CEO.CA Chairman's Briefing

Year-End 2023 Reserves and Resources, Strong Growth and Value Creation

CALGARY, AB / ACCESSWIRE / February 20, 2024 / Valeura Energy Inc. (TSX:VLE)(OTCQX:VLERF) ("Valeura" or the "Company"), the upstream oil and gas company with assets in the Gulf of Thailand and the Thrace Basin of Türkiye, is pleased to announce the results of its third-party independent reserves and resources assessment for its Thailand assets.

Highlights

· Reserves increased across all fields - 29.9 MMbbl 1P, 37.9 MMbbl 2P and 46.5 MMbbl 3P

· 1P and 2P Reserves Replacement more than double the volume of oil produced in 2023 - 219%

· 2P net present value before tax of US$616 million and US$429 million after tax⁽¹⁾

· Considering year end 2023 cash position of US$150.9 million, 2P net asset value after tax of US$579 million, equating to C$7.56 per share⁽²⁾

· More than three-fold increase in best estimate (2C) contingent resources, on a risked basis.

(1) Discounted at 10% discount rate (NPV₁₀)

(2) Proved plus probable (2P) NPV₁₀ plus net cash of US$150.9 million at December 31, 2023 (cash US$150.9, debt nil), assuming C$/US$ exchange rate of 0.742, and 103.3 million shares outstanding

Sean Guest, President and CEO commented:

"I am very pleased to announce the results of our end 2023 reserves and resources evaluation, which show substantial increases on all fronts, whether expressed as volumes of barrels or dollars of value. Through our work programme in 2023 we have replaced more than double the oil we produced, extended the anticipated economic life of our portfolio, and recorded a significant up-tick in NPV. This is an additional year of results that supports our thesis that these assets will continue to deliver cashflow well into the future.

Not only has the value of our assets increased from US$261 million at end 2022 to US$429 million at end 2023 (on a 2P after-tax NPV₁₀ basis), but during the intervening calendar year, cash flow from the assets' 7.5 MMbbls⁽¹⁾ production has enabled us to fully pay down our debt while also accumulating US$151 million in cash by December 31, 2023. Together that creates a net asset value of US$579 million, which, based on our current shares outstanding and foreign exchange rates, equates to approximately C$7.56 per share.

Importantly, our performance in 2023 has resulted in 1P and 2P reserves growth at every one of our assets. For the more mature fields, Manora and Jasmine, our infill drilling programmes have increased reserves and extended field life. For the growth fields, Nong Yao and Wassana, these estimates underscore the value potential of pursuing further development opportunities. 2024 will serve as a proving ground for us to increase output from the Nong Yao field, with development of the Nong Yao C accumulation already well underway. At Wassana, largely as a result of our appraisal work in 2023, we have recorded a two-fold increase in 2P reserves, thereby validating our view that the field offers substantially more oil to commercialise than initially envisaged when we acquired the asset.

Our strategy is to continue pursuing value through growth in all its forms. That includes working to unlock contingent resources (which have also increased 3 ½-fold, year-on-year on a risked basis) and through an active near-field exploration programme this year.

We take great pride in our asset base in Thailand and are pleased to have such a high quality portfolio to continue driving further value growth for our stakeholders."

(1) Including amounts relating to the period January 1, 2023 through March 22, 2023, prior to completion of the Company's Gulf of Thailand acquisition from Mubadala Energy.

Valeura commissioned Netherland, Sewell & Associates, Inc. ("NSAI") to assess reserves and resources for all of its Thailand assets as of December 31, 2023. NSAI's evaluation is presented in a report dated February 19, 2024 (the "NSAI 2023 Report"). This follows a previous evaluation whereby NSAI assessed reserves and resources for the same assets as of December 31, 2022, as disclosed in an NSAI report dated April 17, 2023 (the "NSAI 2022 Report") and announced by the Company on April 18, 2023. Note that as the acquisition of a portion of Valeura's Gulf of Thailand assets (Jasmine, Manora and Nong Yao) from Mubadala Energy was only completed on March 22, 2023, the NSAI 2022 Report is used as the basis for comparison, thereby comparing to the reserves at year end 2022 on a proforma asset basis.

Summary of Valeura's Aggregate Thailand Reserves and Resources as of December 31, 2023

· Proved (1P) reserves of 29.9 MMbbls

· 1P NPV₁₀ of US$301.4 million before tax / US$193.9 million after tax;

· Proved and probable (2P) reserves of 37.9 MMbbls,

· 2P NPV₁₀ of US$616.4 million before tax / US$428.5 million after tax;

· Best estimate (2C) aggregate unrisked contingent resources of 19.9 MMbbls, or 8.9 MMbbls on a risked basis.

Oil and Gas Reserves by Field Based on Forecast Prices and Costs

Net Present Values of Future Net Revenue Based on Forecast Prices and Costs

Net present values of future net revenue from oil reserves are based on cost estimates as of the date of the NSAI 2023 Report, and forecast Brent crude oil reference prices of US$78.00, US$79.18, US$80.36, US$81.79 and US$83.43 per bbl for the years ending December 31, 2024, 2025, 2026, 2027 and 2028 respectively, with 2% escalation thereafter. NSAI assumes cost inflation of 2% per anum.

Values estimated by NSAI assume tax loss carry-forwards associated with ownership of the Wassana field are applied only to taxes levied in respect of that asset, resulting in no taxes payable for the Wassana field in the 1P and 2P cases. The remaining assets are assumed by NSAI to carry their full statutory tax burden.

Summary of Reserves Replacement, Value and Field Life

As compared to the NSAI 2022 Report, the NSAI 2023 Report indicates an addition of 16.4 MMbbls of proved (1P) reserves and 16.3 MMbbls of proved plus probable (2P) reserves, after having produced 7.5 MMbbls of oil in 2023. On both 1P and 2P reserves, this reflects a reserves replacement ratio of 219%.

Based on the mid-point of the Company's 2024 production guidance of 21.5 - 24.5 Mbbls/d (23.0 Mbbls/d), on a 2P reserves basis as of December 31, 2023, the Company estimates its reserves life index to be approximately 4.5 years. Using the same production estimate and 2P reserves as of December 31, 2022, the reserves life index was approximately 3.5 years.

The net present value of estimated future revenue after income taxes, based on a 10% discount rate has increased between the NSAI 2022 Report and the NSAI 2023 Report from US$49.1 million to US$193.9 million on a 1P basis, an increase of 295%. On a 2P basis, the net present value of estimated future revenue after income taxes, based on a 10% discount rate have increased from US$261.0 million to US$428.5 million, an increase of 64%.

The Company estimates that, based on the 2P net present value of estimated future revenue after income taxes, based on a 10% discount rate, plus the Company's 2023 year-end net cash position of US$150.9 million, as disclosed on January 16, 2024, the Company has a 2P net asset value (NAV) of US$579.4 million. Using the current count of shares outstanding, being 103.3 million shares and current foreign exchange rates, Valeura's NAV equates to approximately C$7.56/share.

(1) Cash at December 31, 2023 of US$150.9 million, debt nil.

(2) C$/US$ exchange rate of 0.742

(3) Issued and outstanding as of February 20, 2024

The NSAI 2023 Report indicates an extension in the anticipated end of field life for all assets in Valeura's Thailand portfolio, whether evaluated on 1P or 2P reserves as compared to the NSAI 2022 Report.

(1) Valeura's working interest in Wassana was 89% at December 31, 2022 and 100% at December 31, 2023.

Contingent Oil Resources

NSAI assessed the Company's contingent resources for additional reservoir accumulations and reported estimates in both the NSAI 2023 Report and the NSAI 2022 Report. Contingent resources are heavy crude oil and light/medium crude oil, and are further divided into two subcategories, being Development Unclarified and Development Not Viable. Each subcategory is assigned a percentage risk, reflecting the estimated chance of development. Aggregate totals are provided below.

Of the best estimate 2C contingent resources estimated in the NSAI 2023 Report, on a risked basis: 59% of the estimated volumes are light/medium crude oil, with the remainder being heavy oil; 83% are categorised as Development Unclarified, with the remainder being Development Not Viable. Development Unclarified resources have been assigned risks ranging from 25% to 63%, while Development Not Viable resources have been assigned risks ranging from 14% to 34%.

Comparing the NSAI 2022 Report to the NSAI 2023 Report, the Company has recorded an increase in the best estimate (2C) risked contingent resources of more than three-fold. Valeura's management regards this as a substantial increase in the potential upside within its portfolio.

Further Disclosure and Webcast

Valeura intends to disclose a summary of the NSAI 2023 Report to Thailand's upstream regulator later in February 2024. Thereafter, the Company will publish its estimates of reserves and resources in accordance with the requirements of National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities along with its Annual Information Form for the year ended December 31, 2023 on approximately March 13, 2024.

The Company last completed an independent assessment of its prospective resources in Türkiye, effective December 31, 2018, which is available under Valeura's issuer profile on SEDAR+ at www.sedarplus.com. Valeura has no reserves or contingent resources associated with its properties in Türkiye.

Valeura's management team will host an investor and analyst webcast at 08:00 Calgary /15:00 London / 22:00 Bangkok on Wednesday, February 21, 2024 to discuss its reserves and contingent resources. The live audio and video feed can be accessed via the link below. Written questions may be submitted through the webcast system or by email to IR@valeuraenergy.com.

Webcast link: https://teams.microsoft.com/l/meetup-join/19%3ameeting_NDZiODJmYjMtYTc3MS00YmFlLThhYjctNTNlOTg3MDY0ZjE0%40thread.v2/0?context=%7B%22Tid%22%3A%22a196a1a0-4579-4a0c-b3a3-855f4db8f64b%22%2C%22Oid%22%3A%22241f769c-12ae-4efc-8c14-d2e523040a83%22%2C%22IsBroadcastMeeting%22%3Atrue%2C%22role%22%3A%22a%22%7D&btype=a&role=a

An audio only feed of the event is available by phone using the Conference ID and dial-in numbers below.

Conference ID: 940 829 683#

Dial-in numbers:

Canada: 833-845-9589
Singapore: +65 6450 6302
Thailand: +66 2 026 9035
Türkiye: 00800142034779
UK: 0800 640 3933
USA: 833-846-5630

For further information, please contact:

Valeura Energy Inc. (General Corporate Enquiries) +65 6373 6940
Sean Guest, President and CEO
Yacine Ben-Meriem, CFO
Contact@valeuraenergy.com

Valeura Energy Inc. (Investor Enquiries) +1 403 975 6752 / +44 7392 940495
Robin James Martin, Vice President, Communications and Investor Relations
IR@valeuraenergy.com

Auctus Advisors LLP (Corporate Broker to Valeura) +44 (0) 7711 627 449
Jonathan Wright
Valeura@auctusadvisors.co.uk

CAMARCO (Public Relations, Media Adviser to Valeura) +44 (0) 20 3757 4980
Owen Roberts, Billy Clegg
Valeura@camarco.co.uk

About the Company

Valeura Energy Inc. is a Canadian public company engaged in the exploration, development and production of petroleum and natural gas in Thailand and in Türkiye. The Company is pursuing a growth-oriented strategy and intends to re-invest into its producing asset portfolio and to deploy resources toward further organic and inorganic growth in Southeast Asia. Valeura aspires toward value accretive growth for stakeholders while adhering to high standards of environmental, social and governance responsibility.

Additional information relating to Valeura is also available on SEDAR+ at www.sedarplus.ca.

Oil and Gas Advisories

Reserves and contingent resources disclosed in this news release are based on an independent evaluation conducted by the incumbent independent petroleum engineering firm, NSAI with an effective date of December 31, 2023. The NSAI estimates of reserves and resources were prepared using guidelines outlined in the Canadian Oil and Gas Evaluation Handbook and in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities. The reserves and contingent resources estimates disclosed in this news release are estimates only and there is no guarantee that the estimated reserves and contingent resources will be recovered.

This news release contains a number of oil and gas metrics, including "NAV", "reserves replacement ratio", "RLI", and "end of field life" which do not have standardised meanings or standard methods of calculation and therefore such measures may not be comparable to similar measures used by other companies. Such metrics are commonly used in the oil and gas industry and have been included herein to provide readers with additional measures to evaluate the Company's performance; however, such measures are not reliable indicators of the future performance of the Company and future performance may not compare to the performance in previous periods.

"NAV" is calculated by adding the estimated future net revenues based on a 10% discount rate to net cash, (which is comprised of cash less debt as of December 31, 2023, as disclosed by the Company in is January 16, 2024 press release). NAV is expressed on a per share basis by dividing the total by current basic shares outstanding. NAV per share is not predictive and may not be reflective of current or future market prices for Valeura.

"Reserves replacement ratio" is calculated by dividing the difference in reserves between the NSAI 2023 Report and the NSAI 2022 report, plus actual 2023 production, by the assets' total production before royalties for the calendar year 2023.

"RLI" is calculated by dividing reserves by management's estimated total production before royalties for 2024.

"End of life" is calculated by NSAI as the date at which the monthly net revenue generated by the field is equal to or less than the asset's operating cost.

Reserves

Reserves are estimated remaining quantities of commercially recoverable oil, natural gas, and related substances anticipated to be recoverable from known accumulations, as of a given date, based on the analysis of drilling, geological, geophysical, and engineering data, the use of established technology, and specified economic conditions, which are generally accepted as being reasonable. Reserves are further categorised according to the level of certainty associated with the estimates and may be sub-classified based on development and production status.

Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.

Developed reserves are those reserves that are expected to be recovered from existing wells and installed facilities or, if facilities have not been installed, that would involve a low expenditure (e.g. when compared to the cost of drilling a well) to put the reserves on production.

Developed producing reserves are those reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves may be currently producing or, if shut in, they must have previously been on production, and the date of resumption of production must be known with reasonable certainty.

Developed non-producing reserves are those reserves that either have not been on production, or have previously been on production, but are shut in, and the date of resumption of production is unknown.

Undeveloped reserves are those reserves expected to be recovered from known accumulations where a significant expenditure (e.g., when compared to the cost of drilling a well) is required to render them capable of production. They must fully meet the requirements of the reserves classification (proved, probable, possible) to which they are assigned.

Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.

Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. It is unlikely that the actual remaining quantities recovered will exceed the sum of the estimated proved plus probable plus possible reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of the estimated proved plus probable plus possible reserves.

The estimated future net revenues disclosed in this news release do not necessarily represent the fair market value of the reserves associated therewith.

The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation.

Contingent Resources

Contingent resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies are conditions that must be satisfied for a portion of contingent resources to be classified as reserves that are: (a) specific to the project being evaluated; and (b) expected to be resolved within a reasonable timeframe.

Contingent resources are further categorised according to the level of certainty associated with the estimates and may be sub‐classified based on a project maturity and/or characterised by their economic status. There are three classifications of contingent resources: low estimate, best estimate and high estimate. Best estimate is a classification of estimated resources described in the Canadian Oil and Gas Evaluation Handbook as the best estimate of the quantity that will be actually recovered; it is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate. If probabilistic methods are used, there should be at least a 50 percent probability that the quantities actually recovered will equal or exceed the best estimate.

The project maturity subclasses include development pending, development on hold, development unclarified and development not viable. The contingent resources disclosed in this news release are classified as either development unclarified or development not viable.

Development unclarified is defined as a contingent resource that requires further appraisal to clarify the potential for development and has been assigned a lower chance of development until commercial considerations can be clearly defined. Chance of development is the likelihood that an accumulation will be commercially developed.

Conversion of the development unclarified resources referred to in this announcement is dependent upon (1) the expected timetable for development; (2) the economics of the project; (3) the marketability of the oil and gas production; (4) the availability of infrastructure and technology; (5) the political, regulatory, and environmental conditions; (6) the project maturity and definition; (7) the availability of capital; and, ultimately, (8) the decision of joint venture partners to undertake development.

The major positive factor relevant to the estimate of the contingent development unclarified resources referred to in this news release is the successful discovery of resources encountered in appraisal and development wells within the existing fields. The major negative factors relevant to the estimate of the development unclarified contingent resources referred to in this news release are: (1) the outstanding requirement for a definitive development plan (2) current economic conditions do not support the resource development, (3) limited field economic life to develop the resources and (4) the outstanding requirement for a final investment decision and commitment of all joint venture partners.

Development not viable is defined as a contingent resource where no further data acquisition or evaluation is currently planned and hence there is a low chance of development, there is usually less than a reasonable chance of economics of development being positive in the foreseeable future. The major negative factors relevant to the estimate fo development not viable referred to in this news release are: (1) current economic conditions do not support the resource development, and (2) availability of technical knowledge and technology within the industry to economically support resource development.

If these contingencies are successfully addressed, some portion of these contingent resources may be reclassified as reserves.

The NSAI estimates have been risked, using the chance of development, to account for the possibility that the contingencies are not successfully addressed. Due to the early stage of development for the development unclarified resources, NSAI did not perform an economic analysis of these resources; as such, the economic status of these resources is undetermined and there is uncertainty that any portion of the contingent resources disclosed in this news release will be commercially viable to produce.

Glossary

bbl barrel
Mbbl thousand barrels of oil
MMbbl million barrels of oil

Advisory and Caution Regarding Forward-Looking Information

Certain information included in this news release constitutes forward-looking information under applicable securities legislation. Such forward-looking information is for the purpose of explaining management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project", "target" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this news release includes, but is not limited to: the anticipated economic life of its portfolio; anticipated increase in output from the Nong Yao field, with development of the Nong Yao C accumulation; the view that the Wassana field offers substantially more oil to commercialise than initially envisaged; the Company's intention to continue pursuing growth of the assets through accessing contingent resources and through exploration; the Company's ability to continue driving further value growth for our stakeholders; statements related to the Company's 2024 production guidance of 21.5 - 24.5 Mbbls/d; the anticipated filing date of the Company's Annual information Form; and that contingent resource accumulations provide a future opportunity to access additional hydrocarbon volumes.

In addition, statements related to "reserves" and "resources" are deemed to be forward-looking information as they involve the implied assessment, based on certain estimates and assumptions, that the resources can be discovered and profitably produced in the future.

Forward-looking information is based on management's current expectations and assumptions regarding, among other things: political stability of the areas in which the Company is operating; continued safety of operations and ability to proceed in a timely manner; continued operations of and approvals forthcoming from governments and regulators in a manner consistent with past conduct; future drilling activity on the required/expected timelines; the prospectivity of the Company's lands; the continued favourable pricing and operating netbacks across its business; future production rates and associated operating netbacks and cash flow; decline rates; future sources of funding; future economic conditions; the impact of inflation of future costs; future currency exchange rates; interest rates; the ability to meet drilling deadlines and fulfil commitments under licences and leases; future commodity prices; the impact of the Russian invasion of Ukraine; royalty rates and taxes; future capital and other expenditures; the success obtained in drilling new wells and working over existing wellbores; the performance of wells and facilities; the availability of the required capital to funds its exploration, development and other operations, and the ability of the Company to meet its commitments and financial obligations; the ability of the Company to secure adequate processing, transportation, fractionation and storage capacity on acceptable terms; the capacity and reliability of facilities; the application of regulatory requirements respecting abandonment and reclamation; the recoverability of the Company's reserves and contingent resources; ability to attract a partner to participate in its tight gas exploration/appraisal play in Türkiye; future growth; the sufficiency of budgeted capital expenditures in carrying out planned activities; the impact of increasing competition; the ability to efficiently integrate assets and employees acquired through acquisitions; global energy policies going forward; future debt levels; and the Company's continued ability to obtain and retain qualified staff and equipment in a timely and cost efficient manner. In addition, the Company's work programmes and budgets are in part based upon expected agreement among joint venture partners and associated exploration, development and marketing plans and anticipated costs and sales prices, which are subject to change based on, among other things, the actual results of drilling and related activity, availability of drilling, offshore storage and offloading facilities and other specialised oilfield equipment and service providers, changes in partners' plans and unexpected delays and changes in market conditions. Although the Company believes the expectations and assumptions reflected in such forward-looking information are reasonable, they may prove to be incorrect.

Forward-looking information involves significant known and unknown risks and uncertainties. Exploration, appraisal, and development of oil and natural gas reserves and resources are speculative activities and involve a degree of risk. A number of factors could cause actual results to differ materially from those anticipated by the Company including, but not limited to: the ability of management to execute its business plan or realise anticipated benefits from acquisitions; the risk of disruptions from public health emergencies and/or pandemics; competition for specialised equipment and human resources; the Company's ability to manage growth; the Company's ability to manage the costs related to inflation; disruption in supply chains; the risk of currency fluctuations; changes in interest rates, oil and gas prices and netbacks; potential changes in joint venture partner strategies and participation in work programmes; uncertainty regarding the contemplated timelines and costs for work programme execution; the risks of disruption to operations and access to worksites; potential changes in laws and regulations, the uncertainty regarding government and other approvals; counterparty risk; the risk that financing may not be available; risks associated with weather delays and natural disasters; and the risk associated with international activity. See the most recent annual information form and management's discussion and analysis of the Company for a detailed discussion of the risk factors.

Certain forward-looking information in this news release may also constitute "financial outlook" within the meaning of applicable securities legislation. Financial outlook involves statements about Valeura's prospective financial performance or position and is based on and subject to the assumptions and risk factors described above in respect of forward-looking information generally as well as any other specific assumptions and risk factors in relation to such financial outlook noted in this news release. Such assumptions are based on management's assessment of the relevant information currently available, and any financial outlook included in this news release is made as of the date hereof and provided for the purpose of helping readers understand Valeura's current expectations and plans for the future. Readers are cautioned that reliance on any financial outlook may not be appropriate for other purposes or in other circumstances and that the risk factors described above or other factors may cause actual results to differ materially from any financial outlook. The forward-looking information contained in this new release is made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward-looking information contained in this new release is expressly qualified by this cautionary statement.

This news release does not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction, including where such offer would be unlawful. This news release is not for distribution or release, directly or indirectly, in or into the United States, Ireland, the Republic of South Africa or Japan or any other jurisdiction in which its publication or distribution would be unlawful.

Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this news release.

This information is provided by Reach, the non-regulatory press release distribution service of RNS, part of the London Stock Exchange. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

SOURCE: Valeura Energy Inc.