REG - Vaalco Energy Inc - Q4 & FY 2025 RESULTS
13/03/2026 07:00
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RNS Number : 4895W Vaalco Energy Inc 13 March 2026
THIS RELEASE CONTAINS INSIDE INFORMATION
VAALCO ENERGY, INC. ANNOUNCES FOURTH QUARTER AND FULL YEAR 2025 RESULTS
HOUSTON - March 13, 2026 - VAALCO Energy, Inc. (NYSE: EGY, LSE: EGY)
("Vaalco" or the "Company") today reported operational and financial results
for the fourth quarter and full year of 2025, including year-end 2025
reserves. Additionally, the Company provided operational and financial
guidance for the first quarter and full year of 2026.
2025 Full Year Highlights:
• Sold 17,452 net revenue interest ("NRI")((1)) barrels of oil
equivalent per day ("BOEPD"), above the high end of the Company's increased
guidance, while delivering production of 16,556 NRI((1)) BOEPD or 21,160
working interest ("WI")((2)) BOEPD, both above the midpoint of Vaalco's
increased guidance;
• Reported full year ("FY") 2025 net loss of $41.4 million ($0.40
per diluted share) and Adjusted Net Loss((3)) of $4.0 million ($0.04 per
diluted share);
• Generated Adjusted EBITDAX((3)) of $173.4 million and net cash
from operating activities of $212.7 million in FY 2025;
• Reported year-end 2025 SEC proved reserves of 43.0 million barrels
of oil equivalent ("MMBOE"), which included 4 MMBOE of positive revisions,
organic additions and extensions, replacing two-thirds of 2025 production;
• Entered into new reserves based lending facility with a current
commitment level of $255 million and the ability to grow to $300 million;
• Continued strong collection of receivables in Egypt and at year
end 2025 this balance had fallen to $31 million;
• Acquired 70% WI((3)) in and will operate the CI-705 block in
offshore Côte d'Ivoire, which covers approximately 2,300 square kilometers
("km(2")) located in the prolific Tano basin and is approximately 70 km to the
west of Vaalco's CI-40 Block; and
• Returned $26.5 million to shareholders in 2025 through dividends
and has returned over $115 million to shareholders since Q4 2021 through
dividends and share buybacks.
Fourth Quarter 2025 Highlights:
• Sold 18,566 NRI BOEPD, 10% above the high end of guidance, while
production was 16,128 NRI((2)) BOEPD or 20,729 WI((2)) BOEPD;
• Reported net loss of $58.6 million ($0.56 per diluted share),
Adjusted Net Loss((3)) of $2.3 million ($0.02 per diluted share) and Adjusted
EBITDAX((3)) of $42.9 million; and
• Invested $100.1 million in capital expenditures, which included
the successful start to the Gabon Phase Three Drilling Program, continued
Côte d'Ivoire Floating Production Storage and Offloading vessel ("FPSO") Dry
Dock refurbishment and key long leads for the upcoming 2026 drilling campaign
in Côte d'Ivoire and drilling in
Egypt.
2026 Recent Key Items and Outlook:
• Confirmed as operator with a 60% WI in the Kossipo field on the
CI-40 Block, located southwest of the Baobab field, with a field development
plan ("FDP") expected to be completed in second half of 2026;
◦ Further information on the Kossipo field can be found in the Q4 2025
supplemental deck posted on Vaalco's website;
• Divested all Canadian properties for $25.5 million with a closing
date of February 19, 2026;
• Successfully drilled, completed and placed on production the Etame
15H-ST development well, confirming expectations from the ET-15P pilot well
results;
• Planning a 2026 capital budget of $290 to $360 million,
including a drilling campaign at Etame, expected completion of the FPSO
Refurbishment/Reconnection Project, initial Phase 5 Drilling Program at Baobab
and continued field activity in Egypt; and
• Declared quarterly cash dividend of $0.0625 per share of common
stock to be paid on March 27, 2026.
(1) All NRI sales and production rates are Vaalco's working interest
volumes less royalty volumes, where applicable.
(2) All WI production rates and volumes are Vaalco's working interest
volumes, where applicable.
(3) Adjusted EBITDAX, Adjusted Net Income (Loss), Adjusted Working
Capital, Free Cash Flow and Net Debt are Non-GAAP financial measures and are
described and reconciled to the closest GAAP measure in the attached table
under "Non-GAAP Financial Measures."
George Maxwell, Vaalco's Chief Executive Officer, commented, "In 2025, we
successfully completed another year where we delivered consistent quarterly
results that either met or exceeded our guidance. We repeatedly raised
production and sales guidance in 2025 and continued to deliver on those
increased guidance ranges. Operationally, we kicked off the Gabon Phase Three
Drilling Campaign in Q4 2025, we continued to progress the FPSO project for
Baobab and we successfully continued to drill in Egypt. Financially, we
entered into a new reserves based lending facility with the ability to grow to
$300 million and we ended 2025 with an additional $35 million in cash on hand
compared to the prior quarter end and closed the year with a net debt position
of around $1 million. We also generated $173 million in Adjusted EBITDAX,
driven by strong sales and continued to have increased collections from our
receivables, where all of our aged receivables are now largely current. We are
particularly pleased with the progress our team have made in our Egyptian
receivables in 2025. At the start of 2025 our outstanding accounts receivable
for Egypt amounted to $113 million, and at year end 2025 this balance had
fallen to $31 million even after invoicing over $129 million in revenue for
the year. We are pleased to be working with strong partners and host nations
that continue to be very positive toward capital investment in oil and gas
projects."
"In 2026, we began the year by divesting all of our Canadian assets, and
increased our future growth potential in Côte d'Ivoire by being confirmed as
operator with a 60% WI in the Kossipo field. The Kossipo field is a discovery
with material oil in place, located in close proximity to our highly
productive Baobab field on the CI-40 Block. We also have had a positive start
to our Gabon drilling campaign with the ET-15H-ST well. Despite non-commercial
Gamba sands in the West Etame exploration prospect, we are now using the well
bore to side-track and drill another Gamba development well before moving to
the SEENT and Ebouri platforms where we have several wells and workovers
planned to enhance production, lower costs and potentially add reserves. The
FPSO for Baobab is currently off the coast of South Africa and is expected to
return to offshore Côte d'Ivoire by late March, with the field expected to
restart in Q2 2026. Soon thereafter, we plan to start the Phase 5 Drilling
Program at Baobab. We are well on our way to another successful year, as
indicated by our 2026 guidance and believe that we are well positioned to
deliver on our forecasted 225% organic production growth by 2030."
Mr. Maxwell concluded, "I am proud of all that we have accomplished in these
past five years and would like to thank our hard-working employees for helping
us to achieve so many milestones. We have successfully grown Vaalco from a
single asset delivering around 5,000 BOPD to a diversified, multi country
operator well on our way to achieving our goal of 50,000 BOEPD. I believe that
we are well positioned to continue to execute operationally and financially to
achieve all of our growth targets and continue to generate and return value to
our shareholders for the rest of the decade. Our track record of success in
delivering results should provide our investors with assurance that we can
execute on our expanded portfolio of opportunities."
Operational Update
Gabon
The Company's Phase Three Drilling Program in Gabon commenced in the fourth
quarter of 2025 with the drilling of two pilot wells in the Etame field. Based
on the results of the pilot wells, the Company proceeded with the drilling of
the Etame 15H-ST1 development well in the 1V block of Etame in December 2025.
The well was completed and placed on production in January 2026 confirming
expectations from the ET-15P pilot well results. The Company recently
announced that although the West Etame exploration well (ET-14P) encountered
10 meters of high quality sands, the target zone was water-bearing. The lower
portion of the well will be plugged and abandoned but the well bore will be
utilized and sidetracked in the upper portion of the well to drill the ET-14H
development well in the Main Fault Block of Etame. Operations are expected to
be completed in April.
After completing the program at the Etame platform, the Company expects to
move the drill rig to the SEENT and Ebouri platforms where the Company has
several wells and workovers planned to enhance production, lower costs and
potentially add reserves.
In the Niosi and Guduma blocks, the partners initiated its 3D seismic campaign
in November 2025 and was completed in January 2026. The seismic acquisition
was executed to satisfy the minimum commitments under the terms of the Niosi
PSC as well as to inform the decision on whether to proceed into the second
exploration period for the Guduma Block.
Egypt
Vaalco conducted a drilling campaign in Egypt that began in December 2024 and
concluded in the fourth quarter of 2025. During the fourth quarter of 2025,
four development wells were drilled in the Eastern Desert, of which three were
completed during the same period and the fourth well was completed in January
2026. The successful 2025 Egyptian drilling program included an exploration
well in the H-Field, Eastern Desert, that opens a new development area with an
initial flow rate of approximately 450 BOEPD. Additionally, continuous well
interventions, workovers and optimization activities were carried out
throughout the fourth quarter of 2025 to enhance production levels.
Côte d'Ivoire
In connection with the planned dry dock refurbishment, the Baobab FPSO ceased
hydrocarbon production on January 31, 2025, with the final crude oil lifting
in February 2025. The vessel departed the field in late March 2025 for Dubai
for the refurbishment work, which was completed in February 2026. The Baobab
FPSO has commenced mobilization back to Côte d'Ivoire and is expected to
return to offshore Côte d'Ivoire by late March 2026. A rig has been secured
for the planned development drilling program at Baobab which is expected to
begin during the fourth quarter of 2026 after the FPSO returns to service. The
drilling campaign is expected to bring meaningful additions to production from
the main Baobab field in CI-40.
In February 2026, the Company was confirmed as the operator with a 60% WI in
the Kossipo field on the CI-40 Block with a field development plan ("FDP") to
be completed in the second half of 2026. The field was discovered in 2002 with
the Kossipo-1X well and later appraised in 2019 with the Kossipo-2A well,
which tested at over 7,000 BOPD. Vaalco is continuing to analyze ocean bottom
node ("OBN") seismic data that was recently acquired which is helping to drive
and derisk the Company's updated evaluation and assisting with the FDP.
Equatorial Guinea
The Company owns a 60% WI in an undeveloped portion of Block P offshore
Equatorial Guinea where it is the designated operator. The Company has an
existing plan of development of the Venus field discovery on Block P, which
focuses on key areas of drilling evaluations, facilities design, market
inquiries and metocean review. Vaalco has completed the initial Front End
Engineering and Design study that confirmed the viability of the development
concept and is currently evaluating alternative technical solutions which may
deliver enhanced economic value.
Canada
On February 5, 2026, Vaalco announced an agreement for the sale of all of its
producing properties in Canada to a third party for approximately $25.5
million with a closing date of February 19, 2026. The Canadian properties were
producing approximately 1,850 BOEPD at the time of the sale. Vaalco's first
quarter 2026 results will include January and prorated February Canadian
production and financial results.
Year-End 2025 Reserves
Vaalco's SEC proved reserves at December 31, 2025 decreased by 5% to 43.0
MMBOE. Year-end 2025 reserves included 17.5 MMBOE in proved developed reserves
and 25.5 MMBOE in proved undeveloped reserves. The Company's SEC reserves were
prepared by its third-party independent reserve engineers, Netherland, Sewell
& Associates, Inc., ("NSAI") that has provided annual independent
estimates of Vaalco's year-end SEC reserves for over 16 years. In 2025, the
Company added 2.8 MMBOE of SEC proved reserves due to positive revisions and
1.2 MMBOE of SEC proved reserves through extensions and additions. These
additions were offset by 6.0 MMBOE of full year 2025 production. Vaalco had a
reserve replacement ratio of 66% compared to the 6.0 MMBOE of production in
2025.
The standardized measure of Vaalco's SEC proved reserves, utilizing SEC
pricing increased to $410.0 million at December 31, 2025 from $379.4 million
at December 31, 2024. This was primarily driven by the positive revisions,
offset by widening differentials in Gabon and a decrease in year over year SEC
prices which were utilized for the calculation and can be found in the
Company's Annual Report on Form 10-K disclosure, which is expected to be filed
with the SEC no later than March 16, 2026.
MMBoe
Proved SEC Reserves at December 31, 2024 45.0
2025 Production (6.0)
Revisions of Previous Estimates 2.8
Extensions and Additions 1.2
Proved SEC Reserves at December 31, 2025 43.0
At year-end 2025, NSAI provided the 2P WI CPR estimates of proven and probable
reserves which were prepared in accordance with the definitions and guidelines
set forth in the 2018 Petroleum Resources Management Systems approved by the
Society of Petroleum Engineers as of December 31, 2025 using Vaalco's
management assumptions for future commodity pricing and costs shown below
under "WI CPR Reserves". The 2P WI CPR reserves attributable to Vaalco's
ownership are reported on a WI basis prior to deductions for government
royalties. Management's year-end 2025 2P WI CPR estimate of reserves is 90.7
MMBOE to Vaalco's WI, a decrease of 6% from 96.1 MMBOE at December 31, 2024.
The present value discounted at 10% ("PV-10") of Vaalco's 2P WI CPR reserves
at year-end 2025, utilizing management timing assumptions and escalated
pricing and cost assumptions, is $858.8 million, up 26% from $684.1 million at
December 31, 2024.
See "PV-10 Value and Probable Reserves" and "WI CPR Reserves" for additional
information related to 2P WI CPR reserves and 2P PV-10.
Financial Update - Fourth Quarter of 2025
Vaalco reported a net loss of $58.6 million ($0.56 per diluted share) for Q4
2025 which was down compared with net income of $1.1 million ($0.01 per
diluted share) in Q3 2025 and net income of $11.7 million ($0.11 per diluted
share) in Q4 2024. The decrease in earnings compared with Q3 2025 and Q4 2024
was driven primarily by a non-cash impairment charge of $67.2 million to the
carrying value of proved and unproved oil and gas properties for Vaalco's
Canadian assets reported as held for sale.
Adjusted EBITDAX totaled $42.9 million in Q4 2025, compared with $23.7 million
in Q3 2025. The increase was primarily due to higher sales volumes and
slightly higher realized pricing. Adjusted EBITDAX was down from $76.2 million
generated in Q4 2024 primarily due to lower realized pricing and lower sales
volumes.
Quarterly Summary - Sales and Net Revenue
$ in thousands Three Months Ended December 31, 2025 Three Months Ended September 30, 2025
Gabon Egypt Canada Côte d'Ivoire Total Gabon Egypt Canada Côte d'Ivoire Total
Oil Sales $ 56,238 $ 54,842 $ 2,966 $ - $ 114,046 $24,287 $ 58,271 $ 3,278 $ - $ 85,836
NGL Sales - - 1,444 - 1,444 - - 1,418 - 1,418
Gas Sales - - 648 - 648 - - 196 - 196
Gross Sales 56,238 54,842 5,058 - 116,138 24,287 58,271 4,892 - 87,450
Selling Costs & Carried Interest 1,305 (232) (177) - 896 495 (183) (187) - 125
Royalties & Taxes (7,830) (17,520) (642) - (25,992) (3,511) (22,392) (665) - (26,568)
Net Revenue $ 49,713 $ 37,090 $ 4,239 $ - $ 91,042 $21,271 $ 35,696 $ 4,040 $ - $ 61,007
Oil Sales MMB (working interest) 970 1,009 56 - 2,035 383 995 52 - 1,430
Average Oil Price Received $ 57.97 $ 54.14 $ 53.23 $ - $ 56.05 $ 63.46 $ 58.40 $ 62.75 $ - $ 60.04
Change (7) %
Average Brent Price $ 63.65 $ 69.04
Change (8) %
Gas Sales MMCF (working interest) - - 402 - 402 - - 429 - 429
Average Gas Price Received - - $ 1.62 - $ 1.61 - - $ 0.46 - $ 0.46
Change 250 %
Average Aeco Price ($USD) - - $ 2.12 - $ 2.12 - - $ 0.69 - $ 0.69
Change 208 %
NGL Sales MMB (working interest) - - 63 - 63 - - 56 - 56
Average Liquids Price Received - - $ 22.78 - $ 22.78 - - $ 25.17 - $ 25.17
Change (9) %
Revenue and Sales Q4 2025 Q4 2024 % Change Q4 2025 vs. Q4 2024 Q3 2025 % Change Q4 2025 vs. Q3 2025
Production (NRI BOEPD) 16,128 20,775 (22) % 5 %
15,405
Sales (NRI BOE) 1,708,000 1,872,000 (9) % 1,180,000 45 %
Realized commodity price ($/BOE) $ 52.54 $ 64.77 (19) % $ 51.26 2 %
Commodity (Per BOE including realized $ 52.59 $ 64.48 (18) % $ 50.96 3 %
commodity derivatives)
Total commodity sales ($MM) $ 91.0 $ 121.7 (25) % $ 61.0 49 %
In Q4 2025, Vaalco had a net revenue increase of $30.0 million or 49% compared
to Q3 2025 primarily due to an increase in the total NRI sales volumes of
1,708 MBOE which was 45% higher than the Q3 2025 volumes of 1,180 MBOE and was
lower compared to 1,872 MBOE for Q4 2024 and a higher average realized price
received of $52.54 per BOE in Q4 2025 compared to $51.26 per BOE in Q3 2025.
Q4 2025 NRI sales were 10% above the high end of Vaalco's guidance. The higher
sales and production volumes in Q4 2025 compared to Q3 2025 was primarily a
result of a planned and successful full field maintenance shutdown in Gabon
which occurred in July 2025.
Costs and Expenses Q4 2025 Q4 2024 % Change Q4 2025 vs. Q4 2024 Q3 2025 % Change Q4 2025 vs. Q3 2025
Production expense, excluding offshore workovers and stock comp ($MM) $ 43.0 $ 36.5 18 % $ 29.8 44 %
Production expense, excluding offshore workovers ($/BOE) $ 25.21 $ 19.52 29 % $ 25.24 - %
Offshore workover expense ($MM) $ 0.1 $ 0.1 - % $ 0.1 - %
Depreciation, depletion and amortization ($MM) $ 30.8 $ 37.0 (17) % $ 20.6 50 %
Depreciation, depletion and amortization ($/BOE) $ 18.06 $ 19.79 (9) % $ 17.41 4 %
General and administrative expense, excluding stock-based compensation ($MM) $ 5.2 $ 7.1 (27) % $ 7.2 (28) %
General and administrative expense, excluding stock-based compensation ($/BOE) $ 3.04 $ 3.80 (20) % $ 6.07 (50) %
Stock-based compensation expense ($MM) $ 1.5 $ 1.4 8 % $ 1.7 (11%)
Current income tax expense (benefit) ($MM) $ 5.2 $ 26.2 (80) % $ 8.6 (39) %
Deferred income tax expense (benefit) ($MM) $ (9.8) $ (9.0) 9 % $ (12.2) (19%)
Total production expense (excluding offshore workovers and stock compensation)
of $43.0 million in Q4 2025 increased by 44% compared to Q3 2025 and 18%
compared to Q4 2024. The increase in Q4 2025 compared to Q3 2025 was driven by
a 45% increase in sales volumes and compared to Q4 2024 was driven by an
increase in production expenses in Gabon partially offset by a reduction in
production expenses in Côte d'Ivoire. Q4 2025 production expense per BOE was
at the low end of Vaalco's guidance.
DD&A expense for Q4 2025 was $30.8 million, which was 50% higher than
$20.6 million in Q3 2025 and 17% lower than $37.0 million in Q4 2024. The
increase in Q4 2025 DD&A expense compared to Q3 2025 was due primarily to
a 45% increase in sales volumes. The decrease in Q4 2025 DD&A expense
compared to Q4 2024 was due primarily to a reduction in DD&A expenses in
the Côte d'Ivoire segment.
General and administrative ("G&A") expense, excluding stock-based
compensation, decreased to $5.2 million in Q4 2025, compared to $7.2 million
in Q3 2025 and $7.1 million in Q4 2024 primarily due to lower professional
service fees and salaries and wages. Q4 2025 cash G&A was below the low
end of the Company's guidance range of $7 million to $9 million.
Non-cash stock-based compensation expense was $1.5 million for Q4 2025
compared to $1.7 million for Q3 2025 and $1.4 million for Q4 2024.
Exploration expense was $6.0 million for Q4 2025 compared to $0.4 million for
Q3 2025. This Q4 amount was primarily attributable to seismic acquisition
costs with Niosi and Guduma blocks in Gabon as well as costs related to the
Egyptian exploration well in South Ghazalat determined to be non-commercial.
The Q3 2025 amount was due to seismic acquisition costs with Niosi and Guduma
blocks in Gabon. There were minimal exploration costs incurred in Q4 2024.
Total other income (expense), net, was an income of $1.6 million for Q4 2025
compared to an expense of $3.4 million for Q3 2025 and an expense of $9.7
million during Q4 2024. Other income (expense), net, includes gains or losses
on derivatives, interest expense and foreign currency losses. As previously
disclosed, during Q4 2024, the bargain purchase gain for the Baobab
acquisition was reduced by $6.4 million.
Vaalco reported an income tax benefit for Q4 2025 of $4.6 million which was
comprised of a $5.2 million current tax expense, offset by a deferred tax
benefit of $9.8 million. Income tax benefit includes a $7.3 million favorable
oil price adjustment as a result of the change in value of the government of
Gabon's allocation of Profit Oil between the time it was produced and the time
it was taken in-kind. After excluding this impact, income taxes were $2.7
million for the period. Income tax expense for Q4 2024 was $17.2 million which
is comprised of current tax expense of $26.2 million and deferred tax benefit
of $9.0 million. Current quarter tax was impacted by non-deductible items
(such as the Côte d'Ivoire transaction costs) and the change in market value
of tax barrels due to Gabon State mark-to-market at quarter end.
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 December 31, 2025 $ 1,451 $ 8,430 $ - $ - $ - $ - $ 9,881
Financial Update - Full Year 2025
Net sales for the year ended December 31, 2025 decreased to 6,370 MBOE
compared to 7,262 MBOE in the year ended December 31, 2024. The decrease was
driven primarily by a reduction in sales volume from Côte d'Ivoire due to the
FPSO refurbishment.
The average realized price for the year ended December 31, 2025 was $56.11
per BOE, representing a decrease of 15% from $65.64 realized in the year ended
December 31, 2024. This decrease in crude oil price reflects the softening of
commodity prices over the past year.
The Company reported a net loss for the year ended December 31, 2025 of $41.4
million, which compares to a net income of $58.5 million for the year ended
December 31, 2024. The decrease in net income for the year ended December 31,
2025 compared to the same period in 2024 was primarily driven by a non-cash
impairment charge of $67.2 million to the carrying value of proved and
unproved oil and gas properties for Vaalco's Canadian assets reported as held
for sale. Also, the net loss was due to lower realized pricing in 2025 and a
reduction in sales volume primarily in the Company's Côte d'Ivoire segment in
2025. In addition, as previously disclosed, the year ended December 31, 2024
included a bargain purchase gain of $13.5 million related to the Baobab
acquisition completed in April 2024.
Year to Date Summary - Sales and Net Revenue
$ in thousands Year Ended December 31, 2025 Year Ended December 31, 2024
Gabon Egypt Canada Côte d'Ivoire Total Gabon Egypt Canada Côte d'Ivoire Total
Oil Sales $208,353 $225,957 $ 15,319 $ 18,396 $ 468,025 $236,221 $250,946 $ 28,418 $ 95,082 $ 610,667
NGL Sales - - 5,968 - 5,968 - - 7,859 - 7,859
Gas Sales - - 2,052 - 2,052 - - 1,849 - 1,849
Gross Sales 208,353 225,957 23,339 18,396 476,045 236,221 250,946 38,126 95,082 620,375
Selling Costs & Carried Interest 1,865 (743) (835) - 287 2,276 (531) (1,131) - 614
Royalties & Taxes (28,480) (85,250) (3,330) - (117,060) (32,543) (104,449) (5,009) - (142,001)
Net Revenue $181,738 $139,964 $ 19,174 $ 18,396 $ 359,272 $205,954 $145,966 $31,986 $ 95,082 $478,988
Oil Sales MMB (working interest) 3,144 3,918 250 238 7,550 2,971 3,791 402 1,223 8,387
Average Oil Price Received $ 66.27 $ 57.48 $ 61.16 $ 77.36 $ 61.99 $ 79.52 $ 66.20 $ 70.66 77.74 $ 72.81
Change (15) %
Average Brent Price $ 69.14 $ 80.52
Change (14) %
Gas Sales MMCF (working interest) - - 1,692 - 1,692 - - 1,772 - 1,772
Average Gas Price Received - - $ 1.21 - $ 1.21 - - $ 1.04 - $ 1.04
Change 16 %
Average Aeco Price ($USD) - - $ 1.40 - $ 1.40 - - $ 1.05 - $ 1.05
Change 33 %
NGL Sales MMB (working interest) - - 248 - 248 - - 309 - 309
Average Liquids Price Received - - $ 24.04 - $ 24.04 - - $ 25.46 - $ 25.46
Change (6) %
Capital Investments/Balance Sheet
For the fourth quarter of 2025, net capital expenditures totaled $100.1
million on a cash basis and $88.8 million on an accrual basis, within its
fourth quarter guidance of $70 million to $90 million. These expenditures were
primarily related to project costs and long-lead items for Egypt and Gabon
drilling program, continued FPSO refurbishment and key long leads for the
upcoming 2026 drilling campaign in Côte d'Ivoire.
As of December 31, 2025, Vaalco had an unrestricted cash balance of $58.9
million. The Company had a working capital deficit of $59.0 million at
December 31, 2025 compared to a working capital of $56.2 million at December
31, 2024. In addition, Vaalco had an Adjusted Working Capital deficit of $41.2
million at December 31, 2025 compared to an Adjusted Working Capital of $73.1
million at December 31, 2024.
In March 2025, Vaalco entered into a new reserves based lending facility (the
"2025 RBL Facility") that had initial aggregate commitments of $190.0 million
and the ability to grow to $300.0 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 previously
undrawn reserves based lending facility. 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. As of December 31, 2025, the Company had
$60.0 million outstanding borrowings.
On February 4, 2026, the Company borrowed an additional $65.0 million under
the 2025 RBL Facility. The borrowing accrues interest at a rate of 10.2% per
annum which is based on the Term SOFR plus the Applicable Margin of 6.5% per
annum. In addition, the borrowing is due to be repaid within one month from
the drawdown date with, subject to certain conditions, the option to rollover
the debt upon maturity.
Effective October 17, 2025, the Lenders unanimously approved an increase in
the Company's borrowing base under the new facility from $186.6 million to
$190.0 million after the Company completed its semi-annual borrowing base
redetermination process. In addition, the Lenders also approved to (i) extend
the first date on which the Initial Total Commitments will be reduced from
September 30, 2026 to March 31, 2027, and (ii) update the semi-annual
commitment reduction amounts from $19.0 million to $10.0 million on March
31, 2027, and $22.5 million starting on September 30, 2027.
In addition, on November 7, 2025, subject to certain conditions precedent,
certain existing lenders under the new facility agreed to increase their
initial commitment effective January 23, 2026 (the "Effective Increase Date")
so that the aggregate borrowing base under the 2025 RBL Facility as of the
Effective Increase Date would increase from $190.0 million to
$255.0 million. The increase in commitments was undertaken with the existing
accordion feature included in the new facility.
Quarterly Cash Dividend
Vaalco paid a quarterly cash dividend of $0.0625 per share of common stock for
the fourth quarter of 2025 on December 24, 2025. The Company also recently
announced its next quarterly cash dividend of $0.0625 per share of common
stock for the first quarter of 2026 ($0.25 annualized), to be paid on March
27, 2026 to stockholders of record at the close of business on February 27,
2026. Future declarations of quarterly dividends and the establishment of
future record and payment dates are subject to approval by the Vaalco Board of
Directors.
Hedging
The Company continued to hedge a portion of its expected future production to
lock in cash flow generation to assist in funding its capital and shareholder
return programs.
The following includes hedges remaining in place as of the end of the fourth
quarter of 2025:
Settlement Period
Instrument Index January 2026 - March 2026 April 2026 - June 2026 July 2026 - September 2026 October 2026 - December 2026
Crude oil:
Collars Dated Brent
Total volumes (Bbls) 400,000 360,000 75,000 -
Weighted average floor price ($/Bbl) $ 62.29 $ 61.88 $ 65.00 $ -
Weighted average ceiling price ($/Bbl) $ 68.63 $ 67.95 $ 71.00 $ -
Natural Gas(a):
Swaps AECO 7A
Total volumes (GJs)(b) 225,000 150,000 150,000 50,000
Weighted average fixed price (CAD/GJ) $ 2.99 $ 2.80 $ 2.80 $ 2.80
(a) Natural gas hedge contracts were assumed by the third-party purchaser upon
closing of the sale pursuant to the Canada APA.
(b) One gigajoule (GJ) equals one billion joules (J). A gigajoule of natural
gas is approximately 25.5 cubic meters standard conditions.
Subsequent to December 31, 2025, the Company entered into the following
additional derivative contracts to cover its future anticipated production:
Settlement Period
Instrument Index January 2026 - March 2026 April 2026 - June 2026 July 2026 - September 2026 October 2026 - December 2026 January 2027 - March 2027
Crude oil:
Collars Dated Brent
Total volumes (Bbls) 260,000 338,000 702,000 692,000 673,000
Weighted average floor price ($/Bbl) $ 62.00 $ 64.22 $ 63.72 $ 64.96 $ 64.68
Weighted average ceiling price ($/Bbl) $ 67.80 $ 70.14 $ 68.49 $ 68.33 $ 72.63
Swaps Dated Brent
Total volumes (Bbls) 100,000
Weighted average fixed price ($/Bbl) $ 65.10
The Company has continued to add more hedges as part of a rolling hedging
program to provide downside protection against a volatile commodity price
backdrop. Taking advantage of higher oil prices in early 2026, the Company
further secured the above additional hedge positions. As a result,
approximately 2,900 MBbls of 2026 oil production is hedged at an average floor
price of approximately $64.00 per barrel. In addition, approximately 700 MBbls
of expected 2027 oil production is hedged with an average floor price of
approximately $65.00 per barrel.
2026 Guidance:
The Company has provided first quarter 2026 guidance and its full year 2026
guidance. All of the quarterly and annual guidance is detailed in the tables
below.
FY 2026 Gabon Egypt Canada Côte d'Ivoire
Production (BOEPD) WI 20100 - 22400 8300 - 9200 9500 - 10500 200 - 300 2100 - 2400
Production (BOEPD) NRI 16100 - 17950 7300 - 8000 6500 - 7300 200 - 250 2100 - 2400
Sales Volume (BOEPD) WI 18800 - 22600 7200 - 9800 9500 - 10500 200 - 300 1900 - 2000
Sales Volume (BOEPD) NRI 14900 - 18050 6300 - 8500 6500 - 7300 200 - 250 1900 - 2000
Production Expense (millions) WI & NRI $150.50 - $178.00
Production Expense per BOE WI $19.00 - $24.00
Production Expense per BOE NRI $23.50 - $31.00
Exploration Expense (millions) WI & NRI $30 - $35 MM
Offshore Workovers (millions) WI & NRI $0 - $10 MM
Cash G&A (millions) WI & NRI $31.0 - $37.0 MM
CAPEX Excluding Acquisitions (millions) WI & NRI $290 - $360 MM
DD&A ($/BOE) NRI $15.00 - $19.00
Q1 2026 Gabon Egypt Canada Côte d'Ivoire
Production (BOEPD) WI 18700 - 20600 7300 - 8000 10300 - 11400 1100 - 1200
Production (BOEPD) NRI 14200 - 16000 6300 - 7000 7000 - 8000 900 - 1000
Sales Volume (BOEPD) WI 15200 - 17000 3800 - 4400 10300 - 11400 1100 - 1200
Sales Volume (BOEPD) NRI 11200 - 12900 3300 - 3900 7000 - 8000 900 - 1000
Production Expense (millions) WI & NRI $26.0 - $32.5 MM
Production Expense per BOE WI $18.00 - $22.00
Production Expense per BOE NRI $24.00 - $29.00
Exploration Expense (millions) WI & NRI $27 - $32 MM
Offshore Workovers (millions) WI & NRI $0 - $0 MM
Cash G&A (millions) WI & NRI $7.0 - $9.0 MM
CAPEX Excluding Acquisitions (millions) WI & NRI $90- $110 MM
DD&A ($/BOE) NRI $16.00 - $19.00
Conference Call
As previously announced, the Company will hold a conference call to discuss
its fourth quarter 2025 financial and operating results, Friday, March 13,
2026, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time and 2:00 p.m. London
Time). Interested parties may participate by dialing (833) 685-0907. Parties
in the United Kingdom may participate toll-free by dialing 08002799489 and
other international parties may dial (412) 317-5741. Participants should
request to be joined to the "Vaalco Energy Fourth 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 "Q4 2025 Supplemental Information" investor deck will be posted to Vaalco's
website prior to its conference call on March 13, 2026 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 and Nigeria.
Vaalco's Legal Entity Identifier (LEI) is 549300CFHFVIWB8M6T24
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
Burson Buchanan (UK Financial PR) +44 (0) 207 466 5000
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 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;
(iii) expectations regarding future acquisitions, investments or divestitures;
(iv) expectations of future dividends; (v) expectations of future balance
sheet strength; and (vi) 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 and any subsequent Quarterly Reports on Form 10-Q filed
with the SEC.
Dividends beyond the first quarter of 2026 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.
PV-10 Value and Probable Reserves
PV-10 is a non-GAAP financial measure and represents the period-end present
value of estimated future cash inflows from VAALCO's reserves, less future
development and production costs, discounted at 10% per annum to reflect
timing of future cash flows. PV-10 values for 2P WI CPR reserves have been
calculated using VAALCO's management assumptions for timing, escalated crude
oil price and cost in the case of 2P WI CPR reserves. PV-10 generally differs
from standardized measure, the most directly comparable GAAP financial
measure, because it generally does not include the effects of income taxes;
however, VAALCO's PV-10 does include the effect of income taxes. PV-10 is a
widely used measure within the industry and is commonly used by securities
analysts, banks and credit rating agencies to evaluate the estimated future
net cash flows from proved reserves on a comparative basis across companies or
specific properties. VAALCO's PV-10 includes the effect of income taxes.
Neither PV-10 nor the standardized measure purports to represent the fair
value of the Company's crude oil and natural gas reserves.
VAALCO has provided summations of its PV-10 for its proved and probable
reserves on a 2P WI CPR basis in this press release. The SEC strictly
prohibits companies from aggregating proved, probable and possible reserves in
filings with the SEC due to the different levels of certainty associated with
each reserve category. GAAP does not provide a measure of estimated future net
cash flows for reserves other than proved reserves and accordingly it is not
practicable to reconcile the PV-10 value of 2P WI CPR reserves to a GAAP
measure, such as the standardized measure. Investors should be cautioned that
estimates of PV-10 of probable reserves, as well as the underlying volumetric
estimates, are inherently more uncertain of being recovered and realized than
comparable measures for proved reserves. Further, because estimates of
probable reserve volumes have not been adjusted for risk due to this
uncertainty of recovery, their summation may be of limited use. Nonetheless,
VAALCO believes that PV-10 estimates for probable reserves present useful
information for investors about the future net cash flows of its reserves in
the absence of a comparable GAAP measure such as standardized measure.
WI CPR Reserves
WI CPR reserves represent proved ("1P") and proved plus probable ("2P")
estimates as reported by NSAI and prepared in accordance with the definitions
and guidelines set forth in the 2018 Petroleum Resources Management Systems
approved by the Society of Petroleum Engineers. The SEC definitions of proved
and probable reserves are different from the definitions contained in the 2018
Petroleum Resources Management Systems approved by the Society of Petroleum
Engineers. As a result, 1P and 2P WI CPR reserves may not be comparable to
United States standards. The SEC requires United States oil and gas reporting
companies, in their filings with the SEC, to disclose only proved reserves
after the deduction of royalties and production due to others but permits the
optional disclosure of probable and possible reserves in accordance with SEC
definitions.
1P and 2P WI CPR reserves, as disclosed herein, may differ from the SEC
definitions of proved and probable reserves because:
• Pricing for SEC is the average closing price on the first
trading day of each month for the prior year which is then held flat in the
future, while the 1P and 2P WI CPR pricing assumption was $65.00 per barrel of
oil beginning in 2026, $70.00 in 2027, and inflating 2% thereafter; and
• Lease operating expenses are typically not escalated under the
SEC's rules, while for the WI CPR reserves estimates, they are escalated at 2%
annually beginning in 2027.
Management uses 1P and 2P WI CPR reserves as a measurement of operating
performance because it assists management in strategic planning, budgeting and
economic evaluations and in comparing the operating performance of the Company
to other companies. Management believes that the presentation of 1P and 2P WI
CPR reserves is useful to its international investors, particularly those that
invest in companies trading on the London Stock Exchange, in order to better
compare reserve information to other London Stock Exchange-traded companies
that report similar measures. However, 1P and 2P WI CPR reserves should not be
used as a substitute for proved reserves calculated in accordance with the
definitions prescribed by the SEC. In evaluating Vaalco's business, investors
should rely on Vaalco's SEC proved reserves and consider 1P and 2P WI CPR
reserves only supplementally.
VAALCO ENERGY, INC AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
As of December 31, 2025 As of December 31, 2024
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 58,900 $ 82,650
Receivables:
Trade, net of allowances for credit loss and other of $0.0 million and $0.2 39,924 94,778
million, respectively
Accounts with joint venture owners, net of allowance for credit losses of $2.7 5,420 179
million and $1.5 million, respectively
Egypt receivables and other 2,277 35,763
Other current assets 26,280 24,557
Current assets held for sale 179 -
Total current assets 132,980 237,927
Crude oil, natural gas and NGLs properties and equipment, net 586,095 538,103
Other noncurrent assets:
Restricted cash 1,659 8,665
Value added tax and other receivables, net of allowances for credit loss and 7,149 10,094
other of $0.0 million and $0.8 million, respectively
Right of use operating lease assets 16,596 17,254
Right of use finance lease assets 68,615 79,849
Deferred tax assets 54,825 55,581
Other long-term assets 13,630 7,477
Noncurrent assets held for sale 31,826 -
Total assets $ 913,375 $ 954,950
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities 191,817 $ 181,728
Current liabilities held for sale 183 -
Asset retirement obligations 78,406 78,592
Operating lease liabilities - net of current portion 11,183 13,903
Finance lease liabilities - net of current portion 57,256 67,377
Deferred tax liabilities 63,630 93,904
Long-term debt 60,000 -
Other long-term liabilities - 17,863
Noncurrent liabilities held for sale 7,403 -
Total liabilities 469,878 453,367
Total shareholders' equity 443,497 501,583
Total liabilities and shareholders' equity $ 913,375 $ 954,950
VAALCO ENERGY, INC AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Year Ended
December 31, 2025 December 31, 2024 September 30, 2025 December 31, 2025 December 31, 2024
(in thousands except per share amounts)
Revenues:
Crude oil, natural gas and natural gas liquids sales $ 91,042 $ 121,721 $ 61,007 $ 359,272 $ 478,988
Operating costs and expenses:
Production expense 43,107 36,641 29,872 158,177 163,500
Exploration expense 6,040 - 353 8,914 48
Depreciation, depletion and amortization 30,845 37,047 20,555 109,978 143,034
Impairment loss on assets held for sale 67,224 - - 67,224 -
General and administrative expense 6,696 8,454 8,845 33,089 29,684
Credit losses and other (379) 1,082 484 106 6,304
Total operating costs and expenses 153,533 83,224 60,109 377,488 342,570
Other operating income (expense), net (2,391) 10 - (2,391) 78
Operating income (loss) (64,882) 38,507 898 (20,607) 136,496
Other income (expense):
Derivative instruments gain (loss), net 3,643 (365) (1,093) 2,876 (745)
Interest expense, net (2,044) (1,092) (2,333) (8,243) (3,732)
Bargain purchase gain - (6,366) - - 13,532
Other income (expense), net 32 (1,828) 33 (595) (5,754)
Total other income (expense), net 1,631 (9,651) (3,393) (5,962) 3,301
Income (loss) before income taxes (63,251) 28,856 (2,495) (26,569) 139,797
Income tax expense (benefit) (4,648) 17,192 (3,596) 14,822 81,307
Net income (loss) $ (58,603) $ 11,664 $ 1,101 $ (41,391) $ 58,490
Other comprehensive income (loss):
Currency translation adjustments 1,387 (5,975) (1,799) 4,464 (7,842)
Comprehensive income (loss) $ (57,216) $ 5,689 $ (698) $ (36,927) $ 50,648
Basic net income (loss) per share:
Net income (loss) per share $ (0.56) $ 0.11 $ 0.01 $ (0.40) $ 0.56
Basic weighted average shares outstanding 104,258 103,743 104,258 104,055 103,669
Diluted net income (loss) per share:
Net income (loss) per share $ (0.56) $ 0.11 $ 0.01 $ (0.40) $ 0.56
Diluted weighted average shares outstanding 104,258 103,812 104,283 104,055 103,747
VAALCO ENERGY, INC AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Year Ended December 31,
2025 2024
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (41,391) $ 58,490
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:
Depreciation, depletion and amortization 109,978 143,034
Bargain purchase gain and measurement period adjustment - (13,532)
Impairment loss on assets held for sale 67,224 -
Deferred taxes (29,427) (16,785)
Non-cash exploration expense 2,409 48
Stock-based compensation expense 6,211 4,281
Derivative instruments loss, net (2,876) 745
Cash settlements paid on matured derivative contracts, net (48) (453)
Credit losses and other (389) 5,979
Equipment and other expensed in operations 5,572 2,505
Change in operating assets and liabilities 95,404 (70,594)
Net cash provided by operating activities 212,667 113,718
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment expenditures, including exploration expense (252,856) (102,996)
Acquisition of crude oil and natural gas properties (3,034) 877
Net cash used in investing activities (255,890) (102,119)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuances of common stock - 447
Proceeds from borrowings 60,000 -
Dividend distribution (26,480) (26,216)
Treasury shares (709) (6,802)
Deferred financing costs (7,145) -
Payments of finance lease (13,289) (10,477)
Net cash provided by (used in) in financing activities 12,377 (43,048)
Effects of exchange rate changes on cash 83 (3)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH (30,763) (31,452)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD 97,726 129,178
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD $ 66,963 $ 97,726
VAALCO ENERGY, INC AND SUBSIDIARIES
Selected Financial and Operating Statistics
(Unaudited)
Three Months Ended Year Ended
December 31, 2025 December 31, 2024 September 30, 2025 December 31, 2025 December 31, 2024
NRI SALES DATA
Crude oil, natural gas and natural gas liquids sales (MBOE) 1,708 1,872 1,180 6,370 7,262
Average daily sales volumes (BOE) 18,566 20,352 12,831 17,452 19,843
WI PRODUCTION DATA
Etame Crude oil (MBbl) 712 791 655 2,913 3,199
Gabon Average daily production volumes (BOEPD) 7,743 8,598 7,118 7,982 8,741
Egypt Crude oil (MBbl) 1,009 923 995 3,918 3,791
Egypt Average daily production volumes (BOEPD) 10,963 10,035 10,812 10,735 10,357
Canada Crude Oil (MBbl) 56 99 52 250 402
Canada Natural Gas (MMcf) 402 431 429 1,692 1,772
Canada Natural Gas Liquid (MBOE) 63 75 56 248 309
Canada Crude oil, natural gas and natural gas liquids (MBOE) 186 246 180 781 1,006
Canada Average daily production volumes (BOEPD) 2,023 2,669 1,957 2,139 2,749
Côte d'Ivoire Crude oil (MBbl) - 368 - 111 1,058
Côte d'Ivoire Average daily production volumes (BOEPD) - 3,997 - 305 2,891
Total Crude oil, natural gas and natural gas liquids production (MBOE) 1,907 2,328 1,830 7,723 9,054
Average daily production volumes (BOEPD) 20,729 25,300 19,887 21,160 24,738
NRI PRODUCTION DATA
Etame Crude oil (MBbl) 620 688 570 2,535 2,783
Gabon Average daily production volumes (BOEPD) 6,737 7,481 6,192 6,944 7,605
Egypt Crude oil (MBbl) 702 644 693 2,730 2,585
Egypt Average daily production volumes (BOEPD) 7,635 7,001 7,532 7,479 7,063
Canada Crude Oil (MBbl) 48 85 45 214 350
Canada Natural Gas (MMcf) 349 371 368 1,449 1,542
Canada Natural Gas Liquid (MBOE) 55 64 48 212 269
Canada Crude oil, natural gas and natural gas liquids (MBOE) 162 211 154 667 870
Canada Average daily production volumes (BOEPD) 1,757 2,296 1,681 1,828 2,377
Côte d'Ivoire Crude oil (MBbl) - 368 - 111 1,058
Côte d'Ivoire Average daily production volumes (BOEPD) - 3,997 - 305 2,891
Total Crude oil, natural gas and natural gas liquids production (MBOE) 1,484 1,911 1,417 6,043 7,296
Average daily production volumes (BOEPD) 16,128 20,775 15,405 16,556 19,935
AVERAGE SALES PRICES:
Crude oil, natural gas and natural gas liquids sales (per BOE) - WI basis $ 53.46 $ 65.69 $ 55.91 $ 58.72 $ 68.63
Crude oil, natural gas and natural gas liquids sales (per BOE) - NRI basis $ 52.54 $ 64.77 $ 51.26 $ 56.11 $ 65.64
Crude oil, natural gas and natural gas liquids sales (Per BOE including $ 52.59 $ 64.48 $ 50.96 $ 56.10 $ 65.58
realized commodity derivatives) - NRI basis
COSTS AND EXPENSES (Per BOE of sales):
Production expense $ 25.24 $ 19.57 $ 25.30 $ 24.83 $ 22.51
Production expense, excluding offshore workovers and stock compensation* $ 25.20 $ 19.49 $ 25.23 $ 24.78 $ 22.48
Depreciation, depletion and amortization $ 18.06 $ 19.79 $ 17.41 $ 17.27 $ 19.69
General and administrative expense** $ 3.92 $ 4.52 $ 7.49 $ 5.19 $ 4.09
Property and equipment expenditures, cash basis (in thousands) $ 100,128 $ 41,466 $ 48,302 $ 252,856 $ 102,996
* Offshore workover costs excluded for Q4 2025, Q4
2024, and Q3 2025 are $0.1 million, $0.1 million and $0.1 million,
respectively.
* Stock compensation associated with production
expense excluded for Q4 2025, Q4 2024, and Q3 2025 are immaterial.
** General and administrative expenses include $0.88,
$0.72 and $1.42 per barrel of oil related to stock-based compensation expense
for Q4 2025, Q4 2024, and Q3 2025, 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
Baobab Acquisition, FPSO demobilization, transaction costs related to the
Baobab 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 Baobab 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 Year Ended
Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) December 31, 2025 December 31, 2024 September 30, 2025 December 31, 2025 December 31, 2024
Net income (loss) $ (58,603) $ 11,664 $ 1,101 $ (41,391) $ 58,490
Adjustment for discrete items:
Unrealized derivative instruments (gain) loss (3,549) 96 737 (2,923) 292
Impairment loss on assets held for sale 67,224 - - 67,224 -
Bargain purchase gain and measurement period adjustment - 6,366 - - (13,532)
Deferred income tax benefit (9,858) (11,781) (12,171) (29,427) (20,332)
Non-cash purchase price adjustment - - - - 14,981
Transaction costs related to acquisition 53 508 17 126 3,910
Other operating (income) expense, net 2,391 (10) - 2,391 (78)
Adjusted Net Income (Loss) $ (2,342) $ 6,843 $ (10,316) $ (4,000) $ 43,731
Diluted Adjusted Net Income (Loss) per Share $ (0.02) $ 0.07 $ (0.10) $ (0.04) $ 0.42
Diluted weighted average shares outstanding ((1)) 104,258 103,812 104,283 104,055 103,747
((1) ) No adjustments to weighted average shares outstanding
Three Months Ended Year Ended
Reconciliation of Net Income to Adjusted EBITDAX December 31, 2025 December 31, 2024 September 30, 2025 December 31, 2025 December 31, 2024
Net income (loss) $ (58,603) $ 11,664 $ 1,101 $ (41,391) $ 58,490
Add back:
Interest expense, net 2,044 1,092 2,333 8,243 3,732
Income tax expense (4,648) 17,192 (3,596) 14,822 81,307
Depreciation, depletion and amortization 30,845 37,047 20,555 109,978 143,034
Impairment loss on assets held for sale 67,224 - - 67,224 -
Exploration expense 6,040 - 353 8,914 48
Non-cash or unusual items:
Stock-based compensation 1,508 1,196 1,685 5,956 4,558
Unrealized derivative instruments (gain) loss (3,549) 96 737 (2,923) 292
Bargain purchase gain and measurement period adjustment - 6,366 - - (13,532)
Other operating (income) expense, net 2,391 (10) - 2,391 (78)
Non-cash purchase price adjustment - - - - 14,981
Transaction costs related to acquisition 53 508 17 126 3,910
Credit losses (recovery) and other (379) 1,082 484 106 6,304
Adjusted EBITDAX $ 42,926 $ 76,233 $ 23,669 $ 173,446 $ 303,046
( )
(
)
VAALCO ENERGY, INC AND SUBSIDIARIES
Reconciliations of Non-GAAP Financial Measures
(Unaudited)
(in thousands)
Reconciliation of Working Capital to Adjusted Working Capital December 31, 2025 December 31, 2024 Change
Current assets $ 132,980 $ 237,927 $ (104,947)
Current liabilities (192,000) (181,728) (10,272)
Working capital (59,020) 56,199 (115,219)
Add: lease liabilities - current portion 17,863 16,895 968
Adjusted Working Capital $ (41,157) $ 73,094 $ (114,251)
Year Ended December 31, 2025
Reconciliation of Free Cash Flow (in thousands)
Net cash provided by Operating activities $ 212,667
Net cash used in Investing activities (255,890)
Net cash provided by Financing activities 12,377
Effects of exchange rate changes on cash 83
Total net cash change (30,763)
Add back shareholder cash out:
Dividends paid 26,480
Total cash returned to shareholders 26,480
Free Cash Flow $ (4,283)
Reconciliation of Debt to Net Debt
Net debt, or outstanding debt obligations less cash and cash equivalents, is a
non-GAAP financial measure. Management uses net debt as a measure of the
Company's outstanding debt obligations that would not be readily satisfied by
its cash and cash equivalents on hand.
Reconciliation of Debt to Net Debt December 31, 2025 September 30, 2025
Long-term debt $ 60,000 $ 60,000
Less: Cash and cash equivalents (58,900) (32,114)
Net debt $ 1,100 $ 27,886
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