canaccord comments
Valeura Energy* (VLE : TSX : $1.15), Net Change: 0.19, % Change: 19.79%, Volume: 327,179 TURKISH DELIGHT! Shares of Valeura Energy were surging on Friday after the company announced it has signed a Definitive Agreement with Statoil (STO) for the farmout of its Banarli licence in Turkey's Thrace Basin. Canaccord Genuity Energy Analyst Kimberly Hedlin says Valeura also continues to pursue a partner on its JV lands for the deeper basin-centred gas play. Additionally, the conventional Bati Gurgen-2 sidetrack well has been completed as a producer, testing a restricted rate of 1.0 MMcf/d (167 boe/d). Hedlin views the announcement positively, as it validates Statoil's ongoing interest in the Banarli block, along with the conventional upside potential on Banarli. Based on the terms of the Definitive Agreement, Statoil can earn a 50% interest in the deep formations on the Banarli block in exchange for $6M in back costs and a three-phased carry of at least $30M. The earning program includes at least two deep exploration wells and 3D seismic. To finalize the farmout, the parties require approvals from Turkey's General Directorate of Petroleum Affairs (GDPA). An application is expected to be submitted by the end of August and once approved, Valeura will receive $6M in back payments from Statoil. The company continues to work toward a year-end spud date, although timing will depend on government approvals. Given Statoil's stature and size, Hedlin believes the GDPA will make approvals a top priority