Valeura Gets Good News in Turkey
Valeura Energy, a junior Canadian producer active in Turkey, said February 6 an independent resource report estimated the mean risked prospective resource of its basin-centred deep gas play in the Thrace Basin at 5.2 trillion ft3, including 165mn barrels of condensate.
“We are pleased to now have an independent evaluation that supports Valeura’s thesis that the Thrace Basin may hold a very large unconventional, basin-centred natural gas-condensate resource,” Valeura CEO Sean Guest said. “Valeura has been maturing this play for almost five years and these efforts culminated in the drilling of the Yamalik-1 natural gas-condensate discovery in 2017 with our partner Statoil.”
The resource report, prepared by DeGolyer & MacNaughton (D&M), evaluated the unconventional prospective resources attributable to basin-centred deep gas prospects associated with Valeura’s holdings at Banarli (50% working interest), West Thrace (31.5% working interest) and South Thrace (81.5% working interest).
The evaluation included the results from Yamalik-1, which encountered a continuous natural gas and condensate column of some 1,300 metres in over-pressured reservoirs below 2,900 metres in the Teslimkoy and Kesan formations. At a total depth of 4,196 metres, the well ended in the midst of a productive formation, with another 800 metres of reservoir below it.
While Yamalik-1 was the first well in the basin-centred play to be extensively fracture stimulated, data from seven earlier wells around the basin also indicated over-pressured gas below 2,500 metres. Yamalik-1 tested 2.9mn ft3/day of gas from four intervals in the Kesan formation.
The D&M report did not assign recoverable reserves, largely because there has been very little stimulation and production testing from the over-pressured zones in the Thrace Basin, and no production. Still, using its experience from similar basins, D&M assumed recovery factors ranging from a low of 25% to a high of 55%, with best and mean estimates coming in at 40%.
“Significantly more delineation drilling, stimulation, and testing will be required to confirm that gas can be commercially recovered from the prospect, and to generate type curves that can be used in a predictive sense,” Valeura said.
Yamalik-1 will be tied in to Valeura’s existing gathering system in the second quarter this year to enable long-term production testing and gas and condensate sales, while a three-well delineation drilling program is expected to be launched in 3Q 2018, once a larger rig can be secured to drill to 5,00 metres. Statoil, which has farmed-in on the Banarli licences, will pay the full costs of the first of those three wells, while costs for the next two will be shared equally between Statoil and Valeura.
“Given the plan to drill an additional two wells, there is the likelihood that Valeura will require equity financing,” investment bank GMP FirstEnergy said in a research note released February 7. “We estimate that Valeura will require equity financing between C$40mn and C$50mn to participate in the upcoming delineation drilling program.”