Test Well Boosts Valeura's Confidence in Turkey

Valeura said on Monday that findings from a test well in Turkey's Thrace basin, where it operates with Norway's Equinor, had boosted its confidence in the area's potential for gas fracking.

Toronto-listed Valeura and its partners sit on 20 trillion cubic feet, or roughly 3.5 billion barrels of oil equivalent, of potential gas and condensate resources two hours from Istanbul, which they are fracking at a depth of more than 3 kilometers (1.86 miles).

Valeura CEO Sean Guest said results from the appraisal well supported the company's view that there was a gas accumulation in the Thrace Basin.

"We are encouraged by the results and look forward to now drilling (the well) Devepinar-1, 20 kilometers west, to prove that the play is pervasive across the basin," he said.

Guest added the company was also focusing on the completion and testing program for the Inanli-1 well.

"With several reservoir sweet spots, and intervals of increased natural fracturing identified, we are eager to test flow rates," he said, adding that fracking and testing operations are planned to start around the end of March.

The company, which also produces conventional gas at shallower depths of the Thrace basin, is eyeing a secondary listing on the London stock exchange this year to fund future drilling in the basin.

Norwegian energy giant Equinor got an early foot in the door with a 50 percent stake in the deep gas project. It is paying for seismic data and two test wells and is expected to take over operation of the site at the end of the year.

Valeura could also sell at least part of its stake before the project goes into full commercial production.

Turkey, which imports virtually all of its gas and is looking to lessen its dependence on Russian energy, supports the project.

Valeura says it has not encountered any local protests such as those seen in Britain, which is currently the only European country with active shale operations.

The tight rock targeted by Valeura can be compared to some geologies in the United States that produce gas already, the company said. 

(Reporting By Shadia Nasralla; Editing by Kirsten Donovan)