Valeura Energy Inc. (“Valeura” or the “Corporation”) (TSX: VLE) is pleased to announce the closing of the following transformational transactions:
- the farm-in for the exploration of the deep formations below approximately 2,500 metres on Valeura’s 100% owned and operated Banarli licences in accordance with the farm-in agreement between Corporate Resources B.V. (“CRBV“), a wholly-owned affiliate of Valeura, and Statoil Banarli Turkey B.V. (“Statoil“) (the “Banarli Farm-in“), whereby Statoil can earn a 50% interest in the deep rights by investing US$36 million of which US$6 million is an up-front payment as a contribution to back costs incurred on the Banarli licences; and
- the sale of CRBV’s current 40% participating interest for US$12 million in the deep formations below approximately 2,500 metres on certain lands in an existing joint venture with Thrace Basin Natural Gas (Turkiye) Corporation (“TBNG“) and Pinnacle Turkey Inc. (the “TBNG JV“), in accordance with the sale and purchase agreement between CRBV and Statoil (the “West Thrace Deep Rights Sale“).
Valeura has now received the cash payments from Statoil of US$6 million and US$12 million with respect to the Banarli Farm-in and the West Thrace Deep Rights Sale, respectively.
Valeura anticipates using the above payments from Statoil, together with the $11 million raised under its underwritten private placement offering of subscription receipts (the “Offering”), if and when released from escrow, to fund the acquisition of TBNG by Valeura Energy Netherlands B.V., a wholly-owned affiliate of Valeura (the “TBNG Acquisition”), and to ramp-up shallow gas drilling. Closing of the TBNG Acquisition will require a payment of approximately US$18.5 million, after closing adjustments, and is currently expected to occur in February 2017. This transaction will increase Valeura’s participating interest in the TBNG JV to 81.5% (subject to the West Thrace Deep Rights Sale) and establishes Valeura as the operator.
The Ministry of Energy and Natural Resources of the Republic of Turkey approved the Banarli Farm-in, the West Thrace Deep Rights Sale and the TBNG Acquisition on December 30, 2016.
“Closing of these transformational transactions with Statoil is an exciting milestone for Valeura, which paves the way to spud the first 4,000 metre exploration well in Q1 2017 under the Banarli Farm-in, funded by Statoil, targeting a deep, over-pressured, basin-centered gas play that has the potential to be another game-changer for Valeura”, said Jim McFarland, President and Chief Executive Officer of Valeura. “In addition, we now have the financial capacity to proceed with our planned 2017 shallow gas drilling program in the Thrace Basin, which is expected to commence in February on the TBNG JV lands at the Dogu Atakoy-3 location where approvals and site preparation are already complete”, adds McFarland.
ABOUT THE CORPORATION
Valeura Energy Inc. is a Canada-based public company currently engaged in the exploration, development and production of petroleum and natural gas in Turkey.