(Disclosure: The following represents my opinions only. I am not receiving any compensation for writing this article, nor does Hydra Capital have any business relationship with companies mentioned in this post. I am long VLE.TO)
Valeura Energy (VLE.TO, last at $3.05) has released results from the third of four planned tests at the Yamalik-1 well in Thrace Basin, Western Turkey. I said pretty much all I have to say for now in a note from last week, but obviously this test result continues to add to be body of evidence that Valeura and Statoil have a BCGA on their hands here. To summarize the results, I will quote directly from the press release here:
"Two slick-water fracs were carried out in Test #3 to access approximately 26 metres of indicated net gas pay over a depth interval from 3,488 to 3,635 metres. The well was produced for a total of 37 hours. Over the final 24 hours of stable flow, the well was produced at an average restricted rate of approximately 0.9 million cubic feet per day ("MMcf/d") of natural gas. This rate compares to the final 24-hour rate of 0.8 MMcf/d in both Test #1 and Test #2.
Condensate production in the range of 20 to 30 barrels per MMcf was observed in Test #3. The condensate measurement is subject to considerable uncertainty given the nature of the testing protocol and the short duration of the testing."
Measured condensate yields appear to be a little lower than the first two tests, but continue to confirm the liquids potential of the BCGA cell and are a very welcome bonus for a play that I don't think anyone was expecting any condensate from to begin with. The presence of gas and condensate has now been proven over some 650 vertical metres, with the expectation that gas saturation should be pervasive throughout the interval below the regional pressure seal. With aggregate (restricted) rates from the first three tests now totalling 2.5 mmcf/d, Yamalik-1 continues to surpass all pre-drill expectations. Slowly but surely the market is waking up to what's taking shape here and industry is usually a few steps ahead, so it will be very interesting to see how this plays out for Valeura over the coming weeks and months.