Valeura Energy Inc. (TSX: VLE) has executed a conditional offer with TransAtlantic Worldwide Ltd., a wholly-owned affiliate of TransAtlantic Petroleum Ltd., to acquire natural gas production of approximately 10.0 MMcf/d (net before royalties), 546,030 net acres of land in the Thrace and Anatolian basins of Turkey and exposure to a world-class unconventional tight gas opportunity in the Thrace Basin for a purchase price of approximately US$61.5 million in cash.
The assets complement Valeura's existing operations in Turkey acquired in two earlier transactions announced in December 2010 and provide exposure to a significant unconventional tight gas opportunity in the Thrace Basin. The acquisition is expected to increase the Valeura's working interest production in Turkey to approximately 12.0 MMcf/d and net acreage holdings to more than 836,000 acres. Total production in Turkey and Canada would be expected to grow to approximately 2,200 BOE/d upon completion of the proposed acquisition.
"This proposed transaction is a great fit with our announced growth strategy, providing immediate cash flow, a meaningful production base in Turkey and a rich portfolio of exploitation and exploration opportunities in both conventional and unconventional gas plays in a premium-priced gas market and diversity to complement our oil focus in southeast Turkey," said Jim McFarland, president and chief executive officer of Valeura. "We are also very pleased to be expanding our relationship with TransAtlantic, which has established a strong upstream business and a large oil and gas services division in Turkey that can provide specialized equipment, particularly in pursuit of the tight gas opportunities."
Unconventional Opportunity
Valeura believes there is upside potential associated with applying North American well completion technology to exploit deeper tight gas sand reservoirs in the Mezardere, Ceylan and Hamitabat formations at depths to the top of these formations from 1,000 to 3,500 m.
In parts of the Thrace Basin, there are up to 9,000 m of Tertiary-aged sediments with a number of tight gas and other unconventional gas targets that are expected to benefit from multi-stage fracture treatments in vertical wells, given the relatively thick nature of the stacked sandstone reservoirs.
On a preliminary basis, the corporation has mapped five closures under existing shallow gas fields on the Thrace Basin onshore Lands at the Mezardere horizon, alone, which could be prospective for tight gas development. Exploration and development of these and other unconventional targets is expected to be an important focus of the Valeura's go forward capital program. A new work program and budget for 2011 on the Thrace Basin onshore Lands is currently under development.
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