Research Capital Analyst Update todayIMPACT: Wassana Reserves Additions Extend field life beyond 2030.
Although VLE’s Thailand assets are mature, we see the potential for a significant life
extension through additional development and appraisal drilling. We believe a contingent
resource report could quantify some of the remaining upside. Longer life reserves should
also push any realized abandonment liabilities, well into the future. In addition, with
the substantial free cash flow generated from these assets, we expect VLE to quickly
build up a large cash resource, that can be redeployed into maintaining and growing
production from its current assets, or into an acquisition of longer life assets, or returned
to shareholders through a dividend and share buy back program. We reiterate our BUY
recommendation and $8.25 target price equivalent to a 1.8x multiple of our 2024 debt-
adjusted cash flow forecast.