(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 Reports Final 2014 Results
Link here for full press release:
For me, there were no real surprises. The reported IP30 from Gurgen-3 was 1.1 mmcf/d, which is lower than Gurgen-1 and Gurgen-2, but still a nice result, epecially when you are generating $46.22/boe netbacks like VLE. Q4 production was reported at 1,180 boe/day which generated funds flow from operations of $3.7mm. Annualize that and you're looking at around $14mm/yr assuming that all else is equal. The real bet here is whether or not Banarli is as prospective as I think it is… In the meantime, with its $10mm in positive working capital and 57.9 million shares out, I'm holding this one.
A few numbers below:
1P NPV10BT $0.68/sh
2P NPV10BT $1.86/sh
… plus $10mm positive working capital, no debt (57.9mm shares out)
2P reserves increased from 5.3 mmboe to 5.8 mmboe
$46.22/boe netbacks in most recent Q; generated $3.7mm cash flow for the Q
F&D recycle ratio hovering around 2x
~1,180 boepd net production (all gas)
3D planned on 100%-owned Banarli block for May-June… drilling in Q4
2015 budget of $18-20mm, all internally funded.
Not much to do but wait for late Q3 / early Q4 in my eyes… maybe they pull a rabbit out of the hat and get the deep gas farmed out in the meantime. It'll also be worth keeping an eye out for any discussion of 3D seismic survey results this summer.