Turkey-focused upstream natural gas supplier Valeura Energy Inc. (LON: VLU) today posted mixed financial and operational results for the second quarter of 2019, alongside ‘positive’ production test results for its Inanli-1 appraisal well.
For the second quarter of FY19, the Company noted that production had dipped 9% compared to Q1, and was down 5% on a year-on-year comparison for the second quarter. Its operating income of $1.8 million for Q2 was 21% lower than its figure for the previous quarter, but up 20% on Q2 2018.
Its average realised gas price of $8.54/Mcf was 7% lower than in Q1 FY19, but up 15% on-year for the same period. The Company’s net working capital surplus also dropped during the quarter, from $56.1 million on March 31, to $52.3 million on June 30 2019.
Operationally, Valeura Energy told investors that it had completed drilling operations at the Devepinar-1 project within budget.
Further, it reported that it had successfully flowed natural gas from a 21 metre gross interval that it had stimulated at its Inanli-1 appraisal well. The well has been flowing since August 3 2019 and gas flow is stable, with production for the first eight days averaging 643 Mcf/d.
Valeura Energy comments
Sean Guest, President and CEO commented:
“I am very pleased with our second quarter results. Price realisations and operating netbacks remain strong and are getting stronger with the recent increase in BOTAS’ reference price. At the same time, our team has done an excellent job offsetting natural declines and maintaining production from our conventional shallow reservoirs, which is helping to preserve our strong financial position, including our net working capital surplus of $52.3 million.”
“These favourable netbacks help illuminate the long-term economics for gas production in Turkey. Meanwhile, the substantial value of our BCGA play is becoming clearer with every step of our appraisal programme. At the Inanli-1 well, we have stimulated the deepest reservoir zone ever tested in the BCGA, and initial results have been very encouraging with a good, stable gas flow and minimal water production. We are excited by the indications of potential commerciality at this depth and look forward to the results from shallower zones.”
The Company’s share price last closed at 2.41 CAD, after rallying over 5% during trading. The Company’s p/e ratio is currently unavailable, their market cap stands at £136.37 million.
Elsewhere in the oil and gas sector, there have been updates from; Eco Atlantic Oil and Gas Ltd (AIM: ECO), President Energy PLC (LON: PPC), Mosman Oil and Gas Limited (AIM: MSMN), Nostrum Oil and Gas PLC (LON: NOG) and Reabold Resources PLC (LON: RBD).