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Valeura Energy aiming to start up Thai oil asset in June


Singapore-headquartered Valeura Energy is forging ahead with the expansion of its Nong Yao oilfield offshore Thailand, with start-up of the C extension expected in June.


The Toronto-listed operator is investing US$47 million net to expand its producing Nong Yao field through the exploitation of the Nong Yao C accumulation. Valeura next month expects to transport a mobile offshore production unit (MOPU) to the field where it will be connected via a pipeline to the existing field infrastructure and will serve as the wellhead production platform for the Nong Yao C field extension.


“As soon as practical” after installation and commissioning, Valeura intends to begin drilling a programme of nine development wells — six producers and three water injectors — and in tandem with carry out debottlenecking works on the existing facilities to accommodate the new production. First oil is expected in June 2024 and, when ramped up in the following months, the company is targeting peak output of approximately 11,000 barrels per day, net to its 90% working interest.


During the fourth quarter of 2023, Valeura completed an infill drilling programme on the Jasmine field, also in the Gulf of Thailand, and thereafter an infill drilling programme on the Nong Yao field. All campaigns were successful in adding additional production, and company management anticipates that the results of drilling activity will lead to an extension to the economic life of the fields through both sustaining current production and appraisal successes which give rise to future drilling opportunities.


Last month, 2023, the operator mobilised its drilling rig to the Wassana field, where a production-oriented infill drilling programme of three horizontal development wells is currently under way.


Approximately 75% of the company’s 2024 capex of between US$135 million and US$155 million is directed toward drilling. Valeura intends to have one drilling rig under contract for the entire year, and to conduct a continuous drilling programme covering each of its fields. The drilling sequence itself is subject to ongoing real-time optimisation.


The 100%-owned Wassana field is another key growth asset for the company. Valeura has commenced a production-oriented drilling campaign that is targeting reservoir intervals which have been only partially developed. The current drilling campaign of three horizontal development wells is intended to increase production to a target rate of approximately 4500 bpd of oil, and Valeura might drill additional development wells later in the year.


Also, following the success of its 2023 Wassana appraisal drilling programme, where results indicated a possible additional 20 production well locations, Valeura is evaluating options to expand the field’s production infrastructure, with a view taking the final investment decision in 2024.


Valeura’s stated objective is to pursue a redevelopment of the field such that further accumulations can be commercialised, thereby increasing prod8uction and extending the field’s economic life beyond 2030.


Meanwhile, at the company’s 100%-held Jasmine field, Valeura this year envisages investing approximately US$50 million with the majority of this capex being directed toward an infill drilling campaign planned for the second half of 2024. These infill wells are a direct follow-on from opportunities identified in its 2023 and earlier drilling campaigns.


Valeura said its efforts at Jasmine are oriented toward reducing the effect of natural declines and continuing the field’s long history of year-on-year reserves additions.

At the same time, it has sanctioned a project to improve both the cost base and greenhouse gas (GHG) emissions intensity of its operations at Jasmine.


As part of the US$50 million capex planned for Jasmine, Valeura will invest approximately US$8 million to install a gas turbine generator tailor-made to utilise the field’s unique waste gas stream as feedstock for power generation.


“I am pleased to present our high-level outcomes for 2023 and guidance outlook for 2024. By delivering average oil production of 20,400 bpd, strong operating margins and managing spending to within or below our guidance range, we are in a very strong financial position. At year-end 2023, we had no debt, US$150 million in cash and a suite of growth projects in our sights to deliver further value for our stakeholders,” said Valeura chief executive Sean Guest.


“With all fields online, we are seeing a strong start to the new year and have recorded 2024 production to date of 22,600 bpd. That start energises our view that 2024 will be a year to both demonstrate the resilience of our legacy assets and also to showcase the growth potential of our business. Our key organic projects for the year are the development of the Nong Yao C accumulation, which will start with an aggressive drilling campaign later this quarter and further development of the Wassana field — initially through infill drilling and thereafter through finalising plans for a large-scale redevelopment of the field.”


Exploration targets


While Valeura’s focus remains primarily on investment opportunities that generate immediate or near-term cash flow, it intends to invest approximately US$8 million in pursuing exploration opportunities within its existing Thai licences. Current exploration opportunities have been identified at Wassana North, Nong Yao D and the Ratree prospect, the last of which is located near the Jasmine field.


The company said that final drilling sequencing and timing would be determined through ongoing work to optimise the exploration campaign around its development drilling plans. Additional exploration prospects within Valeura’s asset portfolio are being evaluated as part of its normal course of business.


“We are guiding to average 2024 oil production of between 21,500 and 24,500 bpd and planning a capex programme of US$135 to US$155 million plus an US$8 million exploration programme. Our total Opex guidance is US$205 to US$235 million, which equates to approximately US$26 per barrel,” added Guest.


“While this is a reduction in our unit operating costs from 2023, we will continue to focus on driving even further efficiency into our business and have embarked on a programme to capture these opportunities across the portfolio. That includes innovative projects like our bespoke gas turbine installation planned for Jasmine, which not only improves the asset’s GHG emissions profile, but pays out quickly through opex reductions.”


Valeura also has acreage in the Thrace basin in Turkey, for which it is continuing to seek a partner to participate in its tight gas exploration/appraisal play. The operator this week said it does not intend to commit material spending to the play until such time as a suitable commercial arrangement is in place.

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