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1. Company Snapshot

1.a. Company Description

Valeura Energy Inc., together with its subsidiaries, engages in the exploration, development, and production of petroleum and natural gas in Turkey.As of December 31, 2021, the company had interests in six production leases and exploration licenses covering approximately 0.23 million gross acres and 0.19 net acres of deep rights in the Thrace Basin of northwest Turkey.Valeura Energy Inc.


was incorporated in 2000 and is headquartered in Calgary, Canada.

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1.b. Last Insights on VLE

Valeura Energy Inc.'s recent performance has been driven by strong operational and financial updates. The company reported record oil production, averaging 26,109 bbls/d in Q4 2024, resulting in full-year average oil production of 22,825 bbls/d. Additionally, Valeura announced record reserves and resources at year-end 2024, with a 2P reserves replacement ratio of 245%. This suggests a strong foundation for future growth. The company's guidance outlook for 2025 also appears promising, with a focus on continued production growth and reserve replacement.

1.c. Company Highlights

2. Valeura Energy's Earnings Surprise: A Deeper Dive

Valeura Energy reported a strong financial performance in the quarter, with revenues likely driven by higher production and better prices. The company's EPS came in at $0.2073, significantly beating estimates of $0.07. The improvement in financials is attributed to higher production, better prices, and improved cost control, resulting in a notable increase in EBITDAX. Adjusted cash flow from operations also improved, with margins increasing from 35% last year to 39% this year and now just shy of 50%. This translates to generating $0.5 for every dollar received from cash flow from operations.

Publication Date: Nov -23

📋 Highlights
  • PTTEP Farm-In Growth: EARNED 40% interest in Thai blocks, 1,200 sq km seismic data acquired, 4 exploration wells drilled with discoveries.
  • Production Increase: Nong Yao drilling boosted output to 24,500 barrels/day in November, 7% QoQ and 3% YoY growth.
  • Financial Metrics: EBITDAX margin rose over 400 bps, adjusted cash flow margins reached 50%, cash position doubled YoY.
  • Wassana Redevelopment: 20.5 MMbbl 2P reserves confirmed, $16M allocated in Q4, FID achieved for 2027 first oil target.
  • Tax Strategy: $400M tax loss carryforwards from KrisEnergy deal, expected consumption in 2-3 years at $60/bbl+ oil prices.

Operational Highlights

The company's production has increased, with the drilling campaign in Nong Yao field bringing in new wells and production up to 24,500 barrels per day in November. The PTTEP farm-in has significantly increased Valeura's acreage position and set the company up for future growth. The Wassana field redevelopment is also on track, with a new central processing facility being installed, and production expected to continue out to 2043.

Valuation Metrics

Valeura's valuation metrics suggest that the company's shares are relatively undervalued. The P/E Ratio stands at 2.39, indicating that the company's shares are trading at a discount compared to its earnings. The EV/EBITDA ratio is also low at 1.33, suggesting that the company's enterprise value is relatively low compared to its EBITDA. Additionally, the ROE is high at 47.74%, indicating that the company is generating strong returns on equity. With a Free Cash Flow Yield of 24.04%, the company is generating significant cash from its operations.

Growth Prospects

Valeura is well-positioned for future growth, with a strong balance sheet and a solid business unit in Thailand. The company is looking to invest in its business and pursue M&A opportunities, particularly in the G1 and G3 blocks. The PTTEP farm-in has already shown promising results, with discoveries made in the exploration wells. As Yacine Ben-Meriem noted, the company's financial momentum is expected to continue, with a strong focus on cost control and production growth.

Outlook

Analysts estimate next year's revenue growth at -10.4%, but Valeura's strong operational performance and growth prospects suggest that the company is well-positioned to navigate any challenges. With a robust balance sheet and a focus on value-accretive M&A opportunities, Valeura is poised for long-term success. The company's shares may be undervalued, given the strong financial performance and growth prospects, making it an attractive investment opportunity.

3. NewsRoom

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Valeura Energy Inc. Announces Türkiye Joint Venture Agreement

Oct -15

Source:

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Valeura Energy Inc.: Türkiye Joint Venture Agreement

Oct -15

Source: globenewswire.com

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Valeura Energy Inc.: Q3 2025 Operations and Financial Update

Oct -09

Source:

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Valeura Energy Inc Announces Q3 2025 Operations and Financial Update

Oct -09

Source:

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Is Weakness In Valeura Energy Inc. (TSE:VLE) Stock A Sign That The Market Could be Wrong Given Its Strong Financial Prospects?

Oct -07

Source:

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Valeura Ranked No. 1 of Canada's Top Growing Companies

Sep -30

Source:

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Valeura Energy Inc. Announces Ranked No. 1 of Canada's Top Growing Companies

Sep -30

Source:

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Discovering Undiscovered Gems in Canada This September 2025

Sep -17

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.63%)

6. Segments

Petroleum and Natural Gas

Expected Growth: 4.6%

Valeura Energy Inc.'s 4.6% growth in Petroleum and Natural Gas is driven by increasing demand for energy, successful exploration and production activities, strategic acquisitions, and favorable government regulations. Additionally, improving operational efficiency, cost savings, and strong commodity prices also contribute to the growth.

Royalties

Expected Growth: 4.83%

Valeura Energy Inc.'s 4.83% royalties growth is driven by increased natural gas production, rising commodity prices, and successful exploration and development activities in Turkey. Additionally, the company's focus on low-cost operations and strategic partnerships have contributed to the growth.

7. Detailed Products

Crude Oil

Valeura Energy Inc. is involved in the exploration, development, and production of crude oil in Turkey. The company focuses on extracting crude oil from its operated fields in the Thrace Basin.

Natural Gas

Valeura Energy Inc. is also engaged in the exploration, development, and production of natural gas in Turkey. The company's natural gas operations are focused on the Thrace Basin.

Condensate

Valeura Energy Inc. produces condensate, a type of light oil, as a byproduct of its natural gas operations in Turkey.

Liquefied Petroleum Gas (LPG)

Valeura Energy Inc. also produces LPG, a byproduct of its natural gas operations in Turkey.

8. Valeura Energy Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Valeura Energy Inc. is medium due to the availability of alternative energy sources such as solar and wind power.

Bargaining Power Of Customers

The bargaining power of customers for Valeura Energy Inc. is low due to the lack of negotiating power of individual customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Valeura Energy Inc. is medium due to the presence of multiple suppliers in the market.

Threat Of New Entrants

The threat of new entrants for Valeura Energy Inc. is high due to the relatively low barriers to entry in the energy industry.

Intensity Of Rivalry

The intensity of rivalry for Valeura Energy Inc. is high due to the presence of several established players in the energy industry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 20.58%
Debt Cost 8.32%
Equity Weight 79.42%
Equity Cost 8.32%
WACC 8.32%
Leverage 25.91%

11. Quality Control: Valeura Energy Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Valeura Energy

A-Score: 5.7/10

Value: 9.0

Growth: 9.9

Quality: 8.0

Yield: 0.0

Momentum: 4.5

Volatility: 2.7

1-Year Total Return ->

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PrimeEnergy Resources

A-Score: 5.4/10

Value: 6.3

Growth: 8.9

Quality: 7.2

Yield: 0.0

Momentum: 7.0

Volatility: 2.7

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Spartan Delta

A-Score: 5.1/10

Value: 5.7

Growth: 4.6

Quality: 5.8

Yield: 1.0

Momentum: 9.5

Volatility: 4.0

1-Year Total Return ->

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Berry

A-Score: 4.9/10

Value: 7.3

Growth: 4.6

Quality: 4.2

Yield: 9.0

Momentum: 1.5

Volatility: 3.0

1-Year Total Return ->

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HighPeak Energy

A-Score: 4.8/10

Value: 7.7

Growth: 9.4

Quality: 5.5

Yield: 3.0

Momentum: 0.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Epsilon Energy

A-Score: 4.7/10

Value: 5.7

Growth: 2.7

Quality: 6.4

Yield: 7.0

Momentum: 1.0

Volatility: 5.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

7.95$

Current Price

7.95$

Potential

-0.00%

Expected Cash-Flows