RE:WassanaFROM CORMARK. Valeura (VLE-T, $4.72) – Top Pick, $12.00 Target, Garett Ursu: This morning Valeura reported the suspension of the Wassana field offshore Thailand due to precautionary measures. During a routine underwater safety inspection of the field’s production facility, the mobile offshore production unit (MOPU), a crack was identified within one of the MOPU’s steel jack-up legs. As the crack may pose a risk to the structural integrity of the MOPU, the Company has suspended Wassana operations while further inspection/analysis is conducted. An update on the field’s operating status is expected concurrent with a general corporate Q2/24 update in the second week of July. As the shut-in does not relate to any reservoir or well performance issues and there was no actual incident (i.e. spill or injuries), our positive thesis on the field and Company remains intact, though given the extent of the shut-in is currently unknown, we expect the stock to be weak today. Recall that the 100% WI Wassana field averaged ~4,950 B/d through April and May (according to government data), representing ~25% of our pre-suspension corporate volume estimates for Q2/24. Despite the Wassana shut-in, we reiterate our Top Pick rating and $12.00 target on Valeura given our free cash flow estimates and valuation on the name. – GU