Valeura Energy Inc. - Second Quarter 2023 Results

Valeura Energy Inc. (TSX: VLE, OTCQX: VLERF) ('Valeura' or the 'Company'), the upstream oil and gas company with assets in the Gulf of Thailand and the Thrace Basin of Turkey, reports its unaudited financial and operating results for the three and six month periods ended June 30, 2023.

Q2 2023 Highlights

No lost time safety incidents: Valeura's first full quarter of Gulf of Thailand production operations; Oil production of 22,097 bbls/d; Oil sales of 2.167 million bbls, generating revenue of US$174.2 million; Opex per barrel of US$22.7/bbl(1); Capex spending of US$33.6 million(6); Adjusted cash flow from operations of US$70.4 million(2); Adjusted EBITDAX of US$78.9 million(3) and Net cash balance of US$87.6 million(4).

Q2 2023 Key Achievements

Captured early operational synergies between assets by moving to a one-rig drilling programme, rather than two; Drilled eight wells during Q2, including completion of an infill drilling programme on the Jasmine oil field and an infill drilling programme on the Nong Yao oil field; Under budget operating and capital cost performance, resulting in a downward revision to spending expectations for the year, and no change to production guidance; First production from the Wassana oil field re-start on April 28, 2023; Completed the purchase of the Wassana oil field's mobile offshore production unit ('MOPU') and increased working interest in Licence G10/48 to 100% and Divested interest in Licence G6/48 in exchange for a royalty on future production from the undeveloped Rossukon oil field. Sean Guest, President and CEO of Valeura commented: 'I am pleased to announce that during our first full quarter of production operations in Thailand, we have safely and responsibly produced an average of 22,097 bbls/d of oil. Our Q2 2023 results mark a step change in our business, underscored by sales of 2.167 million barrels of oil, generating revenue of US$174.2 million. Operating costs were managed below our guidance estimates for the quarter, at US$22.7/bbl on an adjusted basis, resulting in adjusted cash flow from operations of US$70.4 million.

Our company is in a strong financial position. Compared to our metrics as of one year earlier, we have added only a modest level of debt, which has already been reduced to US$30.7 million as of June 30, 2023. We have increased our cash position from approximately US$30 million one year ago to US$121.7 million, even after having paid taxes and investing US$33.6 million of capital spending into our assets during the quarter. Valeura is now a strongly cash generative business.

We are fulfilling our promise to deliver value and growth, and at the same time are beginning to see the benefits of operating synergies across the portfolio we have assembled. With more than half the year completed, we have revisited our guidance estimates for the year and are now revising downward our expectations for both capital and operating spending while keeping production expectations unchanged.

At the same time, our longer term outlook for growth remains positive as evidenced by the key 90 million barrel production milestone achieved at Jasmine during the quarter and ongoing success with infill drilling across the portfolio, which continues to support our objective of replacing produced reserves.'

Webcast

Valeura's management team will host an investor and analyst webcast at 08:30 Calgary / 15:30 London / 21:30 Bangkok / 22:30 Singapore tomorrow, August 10, 2023, to discuss today's announcement. The live audio and video feed can be accessed via the link below. Written questions may be submitted through the webcast system or by email to [e-mail].

An audio only feed of the event is available by phone using the Conference ID and dial-in numbers below.

Conference ID: 582 141 370

Dial-in numbers: Canada: 833-845-9589

Singapore: [phone]

Thailand: [phone]

Turkey: 00800142034779

UK: 0800 640 3933

USA: 833-846-5630

Contact:

Tel: [phone]

Email: [e-mail]

About the Company

Valeura Energy Inc. is a Canada-based 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 re-invest 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.

Advisory and Caution Regarding Forward-Looking Information

Certain information included in this news release constitutes forward-looking information under applicable securities legislation. Such forward-looking information is for the purpose of explaining management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Forward-looking information typically contains statements with words such as 'anticipate', 'believe', 'expect', 'plan', 'intend', 'estimate', 'propose', 'project', 'target' or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this news release includes, but is not limited to: Valeura's longer term outlook for growth remaining positive; the production, price realisations, operating costs and capital spending guidance for 2023, including the Company's downward revision to capital and operating spending while keeping production expectations unchanged from earlier disclosure; the Company continuing to fund its operating costs and capital spending through cash generated from ongoing operations; the Company's aim to repay its debt facility in full during the remainder of 2023; the potential for further infill drilling programmes; the timing to mobilise the Nong Yao C mobile offshore production unit to the field and development drilling thereafter; plans to further infill drill on the Nong Yao accumulations; the Manora oil field infill wells having met or exceeded their pre-drill volume estimates; potential for the extension of the Manora oil field's economic life; the number of further infill drilling targets on the Manora oil field; the timing and quantum for pilot wells to assess the potential for additional volumes in a northward extension of the Wassana oil field; the components of the forward drilling schedule, including the acceleration of the next phase of infill drilling on both the Jasmine and Nong Yao oil fields and the drilling of various wells on these fields in 2023, which were previously planned for 2024; the Company's intent to present environmental, social, and governance performance metrics as part of an inaugural sustainability report in due course, along with an articulation of its forward strategy to ensure the sustainability of its business and the Company's use of production downtime at the Wassana oil field to conduct maintenance work.

Forward-looking information is based on management's current expectations and assumptions regarding, among other things: political stability of the areas in which the Company is operating; continued safety of operations and ability to proceed in a timely manner; continued operations of and approvals forthcoming from governments and regulators in a manner consistent with past conduct; future drilling activity on the required/expected timelines; the prospectivity of the Company's lands; the continued favourable pricing and operating netbacks across its business; future production rates and associated operating netbacks and cash flow; decline rates; future sources of funding; future economic conditions; the impact of inflation of future costs; future currency exchange rates; interest rates; the ability to meet drilling deadlines and fulfil commitments under licences and leases; future commodity prices; the impact of the Russian invasion of Ukraine; royalty rates and taxes; future capital and other expenditures; the success obtained in drilling new wells and working over existing wellbores; the performance of wells and facilities; the availability of the required capital to funds its exploration, development and other operations, and the ability of the Company to meet its commitments and financial obligations; the ability of the Company to secure adequate processing, transportation, fractionation and storage capacity on acceptable terms; the capacity and reliability of facilities; the application of regulatory requirements respecting abandonment and reclamation; the recoverability of the Company's reserves and contingent resources; future growth; the sufficiency of budgeted capital expenditures in carrying out planned activities; the impact of increasing competition; the ability to efficiently integrate assets and employees acquired through acquisitions; global energy policies going forward; future debt levels and the Company's continued ability to obtain and retain qualified staff and equipment in a timely and cost efficient manner. In addition, the Company's work programmes and budgets are in part based upon expected agreement among joint venture partners and associated exploration, development and marketing plans and anticipated costs and sales prices, which are subject to change based on, among other things, the actual results of drilling and related activity, availability of drilling, offshore storage and offloading facilities and other specialised oilfield equipment and service providers, changes in partners' plans and unexpected delays and changes in market conditions. Although the Company believes the expectations and assumptions reflected in such forward-looking information are reasonable, they may prove to be incorrect. Forward-looking information involves significant known and unknown risks and uncertainties. Exploration, appraisal, and development of oil and natural gas reserves and resources are speculative activities and involve a degree of risk. A number of factors could cause actual results to differ materially from those anticipated by the Company including, but not limited to: the ability of management to execute its business plan or realise anticipated benefits from acquisitions; the risk of disruptions from public health emergencies and/or pandemics; competition for specialised equipment and human resources; the Company's ability to manage growth; the Company's ability to manage the costs related to inflation; disruption in supply chains; the risk of currency fluctuations; changes in interest rates, oil and gas prices and netbacks; potential changes in joint venture partner strategies and participation in work programmes; uncertainty regarding the contemplated timelines and costs for work programme execution; the risks of disruption to operations and access to worksites; potential changes in laws and regulations, the uncertainty regarding government and other approvals; counterparty risk; the risk that financing may not be available; risks associated with weather delays and natural disasters and the risk associated with international activity. See the most recent annual information form and management's discussion and analysis of the Company for a detailed discussion of the risk factors.

Certain forward-looking information in this news release may also constitute 'financial outlook' within the meaning of applicable securities legislation. Financial outlook involves statements about Valeura's prospective financial performance or position and is based on and subject to the assumptions and risk factors described above in respect of forward-looking information generally as well as any other specific assumptions and risk factors in relation to such financial outlook noted in this news release. Such assumptions are based on management's assessment of the relevant information currently available, and any financial outlook included in this news release is made as of the date hereof and provided for the purpose of helping readers understand Valeura's current expectations and plans for the future. Readers are cautioned that reliance on any financial outlook may not be appropriate for other purposes or in other circumstances and that the risk factors described above or other factors may cause actual results to differ materially from any financial outlook. The forward-looking information contained in this new release is made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward-looking information contained in this new release is expressly qualified by this cautionary statement.

This news release does not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction, including where such offer would be unlawful. This news release is not for distribution or release, directly or indirectly, in or into the United States, Ireland, the Republic of South Africa or Japan or any other jurisdiction in which its publication or distribution would be unlawful.

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