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Valeura Energy Inc.: Final Investment Decision on Wassana Field Redevelopment
GlobeNewswire·2025-05-14 07:57

Core Viewpoint - Valeura Energy Inc. has made a final investment decision to redevelop the Wassana field in the Gulf of Thailand, which is expected to significantly enhance shareholder value through increased production and reserves [1][4]. Redevelopment Project Details - The redevelopment will involve a new central processing platform (CPP) designed to optimize the full potential of the Wassana field [9][11]. - First oil production is anticipated in Q2 2027, with peak production expected to reach 10,000 barrels per day (bbls/d) in the second half of 2027, which is more than 2.7 times the current output [9][14]. - The total investment for the redevelopment is estimated at US120million,withUS120 million, with US40 million planned for 2025 and the remainder in 2026, fully funded from existing cash reserves [9][13]. Reserves and Resources Update - The Wassana field's proved plus probable (2P) reserves have increased to 20.5 million barrels, representing an increment of approximately 18 million barrels compared to previous estimates [9][19]. - The end-of-field life (EOFL) has been extended to 2043, an increase of 16 years [9][15]. - The net present value (NPV10) of the 2P reserves before tax is estimated at US354.5million,andaftertaxatUS354.5 million, and after tax at US218.2 million, indicating a significant increase in asset value [21][23]. Economic Viability - The redevelopment project is projected to deliver an internal rate of return (IRR) of approximately 40% even at a lower oil price environment of US60perbarrel,withapaybackperiodof18months[6][16].−Theprojectisdesignedtoberesilientagainstvariouspricescenarios,providingafavorablerisk−rewardprofileforshareholders[6][7].ProductionandOperatingEfficiencies−ThenewCPPwillallowformoreextensivedrillingandalongerfacilitydesignlife,resultinginincreasedcashflowgeneration[11][14].−Theanticipatedoperatingcostsareexpectedtodecreasesignificantly,withadjustedoperatingexpensesperbarrelprojectedtobeintherangeofUS60 per barrel, with a payback period of 18 months [6][16]. - The project is designed to be resilient against various price scenarios, providing a favorable risk-reward profile for shareholders [6][7]. Production and Operating Efficiencies - The new CPP will allow for more extensive drilling and a longer facility design life, resulting in increased cash flow generation [11][14]. - The anticipated operating costs are expected to decrease significantly, with adjusted operating expenses per barrel projected to be in the range of US12 to US16[14].GuidanceUpdate−Thecompany′sguidanceforadjustedcapitalexpendituresfor2025hasbeenrevisedtoUS16 [14]. Guidance Update - The company's guidance for adjusted capital expenditures for 2025 has been revised to US165 million to US185million,reflectingtheanticipatedspendingontheWassanaredevelopmentproject[28][31].−Freecashflowguidancefor2025isprojectedtobebetweenUS185 million, reflecting the anticipated spending on the Wassana redevelopment project [28][31]. - Free cash flow guidance for 2025 is projected to be between US80 million and US195million,basedonbenchmarkBrentoilpricesrangingfromUS195 million, based on benchmark Brent oil prices ranging from US65 to US$85 per barrel [29][30].