Valeura Energy Eyes Transformational Southeast Asia Deals as Thailand Output Set to Rise

Valeura Energy is targeting major Southeast Asian expansion, evaluating three or four potentially transformational acquisitions that could double or triple its producing business. The company is prioritizing growth and reinvestment over near-term dividends or aggressive share buybacks. Thailand production is expected to increase as the Wassana redevelopment could lift output from about 3,000 to 10,000 barrels per day by late next year. Valeura is also pursuing a 40% stake in the G1 and G3 assets, which would add gas production and diversify its oil-focused portfolio. The company has strong financial capacity to fund growth, reporting more than $100 million in quarterly free cash flow, over CAD 300 million in cash and no debt at the end of the second quarter. Reserves doubled to 58 million barrels from 2022 to 2025, supported by a three-year average reserves replacement ratio of 218%.

Valeura Energy is pursuing organic development and acquisitions in Southeast Asia as it seeks to expand its operated oil business in the Gulf of Thailand, according to Robin Martin, the company’s senior vice president of communications and investor relations. Martin said the Canadian company, which is headquartered in Singapore, produces about 22,000 barrels of oil per day from four operated offshore fields in the Gulf of Thailand. Its producing assets include the more mature Manora and Jasmine fields and the earlier-stage Nong Yao and Wassana fields.

Jasmine, developed in 2005 with an expected total output of 7 million barrels, was expected to reach its 100 millionth barrel of production within several weeks of the presentation, Martin said. Nong Yao received a third production facility in 2024, while Wassana is undergoing a redevelopment after Valeura identified substantially more oil than had initially been expected.

Valeura expects the Wassana redevelopment to increase production from about 3,000 barrels per day to approximately 10,000 barrels per day toward the end of next year, followed by a somewhat lower production plateau. Martin said the project would generate an estimated 40% internal rate of return and an 18-month payback period even at an oil price of $60 per barrel.

The company is also working to earn a 40% interest in the G1 and G3 assets in the central Gulf of Thailand, which are operated by Thailand’s national oil company, PTTEP. The assets are adjacent to major existing gas and oil fields, and Valeura expects that new wellhead platforms could be tied into nearby production infrastructure to enable relatively rapid development. Martin said Valeura is awaiting a final administrative step for PTTEP to assign the interest, though the partners have been working on development planning for about a year. He said Valeura expects to make its first final investment decision on a gas development in the area later this year.

The projects would also diversify the company’s portfolio, which is currently oil-focused.

Martin highlighted Valeura’s cash-generation focus, saying the company reported a realized oil price of $106 per barrel during the second quarter. The company generated $150 million in cash flow and more than $100 million in free cash flow during the quarter, he said. He also cited a $77-per-barrel netback in the second quarter and operating costs equivalent to $29 per barrel, despite the impact of higher diesel prices. Valeura reported $154 million of cash flow in the period and ended the second quarter with more than CAD 300 million in cash and no debt, according to Martin.