Valeura Energy Inc. has announced that it has executed a definitive agreement to purchase certain non-operated producing natural gas assets in Turkey owned by Edirne Enerji Petrol Arama Üretim Ve Ticaret Limited ?irketi (Erdine) which is a wholly-owned affiliate of Australia-based Otto Energy Ltd (Otto).

"The deal will provide Valeura with a window on Turkey's growing natural gas sector, expands our network of relationships and demonstrates our commitment and ability to expand the business in Turkey," said Jim McFarland, president and chief executive officer of Valeura.

Agreement Summary

  • Purchase price including taxes of US$ 3.1 million, subject to certain operating adjustments to be made at closing based on an effective date of October 1, 2010
  • Assets consist of a 35% interest in the Edirne Exploration License 3839 in the Thrace Basin, the main natural gas producing region of Turkey
  • Natural gas production from the Edirne License in the third quarter of 2010 was approximately 6.3 million cubic feet per day (MMcf/d) (gross) or 2.2 MMcf/d net to Edirne
  • Edirne realized an average gas price of US$ 7.40 per Mcf in the third quarter of 2010 reflecting the premium prices received for natural gas production in Turkey
  • Edirne's revenues from gas sales were approximately US$1.5 million in the third quarter of 2010
  • Closing is expected to occur on or about December 22, 2010

Asset Details

The Edirne License covers an area of 405 km2 (100,080 gross acres) in the Thrace Basin approximately 200 km northwest of Istanbul near the borders with Greece and Bulgaria. An affiliate of TransAtlantic Petroleum Ltd. operates the Edirne Licence. Natural gas is currently produced from 11 wells that are completed in Tertiary-aged sands in the Osmancik formation at a depth of approximately 1,000 feet.

In terms of additional upside, the Thrace Basin is also prospective for deeper conventional and unconventional gas plays, including both tight gas and shale gas. Valeura will be focusing on determining the potential for these types of high impact plays on the Edirne Licence.

"The Otto deal is an important step in growing and diversifying Valeura's asset base in Turkey to include premium priced natural gas in the Thrace Basin," said McFarland. "The assets provide immediate cash flow and complement the oil focused exploration and development program in southeast Turkey under the AME-GYP farm-in deal announced on September 2, 2010, which is targeting to deliver oil production in 2011."

About Valeura

Valeura is a Canada-based public company currently engaged in the exploration, development and production of petroleum and natural gas in Western Canada and Turkey. The Corporation is continuing to pursue a strategy to expand internationally to selected countries in the Middle East and North Africa Region in the Mediterranean Basin and Latin America.