Valeura Energy (TSE:VLE) executives used a March 19, 2026 webcast to review the company’s 2025 results and outline key operational and strategic priorities, emphasizing stable operating costs, strong cash generation, and multiple growth catalysts in Thailand. Management also addressed the impact of recent oil-market volatility on realized pricing, government take, and potential capital allocation decisions.
2025 operational performance and reserves
Chief Operating Officer Greg Kulawski said 2025 marked “another year of strong delivery,” highlighted by average annual production of 23.2 thousand barrels per day. He also pointed to reserves additions, stating the company achieved nearly 200% reserves replacement in 2025 and over 200% reserves replacement over the past three years.
Wassana redevelopment and near-term production opportunities
Management highlighted progress on the Wassana license redevelopment, where the company took final investment decision (FID) in May 2025. Kulawski said the project economics were attractive even at $60 Brent, citing an estimated ~40% IRR and payback in “less than two years.” He said the redevelopment is expected to reduce unit operating costs at Wassana to levels comparable with Nong Yao, which he described as Valeura’s best current field.
As of the March 2026 webcast, Kulawski said the redevelopment project was about 56% complete, and construction of the facility was “significantly ahead of schedule.” He said the company was evaluating whether the platform could be installed offshore earlier to potentially accelerate first oil, though this remained unconfirmed.
He also said the Wassana central processing platform has been designed to accommodate future satellite tie-ins, as the license includes “significant confirmed volumes” to the north and south. While the main project is being built, Valeura is working to mature satellite developments, including planning exploration and appraisal wells in the southern area and evaluating lower-cost engineering concepts such as minimal-scope wellhead platforms.
In another near-term initiative, Kulawski discussed a plan to add four additional slots on the Nong Yao A platform. He described it as a relatively small project with an estimated budget of about $7 million. Valeura is targeting readiness in November, with the potential to drill new wells starting in Q4. He said Nong Yao wells are typically attractive and may have payback of “less than 12 months,” based on the company’s screening assumptions.
PTTEP farm-in: G1/G3 focus areas and expected gas development timeline
Kulawski also updated investors on Valeura’s strategic farm-in with PTTEP on the G1 and G3 exploration blocks in the Gulf of Thailand, describing them as large acreages near existing infrastructure with a “line of sight to developments.”
He highlighted two focus areas:
- Busabong: Valeura and PTTEP are working toward a gas development FID expected within 2026, with first gas targeted for 2028. Kulawski said the production license application contemplates additional follow-on platform “daisy chains,” and the development is expected to tie into the nearby Bongkot gas field infrastructure.
- Nong Yao Northeast: A set of nearby prospects around the existing Nong Yao field that could potentially justify satellite facilities tied back to Nong Yao A. He said work is ongoing to mature the prospects for exploration and appraisal drilling and begin development planning.
During Q&A, management provided early indicative metrics for Busabong. The team said an initial FID could involve two gas platforms. Chief Executive Officer Sean Guest said a rough estimate of Valeura’s net capital exposure for those platforms was “on the order of” $50 million, with spending likely starting in 2027 and production coming on in “later 2028.” Kulawski added a rough rule of thumb of about 30 MMscf/d per platform (gross), implying around 60 MMscf/d for two platforms, or roughly 10,000 barrels per day of oil equivalent, while stressing the figures were subject to FID and final engineering.
Chief Financial Officer Yacine Ben-Meriem said gas pricing in Thailand is linked to international benchmarks (including crude-linked formulas), rather than a fixed return structure. He characterized the pricing as having an “S-curve” type structure similar to LNG-linked markets, with some downside protection and tempered upside.
Financial results: cash flow, costs, and balance sheet
Ben-Meriem said Valeura generated strong cash flow in 2025 despite a lower oil-price environment than 2024. He said the company lifted 8.47 million barrels during the year at an average price of $70, generating about $594 million.
On costs, Ben-Meriem said adjusted operating expense was $223 million, including $33 million of leases, equivalent to about $26 per barrel. Excluding leases, he said operating costs were $22.4 per barrel, which he said was in line with 2024 and reflected the company’s “lean and disciplined operating models.”
After royalties and adjusted operating costs, Ben-Meriem said Valeura delivered an operating netback of about $300 million, or $35.2 per barrel. He said adjusted cash flow from operations was about $247 million.
On the balance sheet, Ben-Meriem said Valeura started 2025 with $259 million in cash and ended the year with $306 million. He emphasized that Valeura remains debt-free. He said 2025 capital expenditures totaled $189 million, including $44 million dedicated to the Wassana redevelopment project. He also noted the company paid about $35 million of 2024 taxes during 2025, largely related to SRB obligations.
Ben-Meriem also discussed tax loss assets, stating that as of year-end the company had approximately $282 million (also referenced as $83 million in the call) of tax losses available, which management said benefits cash flow in a tax regime it described as having a 50% tax rate.
Oil price volatility, Dubai-linked pricing, and capital allocation
Guest said Valeura’s business was designed to “work extremely well” around $65 per barrel, with resilience below that level. He contrasted that baseline with the current high-price environment driven by geopolitics, arguing that Valeura has strong upside exposure because it operates under a tax-and-royalty system with contractual terms, and because the company has tax shields that reduce cash taxes on three of its four producing assets.
Guest also emphasized that while Valeura guides investors to look at Brent for simplicity, its crude sales are linked to Dubai pricing. He noted that Dubai has historically traded at a small discount to Brent, though in 2025 it was “a little bit above.” However, he said that in the past week or so Dubai was trading at a $40–$50 per barrel premium to Brent, and that Dubai-linked pricing had reached $150–$160 per barrel in recent days. He added that field-level premiums were also higher than normal as buyers focused on security of supply.
In Q&A, Ben-Meriem explained that liftings are priced based on the average price during the month in which the lifting occurs, and that Valeura’s March liftings were expected toward the end of the month, though timing could potentially shift into early April depending on nominations.
Asked about SRB sensitivity, Ben-Meriem said SRB has significant “beta” to oil prices and would likely be elevated in a high-price environment. He suggested that at $150 Dubai, SRB could rise by a factor of about six to seven times compared with a realized price of $60–$65.
Management also addressed hedging, with Ben-Meriem saying the company monitors the market and generally prefers downside protection while retaining upside through instruments such as puts, but indicated put prices appeared “elevated.” On a question about whether Thailand could shift domestic sales pricing away from Dubai toward Brent in a high-price scenario, Ben-Meriem said contracts have been set against Dubai historically and he did not see that changing, adding that recent tenders for April and May were benchmarked to Dubai and reflected some of the best premiums the company has seen.
Guest reiterated Valeura’s capital allocation framework: organic investment, M&A growth, and shareholder returns. He said high prices could slow asset deal activity as sellers revisit expectations, though corporate transactions can remain possible as valuations move in parallel. He said the company would revisit potential shareholder returns with the board if high prices persist and M&A is delayed, listing options such as dividends, special dividends, and various buyback structures.
During Q&A, Guest estimated that if Dubai pricing averaged $150 over the next couple of years, the incremental cash flow impact could be substantial; Ben-Meriem characterized it as around $700 million.
Looking ahead, Guest said the company aims to close the G1/G3 deal in Q2 and announce resource volumes “shortly thereafter,” while also targeting the timing of gas development FIDs in Q3. He said quantifying the value of the PTTEP blocks for the market would be an important next step.
About Valeura Energy (TSE:VLE)
Valeura Energy Inc is an upstream oil & gas company, with a clear strategy to add value for shareholders through growth. The Company is expanding operations organically and through acquisitions in Southeast Asia, focussing on assets with immediate or substantial near-term cash flow, with imbedded reinvestment opportunities.
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