Wassana Drilling Program Exceeding Expectations
Research Report

Valeura Energy Inc.'s (VLE:TSX; PNWRF:OTCMKTS) Wassana drilling program exceeded expectations, according to Auctus Advisors analyst Stephane Foucaud in a February 14 research note.

Production from the first two weeks is now over 4,000 bbl/d. A third oil well in the Wassana field is anticipated to come online within the next week. Once operational, this additional well is projected to increase Wassana's total production further. There is potential for the field's output to surpass the 4.5 million barrel per day target if the positive performance trends continue.

Foucaud also pointed out Valeura's plans to extend the current program with two additional wells; there will be five wells in total.

"These additional wells were previously expected to be drilled later in 2024," Foucaud said. "Drilling the two additional wells immediately after the first three wells could both have a positive impact on the FY24 production guidance and also be a source of cost optimization."

Foucaud also mentioned Valuera's planned acquisition of Nong Yao’s Aurora FSO. This will be acquired for US$19 million. Foucaud believes this purchase will grant Valuera the ability to reduce its opex for the field. 

He commented, "We have provisionally assumed payback on the investment within 24-36 months."

With this, Foucaud gave Valuera a Buy rating and CA$6.40 target price, with an 87% implied total return.

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Disclosures for Auctus Advisors, Valuera Energy Inc., February 14, 2024

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