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.