Valeura Energy Inc.

Everyone, thanks for joining us for Velour Energy's Q3 2024 webcast conference call. My name is Robin Martin. I'm Velour's Vice President, Investor Relations and Communications. Joining me on this call today are CEO Sean Guest, CFO Yassine Ben Mariam, and COO Greg Kalowski. The time is now one minute past 11 p.m. Singapore time, and we are recording today's event. We'll make a replay of this call available through our website later today. Running order for the event today, in a moment I'm going to hand over to Sean to take us through some prepared remarks. After that, we'll do a Q&A session, and I'll guide us through that portion. We'll be taking live questions this time, and to signal that you'd like to ask a question, you can use the raise hand feature in MS Teams. It's a hand icon toward the top of your screen. Before we get going, I'll just point your attention to our disclaimers and advisories slide, which should be shown on your screen now. These slides are also available on our website. Pointing out in particular the information here or the disclaimers here on forward-looking statements that we may use throughout the presentation. So with that, I will hand slides over to Sean, and you can go ahead.

Yeah, thank you very much, Robin. And welcome, everyone, from good morning in Canada through to good evening or good night over here in Asia. Before I hand over to Greg and then to Yassine, I'll maybe just give the reader's eye dispersion of the key points that we're going to make in the presentation today. So looking first at production, our Q3 production was up slightly on Q2, even though we had some issues we were dealing with with the lasagna field. However, importantly, with non-Yau Seafield brought on, we're now looking at Q4 production of around 26,000 barrels a day, which is up more than 35% if we go back to Q4 in 2023. And even more importantly, this higher production now and the work that we've done this year is really guiding us towards a 2025 production that's above the current consensus from the analysts that we see out there. So good news across production. Now, on the other side of the equation on costs, OpEx is pretty well coming in right on guidance, but we are seeing an improving trend. CapEx is coming at the low end of our initial guidance. But more importantly, because we are drilling, have the rig on contract for the full year, that cost is largely fixed. But with efficiencies, we expect to yield 22 production wells against our original budget, which was at 16%. So we're seeing some really good work from the rig. And that kind of leads us to show that we now have extended that rig for an additional year into Q3 of 2026. And at that, we took advantage of what we saw. There are some good rig rates, and we extended that for another year. We also see a lot of activity we have coming up with the success we've had in increasing production and reserves. Cash flow. Obviously, we ended up with $156 million at the end of Q3. But importantly also, given the timing of liftings, we ended up with a record high inventory for us, so with 1.2 million barrels of oil. Now, the most important thing that we've really come across recently is we have now completed, is fully signed off our corporate restructuring so that all of the tie-three assets, are now under the company that only originally held the Wasana asset. That is going to really accelerate a lot of near-term cash flow as those three producing fields can now access at approximately $400 million in tax losses. That's a huge boost to the cash flow of the company. And then following on that news, you would have seen in the past couple of days, we did an announcement on share buybacks. We now see with the cash position we have, this accelerated cash flow, the strength of the balance sheet, that we have enough cash to really do the organic growth that we're looking at in the assets in Thailand, the M&A opportunities that we're looking at, as well as providing some returns to shareholders. So good news across all of that capital allocation. And before I hand over the final point I want to make is, Since we've taken over these assets in 2022 and 2023 in the Gulf of Thailand here, we've made a number of promises. We've set a number of targets, and I believe we're delivering across all of those, both financially and operationally. We see our guidance. We're going to either confirm all of the estimates on the midpoint or in the end of cost. We see the capex lower. But importantly, really for us, the focus is on those reserves and the resources. And we saw the significant increase at the end of 23 with more than 200% reserve replacement ratio. And I can tell you with the drilling and the field development we've done this year, it's looking very good for 24. So with that, I'll hand over to Greg. And if we could have the next slide, Rob.

Thank you, Sean. Hello, everybody. Let me show just a few more points on production. over the last few months. So in July, production was lower due to the precautionary suspension of the Wasana field related to the underwater inspection. When this was resolved, Wasana Safely resumed production on the 2nd of August. And then on the 15th of August, we achieved first oil from the Nongiab Sea Facility and then quickly ramped up production in the next few days. In September, And in October, production was over 26,000 barrels. And overall, we are very pleased that all facilities are running smoothly, and particularly the new facility, non-GFC. So, just as Sean said, for Q4-24 as a whole, we expect production around 26,000 barrels, and the full year average close to the middle point of the guidance range for this year. And again, importantly, this higher rating Q4 of this year, we expect will underpin guidance for production for 2025, which will be above the current analyst rates. Now, moving to CAPEX. Next slide, Robert, please. So again, CAPEX is coming in at the low end of our guidance, which is quite important, considering that most of the drilling CAPEX is largely fixed through the rig contract and associated contract. Now, we have achieved significant efficiencies in drilling, and this year we expect to deliver 22 production wells against our original plan of 16. And I think it's again worth to highlight that our portfolio provides significant optionality, which we do exploit to continuously optimize the drilling sequence. So in Q2, we added Nongiao A infill production wells in advance of the Nongiao C MOPO being ready for drilling. And then all of this good drilling performance through the year enabled us now to accelerate the Manora into drilling program into 2024. Now a few final points before I hand over to Yasin. So being a responsible operator, safe and efficient is critical to Valora's success and is a real priority for us. Our safety performance so far this year has been excellent. touchwood, with no lost time incidents or no spills. Now, in addition, we expect to deliver around 15% decrease in the greenhouse gas emissions intensity relative to the baseline in 2023, being our first year of operatorship. Furthermore, our low BTU generator project for the Jasmine field is on track to come on stream around the end of Q1. And this will bring us both savings in the cost of diesel and will also remove a significant amount of greenhouse gas emissions. Now, with this, let me hand over to Yasin.

Thank you, Craig. Next slide, please, Robin. Greetings, everyone. I'd like to start by highlighting some key numbers for Q2. As Sean mentioned earlier, our production averaged 22,200,000 pounds in the quarter. Lower than the last quarter. It's good to remind the audience that it's quite common for us to have a mismatch often between what we lift and what we produce. So you can see on the lifting side of what we sold, we sold 1.8 million barrels. This led to us having the highest inventory of oil during the history of the company for around 1.2 million. We did manage to sell a couple of cargoes in totality of 0.5 million barrels on the 1st of October, which obviously now we're going to be booked as sales for the next quarter. In terms of realized prices, in September and August we've seen oil prices coming down, impacting our realized prices. Our crude still traded the premium to Dubai, which is a key benchmark in the Gulf of Thailand in terms of selling the crude. and just automatically came slightly below breadth. This is really on the back of most of our sales occurring at the tail end of the quarter rather than the beginning. On the cost side, we recorded OPEX to borrow of $26.3 to borrow, which is an improvement from the last quarter, again, with a flat OPEX overall. On the CAPEX, it's broadly in line. This is the quarter where we had to pay payments tax payment, which related to the H-1 period in 24, which amounted to around 31 million. Overall, that has led to us recording all the revenue of around 139 million, a needy pay tax of 71 million. This led to a pre-tax cash flow from operation of 64 and a cash flow from operation of around 50. Now, shifting to the balance sheet, we ended up the quarter up with 156 million versus 147 million in the last quarter. Importantly, our adjusted working capital is around 160, which is the highest we have in the company yet. Next slide, please, Robin. Thank you. Now, let's break down the cash flow from operation to Q3. As I mentioned earlier, we have recorded a revenue of $139 million on the back of the $1.8 million of lifting of sales. Our royalty totaled around $17 million this quarter, and our net revenue is around $122 million. With OPEX of $54 million and SG&A, which has been flat, compared to our score of $4 million, we ended up with an adjusted cash flow from operation of around $10 million. And with the PETA accrued, again, these numbers, the $14 million of PETA and ASABI as accrued, $10.5 million of that amount is for PETA and the remainder is for the ASABI. We end up with a cash flow per operation of around 50. Now, if we have managed to record those half a million barrels within a quarter, obviously these are just the cash flow per operations, and we need all these numbers here that you see in the dark colours, we don't need to get any higher. Next slide, please, Robin. Now, moving on to the cash position. So we started the quarter with 147 million. As you can see, our cash flow operations is more to cover our OPEX, and we've got a large headroom of 35 million. In this quarter, we also recorded other income, which consists of a royalty payment that we receive when we host a card field. As a reminder, we are due part of our divestment of the Rosicron field, we receive royalties. And in that 2 million as well is some interest income as well. Car tax at 35, expenses were probably just below 1 million. And as you can see there, there has been a tax payment of 31 million. With the adjustment to the working capital, we end up with a quarter at 156 million. I think it's important to highlight that with the additional cargo coming recorded in sales in Q4, and an exit rate of around 26 million. We're certainly looking forward to a strong quarter in Q4. Next slide, please, Morgan. Now, as Sean mentioned earlier on at the beginning, I think one of the key events this quarter is really this reorganization. And maybe as a general reminder to everyone, this organization allows us mechanically speaking to aggregate all of our assets under the same binary G53, which is the Man Yao, the Nora field, and the Wasana field under one entity. This enables us to effectively use all the PIPA tax losses that are sitting in the Wasana company, which amount as of the 30th of September to just shy of $400 million. Now, what we've put here in front of you is an illustration as to what the impact of that organization what to look like. And again, we've used the last 12 months as an example to illustrate the effect of that. So what you have on the top side of the graph there is effectively our last 12 months' financials. During those 12 months, our production averaged 21,000 pounds, and the real-life price obviously was slightly higher than it is today at 84%. But again, just trying to point you towards the 21,000 miles looks like versus a potential higher number for going forward from today for us. So you can see that, you know, the revenue recorded, the adjusted, you know, I'm not going to walk you through all the numbers, obviously, but maybe I'll start from the adjusted pre-tax cash flow, 311 million there. The PIPA component paid on that amount is around 82 million. and the SRV was $10 million. This has led to cash flow from operation of $222 million. And if you deduct the capex after that, the free cash flow is just shy of $95 million. Now, if we have managed to do this tax reorganization at the beginning of 12 months ago, our cash flow, as you can see from operation, is just shy of $280 million. And most importantly, our free cash flow from operations would have been 152 million, which is an uplift of around 60% compared to without the organization. And just this highlights how while you enhance it and boost the cash flow, this reorganization should be able to deliver to the company. And maybe specifically if you look at it from the PTA perspective, Initially, we would have paid 82 million, but in a possible organization, it would have been 24 million. This 24 million relates really to the PTA from the Jasmine, which is excluded from this organization. Now, if you take that 400 million tax losses, PTA tax losses, and you apply the 50% tax rate, you can see how we end up with an enhanced, at least an additional free cash flow of around 200 million. Our expectation now, looking at the current oil prices and effectively the bond going forward, we'll see these amounts being realized in the next three to four years, all subject to oil prices. Obviously, if the oil price shuts up again, that period, that time window will shorten significantly. Next slide, please, Robin. Now, obviously, with the enhanced cash flow and the strong balance sheet, obviously, our capital allocation framework comes into play as well. It is something that we presented to the market a few months ago. It's worth kind of revisiting it now in light of the tax restructuring and the performances we're expecting going forward from the portfolio. But I think we've been quite, you know, Cultural stands with the market in terms of how we see our priorities when it comes to capital spending. Obviously, investing in our portfolio is a priority for us, and our philosophy, so to speak, is to spend to then say that our production between the 20,000 to 25,000 bottles were limited in the 1930s. And it seems that the work that Craig and his team has done from a technical perspective, again, supports that assertion of this point in time. We also see some exploration that, like, you know, the previous owner of the assets haven't really kind of gone after. And with the work that the team has done, we see some, you know, some interesting opportunities there that we would like to target, again, to enhance from our upcoming portfolio. The one that comes to our mind that we see as critical is one important piece next year is the right tree on Jasmine, which could really unlock significant upside there as well. M&A is a cornerstone in terms of what we do, so therefore any value of M&A is a forefront in terms of how we think about allocations. We have, we are, and we will remain very strict in terms of the selection criteria that we apply for those acquisitions. We are patient money. We will wait for the right opportunities. We don't rush into doing deals just for the sake of doing deals. Value appreciation is critical to any M&A opportunity you look at. And, you know, when we look at those other opportunities, we tend to prefer, you know, cash-generated assets, or at least assets that we can see in a line of sight in terms of their ability to generate cash in production. How we said earlier on with the cash balance rate test today and with the forward cash flow that we expect over the next few years, We see the ability for us to also at the same time while maintaining the hub for M&A and investing in our portfolio. So allocate some of that capital to some share buyback and some shareholders return. So you've seen, we just announced yesterday our approval to start the share buyback program. That's going to be effective from today and it's for one year. And all the shares that are going to be purchased are going to be cancelled. Our target amount, sorry, our maximum amount is around 7.3 million shares, with the data, as you can see there in the box, with the daily maximum of just shy of 80,000 shares per day. Now, we will be careful in terms of how we deploy that capital. The key driver for us in terms of when we think about share buyback is really trying to, you know, It doesn't come as a surprise that we see our share price today as a way and a value compared to what it ought to be. And this is, again, our belief that a value from a shareholder accretion perspective, that also makes sense for us. And with that, I'll hand back to Sean.

Thank you, Sina. Yeah, so just talking about it is weird. started at the beginning about, you know, what have we accomplished in the past 18 months? Because it was really just over 18 months ago that we brought this portfolio together and really started our production operations in Thailand. And as we pointed out, the key thing is, you know, in that production, production up 38% from Q4 2023. So that's great. But again, bring that focus back to reserves and the work that we've done on identifying more opportunities on the infield drilling, on the development we've done. 2023, that was 219% reserve replacement ratio. The reserves were increased across every field, not just one or two. And the end of field life was increased on every field as well. Now, we've obviously pointed that we are looking at a redevelopment of Wasana, and we see significant upsides in oil volumes there, which obviously we see that field being able to successfully develop and push it well into the 2030s or mid-2030s. We did do three successful exploration wells, and a lot of this is demonstrating there is more oil to find out here that we can tie back economically. But importantly, it's with that drilling we've done, the exploration, the other drilling, What we see, the increase we see for the year end 2024 on both the reserves and on the resources is looking good. But obviously, we still have to look ahead until our reserves auditor has completed that work and released it in likely about mid to late February. On the balance sheet, cash is good. We just talked about the corporate restructuring. We're seeing the production increases as well, which is all pointing towards really good cash flows as we go towards 2025. But the last element on the balance sheet is also the abandonment liability, so the ARO. Now, last year we saw a significant reduction in that, and what I can say is we've done quite a bit more engineering work on that this year, and that's a focus for the team as well. It's just demonstrating that also that amount really decreasing as we see the amount of abandonment going on in the Gulf of Thailand. So we're just extremely pleased on how the team in Thailand is performing, how the results are coming forward, and we're really delivering across all aspects of our business. Next slide, Robin. So just looking at how have we really been doing as a company? Well, if you look at We have a 20 company international peer group that trade on Toronto, London, and Australia. And if you look back from 2022, we were the number one performer in that peer group. In 23, we were the number one performer. And again, in 2024, we're the number one performer in that peer group. We have done extremely well year on year. But what I can say, the messaging we kind of hear when we're out there is, generally that I've missed it. People see the large increase we've had, and I think it's creating a bit of a level of nervousness. But we still see that there's significant value upside in the share price, even though we've been delivering these top results. And you can see on the left how we trade with peers on production and cash flow metrics. We're still significantly undervalued of those same 20 company peers. So when you then look at how we're trading on our share prices, today being around 540. If you look back at year-end 23, the NSAI and our cash at that time would have had us at 758. Now that corporate restructuring will increase that, and that brings all those metrics to where are the analysts, where is NSAI in year-end 23 looking of that just under $10 mark. So we're still at a significant discount to that, but you can see where the peers would be or where we would be if we had the trading metrics of our peers. The key point is the NSAI, the analyst numbers do not have the work that we've done this year and where we expect the reserves and resources to be. We still see significant upside in the share prices as we move forward. We see we're still one of the cheapest shares out there and we continue to deliver. So with that, I'd like to hand it back over to Robin. We'll take some questions at this point in time. And thank you, everyone, for joining us.

Thank you.

Thanks, Sean. As I've mentioned, we'll be able to take live questions on this call. Just bear with me a moment to enable that. Your first question is going to come from David Round. So, David, just bear with me a second. I'm going to... change settings here to allow you to unmute your line. You should be able to do that now. Go ahead. This is David Round from Stifel. Whenever you're ready, David.

Hopefully that's working. Can you hear me, Robin? Yes, all good. Go ahead. Perfect. Right. Brilliant. Thanks, guys. Thanks for the presentation. I've got a couple of questions. The first one, I'm going to go back to one of the earlier slides, and there's a comment in there that says you are poised to seed initial expectations for 25. I just wonder, are you able to help us understand how much of that is driven by what you're seeing in terms of better well results versus the increased activity you also talk about?

Yeah, hi Dave, this is Greg. I think it's a combination of both. So I think as we have said, we have managed to drill more wells, more production wells this year than we originally planned, so that's a plus. And some of the wells and some of the fields are performing better than we expected, particularly non-GLC is doing really well.

Okay, great. Second question, tax reorganization, obviously brilliant to see that come through. I'm just wondering whether it's going to change your approach at all. And particularly, I suppose I'm thinking about how you're ranking the opportunities pre and post the tax reorg. I assume some have moved up in the pecking order. Would that be correct?

Hi, David, this is Jesse. Are we talking in terms of our own portfolio or more in terms of M&A?

Your own portfolio and thinking about, obviously, the consolidation effects free of the fields and not the other ones. So whether you're probably incentivized to focus more on those fields than Jasmine.

Well, it's a good question. We're highlighting that, for example, when it comes to our portfolio. Obviously, 90 hour is our most profitable field by far. I think the OPEX per barrel there is just shy of $14. So you can see, for example, in terms of how we think about things, whether it might be better to kind of allocate more work there. But again, it's more of a portfolio approach, I guess, rather than specifically just driven by tax monetization.

Okay, great. And final one, it's just a quick clarification. You mentioned the additional rig contract. Could you just remind me exactly when that contract runs into? And I'd be interested in any kind of inflation that you saw on that contract versus what you had this year, please.

Yeah, so we've extended the contract effectively from September 25 through to August 26. So that's exactly a 12-month extension. and the rate that we signed the exemption on is significantly lower to what we paid this year. So we have seen improvement in the market. I think some of it came on the back of Saudi Arabia releasing a number of rigs, and so we've exploited this opportunity, and given the portfolio that we have, it was a good time to extend the contract.

Brilliant. That's very clear and very helpful. I'll hand it back. Thank you.

Thanks, David. Next question will come from Jesus Sanchez. Jesus, just stand by for a second. I'll allow your microphone. There you go. Feel free to unmute when you're ready. Maybe Jesus is not ready. Let's move on. We'll come back to you. Stéphane Foucault of Octus Advisors. Stéphane, I'm going to allow your microphone. There you go. You're able to unmute.

Yes.

Hi, Jen.

Thanks for taking my questions. I've got two, hopefully quite straightforward. The first one, 4Q24 production is really high, 26,000 barrels per day. Do you see that trade sustainable in 2025, given 2020? probably the amount of flush production you had in Q4. That's my first question. And my second question. So, Sean, you talk about the expected good reserve replacement ratio in 2024. Are there any specific fields that you've been very happy with in terms of reserve addition in 2024? Thank you.

First of all, when we talk about the fields and the reserve replacement, the work is still ongoing, still working with NSAI. But a lot of the work that the team has done is really to go very much in-depth into the fields, the productions, the history, because you now have a lot of data from these fields as to how they're producing as they move into this kind of mid- to later stage of their life. And the performance of the wells is actually – I think doing better than you would model just using with a standard hyperbolic type equation, for example. And it's building up that database to really demonstrate that, you know, we need to model this later life behavior differently to how it was previously being modeled. So there's, let's just say, a lot of really good work being done, not on one field or that, but across the portfolio to really look in much more detail than a lot of companies sometimes do to really then demonstrate to the reserve water where we see the potential. And I think the other question was really related to production. And look, obviously the Nong Yao facility right now is still pretty well producing at its maximum. So the fields, you know, Nongyau C is doing extremely well. The A and B facilities are doing extremely well. You're right. At some point, you'll see that start to come off, and we'll expect that we'll have to do some more infield drilling around that facility next year. That's currently in our plan. So, no, we don't expect to be staying at 26, you know, well through 25, but we do expect to deliver kind of above the consensus type of production. And we'll probably put our guidance out. late, you know, in mid-December into early January, depending on how the production is going and timing.

Okay, thank you. So I'm back on the reserve. If I understand what you're saying, is that it's really across the field that you're relooking at the historical production and recovery factor rather than a specific outperformer in 2024?

There will be some of that, and I think I do do gap analysis on the different wells and different blocks that are producing to try and look for the gaps where they have to investigate more. But they're also even going back and looking at the original stoic that's been used again, going back through the core data and the analysis there. And you have so much more information now on how things are producing.

I see. So difficult to set the stage if there is really one that... was really outperforming and driving reserve addition. That's what you're saying.

What we were really pleased with at year end 23 was that the reserve increases were across all the fields. And we would hope to see a similar effect this year. Okay. But again, you know, we'll let our reserve auditor complete their work.

Thank you.

Thanks. I think Jesus is live there now.

Yeah, do you hear me? Yes. Yes, apologies for earlier. Congrats on the recent developments and the results. Just two questions, very quick questions. As far as I know, there is a 15% tax exit rate in Thailand. Will we have to pay that exit tax before buying back our serves in Toronto?

This is Jesse in No, we don't have to. We do have cash sitting outside of Thailand that we can deploy to do this.

In order to perform the complete buyback program?

Yes.

Perfect. That will be, that's all my questions. Thank you very much.

No problem, Jesus.

Thanks, Jesus. Let's move on to Charlie Sharp of Canaccord. Charlie, you should be able to unmute your mic if you're ready for your question. We'll give you a minute, and I'll remind the audience that if you are interested in asking questions, just use the raise feature in Teams. Can you hear me now? Yes, Charlie, good to go. Sorry about that.

Yeah, apologies. Thanks very much for the presentation. Very comprehensive. Appreciate that. Just sort of going back to Nong Yao and maybe Wasana, I think in the results announcement you indicated the strong performance of Nong Yao and you've reiterated that today and indicated that it has the lowest per unit adjusted OPEX. I just wonder if there's something about Nong Yao that is particularly good that you can apply elsewhere across the portfolio, in particular into the redevelopment of Wasana, the bigger, larger development of Wasana? Are there lessons that you can apply? And then also Nong Yao, what's the current status of Nong Yao Di? Is that likely to be a go or are you still in the in consideration period?

Yes, I think on your first question in terms of Nongyao metrics and performance and learnings and applications for other fields, I would say two things. One is some of the features of Nongyao are due to just the size of the production being at peak at the moment and very efficient operations we've got there, including improvements after we have bought the FSL. So that's one part. I think the second part that's very much replicable across the portfolio is all of our drilling operations and continued improvement that we are applying there and very much all of the ongoing lessons and the way we optimize rig performance, all of this playing across all of the portfolios. And we are also using the size of the portfolio to optimize logistics, reduce fuel usage, and all of those features apply right across, including they will play into our new developments, but it wasn't a redevelopment.

Yeah, there's another point, too, which is on the power generation, I think, which is one that will flow through to Wasan as well, which is Nong Yao has some gas, and it was built with bi-fuel generators, so the gas provides a lot of the power requirements on the rig, whereas the older projects like Jasmine were set up to require diesel. So you're actually using that kind of gas that comes with the oil to supply it. a lot of the power, and that can reduce your off-ex a bit. So we're looking at that for Wisana, even though that is a lower GOR. So the oil itself has less gas in it. There is areas we might be able to use high fuel.

That's great. Thanks. And Nong Yao Di, where's that sitting at the moment?

The team has been working on that. We were just up in Bangkok a couple of days ago and went through with the board a look at the programs. They're working hard on that. They're working up a number of locations and that, and we have notionally plans to get to some more drilling over there.

That's great. Thank you very much.

And just a reminder that if you're interested in asking a live question, just click the raise button. In the meantime, a couple of questions have come in through other means. I'll just voice them for the team here. First one, can you give an update on potential transformative M&A?

Yeah, I think the main thing to point out with the M&A, because this is one that does come up a lot. I can say recently we have been trying to push people to really have a good look at the value of the company. Because, you know, that last slide I showed, there is no M&A in that. There's still significant upside in it prior to M&A. However, the point I'll kind of say is, We are very focused on making sure we get the M&A deals that we want. They have to be accretive and tie in. But at this point, what I can add to that is that there's no deal that we went for that we have not got, right? So deals that we're looking at are still active. There's none that we've actually lost at this point in time. So we're continuing to work on those. We see progress, but the larger ones where we use the term transformative will take a little while.

Okay, next question is on Turkey. Can you discuss Turkey a little bit? Any active discussions? And also, how long can you keep renewing the licenses there?

Yeah, so we got our next extension, finally gets added, approved by the government, and that was issued. We're looking at actually extending that further. We can because we have obviously discovered things there. We can put in an application that we've had a discovery to get the two-year appraisal period, but there is also a potential for a force majeure type of period, given some delays that occurred there. So we're looking to try and extend those somewhere beyond the period that we have these blocks now to go to June 25. We would see our desire to get another two to three years there, and that's a discussion that we're currently ongoing with. There are already in the data room. We're now starting to rejuvenate our efforts, given the fact that we do have these blocks assigned.

Great. One further question. How do you feel about hedging?

At the right price, yes. I mean, obviously, considering the overall market conditions today, It's worth highlighting that the oil price came down by $10 in the period of about two weeks. So we are actively looking at a way to at least protect the balance sheet. I think on the back of the tax consolidation and the strong performance from operationally from the team and the expectation in terms of going forward, we're not worried about effectively operationally being hammered by the oil price, but more trying to preserve that dry powder to further growth. But in short, yes, we are looking at a few hedges.

Yeah, I think we do look at it every quarter. It's something we investigate and discuss, but with no debt, with the cash position to fully cover all of our plans right now, it's not really required. So it's opportunistic. And with where our price is now, I don't think we would see hedging at this point.

It's too expensive.

Yes. Very good. Okay. Well, thanks for that. We've got no further questions on the line at the moment. I'll just mention if there is anything that you'd like to ask, feel free to reach out to us. Email address is just ir at velouraenergy.com. Available anytime. Sorry, one last question having come in here. Let's just get this one. How do you expect to actually use the buyback point forward? Is there a floor share price in mind that you're trying to support? Or what other conditions would enable you to be active in the market?

I think we did say earlier on that we see our current share price doesn't reflect the value of the business. I think that should give you an indication as to how we see this whole share buyback. But Again, we take into consideration a few other aspects of these parameters in terms of defining that number. I don't think I'm going to be able to give you an exact number today. I don't think it's fair for the whole market, but at least give you some guidance of how we think about it.

Very good. Okay, no further questions from the floor. I'll hand it over to you to wrap up, Sean.

Yeah, thank you for joining us here. As I said, we're obviously really pleased with the success we've had this year on bringing on these fields. Production is doing excellent. And we're really looking forward to getting into 2025. We'll get our guidance out, as we said, probably around year end. But we're looking forward to a good year. It's very exciting. Thank you very much all for joining us and supporting us. Thanks, everyone.

That concludes the call.