REG - Vaalco Energy Inc - FIRST QUARTER 2025 RESULTS
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RNS Number : 0473I Vaalco Energy Inc 09 May 2025
VAALCO ENERGY, INC. ANNOUNCES FIRST QUARTER 2025 RESULTS
HOUSTON - May 9, 2025 - VAALCO Energy, Inc. (NYSE: EGY, LSE: EGY) ("Vaalco"
or the "Company") today reported operational and financial results for the
first quarter of 2025.
First Quarter 2025 Highlights and Recent Key Items:
• Reported net income of $7.7 million ($0.07 per diluted share),
Adjusted Net Income of $6.3 million ($0.06 per diluted share) and Adjusted
EBITDAX((1)) of $57.0 million;
• Produced 17,764 net revenue interest ("NRI")((2)) barrels of oil
equivalent per day ("BOEPD"), above the high end of guidance, or 22,402
working interest ("WI")((3)) BOEPD, toward the high end of guidance;
• Sold 19,074 NRI BOEPD, toward the high end of guidance;
• Entered into new reserves based revolving credit facility with an
initial commitment of $190 million with the ability to grow to $300 million,
secured against certain Vaalco assets;
• Reduced full year capital expenditure guidance by about 10%,
without impacting full year production or sales guidance;
• Acquired 70% WI((3)) in and will operate the CI-705 block in
offshore Côte D'Ivoire;
• Declared quarterly cash dividend of $0.0625 per share of common
stock to be paid on June 27, 2025; and
• Announced that it will host a Capital Markets Day presentation
on Wednesday, May 14, 2025.
(1) Adjusted EBITDAX, Adjusted Net Income, Adjusted Working Capital and
Free Cash Flow are Non-GAAP financial measures and are described and
reconciled to the closest GAAP measure in the attached table under "Non-GAAP
Financial Measures."
(2) All NRI sales and production rates are Vaalco's working interest
volumes less royalty volumes, where applicable.
(3) All WI production rates and volumes are Vaalco's working interest
volumes, where applicable.
George Maxwell, Vaalco's Chief Executive Officer commented, "We delivered
another successful quarter, once again meeting or exceeding our guidance.
Sales for the first quarter were toward the high end of guidance and our NRI
production was above the high end of guidance, leading to solid net income of
$0.07 per diluted share and Adjusted EBITDAX of $57.0 million. We continue to
execute our strategic vision, with multiple accomplishments achieved in the
first quarter that lay the foundation for profitable growth in 2025 and
beyond. We entered into a new credit facility that will supplement our
internally generated cash flow and cash balance to assist in funding our
robust organic growth projects. In Côte D'Ivoire, we commenced the FPSO
refurbishment project and are preparing for a drilling campaign in 2026 to
augment the production and economic life of the Baobab field. In Gabon, we are
preparing for the 2025/2026 drilling program which is scheduled to begin in Q3
2025. While we are continuing with these two major projects, we have decided
to reduce our capital expenditure budget for 2025 by about 10%. We are
delaying discretionary capital spending and are deferring our capital program
in Canada. We are doing all of this without impacting production or sales
forecasts for 2025 due to the strong performance of our assets in Gabon and
Egypt."
"We believe that we are well positioned to fund the meaningful growth and
opportunities that we have planned over the next few years which should lead
to even greater growth and value for the remainder of the decade. We look
forward to providing additional details at our Capital Markets Day next week
describing our diversified asset portfolio and the upside that we believe is
available to drive future organic growth."
Operational Update
Egypt
The start of the 2024 drilling campaign was deferred until late 2024. In Q4
2024, we completed one well. In Q1 2025, we completed an additional five
wells. Four of the five wells that were completed in Q1 2025 were brought
online and had an average initial production rate for the first 30 days of
approximately 135 barrels of oil per day ("BOPD"). The fifth well was brought
online in early Q2 2025. In addition to all new wells successfully increasing
production levels, new reserves and a new production zone were discovered in
the Bakr formation. The Company is reviewing several options to improve flow
as the reservoir contains heavier oil.
The Company continues to perform detailed technical reviews of its newly
drilled and existing wells while also continuing to work on enhancing
production through a series of planned workovers and recompletions.
Canada
In the first half of 2024, Vaalco drilled and completed four 2.75 mile lateral
wells in Canada. These wells continue to meet production expectations and the
Company is monitoring their longer-term performance for future drilling
opportunities. In 2025, Vaalco has decided to defer the drilling of additional
wells in Canada to reduce the Company's overall capital expenditures.
Gabon
The Company secured a drilling rig in December 2024 in conjunction with its
2025/2026 drilling program, which is planned to begin in Q3 2025 to drill
multiple development wells, and appraisal or exploration wells, as well as to
perform workovers, with options to drill additional wells. Vaalco plans to
drill the wells at both the Etame platform and at the Seent platform, and
perform a re-drill and several workovers in the Ebouri field to access
production and reserves that were previously shut in and removed from proved
reserves due to the presence of hydrogen sulfide ("H(2)S").
In Q1 2025, Vaalco conducted an extended flow test on the Ebouri 4-H well to
gather information on the H(2)S concentrations at this location to aid in
equipment design and to evaluate Vaalco's chemical crude sweetening process.
The well has flowed for over four months, and the H(2)S concentration is
within modeling expectations, demonstrating Vaalco's ability to treat the oil.
The well has provided additional production, with some additional operating
costs associated with the chemical treatment, adding to the Company's strong
first quarter results.
Côte d'Ivoire
As part of the planned dry dock refurbishment, the Baobab Floating Production
Storage and Offloading vessel ("FPSO") ceased hydrocarbon production on
January 31, 2025 and the final lifting of crude oil from the FPSO took place
in February 2025. The vessel departed from the field in late March 2025 and is
now currently under tow to the shipyard in Dubai for the refurbishment.
Significant development drilling is expected to begin in 2026 after the FPSO
is expected to return to service with potential meaningful additions to
production from the main Baobab field in CI-40, as well as a potential future
development of the Kossipo field, which is also on the license.
In March 2025, Vaalco announced that it had farmed into the CI-705 block
offshore Côte d'Ivoire. Vaalco is the operator of the block with a 70% WI and
a 100% paying interest through a commercial carry arrangement and is
partnering with Ivory Coast Exploration Oil & Gas SAS and PETROCI. The
CI-705 block is located in the prolific Tano basin and is approximately 70
kilometers ("km") to the west of Vaalco's CI-40 Block, where the Baobab and
Kossipo oil fields are located, and 60 km west of ENI's recent Calao
discovery. Block CI-705 covers approximately 2,300 km(2) and is lightly
explored with three wells drilled to date on the block. The water depth across
the block ranges from zero to 2,500 meters. Vaalco has invested $3 million to
acquire its interest in the new block, which it believes has significant
prospectivity.
Financial Update - First Quarter of 2025
Vaalco reported net income of $7.7 million ($0.07 per diluted share) for Q1
2025, which was down 34% compared with net income of $11.7 million ($0.11 per
diluted share) in Q4 2024 and up modestly compared to $7.7 million ($0.07 per
diluted share) in Q1 2024. The decrease in earnings compared with Q4 2024 was
driven by lower sales volume in Q1 2025 of 1,717 MBOE compared to a sales
volume of 1,872 MBOE in Q4 2024 and higher production expense, partially
offset by lower depreciation, depletion and amortization ("DD&A") and
lower income tax expense.
Adjusted EBITDAX totaled $57.0 million in Q1 2025, a 25% decrease from $76.2
million in Q4 2024. The decrease was primarily due to lower sales volumes and
higher production expense. Adjusted EBITDAX was down 8% from $61.7 million
generated in Q1 2024.
Quarterly Summary - Sales and Net Revenue
$ in thousands Three Months Ended March 31, 2025 Three Months Ended December 31, 2024
Gabon Egypt Canada Côte d'Ivoire Total Gabon Egypt Canada Côte d'Ivoire Total
Oil Sales 59,864 57,656 5,325 18,042 $ 140,887 54,172 59,010 6,685 28,045 $ 147,912
NGL Sales - - 1,808 - 1,808 - - 1,965 - 1,965
Gas Sales - - 636 - 636 - - 421 - 421
Gross Sales 59,864 57,656 7,769 18,042 143,331 54,172 59,010 9,071 28,045 150,298
Selling Costs & Carried Interest - (149) (232) - (381) 450 (130) (319) - 1
Royalties & Taxes (7,677) (23,587) (1,357) - (32,621) (7,455) (19,899) (1,224) - (28,578)
Net Revenue 52,187 33,920 6,180 18,042 110,329 47,167 38,981 7,528 28,045 121,721
Oil Sales MMB (working interest) 757 920 80 238 1,995 733 923 99 379 2,134
Average Oil Price Received $79.09 $62.49 $66.17 $75.87 $70.61 $73.92 $63.92 $67.68 $73.90 $69.30
Change 2%
Average Brent Price $75.87 $74.66
Change 2%
Gas Sales MMCF (working interest) - - 413 - 413 - - 431 - 431
Average Gas Price Received - - $1.54 - $1.54 - - $0.98 - $0.98
Change 57 %
Average Aeco Price ($USD) - - $1.43 - $1.43 - - $1.36 - $1.36
Change 5 %
NGL Sales MMB (working interest) - - 69 - 69 - - 75 - 75
Average Liquids Price Received - - $26.39 - $26.39 - - $26.22 - $26.22
Change 1 %
Revenue and Sales Q1 2025 Q1 2024 % Change Q1 2025 vs. Q1 2024 Q4 2024 % Change Q1 2025 vs. Q4 2024
Production (NRI BOEPD) 17,764 16,848 5% 20,775 (14%)
Sales (NRI BOE) 1,717,000 1,490,000 15 % 1,872,000 (8%)
Realized commodity price ($/BOE) $ 64.27 $ 66.43 (3%) $ 64.77 (1) %
Commodity (Per BOE including realized $ 64.34 $ 66.41 (3%) $ 64.48 - %
commodity derivatives)
Total commodity sales ($MM) $ 110.3 $ 100.2 10% $ 121.7 (9%)
In Q1 2025, Vaalco had a net revenue decrease of $11.4 million or 9% compared
to Q4 2024 as total NRI sales volumes of 1,717 MBOE was 8% lower than the Q4
2024 volumes of 1,872 MBOE but was 15% higher compared to 1,490 MBOE for Q1
2024, primarily due to production from the Cote d'Ivoire assets acquired in
April 2024. Q1 2025 NRI sales were toward the high end of Vaalco's guidance.
Costs and Expenses Q1 2025 Q1 2024 % Change Q1 2025 vs. Q1 2024 Q4 2024 % Change Q1 2025 vs. Q4 2024
Production expense, excluding offshore workovers and stock comp ($MM) $ 44.7 $ 32.1 39 % $ 36.5 23%
Production expense, excluding offshore workovers ($/BOE) $ 26.08 $ 21.58 21% $ 19.52 34%
Offshore workover expense ($MM) $ - $ (0.1) -% $ 0.1 -%
Depreciation, depletion and amortization ($MM) $ 30.3 $ 25.8 17 % $ 37.0 (18%)
Depreciation, depletion and amortization ($/BOE) $ 17.65 $ 17.30 2 % $ 19.79 (11%)
General and administrative expense, excluding stock-based compensation ($MM) $ 7.8 $ 5.9 31% $ 7.1 9%
General and administrative expense, excluding stock-based compensation ($/BOE) $ 4.51 $ 3.90 16% $ 3.80 19%
Stock-based compensation expense ($MM) $ 1.4 $ 0.9 50% $ 1.4 (3%)
Current income tax expense (benefit) ($MM) $ 17.7 $ 25.7 (31%) $ 26.2 (32) %
Deferred income tax expense (benefit) ($MM) $ (1.6) $ (3.4) (53%) $ (9.0) (82%)
Total production expense (excluding offshore workovers and stock compensation)
of $44.7 million in Q1 2025 increased by 23% compared to Q4 2024 and 39%
compared to Q1 2024. The increase in Q1 2025 compared to Q1 2024 was primarily
driven by higher expenses in Gabon related to government audit settlements of
approximately $4.7 million (net to Vaalco), additional chemical costs
associated with the H(2)S treatment and to the increased sales associated with
the purchase of the Côte d'Ivoire asset. The increase in Q1 2025 compared to
Q4 2024 was driven by higher expenses in Gabon related to the government audit
settlements and higher chemical costs.
DD&A expense for Q1 2025 was $30.3 million which was lower than $37.0
million in Q4 2024 and higher than $25.8 million in Q1 2024. The decrease in
Q1 2025 DD&A expense compared to Q4 2024 is due primarily to the impact of
the year end 2024 depletion adjustments based on the year end reserve reports.
The increase in Q1 2025 DD&A expense compared to Q1 2024 is due to higher
depletable costs in Côte d'Ivoire partially offset by lower depletable costs
in Gabon, Egypt, and Canada.
General and administrative ("G&A") expense, excluding stock-based
compensation, increased slightly to $7.8 million in Q1 2025 from $7.1 million
in Q4 2024 and increased from $5.9 million in Q1 2024. The increase in G&A
expenses compared to Q1 2024 was primarily due to higher professional service
fees, salaries and wages, and accounting and legal fees. Q1 2025 cash G&A
was within the Company's guidance.
Non-cash stock-based compensation expense was $1.4 million for Q1 2025
compared to $0.9 million for Q1 2024. Non-cash stock-based compensation
expense for Q4 2024 was $1.4 million.
Other income (expense), net, was an expense of $2.4 million for Q1 2025,
compared to an expense of $2.3 million during Q1 2024 and an expense of $9.7
million for Q4 2024. Other income (expense), net, normally consists of foreign
currency losses and interest expense, net. Also in Q4 2024, the Company
recorded a reduction in the bargain purchase gain of $6.4 million as a result
of the change in fair value estimates of the net assets acquired in the
Svenska acquisition.
Income tax expense (benefit) was an expense for Q1 2025 of $16.1 million and
is comprised of current expense of $17.7 million and deferred tax benefit of
$1.6 million. In Q1 2024, income tax expense was $22.3 million and is
comprised of current expense of $25.7 million and deferred tax benefit of $3.4
million. Q4 2024 income tax expense was $17.2 million, and is comprised of
current tax expense of $26.2 million and deferred tax benefit of $9.0 million.
Taxes paid by jurisdiction are as follows:
(in thousands) Gabon Egypt Canada Equatorial Guinea Cote d'Ivoire Corporate and Other Total
Cash/In Kind Taxes Paid:
Three months ended March 31, 2025 $ 30,253 6,953 - - $ 790 - $ 37,996
Capital Investments/Balance Sheet
For the first quarter of 2025, net capital expenditures totaled $58.5 million
on a cash basis and $51.3 million on an accrual basis. These expenditures were
primarily related to costs associated with project costs and long lead items
for Gabon and Côte d'Ivoire and the development drilling program in Egypt.
At the end of the first quarter of 2025, Vaalco had an unrestricted cash
balance of $40.9 million. Working capital at March 31, 2025 was $23.2 million
compared with $56.2 million at December 31, 2024, while Adjusted Working
Capital at March 31, 2025 totaled $40.4 million.
In March 2025, Vaalco entered into a new reserves based revolving credit
facility (the "new facility") with an initial commitment of $190 million and
the ability to grow to $300 million, led by The Standard Bank of South Africa
Limited, Isle of Man Branch with other participating banks and financial
partners. The new facility, which is subject to customary administrative
conditional precedents, replaces the Company's existing undrawn revolving
credit facility that was provided by Glencore Energy UK Ltd. The Company
arranged the new facility primarily to provide short-term funding that may be
needed from time-to-time to supplement its internally generated cash flow and
cash balance as it executes its planned investment programs across its
diversified asset base over the next few years.
Quarterly Cash Dividend
Vaalco paid a quarterly cash dividend of $0.0625 per share of common stock for
the first quarter of 2025 on March 28, 2025. The Company also recently
announced its next quarterly cash dividend of $0.0625 per share of common
stock for the second quarter of 2025 ($0.25 annualized), to be paid on June
27, 2025 to stockholders of record at the close of business on May 23, 2025.
Future declarations of quarterly dividends and the establishment of future
record and payment dates are subject to approval by the Vaalco Board of
Directors.
Hedging
The Company continued to opportunistically hedge a portion of its expected
future production to lock in strong cash flow generation to assist in funding
its capital and shareholder return programs.
The following includes hedges remaining in place as of the end of the first
quarter of 2025:
Weighted Average Hedge Price ($/Bbl)
Settlement Period Commodity Type of Contract Index Average Volumes Hedged (Bbl) Floor Ceiling
April 2025 - June 2025 Oil Collars Dated Brent 70,000 $ 65.00 $ 81.00
July 2025 - September 2025 Oil Collars Dated Brent 60,000 $ 65.00 $ 80.00
Subsequent to March 31, 2025, the Company entered into the following
additional derivative contracts to cover its future anticipated production:
Settlement Period Commodity Type of Contract Index Average Volumes Hedged (GJ)((a)) Weighted Average Hedge Price (CAD/GJ)
May 2025 - October 2025 Natural Gas Swap AECO (7A) 114,000 $ 2.15
a) One gigajoule (GJ) equals one billion joules (J). A gigajoule of natural
gas is approximately 25.5 cubic meters standard conditions.
Settlement Period Commodity Type of Contract Index Average Volumes Hedged (Bbl) Weighted Average Hedge Price ($/Bbl)
July 1, 2025 - July 31, 2025 Oil Swap Dated Brent 100,000 $ 65.45
Capital Markets Day Presentation
Vaalco announced that it will host a Capital Markets Day presentation on
Wednesday, May 14, 2025. The presentation will begin at 8 a.m. Central Time (2
p.m. London Time) and is expected to conclude around 10:00 a.m. Central Time.
The agenda will include presentations by key members of management on Vaalco's
longer-term vision including growth across its diversified, multi-country
asset base.
Participation in the Capital Markets Day is directed to Vaalco's shareholders,
buy side and sell side analysts, as well as large institutional investors and
portfolio managers. The session will be web cast live along with related
presentation materials through Vaalco's web site at www.vaalco.com in the
"Investors" section of the web site. A replay will be archived on the site
shortly after the presentation concludes.
2025 Guidance:
The Company has provided second quarter 2025 guidance and updated its full
year 2025 guidance. All of the quarterly and annual guidance is detailed in
the tables below.
FY 2025 Gabon Egypt Canada Côte d'Ivoire
Production (BOEPD) WI 19250 - 22310 7000 - 8300 9750 - 11100 2200 - 2600 300 - 310
Production (BOEPD) NRI 14500 - 16710 6200 - 7100 6200 - 7200 1800 - 2100 300 - 310
Sales Volume (BOEPD) WI 19850 - 22700 7300 - 8300 9750 - 11100 2200 - 2600 600 - 700
Sales Volume (BOEPD) NRI 14900 - 17200 6300 - 7200 6200 - 7200 1800 - 2100 600 - 700
Production Expense (millions) WI & NRI $148.5 - $161.5 MM
Production Expense per BOE WI $18.00 - $21.50
Production Expense per BOE NRI $24.00 - $28.00
Offshore Workovers (millions) WI & NRI $0 - $10 MM
Cash G&A (millions) WI & NRI $25.0 - $31.0 MM
CAPEX excluding acquisitions (millions) WI & NRI $250 - $300 MM
DD&A ($/BOE) NRI $16.00 - $20.00
Q2 2025 Gabon Egypt Canada Côte d'Ivoire
Production (BOEPD) WI 20000 - 22100 7800 - 8600 10100 - 11200 2100 - 2300 -
Production (BOEPD) NRI 15400 - 16800 6800 - 7500 6900 - 7400 1700 - 1900 -
Sales Volume (BOEPD) WI 22800 - 24900 10600 - 11400 10100 - 11200 2100 - 2300 -
Sales Volume (BOEPD) NRI 17800 - 19300 9200 - 10000 6900 - 7400 1700 - 1900 -
Production Expense (millions) WI & NRI $39.5 - $48.0 MM
Production Expense per BOE WI $18.00 - $23.00
Production Expense per BOE NRI $23.00 - $29.00
Offshore Workovers (millions) WI & NRI $0 - $0 MM
Cash G&A (millions) WI & NRI $6.0 - $8.0 MM
CAPEX excluding acquisitions (millions) WI & NRI $65 - $85 MM
DD&A ($/BOE) NRI $16.00 - $20.00
Conference Call
As previously announced, the Company will hold a conference call to discuss
its first quarter 2025 financial and operating results, Friday, May 9, 2025,
at 9:00 a.m. Central Time (10:00 a.m. Eastern Time and 3:00 p.m. London Time).
Interested parties may participate by dialing (833) 685-0907. Parties in the
United Kingdom may participate toll-free by dialing 08082389064 and other
international parties may dial (412) 317-5741. Participants should request to
be joined to the "Vaalco Energy First Quarter 2025 Conference Call." This call
will also be webcast on Vaalco's website at www.vaalco.com. An archived audio
replay will be available on Vaalco's website.
A "Q1 2025 Supplemental Information" investor deck will be posted to Vaalco's
website prior to its conference call on May 9, 2025 that includes additional
financial and operational information.
About Vaalco
Vaalco, founded in 1985 and incorporated under the laws of Delaware, is a
Houston, Texas, USA based, independent energy company with a diverse portfolio
of production, development and exploration assets across Gabon, Egypt, Côte
d'Ivoire, Equatorial Guinea, Nigeria and Canada.
For Further Information
Vaalco Energy, Inc. (General and Investor Enquiries) +00 1 713 543 3422
Website: www.vaalco.com
Al Petrie Advisors (US Investor Relations) +00 1 713 543 3422
Al Petrie / Chris Delange
Buchanan (UK Financial PR) +44 (0) 207 466 5000
Ben Romney / Barry Archer VAALCO@buchanan.uk.com
Forward Looking Statements
This press release includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered
by the safe harbors created by those laws and other applicable laws and
"forward-looking information" within the meaning of applicable Canadian
securities laws(collectively, "forward-looking statements"). Where a
forward-looking statement expresses or implies an expectation or belief as to
future events or results, such expectation or belief is expressed in good
faith and believed to have a reasonable basis. All statements other than
statements of historical fact may be forward-looking statements. The words
"anticipate," "believe," "estimate," "expect," "intend," "forecast,"
"outlook," "aim," "target," "will," "could," "should," "may," "likely," "plan"
and "probably" or similar words may identify forward-looking statements, but
the absence of these words does not mean that a statement is not
forward-looking. Forward-looking statements in this press release include, but
are not limited to, statements relating to (i) estimates of future drilling,
production, sales and costs of acquiring crude oil, natural gas and natural
gas liquids; (ii) expectations regarding Vaalco's ability to effectively
integrate assets and properties it has acquired as a result of the Svenska
acquisition into its operations; (iii) expectations regarding future
exploration and the development, growth and potential of Vaalco's operations,
project pipeline and investments, and schedule and anticipated benefits to be
derived therefrom; (iv) expectations regarding future acquisitions,
investments or divestitures; (v) expectations of future dividends; (vi)
expectations of future balance sheet strength; and (vii) expectations of
future equity and enterprise value.
Such forward-looking statements are subject to risks, uncertainties and other
factors, which could cause actual results to differ materially from future
results expressed, projected or implied by the forward-looking statements.
These risks and uncertainties include, but are not limited to: risks relating
to any unforeseen liabilities of Vaalco; the ability to generate cash flows
that, along with cash on hand, will be sufficient to support operations and
cash requirements; risks relating to the timing and costs of completion for
scheduled maintenance of the FPSO servicing the Baobab field; and the risks
described under the caption "Risk Factors" in Vaalco's most recent Annual
Report on Form 10-K.
Dividends beyond the second quarter of 2025 have not yet been approved or
declared by the Board of Directors for Vaalco. The declaration and payment of
future dividends remains at the discretion of the Board and will be determined
based on Vaalco's financial results, balance sheet strength, cash and
liquidity requirements, future prospects, crude oil and natural gas prices,
and other factors deemed relevant by the Board. The Board reserves all powers
related to the declaration and payment of dividends. Consequently, in
determining the dividend to be declared and paid on Vaalco common stock, the
Board may revise or terminate the payment level at any time without prior
notice.
Any forward-looking statement made by Vaalco in this press release is based
only on information currently available to Vaalco and speaks only as of the
date on which it is made. Except as may be required by applicable securities
laws, Vaalco undertakes no obligation to publicly update any forward-looking
statement, whether written or oral, that may be made from time to time,
whether as a result of new information, future developments or otherwise.
Other Oil and Gas Advisories
Investors are cautioned when viewing BOEs in isolation. BOE conversion ratio
is based on an energy equivalency conversion method primarily applicable at
the burner tip and does not represent a value equivalency at the wellhead.
Given that the value ratio based on the current price of crude oil as compared
to natural gas is significantly different from the energy equivalencies
described above, utilizing such equivalencies may be incomplete as an
indication of value.
Inside Information
This announcement contains inside information as defined in Regulation (EU)
No. 596/2014 on market abuse which is part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018 ("MAR") and is made in accordance with
the Company's obligations under article 17 of MAR. The person responsible for
arranging the release of this announcement on behalf of Vaalco is Matthew
Powers, Corporate Secretary of Vaalco.
VAALCO ENERGY, INC AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
As of March 31, 2025 As of December 31, 2024
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 40,914 $ 82,650
Receivables:
Trade, net of allowances for credit loss and other of $0.2 million and $0.2 120,252 94,778
million, respectively
Accounts with joint venture owners, net of allowance for credit losses of $1.8 2,847 179
million and $1.5 million, respectively
Egypt receivables and other 3,235 35,763
Other current assets 33,590 24,557
Total current assets 200,838 237,927
Crude oil, natural gas and NGLs properties and equipment, net 562,926 538,103
Other noncurrent assets:
Right of use operating lease assets 16,303 17,254
Right of use finance lease assets 78,862 79,849
Deferred tax assets 48,364 55,581
Other long-term assets 19,810 26,236
Total assets $ 927,103 $ 954,950
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 177,675 $ 181,728
Asset retirement obligations 81,053 78,592
Operating lease liabilities - net of current portion 12,915 13,903
Finance lease liabilities - net of current portion 66,198 67,377
Deferred tax liabilities 85,168 93,904
Other long-term liabilities - 17,863
Total liabilities 423,009 453,367
Total shareholders' equity 504,094 501,583
Total liabilities and shareholders' equity $ 927,103 $ 954,950
VAALCO ENERGY, INC AND SUBSIDIARIES
Consolidated Statements of Operations
Three Months Ended
March 31, 2025 March 31, 2024 December 31, 2024
(in thousands except per share amounts)
Revenues:
Crude oil, natural gas and natural gas liquids sales $ 110,329 $ 100,155 $ 121,721
Operating costs and expenses:
Production expense 44,806 32,089 36,641
Exploration expense - 48 -
Depreciation, depletion and amortization 30,305 25,824 37,047
Transaction costs related to acquisition - 1,313 -
General and administrative expense 9,051 6,710 8,454
Credit losses and other (27) 1,812 1,082
Total operating costs and expenses 84,135 67,796 83,224
Other operating income, net - (166) 10
Operating income 26,194 32,193 38,507
Other income (expense):
Derivative instruments gain (loss), net (74) (847) (365)
Interest expense, net (1,295) (935) (1,092)
Bargain purchase gain - - (6,366)
Other income (expense), net (1,012) (487) (1,828)
Total other income (expense), net (2,381) (2,269) (9,651)
Income before income taxes 23,813 29,924 28,856
Income tax expense 16,083 22,238 17,192
Net income $ 7,730 $ 7,686 $ 11,664
Other comprehensive income (loss):
Currency translation adjustments 117 (2,454) (5,975)
Comprehensive income $ 7,847 $ 5,232 $ 5,689
Basic net income per share:
Net income per share $ 0.07 $ 0.07 $ 0.11
Basic weighted average shares outstanding 103,758 103,659 103,743
Diluted net income per share:
Net income per share $ 0.07 $ 0.07 $ 0.11
Diluted weighted average shares outstanding 103,785 104,541 103,812
VAALCO ENERGY, INC AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31,
2025 2024
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 7,730 $ 7,686
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation, depletion and amortization 30,305 25,824
Exploration expense 146 -
Deferred taxes (1,519) (3,441)
Unrealized foreign exchange loss 1,673 (102)
Stock-based compensation 1,475 898
Cash settlements paid on exercised stock appreciation rights - (154)
Derivative instruments (gain) loss, net 74 847
Cash settlements paid on matured derivative contracts, net 123 (24)
Cash settlements paid on asset retirement obligations - (29)
Credit losses and other (27) 1,812
Other operating loss, net - 166
Equipment and other expensed in operations 972 302
Change in operating assets and liabilities (8,246) (11,953)
Net cash provided by operating activities 32,706 21,832
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment expenditures (58,527) (16,618)
Acquisition of crude oil and natural gas properties (247) -
Net cash used in investing activities (58,774) (16,618)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuances of common stock - 447
Dividend distribution (6,570) (6,463)
Treasury shares (155) (6,344)
Deferred financing costs (5,118) -
Payments of finance lease (2,943) (2,095)
Net cash used in in financing activities (14,786) (14,455)
Effects of exchange rate changes on cash 27 (208)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH (40,827) (9,449)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD 97,726 129,178
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD $ 56,899 $ 119,729
VAALCO ENERGY, INC AND SUBSIDIARIES
Selected Financial and Operating Statistics
(Unaudited)
Three Months Ended
March 31, 2025 March 31, 2024 December 31, 2024
NRI SALES DATA
Crude oil, natural gas and natural gas liquids sales (MBOE) 1,717 1,490 1,872
Average daily sales volumes (BOE) 19,074 16,374 20,352
WI PRODUCTION DATA
Etame Crude oil (MBbl) 767 819 791
Gabon Average daily production volumes (BOEPD) 8,522 9,001 8,598
Egypt Crude oil (MBbl) 920 950 923
Egypt Average daily production volumes (BOEPD) 10,225 10,440 10,035
Canada Crude Oil (MBbl) 80 61 99
Canada Natural Gas (MMcf) 413 469 431
Canada Natural Gas Liquid (MBOE) 69 76 75
Canada Crude oil, natural gas and natural gas liquids (MBOE) 218 215 246
Canada Average daily production volumes (BOEPD) 2,420 2,363 2,669
Côte d'Ivoire Crude oil (MBbl) 111 - 368
Côte d'Ivoire Average daily production volumes (BOEPD) 1,235 - 3,997
Total Crude oil, natural gas and natural gas liquids production (MBOE) 2,016 1,984 2,328
Average daily production volumes (BOEPD) 22,402 21,804 25,300
NRI PRODUCTION DATA
Etame Crude oil (MBbl) 667 713 688
Gabon Average daily production volumes (BOEPD) 7,414 7,835 7,481
Egypt Crude oil (MBbl) 642 641 644
Egypt Average daily production volumes (BOEPD) 7,131 7,044 7,001
Canada Crude Oil (MBbl) 66 51 85
Canada Natural Gas (MMcf) 338 392 371
Canada Natural Gas Liquid (MBOE) 56 63 64
Canada Crude oil, natural gas and natural gas liquids (MBOE) 179 179 211
Canada Average daily production volumes (BOEPD) 1,984 1,971 2,296
Côte d'Ivoire Crude oil (MBbl) 111 - 368
Côte d'Ivoire Average daily production volumes (BOEPD) 1,235 - 3,997
Total Crude oil, natural gas and natural gas liquids production (MBOE) 1,599 1,533 1,911
Average daily production volumes (BOEPD) 17,764 16,850 20,775
AVERAGE SALES PRICES:
Crude oil, natural gas and natural gas liquids sales (per BOE) - WI basis $ 67.03 $ 69.62 $ 65.69
Crude oil, natural gas and natural gas liquids sales (per BOE) - NRI basis $ 64.27 $ 66.43 $ 64.77
Crude oil, natural gas and natural gas liquids sales (Per BOE including $ 64.34 $ 66.41 $ 64.48
realized commodity derivatives) - NRI basis
COSTS AND EXPENSES (Per BOE of sales):
Production expense 26.10 $ 21.54 $ 19.57
Production expense, excluding offshore workovers and stock compensation* 26.05 $ 21.56 $ 19.49
Depreciation, depletion and amortization 17.65 $ 17.33 $ 19.79
General and administrative expense** 5.27 $ 4.50 $ 4.52
Property and equipment expenditures, cash basis (in thousands) $ 58,527 $ 16,618 $ 41,466
* Offshore workover costs excluded for the three
months ended March 31, 2025 and 2024 and December 31, 2024 are $0.0 million,
$(0.1) million and $0.1 million, respectively.
* Stock compensation associated with production
expense excluded from the three months ended March 31, 2025 and 2024 and
December 31, 2024 are immaterial.
** General and administrative expenses include $0.76,
$0.58 and $0.72 per barrel of oil related to stock-based compensation expense
in the three months ended March 31, 2025 and 2024 and December 31, 2024,
respectively.
NON-GAAP FINANCIAL MEASURES
Management uses Adjusted Net Income to evaluate operating and financial
performance and believes the measure is useful to investors because it
eliminates the impact of certain non-cash and/or other items that management
does not consider to be indicative of the Company's performance from period to
period. Management also believes this non-GAAP measure is useful to investors
to evaluate and compare the Company's operating and financial performance
across periods, as well as to facilitate comparisons to others in the
Company's industry. Adjusted Net Income is a non-GAAP financial measure and as
used herein represents net income, plus deferred income tax expense (benefit),
unrealized derivative instrument loss (gain), bargain purchase gain on the
Svenska Acquisition, FPSO demobilization, transaction costs related to the
Svenska acquisition and non-cash and other items.
Adjusted EBITDAX is a supplemental non-GAAP financial measure used by Vaalco's
management and by external users of the Company's financial statements, such
as industry analysts, lenders, rating agencies, investors and others who
follow the industry. Management believes the measure is useful to investors
because it is as an indicator of the Company's ability to internally fund
exploration and development activities and to service or incur additional
debt. Adjusted EBITDAX is a non-GAAP financial measure and as used herein
represents net income, plus interest expense (income) net, income tax expense
(benefit), depreciation, depletion and amortization, exploration expense, FPSO
demobilization, non-cash and other items including stock compensation expense,
bargain purchase gain on the Svenska Acquisition, other operating (income)
expense, net, non-cash purchase price adjustment, transaction costs related to
acquisition, credit losses and other and unrealized derivative instrument loss
(gain).
Management uses Adjusted Working Capital as a transition tool to assess the
working capital position of the Company's continuing operations excluding
leasing obligations because it eliminates the impact of discontinued
operations as well as the impact of lease liabilities. Under the applicable
lease accounting standards, lease liabilities related to assets used in joint
operations include both the Company's share of expenditures as well as the
share of lease expenditures which its non-operator joint venture owners' will
be obligated to pay under joint operating agreements. Adjusted Working Capital
is a non-GAAP financial measure and as used herein represents working capital
excluding working capital attributable to discontinued operations and current
liabilities associated with lease obligations.
Management uses Free Cash Flow to evaluate financial performance and to
determine the total amount of cash over a specified period available to be
used in connection with returning cash to shareholders, and believes the
measure is useful to investors because it provides the total amount of net
cash available for returning cash to shareholders by adding cash generated
from operating activities, subtracting amounts used in financing and investing
activities, effects of exchange rate changes on cash and adding back amounts
used for dividend payments and stock repurchases. Free Cash Flow is a non-GAAP
financial measure and as used herein represents net change in cash, cash
equivalents and restricted cash and adds the amounts paid under dividend
distributions and share repurchases over a specified period.
Free Cash Flow has significant limitations, including that it does not
represent residual cash flows available for discretionary purposes and should
not be used as a substitute for cash flow measures prepared in accordance with
GAAP. Free Cash Flow should not be considered as a substitute for cashflows
from operating activities before discontinued operations or any other
liquidity measure presented in accordance with GAAP. Free Cash Flow may vary
among other companies. Therefore, the Company's Free Cash Flow may not be
comparable to similarly titled measures used by other companies.
Adjusted EBITDAX and Adjusted Net Income have significant limitations,
including that they do not reflect the Company's cash requirements for capital
expenditures, contractual commitments, working capital or debt service.
Adjusted EBITDAX, Adjusted Net Income, Adjusted Working Capital and Free Cash
Flow should not be considered as substitutes for net income (loss), operating
income (loss), cash flows from operating activities or any other measure of
financial performance or liquidity presented in accordance with GAAP. Adjusted
EBITDAX and Adjusted Net Income exclude some, but not all, items that affect
net income (loss) and operating income (loss), and the calculation of these
measures may vary among other companies. Therefore, the Company's Adjusted
EBITDAX, Adjusted Net Income, Adjusted Working Capital and Free Cash Flow may
not be comparable to similarly titled measures used by other companies.
The tables below reconcile the most directly comparable GAAP financial
measures to Adjusted Net Income, Adjusted EBITDAX, Adjusted Working Capital
and Free Cash Flow.
VAALCO ENERGY, INC AND SUBSIDIARIES
Reconciliations of Non-GAAP Financial Measures
(Unaudited)
(in thousands)
Three Months Ended
Reconciliation of Net Income to Adjusted Net Income March 31, 2025 March 31, 2024 December 31, 2024
Net income $ 7,730 $ 7,686 $ 11,664
Adjustment for discrete items:
Unrealized derivative instruments loss (gain) 198 823 96
Bargain purchase gain - - 6,366
Deferred income tax expense (benefit) (1,610) (3,441) (11,781)
Transaction costs related to acquisition 22 1,313 508
Other operating (income) expense, net - 166 (10)
Adjusted Net Income $ 6,340 $ 6,547 $ 6,843
Diluted Adjusted Net Income per Share $ 0.06 $ 0.06 $ 0.07
Diluted weighted average shares outstanding ((1)) 103,785 104,541 103,812
((1) ) No adjustments to weighted average shares outstanding
Three Months Ended
Reconciliation of Net Income to Adjusted EBITDAX March 31, 2025 March 31, 2024 December 31, 2024
Net income $ 7,730 $ 7,686 $ 11,664
Add back:
Interest expense, net 1,295 935 1,092
Income tax expense 16,083 22,238 17,192
Depreciation, depletion and amortization 30,305 25,824 37,047
Exploration expense - 48 -
Non-cash or unusual items:
Stock-based compensation 1,352 899 1,196
Unrealized derivative instruments loss 198 823 96
Bargain purchase gain - - 6,366
Other operating (income) expense, net - 166 (10)
Transaction costs related to acquisition 22 1,313 508
Credit losses and other (27) 1,812 1,082
Adjusted EBITDAX $ 56,958 $ 61,744 $ 76,233
( )
(
)
VAALCO ENERGY, INC AND SUBSIDIARIES
Reconciliations of Non-GAAP Financial Measures
(Unaudited)
(in thousands)
Reconciliation of Working Capital to Adjusted Working Capital March 31, 2025 December 31, 2024 Change
Current assets $ 200,838 $ 237,927 $ (37,089)
Current liabilities (177,675) (181,728) 4,053
Working capital 23,163 56,199 (33,036)
Add: lease liabilities - current portion 17,249 16,895 354
Adjusted Working Capital $ 40,412 $ 73,094 $ (32,682)
Three Months Ended March 31, 2025
Reconciliation of Free Cash Flow (in thousands)
Net cash provided by Operating activities $ 32,706
Net cash used in Investing activities (58,774)
Net cash used in Financing activities (14,786)
Effects of exchange rate changes on cash 27
Total net cash change (40,827)
Add back shareholder cash out:
Dividends paid 6,570
Total cash returned to shareholders 6,570
Free Cash Flow $ (34,257)
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