Valeura Energy Inc., an upstream natural gas company with assets in the Thrace Basin of Turkey, is pleased to announce that it has executed a Share Purchase Agreement (the “Agreement”) to sell its producing shallow conventional gas business to TBNG Limited (the “Buyer”) for a cash consideration of US$15.5 million, plus royalty payments of up to an additional US$2.5 million.

Proceeds from the deal will add to Valeura’s strong net cash position, which as of September 30, 2020 was approximately US$31 million. Upon completion of this transaction, the incremental cash will bolster the Company’s ability to execute its growth strategy through mergers and acquisitions and further appraisal of its deep gas play. This value-driven M&A strategy aims to add near-term/mid-term production growth and cash flow by focusing on cash flow-generating opportunities, with follow-on growth potential. Valeura remains debt free and in a strong position to negotiate future opportunities.

The Company’s interest in its 20 Tcfe unrisked mean prospective resource deep, tight gas play in the Thrace Basin will be unaffected by this transaction, and Valeura will remain the operator of record for all subject leases and licences. Valeura will also retain access to local gas markets via the existing gas transportation and processing infrastructure under the Agreement, for use in its ongoing deep gas appraisal activities.

Sean Guest, President and CEO commented:

“I am pleased to announce the pending sale of our mature, conventional gas business as a way to strengthen our balance sheet and increase our cash to pursue higher-value growth opportunities. Our objective has been to maximise the value of these mature assets, and today’s monetisation agreement is a key step towards accomplishing that goal. We have re-tooled Valeura into a lean, shrewd, debt-free machine, focused on value growth. To that end, the other pillars of our strategy remain unchanged. We are pursuing near/mid-term opportunities through the mergers and acquisition market intended to add significant growth potential and at the same time, we are continuing in our commitment to Turkey, as we appraise our 20 Tcfe unrisked mean prospective resource deep tight gas play. In all instances, our priority is to add cash-flow generation to the portfolio, along with opportunities for smart re-investment to generate incremental value for shareholders.”

About Valeura Energy

Valeura Energy Inc. (TSX:VLE, LSE:VLU) is a Canada-based public company currently engaged in the exploration, development and production of petroleum and natural gas in Turkey.