VALEURA ANNOUNCES THIRD QUARTER 2010 FINANCIAL AND OPERATING RESULTS

CALGARY, Nov. 25 /CNW/ - Valeura Energy Inc. ("Valeura" or the "Corporation") (TSX-V: "VLE") is pleased to report highlights of its unaudited interim financial and operating results for the three and nine month periods ended September 30, 2010, and to provide an update on subsequent developments. The complete quarterly reporting package for the Corporation, including the unaudited interim financial statements and associated management's discussion and analysis, have been filed on SEDAR at www.sedar.com and posted on the Corporation's website at www.valeuraenergy.com.  

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 ("MENA"), the Mediterranean Basin and Latin America.

THIRD QUARTER 2010 HIGHLIGHTS

• On September 2, 2010, announced execution of a farmout agreement (the "Agreement") with Aladdin Middle East Ltd. ("AME") and Guney Yildizi Petrol Uretim Sondaj, Muteahhitlik ve Ticaret A.S. ("GYP") (collectively "AME-GYP"), two affiliated oil and gas exploration and production companies operating in Turkey and controlled by the Turkey-based Sayer Group. 
  
  
• Valeura will farm-in on one production lease containing the Kahta heavy oil field, three exploration licences at Karakilise and five exploration licences at Rubai operated by AME-GYP, all located in southeastern Turkey within the Zagros fold belt, which extends into Turkey from Iraq and Syria and encompasses one of the most prolific hydrocarbon basins in the world.
  
  
• Valeura expects to invest a minimum of US$ 8.8 million (Phase I) by December 31, 2010 in a reservoir redevelopment study on the Kahta field, recompletions of two indicated oil wells, approximately 340 km of 2D seismic and drilling of one exploration well to earn a 25% beneficial interest in the Kahta lease and Karakilise licences and 14.95% in the Rubai licences.
  
  
• Valeura has the option to increase its earning expenditures up to a total of US$ 17.6 million (Phase II) prior to the end of 2011 to increase its beneficial interests on a sliding scale basis up to 50% in Kahta, 50% in the Karakilise licences and 29.9% in the Rubai licences.
  
  
• Completed the first recompletion at the NE Ogunduk-1 well in Rubai licence 2599 and demonstrated producibility of 30 to 50 bopd of 15º API gravity oil at a high water-cut. The well was drilled in 2009 in an apparent flank position on the structure. The well is temporarily suspended pending the results of a possible appraisal well to be spudded at the end of January 2011 targeting a higher structural position to be confirmed with new 2D seismic to be shot in December 2010.
  
  
• Commenced a 250 km 2D seismic acquisition program on the Karakilise licences in late September which is expected to be completed by the end of November 2010 aimed at expanding the prospect and lead inventory on the licences and confirming the location of the Corporation's first exploration drilling location at Altinakar-1 on licence 2674.
  
  
• Petroleum and natural gas sales from Canadian operations in the third quarter of 2010 averaged 243 barrels of oil equivalent per day ("boepd") compared to 336 boepd in the third quarter of 2009.
  
  
• Funds flow from operations in the third quarter of 2010 was negative ($653,959) compared to negative ($176,777) in the third quarter of 2009 reflecting the impact of higher G&A expenses related to increased international business development activities.
  
  
• As at September 30, 2010 the Corporation had a positive working capital balance of $25.5 million, including cash and cash equivalents of $25.1 million, and undrawn standby credit facilities of $3.65 million. This compares to a working capital deficit of $5.0 million as at September 30, 2009.

RESULTS SUMMARY

The acquisition by PanWestern Energy Inc. ("PanWestern") of the shares of Northern Hunter Energy Inc. ("Northern Hunter") on April 9, 2010 pursuant to a plan of arrangement was accounted for under generally accepted accounting principles as a reverse take-over of PanWestern by Northern Hunter. The unaudited interim consolidated results for the Corporation for the third quarter of 2010 reflect the results of the combined operations of PanWestern and Northern Hunter (now Valeura) whereas prior comparative periods represent the results of Northern Hunter only.

(unaudited)		Three Months Ended September 30, 2010		Three Months Ended September 30, 2009		Nine Months Ended September 30, 2010		Nine Months Ended September 30, 2009
Financial ($ except share and per share amounts)
Petroleum and natural gas revenues (net) Funds flow from operations^1 Net income/(loss) Capital expenditures Net working capital surplus/(deficit) Common shares outstanding       Basic       Diluted Share trading       High       Low       Close		794,215 (653,959) (2,198,913) 1,201,856 - - - 0.42 0.27 0.37		897,873 (176,777) (1,174,449) 280,178 - - - - - -		2,548,440 (1,838,402) (7,089,413) 2,094,450 25,539,767 198,677,125 236,879,625 0.95 0.27 0.37		2,397,432 (134,274) (2,175,288) 3,072,557 (5,019,577) - - - - -
Operations
Production       Crude oil & NGL's (bbl/d)       Natural Gas (mcf/d)       Boe/d (@ 6:1)^2 Average reference price       Edmonton light  (Cdn$ per bbl)       AECO (Cdn$ per mcf) Average realized price       Crude oil (Cdn$ per bbl)       Natural gas liquids (Cdn$ per bbl)       Natural gas (Cdn$ per mcf)		92 906 243 74.44 3.55 65.06 38.95 3.49		115 1,325 336 71.36 2.92 63.15 31.28 2.79		89 955 248 76.53 4.12 67.23 43.52 4.05		93 1,221 297 62.45 3.77 58.08 28.52 3.53
Average Operating Netback (Cdn$ per BOE @ 6:1) ^2		10.94		7.17		13.40		8.67

Notes:

1. The above table includes non-GAAP measures, which may not be comparable to other companies. Funds flow from operations is calculated as a cash flow from operating activities before adjustments for asset retirement expenditures and net changes in non-cash working capital. See MD&A for further discussion.
2. BOEs may be misleading, particularly if used in isolation.  A BOE conversion ratio of 6.0 mcf per 1.0 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head.

OUTLOOK

Operations

In Turkey, the Corporation commenced its second well recompletion in late November at the Karakilise-1 well in Licence 2677. The recompletion is targeting to re-establish producibility from the Cretaceous-aged Mardin formation to hold the exploration licence for a further three years. The well had previously produced approximately 50,000 barrels from the Mardin before it was deepened and then suspended in 2006.

The Corporation expects to spud the Altinakar-1 well at the end of November targeting the Ordovician-aged Bedinan formation at a depth of approximately 8,200 ft. Valeura will fund 100% of the drilling cost which is expected to be approximately US$ 4.0 million.

The seismic crew currently completing the Karakilise program is expected to move in early December to the Rubai licences and complete up to a total of 90 km of 2D seismic on the Ogunduk structure and two high impact exploration leads at Bostanci and Cizre.

Completion of the above programs in 2010 is expected to satisfy the Phase I earning requirement.

The optional Phase II earning program of up to an additional US$ 8.8 million could include two to three exploration and appraisal wells in the first half of 2011 at Ogunduk, Bostanci and Kahta and a new 3D seismic program at Kahta to support the assessment of a potential redevelopment program including recompletions, infill drilling and step-out drilling of satellite structures.

The Corporation has sufficient cash to fund both Phases I and II of the earning program (US$ 17.6 million).

With success in holding high potential exploration licences for a further three years and a positive assessment of the redevelopment potential at Kahta, there is potential for a much larger drilling program in Turkey on the exploration licences at Karakilise and Rubai and on the Kahta lease. The Karakilise 2D seismic program, alone, has identified more than 20 exploration prospects and leads on licences 2674 and 2677 in the Bedinan and Mardin formations.

In Canada, the Corporation plans a modest capital program of less than $ 0.1 million in the fourth quarter of 2010 increasing total 2010 expenditures to approximately $1.5 million on programs to mitigate natural declines and reduce operating costs.

The outlook for total corporate capital expenditures in 2010 is approximately $11.5 million.

Business Development

The farm-in arrangement in Turkey establishes a position for Valeura to  potentially create a significant operation in the MENA region.  The Rubai exploration licences in particular are in proximity to major hydrocarbon basins in Syria and Iraq creating greater interest for further business development in this region.  The Corporation has put considerable effort into creating further relationships and potential deal flow in Turkey, including both oil opportunities in southeast Turkey and premium gas opportunities in the Thrace Basin in northwest Turkey near Istanbul. The Thrace Basin is the main gas producing region of the country where high natural gas prices in excess of US$7.00 per mcf are being realized by producers.  The Corporation continues to pursue production and development opportunities in this basin that would diversify the existing assets in Turkey and provide access to immediate cash flow growth.  The Corporation remains focused on obtaining early stage production whether through acquisition or development initiatives.

The Corporation is continuing to pursue its strategy to build a global exploration and production company with a portfolio of assets in up to two regions of the world.  Selected countries in the MENA region, the Mediterranean Basin and Latin America remain of prime interest but the Corporation may pursue acquisitions in other regions on an opportunistic basis that otherwise meet its criteria of acceptable political and contract risk, attractive fiscal and royalty regimes, established infrastructure and significant deal flow.

The Corporation is continuing to pursue farm-ins, asset acquisitions and corporate acquisitions to execute its growth strategy.  Targets include onshore oil and gas assets (conventional and non-conventional) and undercapitalized companies that can provide material exploitation, development and step-out exploration upside.  The Corporation aims to leverage its knowledge of certain countries and hydrocarbon basins and its proven technical and operational skills in applying best available technologies to capture value.  The flow of potential international opportunities continues to be robust.

FORWARD-LOOKING INFORMATION

This news release contains certain forward‐looking statements relating, but not limited, to operational information, the Corporation's anticipated expenditures on the Kahta field in Turkey, the Corporation's plans to:  recomplete two oil wells, acquire seismic and drill one exploration well to earn a 25% beneficial interest in the Kahta lease and Karakilise licences and a 14.95% interest in the Rubai licences; acquire new seismic for Rubai licences 2598, 2599 and 2600, and to spud the Altinakar-1 well; the anticipated satisfaction of the Corporation's Phase I earning requirement in Turkey;  future transaction and operational plans and the timing associated therewith, anticipated capital budgets and estimated costs. Forward‐looking information typically contains statements with words such as "anticipate", "estimate", "expect", "potential", "could", or similar words suggesting future outcomes. The Corporation cautions readers and prospective investors in the Corporation's securities to not place undue reliance on forward‐looking information as by its nature, it is based on current expectations regarding future events that involve a number of assumptions, inherent risks and uncertainties, which could cause actual results to differ materially from those anticipated by the Corporation.

Forward-looking information is based on management's current expectations and assumptions regarding, among other things, the Corporation's growth strategies, plans for and results of future transactions, results of future seismic programs, future drilling activity, future capital and other expenditures (including the amount, nature and sources of funding thereof), future economic conditions, future currency and exchange rates, continued political stability of the areas in which the Corporation is anticipating completing transactions, the Corporation's continued ability to obtain and retain qualified staff and equipment in a timely and cost efficient manner and the receipt of all necessary approvals for transactions. In addition, budgets are based upon the Corporation's current acquisition plans and exploration plans and anticipated costs both of which are subject to change based on, among other things, the actual results of acquisitions, drilling activity, unexpected delays and changes in market conditions. Although the Corporation believes the expectations and assumptions reflected in such forward‐looking information are reasonable, they may prove to be incorrect.

Forward‐looking information involves significant known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from those anticipated by the Corporation including, but not limited to, risks associated with the oil and gas industry (e.g. operational risks in exploration, inherent uncertainties in interpreting geological data, changes in plans with respect to exploration or capital expenditures, the uncertainty of estimates and projections in relation to costs and expenses, and health, safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with negotiating with third parties in countries other than Canada, the uncertainty regarding government and other approvals and the risk associated with international activity. The forward‐looking information included in this news release is expressly qualified in its entirety by this cautionary statement. The forward‐looking information included herein is made as of the date hereof and Valeura assumes no obligation to update or revise any forward‐looking information to reflect new events or circumstances, except as required by law.

Additional information relating to Valeura is also available on SEDAR at www.sedar.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

For further information:

Jim McFarland, President and CEO
Valeura Energy Inc.
[phone]
[email protected]

Steve Bjornson, CFO
Valeura Energy Inc.
[phone]
[email protected]

www.valeuraenergy.com