REG - Vaalco Energy Inc - FIRST QUARTER 2026 RESULTS
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RNS Number : 5089D Vaalco Energy Inc 08 May 2026
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
VAALCO ENERGY, INC. ANNOUNCES FIRST QUARTER 2026 RESULTS
HOUSTON - May 8, 2026 - VAALCO Energy, Inc. (NYSE: EGY, LSE: EGY) ("Vaalco"
or the "Company") today reported operational and financial results for the
first quarter 2026. Additionally, the Company provided operational and
financial guidance for the second quarter and full year of 2026.
First Quarter 2026 Highlights and Recent Key Items:
• Invested $78.1 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;
◦ Successfully drilled, completed and placed on production the
Etame 14H development well in April 2026 at an initial rate of 4,850 gross
barrels of oil per day ("BOPD"), encountering 325 meters of net pay in
high-quality Gamba sands;
◦ Successfully drilled, completed and placed on production the
Etame 15H development well in February 2026 at an initial rate of 2,000 gross
BOPD, confirming expectations from the ET-15P pilot well results;
◦ Baobab Ivoirien FPSO is now fully moored back on its original
location and resumption of production at Côte d'Ivoire remains on track for
Q2 2026;
• 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 the second half of 2026;
◦ Further information on the Kossipo field can be found in the Q1 2026
supplemental deck posted on Vaalco's website;
• Divested all Canadian properties for an adjusted purchase price of
$25.5 million with a closing date of February 19, 2026;
• Sold 12,157 net revenue interest ("NRI")((1)) barrels of oil
equivalent per day ("BOEPD") and produced 15,110 NRI((1)) BOEPD or 19,884
working interest ("WI")((2)) BOEPD, all of which were slightly above the
midpoint of guidance;
• Expecting Q2 2026 sales volumes to range between 16,800 and
18,300 NRI BOPD, a 44% increase compared to Q1 2026 (at the midpoint of
guidance);
• Increasing full year 2026 production and sales NRI volumes by 8%
and 12%, respectively at the midpoint, while maintaining 2026 capital budget
guidance unchanged even with additional drilling in Egypt included;
• Reported a net loss of $93.8 million ($0.90 per diluted share),
which includes $94.2 million in expenses primarily due to a loss on derivative
instruments and exploration expense;
◦ Excluding primarily the $55.9 million unrealized portion of the
derivative loss, Adjusted Net Loss((3)) totaled $47.2 million ($0.45 per
diluted share);
• Generated Adjusted EBITDAX((3)) of $11.6 million which included
no partner liftings in Gabon and no sales in Côte d'Ivoire, Q2 2026 is
expected to have two partner liftings in Gabon and Q3 2026 sales are expected
to include Côte d'Ivoire;
• Reduced trade receivable in Egypt even further from $31.6
million at December 31, 2025 to $24.2 million at March 31, 2026; and
• Declared quarterly cash dividend of $0.0625 per share of common
stock to be paid on June 26, 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, "We began 2026 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 8 kilometers from 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 well coming online in February 2026 and the Etame 14H well
coming online in April 2026. These wells helped production in Gabon increase
slightly in Q1 2026 and the larger impact can be seen in our guidance for Q2
2026 compared to Q4 2025. Despite the increase in production, as we mentioned
on our year-end call, sales were lower due to a government lifting in Gabon in
the first quarter 2026 to settle our foreign tax expense. We expect this to be
the only government lifting in 2026 and, as you can see from our second
quarter guidance, we expect two optimized liftings in Gabon driving strong
sales in a higher priced environment. The FPSO for Baobab is moored in place
at the Baobab field in offshore Côte d'Ivoire and the field is expected to
restart in Q2 2026. These factors have given us the confidence to increase
full year production and sales guidance for 2026. Additionally, we plan to
start the Phase Five Drilling Program at Baobab later this year with material
potential production uplift in 2027."
Mr. Maxwell concluded, "Operationally, we are delivering as expected, with
strong results from our drilling programs and capital investments.
Financially, the first quarter was difficult, driven by several factors
including realized and unrealized hedging losses, exploration expense related
to the Etame West ET 14-P well, our investment in seismic with our partners in
the Niosi and Guduma blocks in offshore Gabon and the government lifting in
Gabon. We have a pragmatic hedging program that we put into place in early
2025 to protect cash flow as we invest significant capital in 2026 across our
portfolio to grow production. While this has reduced risk and protected cash
flows, during the recent upswing in pricing it has caused us to recognize cash
and non-cash derivative losses, but we are benefiting from unhedged sales at
much higher prices. We believe that Q2 2026 will be much stronger financially
with additional liftings and we will see continued improvement in the second
half of 2026 and into 2027. We believe that the first quarter was an
inflection point. With the continued operational successes we are delivering
and as indicated by the increased full year 2026 production and sales guidance
without increasing 2026 capital guidance, we are confident in our strategic
vision. Vaalco remains well positioned to deliver on our forecasted 225%
organic production growth by 2030."
Operational Update
Gabon
The Company's Phase Three Drilling Program in Gabon commenced in the fourth
quarter of 2025 with the drilling of the ET-15H development well in the 1V
block of Etame in December 2025. The well was completed and placed on
production in February 2026 confirming expectations from the ET-15P pilot well
results. The Company proceeded to drill the West Etame exploration well
(ET-14) and although the well encountered 10 meters of high quality sands, the
target zone was water-bearing. The lower portion of the well was plugged and
abandoned but the well bore was utilized and sidetracked in the upper portion
of the well to drill the ET-14H development well in the Main Fault Block of
Etame.
The ET-14H well was successfully completed and placed on production in an
attic position within the Main Fault Block of the Etame field, with a lateral
of 325 meters of net pay in high-quality Gamba sands in April 2026. The well
achieved an initial flow rate of approximately 4,850 gross BOPD or 2,850 net
BOPD. Vaalco continued its drilling campaign in offshore Gabon by mobilizing
the rig to the Ebouri platform and commenced drilling the EEBOM-5H development
well in April 2026. The Company has several wells and workovers planned at the
Ebouri and SEENT platforms to enhance production and potentially add reserves.
Vaalco and its partners completed the 3D seismic campaign across the
jointly-owned Niosi and Guduma blocks in January 2026. The seismic acquisition
was executed and satisfies the minimum commitments under the terms of the
Niosi PSC as well as to inform the decision on proceeding into the second
exploration period for the Guduma Block.
Egypt
The drilling campaign in Egypt began in December 2024 and continued throughout
2025 with the final well placed on production in January 2026. All wells
drilled in the Eastern Desert successfully achieved their target.
During the first quarter of 2026, operations focused on interventions,
workovers, and production optimization activities. A workover campaign to
reactivate shut-in wells contributed to incremental production over the 2025
exit rate, while improved uptime supported increased average daily production
rates.
With the success of the recent drilling campaign, captured efficiencies and
accelerated technical subsurface evaluation, the Company decided to drill
additional wells in Egypt in 2026. Vaalco contracted a rig and began drilling
in early May targeting six additional wells to be drilled in Egypt, without
increasing the total Company full year 2026 capital guidance range.
Côte d'Ivoire
The Baobab FPSO completed its planned dry dock refurbishment in February 2026
and arrived back in Côte d'Ivoire in early April 2026. Reconnection
activities are now underway with four out of seven risers and umbilicals
connected and field production is expected to restart during the second
quarter of 2026. A rig has been secured for the planned development drilling
program which is expected to begin at the end of the third quarter of 2026.
The drilling campaign is expected to bring meaningful additions to production
from the main Baobab field in block 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 gross BOPD. Vaalco is continuing to analyze ocean
bottom node seismic data that was recently acquired which is helping to drive
and de-risk the Company's updated evaluation and assisting with the FDP.
Equatorial Guinea
Vaalco owns a 60% WI in an undeveloped portion of Block P offshore Equatorial
Guinea where it is the designated operator. Vaalco 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. The Company 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 included January and prorated February Canadian
production and financial results.
Financial Update - First Quarter of 2026
Vaalco reported a net loss of $93.8 million ($0.90 per diluted share) for Q1
2026 which was down compared with a net loss of $58.6 million ($0.56 per
diluted share) in Q4 2025 and net income of $7.7 million ($0.07 per diluted
share) in Q1 2025. The decrease in earnings compared with Q4 2025 and Q1 2025
was driven primarily by hedging losses, fewer lifting and lower sales, and
higher exploration expenses.
Adjusted EBITDAX totaled $11.6 million in Q1 2026, compared with $42.9 million
in Q4 2025. The decrease was primarily due to lower sales volumes. Adjusted
EBITDAX was down from $57.0 million generated in Q1 2025 primarily due to
lower sales volumes and lower realized pricing including realized derivative
losses.
Quarterly Summary - Sales and Net Revenue
$ in thousands Three Months Ended March 31, 2026 Three Months Ended December 31, 2025
Gabon Egypt Canada((a)) Côte d'Ivoire Total Gabon Egypt Canada Côte d'Ivoire Total
Oil Sales $ 24,368 $ 66,410 $ 1,744 $ - $ 92,522 $ 56,238 $ 54,842 $ 2,966 $ - $ 114,046
NGL Sales - - 750 - 750 - - 1,444 - 1,444
Gas Sales - - 368 - 368 - - 648 - 648
Gross Sales 24,368 66,410 2,862 - 93,640 56,238 54,842 5,058 - 116,138
Selling Costs & Carried Interest - (184) (143) - (327) 1,305 (232) (177) - 896
Royalties & Taxes (2,967) (27,310) (437) - (30,714) (7,830) (17,520) (642) - (25,992)
Net Revenue $ 21,401 $ 38,916 $ 2,282 $ - $ 62,599 $ 49,713 $ 37,090 $ 4,239 $ - $ 91,042
Oil Sales MMB (working interest) 371 1,014 31 - 1,416 970 1,009 56 - 2,035
Average Oil Price Received $ 65.70 $ 65.33 $ 56.99 $ - $ 65.33 $ 57.97 $ 54.14 $ 53.23 $ - $ 56.05
Change 17 %
Average Brent Price $ 80.72 $ 63.65
Change 27 %
Gas Sales MMCF (working interest) - - 226 - 226 - - 402 - 402
Average Gas Price Received - - $ 1.63 - $ 1.63 - - $ 1.62 - $ 1.62
Change - %
Average Aeco Price ($USD) - - $ 1.46 - $ 1.46 - - $ 2.12 - $ 2.12
Change (31) %
NGL Sales MMB (working interest) - - 31 - 31 - - 63 - 63
Average Liquids Price Received - - $ 24.07 - $ 24.07 - - $ 22.78 - $ 22.78
Change 6 %
((a)) Reflects net revenues and sales volumes from January 1, 2026 through the
closing date of the Canada Assets Divestment date on February 19, 2026.
Revenue and Sales Q1 2026 Q1 2025 % Change Q1 2026 vs. Q1 2025 Q4 2025 % Change Q1 2026 vs. Q4 2025
Production (NRI BOEPD) 15,110 17,764 (15) % 16,128 (6) %
Sales (NRI BOE) 1,094,000 1,717,000 (36) % 1,708,000 (36) %
Realized commodity price ($/BOE) $ 57.21 $ 64.27 (11) % $ 52.54 9 %
Commodity (Per BOE including realized $ 43.84 $ 64.34 (32) % $ 52.59 (17) %
commodity derivatives)
Total commodity sales ($MM) $ 62.6 $ 110.3 (43) % $ 91.0 (31) %
In Q1 2026, Vaalco had a net revenue decrease of $28.4 million or 31% compared
to Q4 2025 primarily due to a decrease in the total NRI sales volumes of 1,094
MBOE which was 36% lower than the Q4 2025 volumes of 1,708 MBOE. This was
primarily attributed to the timing of Gabon liftings and the sale of the
Canadian assets in Q1 2026. Q1 2026 volumes were lower compared to 1,717 MBOE
for Q1 2025 primarily due to the timing of Gabon liftings, the temporary
shut-in at Côte d'Ivoire due to the FPSO refurbishment and the sale of the
Canadian assets. Average realized price received of $57.21 per BOE in Q1 2026
was higher compared to $52.54 per BOE in Q4 2025, but lower than Q1 2025 of
$64.27. Q1 2026 NRI sales were slightly above the midpoint of Vaalco's
guidance.
Costs and Expenses Q1 2026 Q1 2025 % Change Q1 2026 vs. Q1 2025 Q4 2025 % Change Q1 2026 vs. Q4 2025
Production expense, excluding offshore workovers and stock comp ($MM) $ 28.3 $ 44.7 (37)% $ 43.0 (34)%
Production expense, excluding offshore workovers ($/BOE) $ 25.89 $ 26.08 (1) % $ 25.21 3%
Offshore workover expense ($MM) $ - $ - - % $ 0.1 -%
Exploration expense ($MM) $ 22.4 $ - - % $ 6.0 273 %
Depreciation, depletion and amortization ($MM) $ 18.2 $ 30.3 (40)% $ 30.8 (41) %
Depreciation, depletion and amortization ($/BOE) $ 16.65 $ 17.65 (6) % $ 18.06 (8) %
General and administrative expense, excluding stock-based compensation ($MM) $ 6.9 $ 7.8 (11) % $ 5.2 33 %
General and administrative expense, excluding stock-based compensation ($/BOE) $ 6.33 $ 4.51 40% $ 3.04 108 %
Stock-based compensation expense ($MM) $ 1.4 $ 1.4 - % $ 1.5 (10) %
Current income tax expense (benefit) ($MM) $ 14.9 $ 17.7 (16)% $ 5.2 186 %
Deferred income tax expense (benefit) ($MM) $ (10.6) $ (1.6) 560% $ (9.8) 8 %
Total production expense (excluding offshore workovers and stock compensation)
of $28.3 million in Q1 2026 decreased by 34% compared to Q4 2025 and 37%
compared to Q1 2025. The decrease in Q1 2026 compared to Q4 2025 and Q1 2025
was primarily driven by lower expenses in Gabon mainly due to the change in
oil inventory adjustments. Production expenses associated with unsold crude
oil inventory are capitalized and included in inventory, which are then
subsequently expensed when oil inventory is sold. In addition, Vaalco had
higher costs during the three months ended March 31, 2025 related to
government audit settlements. The Company also had significantly lower
production expense in Côte d'Ivoire as there were no production operations
during current period.
Depreciation, depletion and amortization ("DD&A") expense for Q1 2026 was
$18.2 million, which was 41% lower than $30.8 million in Q4 2025 and 40% lower
than $30.3 million in Q1 2025. The decrease in Q1 2026 DD&A expense
compared to Q4 2025 was due primarily to a 36% decrease in sales volumes. The
decrease in Q1 2026 DD&A expense compared to Q1 2025 was due primarily to
a reduction in DD&A expenses in the Gabon, Egypt, Canada and Côte
d'Ivoire segments.
General and administrative ("G&A") expense, excluding stock-based
compensation, increased to $6.9 million in Q1 2026, compared to $5.2 million
in Q4 2025 driven by an increase in salaries and wages. Q1 2026 G&A was
11% lower than the $7.8 million in Q1 2025 primarily due to a decrease in
salaries and wages. Q1 2026 cash G&A was slightly below the low end of the
Company's guidance range of $7 million to $9 million.
Non-cash stock-based compensation expense was $1.4 million for Q1 2026
compared to $1.5 million for Q4 2025 and $1.4 million for Q1 2025.
Exploration expense was $22.4 million for Q1 2026 compared to $6.0 million for
Q4 2025. This Q1 amount was primarily attributable to the cost of additional
seismic data related to the Niosi and Guduma licenses and the costs of an
exploration well at West Etame offshore Gabon that was determined to be
unsuccessful. The Q4 2025 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. There were no exploration costs incurred in Q1 2025.
Total other income (expense), net, was an expense of $73.3 million for Q1 2026
compared to an income of $1.6 million for Q4 2025 and an expense of $2.4
million during Q1 2025. Other income (expense), net, includes gains or losses
on derivatives, interest expense and foreign currency losses. Vaalco recorded
a $70.6 million net loss on derivative instruments for the three months ended
March 31, 2026, which included an unrealized loss of $55.9 million related to
the change in fair value of the Company's commodity derivative contracts
primarily driven by an increase in the futures curve for forecasted commodity
prices and a realized loss of $14.6 million on matured commodity derivative
contracts. Vaalco recognized a net loss on derivative instruments of $0.1
million during the same period in 2025. The increase in derivative losses was
primarily due to a higher volume of outstanding derivative contracts entered
into for the three months ended March 31, 2026 compared to the same period in
2025. The Company's derivative instruments currently cover a portion of its
crude oil production through June 2027.
Vaalco reported an income tax expense for Q1 2026 of $4.3 million which was
comprised of a $14.9 million current tax expense, offset by a deferred tax
benefit of $10.6 million. Income tax expense includes a $2.9 million
unfavorable 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 its present marked to market liability. Excluding the impact of
the unfavorable oil price adjustment, income taxes were $1.4 million for the
period. Income tax expense for Q1 2025 was $16.1 million, which includes a
$0.7 million unfavorable 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, current income taxes were $15.4 million for the period.
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, 2026 $ 24,537 $ 7,370 $ - $ - $ - $ - $ 31,907
Capital Investments/Balance Sheet
For the first quarter of 2026, net capital expenditures totaled $78.1 million
on a cash basis and $73.5 million on an accrual basis, below its first quarter
guidance of $90 million to $110 million. These expenditures were primarily
related to the new wells drilled as part of the Phase Three Drilling Campaign
in offshore Gabon as well as expenditures associated with the refurbishment
and reconnection activities of the FPSO in Côte d'Ivoire.
As of March 31, 2026, Vaalco had an unrestricted cash balance of $48.0
million. The Company had a working capital deficit of $110.1 million at
March 31, 2026 compared to a working capital deficit of $59.0 million at
December 31, 2025. In addition, Vaalco had an Adjusted Working Capital
deficit of $91.0 million at March 31, 2026 compared to an Adjusted Working
Capital deficit of $41.2 million at December 31, 2025.
At March 31, 2026, Vaalco had long-term debt of $152.0 million and
approximately $103.0 million of liquidity remaining on its reserves based
lending facility (the "2025 RBL Facility"). The Company arranged the 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. The aggregate commitments will reduce semi-annually
starting with a $13.4 million reduction on March 31, 2027, and a $30.2 million
reduction for each of the subsequent semi-annual periods starting on September
30, 2027.
During the first quarter of 2026, the Company borrowed an additional $92.0
million under its 2025 RBL Facility. The borrowings accrue interest at a rate
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. The proceeds were primarily used to fund the Baobab FPSO
refurbishment.
Certain existing lenders under the new facility agreed to increase their
commitments 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. On April 28, 2026, certain existing Lenders
under the 2025 RBL Facility agreed to increase their commitments from $255.0
million to $300.0 million. The increase in commitments was undertaken with the
existing accordion feature included in the 2025 RBL Facility.
Quarterly Cash Dividend
Vaalco paid a quarterly cash dividend of $0.0625 per share of common stock for
the first quarter of 2026 on March 27, 2026. The Company also recently
announced its next quarterly cash dividend of $0.0625 per share of common
stock for the second quarter of 2026 ($0.25 annualized), to be paid on June
26, 2026 to stockholders of record at the close of business on May 22, 2026.
Future declarations of quarterly dividends and the establishment of future
record and payment dates are subject to approval by the Vaalco Board of
Directors.
Hedging
The Company continued to hedge a portion of its expected future production to
protect cash flow generation to assist in funding its capital and shareholder
return programs.
The following includes hedges remaining in place as of the end of the first
quarter of 2026:
Settlement Period Index Total volumes (Bbls) Weighted average floor price ($/Bbl) Weighted average ceiling price ($/Bbl)
Crude oil:
Call Option ICE((a)) Brent
April 2026 to June 2026 211,000 - $ 122.00
Collars Dated Brent
2026
April 2026 to June 2026 698,000 $ 63.01 $ 69.01
July 2026 to September 2026 777,000 $ 63.85 $ 68.73
October 2026 to December 2026 692,000 $ 64.96 $ 68.33
2027
January 2027 to March 2027 673,000 $ 64.68 $ 72.63
April 2027 to June 2027 564,000 $ 70.99 $ 84.35
(a) Intercontinental Exchange
2026 Guidance:
The Company has provided second 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 22050 - 24500 9300 - 10300 10400 - 11500 250 - 300 2100 - 2400
Production (BOEPD) NRI 17400 - 19450 8100 - 9000 7000 - 7800 200 - 250 2100 - 2400
Sales Volume (BOEPD) WI 21350 - 25000 8300 - 10500 10400 - 11500 250 - 300 2400 - 2700
Sales Volume (BOEPD) NRI 16800 - 19950 7200 - 9200 7000 - 7800 200 - 250 2400 - 2700
Production Expense (millions) WI & NRI $150.50 - $178.00
Production Expense per BOE WI $18.00 - $22.00
Production Expense per BOE NRI $22.00 - $29.00
Exploration Expense (millions) WI & NRI $26 - $31 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 $16.00 - $20.00
Q2 2026 Gabon Egypt Canada Côte d'Ivoire
Production (BOEPD) WI 21600 - 23800 9900 - 10900 10400 - 11500 - 1300 - 1400
Production (BOEPD) NRI 16800 - 18700 8600 - 9500 6900 - 7800 - 1300 - 1400
Sales Volume (BOEPD) WI 21800 - 23600 11400 - 12100 10400 - 11500 - -
Sales Volume (BOEPD) NRI 16800 - 18300 9900 - 10500 6900 - 7800 - -
Production Expense (millions) WI & NRI $40.5 - $48.5 MM
Production Expense per BOE WI $19.00 - $24.00
Production Expense per BOE NRI $26.00 - $31.00
Exploration Expense (millions) WI & NRI $2 - $3 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 $110- $130 MM
DD&A ($/BOE) NRI $17.00 - $20.00
Conference Call
As previously announced, the Company will hold a conference call to discuss
its first quarter 2026 financial and operating results, Friday, May 8, 2026,
at 8:00 a.m. Central Time (9:00 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 First Quarter 2026 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 2026 Supplemental Information" investor deck will be posted to Vaalco's
website prior to its conference call on May 8, 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 (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; 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 second 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.
VAALCO ENERGY, INC AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
As of March 31, 2026 As of December 31, 2025
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 48,044 $ 58,900
Receivables:
Trade 24,791 39,924
Accounts with joint venture owners, net of allowance for credit losses of $2.9 7,782 5,420
million and $2.7 million, respectively
Other 2,197 2,277
Other current assets 33,304 26,280
Current assets held for sale - 179
Total current assets 116,118 132,980
Crude oil, natural gas and NGLs properties and equipment, net 641,780 586,095
Other noncurrent assets:
Restricted cash 1,659 1,659
Value added tax and other receivables 9,291 7,149
Right of use lease assets 87,575 85,211
Deferred tax assets 49,511 54,825
Other long-term assets 14,728 13,630
Noncurrent assets held for sale - 31,826
Total assets $ 920,662 $ 913,375
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities 226,201 191,817
Current liabilities held for sale - 183
Asset retirement obligations 80,528 78,406
Operating lease liabilities - net of current portion 15,469 11,183
Finance lease liabilities - net of current portion 53,803 57,256
Deferred tax liabilities 47,757 63,630
Long-term debt 152,000 60,000
Noncurrent liabilities held for sale - 7,403
Total liabilities 575,758 469,878
Total shareholders' equity 344,904 443,497
Total liabilities and shareholders' equity $ 920,662 $ 913,375
VAALCO ENERGY, INC AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
March 31, 2026 March 31, 2025 December 31, 2025
(in thousands except per share amounts)
Revenues:
Crude oil, natural gas and natural gas liquids sales $ 62,599 $ 110,329 $ 91,042
Operating costs and expenses:
Production expense 28,379 44,806 43,107
Exploration expense 22,394 - 6,040
Depreciation, depletion and amortization 18,212 30,305 30,845
Loss on sale of assets 1,202 - -
Impairment loss on assets held for sale - - 67,224
General and administrative expense 8,276 9,051 6,696
Credit losses and other 271 (27) (379)
Total operating costs and expenses 78,734 84,135 153,533
Other operating expense, net - - (2,391)
Operating income (loss) (16,135) 26,194 (64,882)
Other income (expense):
Derivative instruments gain (loss), net (70,581) (74) 3,643
Interest expense, net (1,699) (1,295) (2,044)
Other income (expense), net (1,034) (1,012) 32
Total other income (expense), net (73,314) (2,381) 1,631
Income (loss) before income taxes (89,449) 23,813 (63,251)
Income tax expense (benefit) 4,315 16,083 (4,648)
Net income (loss) $ (93,764) $ 7,730 $ (58,603)
Other comprehensive income:
Currency translation adjustments 112 117 1,387
Comprehensive income (loss) $ (93,652) $ 7,847 $ (57,216)
Basic net income (loss) per share:
Net income (loss) per share $ (0.90) $ 0.07 $ (0.56)
Basic weighted average shares outstanding 104,258 103,758 104,258
Diluted net income (loss) per share:
Net income (loss) per share $ (0.90) $ 0.07 $ (0.56)
Diluted weighted average shares outstanding 104,258 103,785 104,258
VAALCO ENERGY, INC AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended March 31,
2026 2025
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (93,764) $ 7,730
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:
Depreciation, depletion and amortization 18,212 30,305
Loss on Canada Assets Divestment 1,202 -
Exploration expense 13,801 -
Amortization of deferred financing costs 392 146
Deferred taxes (10,559) (1,519)
Unrealized foreign exchange gain 190 1,673
Stock-based compensation expense 1,377 1,475
Derivative instruments loss, net 70,581 74
Cash settlements paid on matured derivative contracts, net (957) 123
Credit losses and other 271 (27)
Equipment and other expensed in operations 1,890 972
Change in operating assets and liabilities (41,862) (8,246)
Net cash provided by (used in) operating activities (39,226) 32,706
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment expenditures, including exploration expense (78,074) (58,527)
Proceeds from the Canada Assets Divestment 25,474 -
Acquisition of crude oil and natural gas properties - (247)
Net cash used in investing activities (52,600) (58,774)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 92,000 -
Dividend distribution (6,687) (6,570)
Treasury shares - (155)
Deferred financing costs (1,160) (5,118)
Payments of finance lease (3,176) (2,943)
Net cash provided by (used in) in financing activities 80,977 (14,786)
Effects of exchange rate changes on cash (32) 27
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH (10,881) (40,827)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD 66,963 97,726
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD $ 56,082 $ 56,899
VAALCO ENERGY, INC AND SUBSIDIARIES
Selected Financial and Operating Statistics
(Unaudited)
Three Months Ended
March 31, 2026 March 31, 2025 December 31, 2025
NRI SALES DATA
Crude oil, natural gas and natural gas liquids sales (MBOE) 1,094 1,717 1,708
Average daily sales volumes (BOE) 12,157 19,074 18,566
WI PRODUCTION DATA
Etame Crude oil (MBbl) 676 767 712
Gabon Average daily production volumes (BOEPD) 7,516 8,522 7,743
Egypt Crude oil (MBbl) 1,014 920 1,009
Egypt Average daily production volumes (BOEPD) 11,264 10,225 10,963
Canada Crude Oil (MBbl) 31 80 56
Canada Natural Gas (MMcf) 226 413 402
Canada Natural Gas Liquid (MBOE) 31 69 63
Canada Crude oil, natural gas and natural gas liquids (MBOE) 99 218 186
Canada Average daily production volumes (BOEPD) 1,105 2,420 2,023
Côte d'Ivoire Crude oil (MBbl) - 111 -
Côte d'Ivoire Average daily production volumes (BOEPD) - 1,235 -
Total Crude oil, natural gas and natural gas liquids production (MBOE) 1,790 2,016 1,907
Average daily production volumes (BOEPD) 19,884 22,402 20,729
NRI PRODUCTION DATA
Etame Crude oil (MBbl) 588 667 620
Gabon Average daily production volumes (BOEPD) 6,539 7,414 6,737
Egypt Crude oil (MBbl) 688 642 702
Egypt Average daily production volumes (BOEPD) 7,644 7,131 7,635
Canada Crude Oil (MBbl) 26 66 48
Canada Natural Gas (MMcf) 190 338 349
Canada Natural Gas Liquid (MBOE) 26 56 55
Canada Crude oil, natural gas and natural gas liquids (MBOE) 83 179 162
Canada Average daily production volumes (BOEPD) 927 1,984 1,757
Côte d'Ivoire Crude oil (MBbl) - 111 -
Côte d'Ivoire Average daily production volumes (BOEPD) - 1,235 -
Total Crude oil, natural gas and natural gas liquids production (MBOE) 1,360 1,599 1,484
Average daily production volumes (BOEPD) 15,110 17,764 16,128
AVERAGE SALES PRICES:
Crude oil, natural gas and natural gas liquids sales (per BOE) - WI basis $ 62.87 $ 67.03 $ 53.46
Crude oil, natural gas and natural gas liquids sales (per BOE) - NRI basis $ 57.21 $ 64.27 $ 52.54
Crude oil, natural gas and natural gas liquids sales (Per BOE including $ 43.84 $ 64.34 $ 52.59
realized commodity derivatives) - NRI basis
COSTS AND EXPENSES (Per BOE of sales):
Production expense $ 25.94 $ 26.10 $ 25.24
Production expense, excluding offshore workovers and stock compensation* $ 25.89 $ 26.05 $ 25.20
Depreciation, depletion and amortization $ 16.65 $ 17.65 $ 18.06
General and administrative expense** $ 7.56 $ 5.27 $ 3.92
Property and equipment expenditures, cash basis (in thousands) $ 78,074 $ 58,527 $ 100,128
* Offshore workover costs excluded for Q1 2026, Q1
2025, and Q4 2025 are $0.0, $0.0 and $0.1 million, respectively.
* Stock compensation associated with production
expense excluded for Q1 2026, Q1 2025, and Q4 2025 are immaterial.
** General and administrative expenses include $1.23,
$0.76 and $0.88 per barrel of oil related to stock-based compensation expense
for Q1 2026, Q1 2025, and Q4 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
Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) March 31, 2026 March 31, 2025 December 31, 2025
Net income (loss) $ (93,764) $ 7,730 $ (58,603)
Adjustment for discrete items:
Unrealized derivative instruments (gain) loss 55,948 198 (3,549)
Loss on sale of assets 1,202 - -
Impairment loss on assets held for sale - - 67,224
Deferred income tax benefit (10,559) (1,610) (9,858)
Transaction costs related to acquisition - 22 53
Other operating expense, net - - 2,391
Adjusted Net Income (Loss) $ (47,173) $ 6,340 $ (2,342)
Diluted Adjusted Net Income (Loss) per Share $ (0.45) $ 0.06 $ (0.02)
Diluted weighted average shares outstanding ((1)) 104,258 103,785 104,258
((1) ) No adjustments to weighted average shares outstanding
Three Months Ended
Reconciliation of Net Income (Loss) to Adjusted EBITDAX March 31, 2026 March 31, 2025 December 31, 2025
Net income (loss) $ (93,764) $ 7,730 $ (58,603)
Add back:
Interest expense, net 1,699 1,295 2,044
Income tax expense (benefit) 4,315 16,083 (4,648)
Depreciation, depletion and amortization 18,212 30,305 30,845
Loss on sale of assets 1,202 - -
Impairment loss on assets held for sale - - 67,224
Exploration expense 22,394 - 6,040
Non-cash or unusual items:
Stock-based compensation 1,355 1,352 1,508
Unrealized derivative instruments (gain) loss 55,948 198 (3,549)
Other operating expense, net - - 2,391
Transaction costs related to acquisition - 22 53
Credit losses (recovery) and other 271 (27) (379
Adjusted EBITDAX $ 11,631 $ 56,958 $ 42,926
( )
(
)
VAALCO ENERGY, INC AND SUBSIDIARIES
Reconciliations of Non-GAAP Financial Measures
(Unaudited)
(in thousands)
Reconciliation of Working Capital to Adjusted Working Capital March 31, 2026 December 31, 2025 Change
Current assets $ 116,118 $ 132,980 $ (16,862)
Current liabilities (226,201) (192,000) (34,201)
Working capital (110,083) (59,020) (51,063)
Add: lease liabilities - current portion 19,062 17,863 1,199
Adjusted Working Capital $ (91,021) $ (41,157) $ (49,864)
Three Months Ended March 31, 2026
Reconciliation of Free Cash Flow (in thousands)
Net cash provided by Operating activities $ (39,226)
Net cash used in Investing activities (52,600)
Net cash provided by Financing activities 80,977
Effects of exchange rate changes on cash (32)
Total net cash change (10,881)
Add back shareholder cash out:
Dividends paid 6,688
Total cash returned to shareholders 6,688
Free Cash Flow $ (4,193)
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 March 31, 2026 December 31, 2025
Long-term debt $ 152,000 $ 60,000
Less: Cash and cash equivalents (48,044) (58,900)
Net debt $ 103,956 $ 1,10
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