How much cash does Valeura really make, and what is a share of it worth?

The words on this page

Real cash (true cash)

What was left in the bank each year after every bill, every tax payment and every well drilled. Not profit, and not "cash flow" as companies usually quote it, which leaves the drilling out. The strictest number there is.

Required return

The yearly return you insist on for taking the risk. A dollar promised in ten years is worth less than a dollar today; this rate says how much less. 9% is a common professional figure for a large Canadian producer; the reserve engineers use 10%.

Well life (reserve life)

How long the wells keep producing. After the life you choose, nothing is counted. Netherland, Sewell and Associates evaluated 57.8 million barrels of proved plus probable reserves at 31 December 2025 (37.9 million proved), a record for the company. Against 2025 production of 8.5 million barrels that is about 6.8 years on 2P and 4.5 years proved, and Valeura has replaced roughly 200 per cent of production for three straight years. The model default uses 7 years, which gives no credit for future replacement.

What a share is worth

Every future year's cash, shrunk back to today's dollars at your required return, added up, less the debt, less the cost of cleaning up the wells, divided by the number of shares. Pay less than this and you earn more than your required return; pay more and you earn less.

Where the default growth comes from

2026 guidance of 20,000 to 22,000 bbls a day sits below 2025's 23,242 while the Wassana redevelopment builds toward first oil in Q2 2027, so the growth dial starts flat at 0 per cent rather than assuming either the dip or the planned growth.

The arithmetic, step by step

1. Count the real cash each past year: cash generated by operations as reported, plus interest paid put back, minus rent on leases, minus every dollar spent on wells and plants. Buying and selling assets is shown separately.
2. Project it. The starting cash you choose (an average of the history, or the latest year) grows at your growth dial for ten years, then at the long-run rate for as long as the wells keep producing. Nothing is counted after the well life ends.
3. Bring it back to today. Each year's cash is shrunk by your required return, counted at mid-year because cash arrives through the year rather than on 31 December.
4. Turn it into a share value. Add up the shrunk cash; take off net debt of US$−301M; take off the US$85M cost of cleaning up the wells if that switch is on; divide by 106.21M shares.
5. Work it backwards. "The growth today's price assumes" is the ten-year growth rate at which this start is worth exactly the share price.

Where the numbers come from

• The history is short and the early years describe a different company. The Thai fields arrived in mid 2022 (Wassana) and March 2023 (the Mubadala assets), so 2021 and 2022 are pre-Thailand shell years with negative cash flow, and 2023's reported operating cash flow of US$27.5 million is heavily depressed by acquisition-related working capital and tax timing. The five year average badly understates the current business; the latest year start is the fairer read here.
• The 2023 acquisition line is cash coming in, not going out. Valeura paid about US$10.4 million to complete the Mubadala deal and the acquired companies came with far more cash than that inside them, so the statements show US$238 million of net cash acquired. That one-off inflow sits in the acquisitions row, not in operating cash. The 2022 acquisition figure combines the US$4.0 million paid for the Wassana companies with the US$13.5 million non-refundable deposit paid on signing the Mubadala deal, and 2021's negative figure is the US$14.4 million of net cash received on selling the Turkish business.
• Valeura has no debt. The net debt line by year is aggregated data whose debt figure is almost entirely lease liabilities for the leased production vessels; the company itself has been debt-free since 2024, and today's figure is simply its US$300.7 million of unrestricted cash at 30 June 2026 (a further US$15.8 million is restricted against decommissioning security).
• Leases are the floating production, storage and offloading vessels and the Wassana production unit, and they are real money: the audited statements show principal payments of US$28.1 million in 2023, US$33.1 million in 2024 and US$32.7 million in 2025. The payments cover the interest that accrues on the lease liabilities too, so no separate lease interest is missing from the numbers.
• Interest is cash interest paid, which was US$3.1 million in 2023 on a short-lived acquisition facility and nil in other years.
• Decommissioning obligations for offshore Thailand are significant: US$85.3 million discounted (US$186.3 million undiscounted) at 31 December 2025. In 2026 the regulator agreed a reduction in Manora's expected cost, cutting restricted cash by 31 per cent. The clean-up toggle uses the year end 2025 balance.
• The reserve life is short on paper, about 7 years on 2P at 2025 rates, so the life dial matters more here than for most companies. Valeura has replaced about 200 per cent of production for three straight years and has extended licences, but the model gives no credit for barrels not yet booked.
• 2023 and 2024 net income include large one-off gains (US$239 million of acquisition-related gains in 2023 and a US$109 million deferred tax credit in 2024), so earnings overstate those years; cash is the better guide.
• No production array is shown because 2021 and 2022 had no meaningful production; 2023 to 2025 averaged roughly 20,000 to 23,000 barrels a day.
• Every history year has been hand-checked line by line against the audited annual statements (the 2021, 2023 and 2025 statements cover all five years). Operating cash flow, interest, leases, capital spending, acquisitions, buybacks, net income and weighted share counts all tie to those filings.
• Analyst targets: average US$12.39 across 6 analysts (stockanalysis.com analyst consensus, C$17.21 converted at the Bank of Canada rate of 1.3888, as shown 30 August 2026).

For the technically minded

The method is the one used to evaluate capital projects, from Ted Lawrence, The Business Guide to Economic Evaluations: Projects, Leases, Tariffs and Acquisitions (2017). "Real cash" is the book's project cash flow (chapter 3) with depreciation, debt servicing and debt-like leases restructured out (chapters 4, 5 and 19); short operating leases stay in as a cost of producing, a chapter 19 judgment. The value per share follows the share-purchase evaluation of chapter 20: present value of the company's cash flows at the cost of capital (chapter 10), mid-year discounting (chapter 12), plus non-required assets, less net debt and the decommissioning liability. "What you gain or lose" is the bid-curve NPV of chapter 20; "when you get your money back" is the discounted payout of chapter 13; the bars follow the project profile of chapter 6. The reverse solve on growth is a plain reverse DCF.

Discount-rate anchors: 9% is a common cost-of-equity figure for a large Canadian producer and 10% is the reserve-report convention (PV10). The long-run rate defaults to 0% here: a depleting resource should not be assumed to grow forever, so anything above zero is a judgment you make with the dial.