What Valeura Energy (VLE) Said on Its Q3 Earnings Call

Key Points

• Strong oil prices boosted cash generation: Valeura reported Q3 operating cash flow of $94 million and free cash flow of $50 million, ending the quarter with a record $385 million in cash and no debt. Its realized oil price was $97.40 per barrel, including a roughly $4 premium to Dubai crude.
• Development projects are progressing: The Wassana platform was installed ahead of schedule, with drilling expected to start by year-end 2026 and first oil targeted around early Q2 2027. Valeura plans to assess the Suraphi discovery around year-end, while the Bussabong gas project is targeting production around the end of 2028.
• Guidance held, with costs and dealmaking in focus: Management maintained production and investment guidance, expecting full-year production in the upper half of its range, but raised operating-cost guidance due to higher diesel prices. Valeura continues to pursue acquisitions, though oil-price volatility is complicating negotiations.

Valeura Energy TSE: VLE reported rising cash flow and a record cash balance for the third quarter of 2026, as strong oil prices and production helped fund development work across its Thailand portfolio.

On a Nov. 12 earnings webcast, CEO Sean Guest said the company ended the quarter with $385 million in cash and saw production trend toward the upper end of its guidance. Management also highlighted a new oil discovery near the Manora field and progress on the Wassana redevelopment.

“These assets are not just a starting position,” Guest said, adding that Valeura sees them continuing to provide cash flow through the 2030s. The company also remains interested in acquisitions, although oil-price volatility has made deals more challenging, he said.

Higher Prices Bolster Cash Flow

Valeura realized an average oil price of $97.40 per barrel in the third quarter, including a premium of about $4 per barrel to Dubai crude, CFO Yacine Ben-Meriem said. That premium was roughly double the level earned a year earlier.

Ben-Meriem said tight physical markets in Asia and higher freight costs have made Valeura’s locally produced oil more valuable to regional buyers. The company has no hedges in place, he said, leaving it exposed to changes in oil prices.

Quarterly cash flow from operations was $94 million, up nearly 30% from a year earlier. For the first nine months of 2026, cash flow from operations rose 37% to $269 million. Quarterly free cash flow was $50 million, while nine-month free cash flow rose 88% to $124 million, according to the CFO.

Valeura spent $41 million on capital expenditures during the quarter, including $18 million on the Wassana development, and $7 million on exploration, mostly for wells that discovered the Suraphi field. An $18 million working-capital inflow, primarily from collecting receivables associated with second-quarter oil liftings, also helped increase the cash balance from $317 million at the start of the quarter.

The company had no debt at quarter-end. Its $75 million revolving credit facility remained undrawn, Ben-Meriem said.

Development Projects Advance

COO Greg Kulawski said Valeura is evaluating Suraphi after three well penetrations from a single location. Around year-end, the company expects to decide whether to conduct further appraisal or move toward a final investment decision on development.

Kulawski said Suraphi volumes are expected to appear as contingent resources in the year-end 2026 assessment and would convert to reserves if a final investment decision is made. Guest said a decision could be based on oil drilled to date, while further development drilling could increase reserves.

At Wassana, the new central processing platform was installed in October ahead of schedule and was being commissioned. Development drilling is expected to begin before the end of 2026, with first oil targeted around the beginning of the second quarter of 2027, Kulawski said. The company is also developing an exploration and appraisal program for the southern part of the block.

In the non-operated G3 block, Valeura and partner PTTEP made a final investment decision in September on the Bussabong gas development. The project calls for two platforms, each with space for 24 wells, tied back to existing infrastructure at the Bongkot field. Production is expected around the end of 2028.

Kulawski said Bussabong reserves are expected to be reflected in Valeura’s year-end assessment, subject to completion of a production-sharing contract amendment. He also said exploration drilling is planned in the G1 and G3 blocks in 2027.

Guidance and Acquisition Outlook

Valeura maintained its production, capital expenditure and exploration expenditure guidance. Production averaged 22,300 barrels per day over the first nine months, and management expects the full-year figure to finish in the upper half of its guidance range, even after moving a Wassana shutdown forward to November.

The company raised its operating expenditure guidance because of higher diesel costs. Third-quarter operating expenses were about $28.10 per barrel, with diesel adding roughly $4 per barrel against plan, Ben-Meriem said.

He estimated the company’s full-year Special Remuneratory Benefit at $32 million to $37 million, depending on oil prices, with a substantial portion likely to be recorded in the fourth quarter. He said no SRB or petroleum income tax payments were due during the remainder of 2026.

Guest said Valeura continues to pursue transformational acquisition opportunities, including monitoring potential asset sales by major oil companies in Indonesia. Deals the company has been considering are still moving ahead, he said, although swings in crude prices are creating challenges for buyers and sellers.

About Valeura Energy (TSE:VLE)

Valeura Energy Inc. is a Canadian public company engaged in the exploration, development and production of petroleum and natural gas in Thailand and Türkiye. The Company is executing a growth-oriented strategy, reinvesting into its producing asset portfolio while deploying capital toward further organic and inorganic growth across Southeast Asia. Valeura is committed to delivering value-accretive growth for all stakeholders, underpinned by high standards of environmental, social and governance responsibility.

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