also be interested in sort of just if you could elaborate on on how the decision making process will work there between yourselves and PTC. And secondly, on operations, you said you’re back up at twenty three point two already.

Just interested which asset has driven that step up and if you are able to potentially say what what peak production at Nong Yao could be this year.

Sean Guest, CEO, Valeura Energy: So on on the production element, there’s a couple things going on. So Nong Yao, we are back drilling on Nong Yao. We’re getting a good response there, and that production is, increased significantly back up to almost where it was when we brought on Nong Yao Sea, so getting towards the limit of the facility there. So that’s good. That’s going very well.

But there are some other things. Like, the Wausana production was down because there’s a single water injection well there. And the water injection well was not performing well. It was very hard to inject. So they went in and did a workover of that.

That increases the amount of throughput you can have on water management and hence you’ve increased the oil production. So we’ve had that kick up as well come on, and we hope for further uptakes in Wissana there as we kinda debottleneck that flow a little bit further. But the main the main jump we’ve seen is really on bringing the Nong Yao back on. And then you were you were asking about the operatorship. So, obviously, the deal has yet to close.

Until the deal closes, we actually, you know, are not contributing financially. However, there is a whole approach that’s been defined already for how we work with the operator, how we decisions are made during this interim period before close. So we’re very confident as how that’s gone and how that’s been set up. After close, you follow back into much more of a normal technical committee meeting, operating committee meeting. But, no, we’re not we’re not too worried with the pace at which PTTEP moves.

We are still required to agree on a lot of the elements. You know, if there’s something they really wanna do and we don’t, they’re they have the freedom as you do in almost all JOAs to proceed on their own. So it’s very standard oil and gas practice.

David Round, Analyst: Okay. Great. Thanks, Sean. Maybe just a quick follow-up on on the new blocks. Just looking at the size of them, I mean, ultimately, are you gonna need data over all of it?

Sean Guest, CEO, Valeura Energy: No. I don’t I don’t believe you are. And and, look, we actually have quite a good database because, you know, Chris Energy that we took over in that had a lot of these blocks originally. So there is existing two d. You’ve got magnetic data, gravity data in that.

So you have a very good understanding of where the basins are there. So there’s a lot of area that is really barren basement high that you’re likely going to be able to relinquish. And you’re going to be focused towards along the edge of the major hydrocarbon producing basins that are known. But there are also some synrift basins that exist within the highs where you also see Menorah existing in one of those, the Bulong Field, another operated field there. So there are some potential other basins we could be looking at in there, and that was one of the reasons for having this exploration workshop.

Right. Thanks, Sean.

Robin Martin, Vice President, Investor Relations and Communications, Valeura Energy: Next we’ll go to another live question. Phil Heinrich has been waiting patiently to ask a question. Phil, I’ve allowed your microphone. You can unmute and go ahead. Phil, it looks like you’re still on mute.

We’ll give you a second. Okay. Perhaps we’ve lost you. Feel free, everyone who’s listening to either type a question using the Q and A feature in Teams or press that raise hand button to signal to us that you’d like to ask a live question or you can email us using irfaloraenergy dot com. In the meantime, I’ll ask another question that came in by email M and A related matters.

There was some news yesterday regarding Chevron and Bangkok announcing a farm out of their large exploration block. Interested to know whether you view this as a serious competitor or how investors should be looking at this partnership as it relates to our ambitions in the region.

Sean Guest, CEO, Valeura Energy: Think the first thing that’s exciting to see is, again, more players coming into the Gulf Of Thailand. You’re seeing there’s interest in the play, there’s interest in what’s going on there. Banjak are a major Thai refiner, very well financed company. And they have kind of had upstream assets at time, not always in Thailand. They’ve been in The Philippines.

They’re a major shareholder of a Norwegian company as well. And I know through discussions with them as well that they were looking to review opportunities within the Gulf Of Thailand. So we’re not surprised to see them come in or to come in with Chevron on that block. So we wish them all the best as they kind of move forward there, and we’ll obviously follow what they do is they’re right by our Wasana field.

Robin Martin, Vice President, Investor Relations and Communications, Valeura Energy: Okay. Another typed question that came in on capital allocation. Given the extension of acreage with PTTP, what does this leave how does this leave older assets such as Menorah? And can Menorah still compete for capital?

Sean Guest, CEO, Valeura Energy: Yeah. No. Definitely. So, obviously, our first priority still remains on production. Right?

Production is what yields the cash flow. If we have in the new blocks, we have an opportunity for a good development that can yield very strong production and cash flow, then that has to rank up against Menorah. But immediate production, immediate cash flow is going to rank very highly within our books as we look at those opportunities.

Robin Martin, Vice President, Investor Relations and Communications, Valeura Energy: And your favorite question, Sean, any comments on Turkey?

Sean Guest, CEO, Valeura Energy: Yes. Look, I can say there’s still still discussions ongoing, and we look to hope to be able to achieve a result there that would allow us to see us back in the field. Watch this space.

Robin Martin, Vice President, Investor Relations and Communications, Valeura Energy: Sounds good. I’ll just give another chance to Phil if you’re able to unmute your microphone. We’ll just give you a second. Otherwise, happy to follow-up after the call. No, looks like we’ve lost him.

All right, everyone. That’s, that’s it for the Q and A that we’ve had. Reminder, you can reach out to us at any time. Our contact details are at the end of this presentation and available on the website. And with that, I’ll hand over to you to wrap up, Sean.

Sean Guest, CEO, Valeura Energy: Just again, thank you for everyone taking the time to join us here today. And as Robin said, please feel free to reach out at any time. I know we do these sessions, but we’re always willing to take calls at any time and address issues people might have. So we’re very pleased with the results to date. I’m really looking forward in getting production back up there as we progress into the latter half of the year and watching how Wissana Field progresses.

It’s a very exciting piece of kit to see and to be out in the yard and just see the number of platforms these guys are constructing. It was very impressive. So with that, I’ll say thanks again for joining us.

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