PV Drilling I

[escveritas]

Thailand Drilling Rig Contract Execution
October 4, 2022

Calgary, October 4, 2022: Valeura Energy Inc. (TSX:VLE) (“Valeura” or the “Company”), the upstream oil and gas company with assets offshore Gulf of Thailand and the Thrace Basin of Turkey, is pleased to announce that it has agreed with Petrovietnam Drilling and Well Service Corporation to charter the PV Drilling I jack-up drilling rig to support its Gulf of Thailand operations in 2023.

The PV Drilling I rig is expected to mobilise to the Wassana oil field in mid Q2 2023, where it will conduct an initial scope of work comprised of the Company’s five well infill drilling programme. The arrangement includes an option to extend the scope of work thereafter, to include additional drilling operations at the Company’s discretion.

Valeura reiterates its previous target that it expects to re-start production from the Wassana oil field in Q4 2022, with initial oil production rates of up to 3,000 bbls/d (net to the 89% working interest held by Valeura’s subsidiaries) and is targeting an increase to approximately 4,500 bbls/d (net) as a result of the 2023 infill drilling programme. The Company is continuing to make good progress on the key work streams in support of production re-start at Wassana, including securing the recertification of the field’s Mobile Offshore Production Unit facility and procuring a suitable Floating Storage and Offloading Vessel.

Sean Guest, President and CEO commented:

“We remain confident in our ability to resume oil production at the Wassana field later this quarter. With positive progress on all key work streams, supporting the return to active production operations, we are already setting our sights on our growth targets, and with this drilling rig contract in place we will be well-prepared to increase production in 2023.”

Valeura holds an operated interest in two shallow water offshore licences in the Gulf of Thailand – Licence G10/48, containing the Wassana oil field and Licence G6/48 containing the Rossukon oil field. In addition, Valeura is purchasing a 100% interest* in a Mobile Offshore Production Unit (“MOPU”), onsite at the Wassana oil field. The transaction was announced on April 28, 2022 and closed on June 15, 2022.

Re-activation of a mid-life oil field
Licence G10/48 contains the Wassana oil field, which is a collection of crude oil-bearing sandstone reservoir intervals of Miocene age. The field is estimated to contain 2P reserves of 6.5 MMbbls of oil as of March 31, 2022*.

Production operations were suspended by the previous operator in May 2020 and are planned to resume in Q4 2022 at an initial rate of 3,000 bbls/d, net to the acquired working interest. The field’s production is medium-weight crude oil, which has historically sold at a discount to the Brent oil benchmark of approximately US$6/bbl.

The Wassana field was developed by way of production wells drilled off a Mobile Offshore Production Unit (“MOPU”), which is being purchased by Valeura through a separate transaction. Crude oil will be processed at the MOPU and stored in a leased Floating Storage and Offloading vessel.

Valeura has identified the potential for ongoing infill drilling to increase recoverable reserves from the Wassana field in addition to the potential to access additional volumes through development of additional exploration discoveries on the block.

Valeura’s acquisition of an operated 89% working interest** was completed on June 15, 2022. The remaining 11% interest is held by Palang Sophon.