REG - Vaalco Energy Inc - THIRD QUARTER 2024 RESULTS
12/11/2024 07:00
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RNS Number : 8652L Vaalco Energy Inc 12 November 2024
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
VAALCO ENERGY, INC. ANNOUNCES
THIRD QUARTER 2024 RESULTS
HOUSTON - November 12, 2024 - VAALCO Energy, Inc. (NYSE: EGY, LSE: EGY)
("Vaalco" or the "Company") today reported operational and financial results
for the third quarter of 2024.
Third Quarter 2024 Highlights and Recent Key Items:
• Grew net revenue interest ("NRI")((2)) sales to
2,134,000 barrels of oil equivalent ("BOE"), or 23,198 barrels of oil
equivalent per day ("BOEPD"), toward the upper end of guidance; and 20% above
the second quarter of 2024 due to additional Côte d'Ivoire liftings;
• Reported Q3 2024 net income of $11.0 million ($0.10 per
diluted share) and Adjusted Net Income((1)) of $7.9 million ( $0.08 per
diluted share);
• Increased Adjusted EBITDAX((1)) by 28% to $92.8 million
compared to Q2 2024, driven by sales increase associated with Côte d'Ivoire
liftings;
• Achieved production of 21,770 NRI((2)) BOEPD and working
interest ("WI")((3)) production of 26,709 BOEPD; both were higher than Q2 2024
by 5%;
• Posted unrestricted cash of $89.1 million which is after
$6.6 million paid for quarterly dividend and $12.4 million in cash capital
spending for the quarter;
• Decreased production expense per BOE by 33%
quarter-over-quarter to $19.80 per BOE, at the low end of the Q3 2024 guidance
range ;
• Completed Production Sharing Contracts ("PSCs") with the
Government of Gabon for the offshore Niosi Marin and Guduma Marin exploration
blocks; and
• Announced quarterly cash dividend of $0.0625 per share
of common stock to be paid on December 20, 2024.
(1) Adjusted EBITDAX, Adjusted Net Income,
Adjusted Working Capital and Free Cash Flow(2) are Non-GAAP financial measures
and are described and reconciled to the closest GAAP measure in the attached
table under "Non-GAAP Financial Measures."
(2) All NRI sales and production rates are
Vaalco's working interest volumes less royalty volumes, where applicable.
(3) All WI production rates and volumes are
Vaalco's working interest volumes, where applicable.
George Maxwell, Vaalco's Chief Executive Officer commented, "We continue to
deliver strong quarterly results, both operationally and financially, that are
generating significant Adjusted EBITDAX and building cash on hand to fund
organic growth. In addition, we remain committed to shareholder returns
through our quarterly dividend policy. Our production, sales and Adjusted
EBITDAX all improved compared to Q2 2024 as we realize the positive impacts
from the highly accretive Côte d'Ivoire acquisition, the solid results from
our Canadian drilling program, and the focus on optimizing production in Gabon
and Egypt."
"In the third quarter, we announced that the results of our independent,
third-party reserve engineer's calculation of proved reserves associated with
the Côte d'Ivoire acquisition as of December 31, 2023 was approximately 30%
greater than our initial disclosure. This strategically complementary and
highly cost-effective acquisition expands our West African focus area through
the addition of a sizeable producing asset that has significant upside
potential and considerable future development opportunities in Côte d'Ivoire,
a well-established and investment-friendly country. Additionally, the
documentation has been completed on the production sharing contracts for two
offshore Gabon exploration blocks where Vaalco holds a 37.5% working
interest."
"We are excited about the major projects planned for 2025 that are expected to
deliver a step-change in organic growth across the portfolio in the coming
years. As we work to finalize the timing of our projects, we will provide more
details in early 2025. We have delivered on our focused strategy over the past
three years and believe we will continue to do so with the organic growth
programs across our diversified portfolio over the next few years. We remain
focused on maximizing value and generating strong operational cash flow to
fund our numerous organic opportunities moving forward, all while continuing
to return capital to our shareholders through the quarterly dividend policy."
Operational Update
Egypt
Vaalco focused on enhancing production in the first nine months of 2024
through a series of planned workovers, as well as through interventions using
the OGS-10 rig. Vaalco finalized the K-81 recompletion at the start of the
first quarter which was a carry-over from its 2023 drilling activity. The
EA-55 well, drilled in October 2023, was fracked and put online in January
2024. Three additional workover recompletions were completed in the third
quarter of 2024 with one more in progress. With the low cost of workovers, the
well economics are strongly positive.
A summary of the Egyptian workover campaign's impact in the first nine months
of 2024 is presented below:
Vaalco Egypt 2024 Workover Wells
Well Workover date Type Completion Zone Perforation Interval (ft) IP-30 Rate (BOPD)(a)
K-81 1-Jan-24 Recompletion Asl-D 13.1 154
EA-55 10-Jan-24 Frac & Complete Redbed Hydraulic Frac 143
H-22 7-Feb-24 Recompletion Yusr-A 9.8 82
K-65_ST1 14-Feb-24 Recompletion Asl-D 13.1 43*
K-85 16-Mar-24 Recompletion Asl-D 13.1 420
K-84 27-Mar-24 Recompletion Asl-G 16.4 58*
K-74 3-Apr-24 Water Shut-off Recompletion Asl-A 8.2 108
K-77 7-Apr-24 Recompletion Asl-A 26.2 100
K-84 13-Jun-24 Recompletion Asl-D 19.7 430
K-80 19-Jun-24 Recompletion Asl-D 13.1 188
K-72A 24-Jul-24 Recompletion Asl-A 9.8 150
HE-04 27-Jul-24 ALS Change to SRP Asl-B2 0.0 170
K-65ST1 31-Aug-24 Recompletion Asl-B 6.6 100
a) Initial Production; 30 day duration
* Production - impacted by sand production - Possible workover with sand
screen required
Canada
The 2024 drilling campaign commenced in January 2024 with the drilling of
9-12-30-4W5, which was spud on January 17, 2024. The first well was drilled to
a total depth of 22,732 feet. The second well of the program, 10-12-30-4W5,
was spud on February 9, 2024, and drilled to a total depth of 21,736 feet. The
third well in the program, 11-12-30-4W5 was spud on February 23, 2024, and
drilled to a total depth of 21,624 feet. The fourth well on the program
1-18-30-3W5 was spud on March 9, 2024, and drilled to a total depth of 20,669
feet. The drilling rig was released on March 24, 2024.
Completion of the wells began in late March and was completed in April. By
early May all wells were on production with strong initial rates as noted
below:
Vaalco Canada 2024 Wells
Well Spud date Net Pay (ft) Penetrated Pay Zones Completion Zone Perforation Interval (ft) IP-30 Rate (BOEPD)
09-12-30-4W5 1/17/2024 2.75-Mile Hz (4,400m, 14,430ft) Upper Bioturbated Cardium Cardium 115 Stg x 15T Hydraulic Fracture Treatment 479
10-12-30-4W5 2/9/2024 2.75-Mile Hz (4,400m, 14,430ft) Upper Bioturbated Cardium Cardium 100 Stg x 15T Hydraulic Fracture Treatment 469
11-12-30-4W5 2/23/2024 2.75-Mile Hz (4,400m, 14,430ft) Upper Bioturbated Cardium Cardium 108 Stg x 15T Hydraulic Fracture Treatment 444
1-18-30-3W5 3/9/2024 2.75-Mile Hz (4,400m, 14,430ft) Upper Bioturbated Cardium Cardium 106 Stg x 15T Hydraulic Fracture Treatment 182
Gabon
Vaalco is currently finalizing locations and planning for the next drilling
campaign at Etame that is expected to occur in mid-2025. In October 2022,
Vaalco successfully completed its transition to a Floating Storage and
Offloading vessel ("FSO") and related field reconfiguration processes. This
project provides a low cost FSO solution that increases the storage capacity
for the Etame block and improved operational performance. The Company
continues to demonstrate operational excellence, production uptime and
enhancement in 2024 to optimize production until the next drilling campaign.
The Company recently completed the documentation with the Government of Gabon
for the offshore Niosi Marin and Guduma Marin exploration blocks. This follows
the technical provisional award announced in October 2021 granting Vaalco a
37.5% non-operating working interest in the Niosi Marin Block (previously
G12-13) and the Guduma Marin Block (previously H12-13) located in shallow
waters offshore Gabon, with BW Energy as operator (also holding a 37.5%
working interest) and Panoro Energy as a non-operating joint owner with a 25%
working interest. The Niosi and Guduma blocks cover areas of 2,974 square
kilometers ("km²) and 1,927 km², respectively. The Niosi Block is located
adjacent to the Etame Marin Permit, where Vaalco operates a successful ongoing
exploration and production campaign. To date, the Etame Marin partners have
produced and discovered over 150 million barrels of oil, with multiple fields
brought online. The area benefits from significant infrastructure investments,
including processing facilities and a new FSO vessel installed by Vaalco in
2022 which is located adjacent to the Niosi Marin blocks. The blocks are
also adjacent to BW Energy and Panoro Energy's Dussafu PSC offshore Southern
Gabon, which is another area of significant successful exploration and
development.
Côte d'Ivoire
During the third quarter, three liftings took place. In July, 612,773 gross
barrels were lifted or 197,457 net barrels to Vaalco. In August, 681,584
gross barrels were lifted or 219,630 net barrels to Vaalco. And in September,
667,871 gross barrels were lifted or 215,211 net barrels to Vaalco.
Work with Modec, the operator of the Baobab Floating Production and Offloading
Vessel ("FPSO"), on the dry docking project for the FPSO, projected to be
offline in 2025, continued in the third quarter of 2024. The operator is
currently preparing detailed project timetable and costings for the partners
and regulator; however preliminary work including the execution of a letter of
intent with Modec on April 4, 2024 which covers the key contracts to be
executed, including vessel purchase, EPC, and O&M amendments, as well as
selection of the disconnect and reconnect contractor, and support for the
revised yard bid from Dubai dry docks among other activities.
Financial Update - Third Quarter of 2024
Vaalco reported net income of $11.0 million ($0.10 per diluted share) for the
third quarter of 2024 which was down compared with net income of $28.2 million
($0.27 per diluted share) in the second quarter of 2024 and up compared to
$6.1 million ($0.06 per diluted share) in the third quarter of 2023. The
decrease in earnings compared with the second quarter of 2024 is driven
primarily by the non-cash bargain purchase gain on the Svenska acquisition in
the second quarter.
Adjusted EBITDAX totaled $92.8 million in the third quarter of 2024, a 28%
increase from $72.5 million in the second quarter of 2024 and up 30% from
$71.4 million generated in the same period in 2023. The increase was primarily
due to additional sales volumes from Côte d'Ivoire.
Quarterly Summary - Sales and Net Revenue
$ in thousands Three Months Ended September 30, 2024 Three Months Ended June 30, 2024
Gabon Egypt Canada Côte d'Ivoire Total Gabon Egypt Canada Côte d'Ivoire Total
Oil Sales $ 54,934 $ 63,431 $ 8,038 $ 49,795 $ 176,198 $ 62,327 $ 65,314 $ 9,547 $ 17,240 $ 154,428
NGL Sales - - 2,007 - 2,007 - - 1,922 - 1,922
Gas Sales - - 225 - 225 - - 384 - 384
Gross Sales 54,934 63,431 10,270 49,795 178,429 62,327 65,314 11,853 17,240 156,734
Selling Costs & carried interest 651 (173) (351) - 127 - (117) (318) - (435)
Royalties & taxes (7,977) (28,714) (1,532) - (38,223) (8,653) (29,716) (1,152) - (39,521)
Net Revenue 47,608 34,544 8,387 49,795 140,334 53,674 35,481 10,383 17,240 116,778
Oil Sales MMB (working interest) 709 964 112 632 2,418 759 953 130 211 2,053
Average Oil Price Received $ 77.45 $ 65.79 $ 71.55 $ 78.75 $ 72.87 $ 82.13 $ 68.52 $ 73.52 $ 81.70 $ 75.22
Change -3%
Average Brent Price $ 79.84 $ 84.65
Change -6%
Gas Sales MMCF (working interest) - - 449 - 449 - - 423 - 423
Average Gas Price Received - - $ 0.50 - $ 0.50 - - $ 0.91 - $ 0.91
Change -45%
Average Aeco Price ($USD) - - $ 0.57 - $ 0.57 - - $ 0.84 - $ 0.84
Change -32%
NGL Sales MMB (working interest) - - 82 - 82 - - 76 - 76
Average Liquids Price Received - - $ 24.58 - $ 24.58 - - $ 25.16 - $ 25.16
Change -2%
Revenue and Sales Q3 2024 Q3 2023 % Change Q3 2024 vs. Q3 2023 Q2 2024 % Change Q3 2024 vs. Q2 2024
Production (NRI BOEPD) 21,770 18,845 16% 20,588 6%
Sales (NRI BOE) 2,134,000 1,812,000 18 % 1,764,000 21%
Realized commodity price ($/BOE) $ 65.41 $ 63.41 3% $ 66.05 (1) %
Commodity (Per BOE including realized commodity derivatives) $ 65.42 $ 63.38 3% $ 66.03 (1) %
Total commodity sales ($MM) $ 140.3 $ 116.3 21% $ 116.5 20%
Vaalco had net revenues increase by $24.1 million or 21% as total NRI sales
volumes of 2,134,000 BOE was 21% higher than Q2 2024 and increased 18%
compared to 1,812,000 BOE for Q3 2023. Q3 2024 NRI sales were toward the upper
end of Vaalco's guidance. The Company expects fourth quarter 2024 NRI sales to
be between 18,600 and 20,800 BOEPD.
Q3 2024 realized pricing (net of royalties) was slightly lower compared to Q2
2024 and 3% higher compared to Q3 2023.
Costs and Expenses Q3 2024 Q3 2023 % Change Q3 2024 vs. Q3 2023 Q2 2024 % Change Q3 2024 vs. Q2 2024
Production expense, excluding offshore workovers and stock comp ($MM) $ 42.2 $ 39.9 6% $ 52.4 (19%)
Production expense, excluding offshore workovers ($/BOE) $ 19.80 $ 22.07 (10%) $ 29.70 (33%)
Offshore workover expense ($MM) $ 0.1 $ - -% $ 0.1 -%
Depreciation, depletion and amortization ($MM) $ 47.0 $ 32.5 44 % $ 33.1 42%
Depreciation, depletion and amortization ($/BOE) $ 22.04 $ 18.00 22 % $ 18.78 17%
General and administrative expense, excluding stock-based compensation ($MM) $ 6.0 $ 5.2 15% $ 6.6 (9%)
General and administrative expense, excluding stock-based compensation ($/BOE) $ 2.8 $ 2.90 (3%) $ 3.8 (26%)
Stock-based compensation expense ($MM) $ 0.9 $ 1.0 (10%) $ 0.9 -%
Current income tax expense (benefit) ($MM) $ 33.7 $ 2.1 1505% $ 13.3 153 %
Deferred income tax expense (benefit) ($MM) $ (1.1) $ (2.6) (58%) $ (4.0) (73%)
Total production expense (excluding offshore workovers and stock compensation)
of $42.2 million in Q3 2024 was a 19% decrease compared to Q2 2024 and a 6%
increase compared to the same period in 2023. The decrease in Q3 2024 was
primarily driven by a non-cash purchase price adjustment for the Svenska
acquisition flowing through production expense and decreased operating
expenditure associated with the addition of Côte d'Ivoire in the quarter.
Vaalco has seen withholding tax, inflationary and industry supply chain
pressure on personnel and contractor costs.
Q3 2024 and Q2 2024 had minimal offshore workover expense, while Q3 2023 had
no workover expense.
Q3 2024 production expense per BOE, excluding offshore workover expense,
decreased to $19.80 per BOE which was lower than Q3 2023 and Q2 2024 primarily
due to the increased sales associated with the purchase of the Côte d'Ivoire
asset.
DD&A expense for Q3 2024 was $47.0 million which was higher than $33.1
million in Q2 2024 and higher than $32.5 million in Q3 2023. The increase in
Q3 2024 DD&A expense compared to Q2 2024 is due primarily to increased
depletion associated with the addition of Côte d'Ivoire. The increase in Q3
2024 DD&A expense compared to Q3 2023 is due to higher depletable costs in
Côte d'Ivoire partially offset by lower depletable costs in Gabon, Egypt, and
Canada.
General and administrative ("G&A") expense, excluding stock-based
compensation, decreased to $6.0 million in Q3 2024 from $6.6 million in Q2
2024 and increased from $5.2 million in Q3 2023. The decrease in G&A
expenses compared to Q2 2024 was primarily due to lower professional,
accounting and legal fees. The increase in G&A expenses compared to Q3
2023 was primarily due to higher professional service fees, salaries and
wages, and accounting and legal fees due to growth associated with the
acquisition. Q3 2024 cash G&A was within the Company's guidance.
Non-cash stock-based compensation expense was $0.9 million for Q3 2024
compared to $1.0 million for Q3 2023. Non-cash stock-based compensation
expense for Q2 2024 was $0.9 million.
Other income (expense), net, was an expense of $0.1 million for Q3 2024,
compared to other income of $0.2 million during Q3 2023 and an expense of $2.0
million for Q2 2024. Other income (expense), net, normally consists of foreign
currency losses. Also included in Q3 2024 amount are $0.3 million in
transaction costs related to the Svenska acquisition.
Foreign income taxes for Gabon are settled by the government taking oil
in-kind. Q3 2024 income tax expense was an expense of $32.6 million and is
comprised of current tax expense of $33.7 million and deferred tax benefit of
$1.1 million. Current quarter tax was impacted by non-deductible items (such
as the Svenska transaction costs) and the change in market value of tax
barrels due to Gabon State mark-to-market at quarter end. Q2 2024 income tax
expense was an expense of $9.3 million and is comprised of current tax expense
of $13.3 million and deferred tax benefit of $4.0 million. Q3 2023 income tax
expense was an expense of $25.8 million, comprised of $26.8 million of current
tax expense and a deferred tax benefit of $1.0 million. For all periods,
Vaalco's overall effective tax rate was impacted by non-deductible items
associated with tax rates in foreign jurisdictions higher than the US
statutory rate and by non-deductible items associated with operations.
Taxes extinguished 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 September 30, 2004 - $ 7,235 - - $ 4,531 - $ 11,766
Financial Update - First Nine Months of 2024
WI Sales for the first nine months of 2024 increased to 6,709 MBOE compared to
6,594 MBOE in the first nine months of 2023. The increase was driven primarily
by the Côte d'Ivoire acquisition. Crude oil sales are a function of the
number and size of crude oil liftings in each quarter and do not always
coincide with volumes produced in any given period.
The average realized crude oil price for the first nine months of 2024 was
$65.99 per barrel, representing an increase of 6.0% from $62.48 realized in
the first nine months of 2023. This increase in crude oil price reflects the
increase in commodity pricing over the past year.
The Company reported net income for the nine months ended September 30, 2024
of $46.8 million, which compares to $16.4 million for the same period of 2023.
The increase in net income for the nine months ended September 30, 2024
compared to the same period in 2023 was primarily due to the bargain purchase
gain related to the Svenska acquisition in April, as well as higher sales and
realized pricing.
Year to Date Summary - Sales and Net Revenue
$ in thousands Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023
Gabon Egypt Canada Côte d'Ivoire Total Gabon Egypt Canada Côte d'Ivoire Total
Oil Sales $ 182,048 $ 191,938 $ 21,739 $ 67,035 $ 462,760 $ 194,179 $ 193,570 $ 22,811 $ - $ 410,560
NGL Sales - - 5,905 - 5,905 - - 6,421 - 6,421
Gas Sales - - 1,429 - 1,429 - - 2,649 - 2,649
Gross Sales 182,048 191,938 29,073 67,035 470,094 194,179 193,570 31,881 - 419,630
Selling Costs & carried interest 1,825 (401) (812) - 612 3,590 (995) - - 2,595
Royalties & taxes (25,088) (84,550) (3,801) - (113,439) (25,833) (86,176) (4,304) - (116,313)
Net Revenue 158,786 106,986 24,460 67,035 357,267 171,936 106,399 27,577 - 305,912
Oil Sales MMB (working interest) 2,238 2,867 303 844 6,252 2,404 3,032 317 - 5,753
Average Oil Price Received $ 81.35 $ 66.94 $ 71.75 $ 79.46 $ 74.02 $ 80.76 $ 63.85 $ 72.01 $ - $ 71.36
Change 4%
Average Brent Price $ 82.50 $ 81.99
Change 1%
Gas Sales MMCF (working interest) - - 1,341 - 1,341 - - 1,327 - 1,327
Average Gas Price Received - - $ 1.07 - $ 1.07 - - $ 2.00 - $ 2.00
Change -47%
Average Aeco Price ($USD) $ 0.95 $ 0.95 $ 1.94 $ -
Change -51%
NGL Sales MMB (working interest) - - 234 - 234 - - 237 - 237
Average Liquids Price Received - - $ 25.26 - $ 25.26 - - $ 27.10 - $ 27.10
Change -7%
Capital Investments/Balance Sheet
For the third quarter of 2024, net capital expenditures totaled $12.4 million
on a cash basis and $26.6 million on an accrual basis. These expenditures were
primarily related to costs associated with the development drilling programs
in Egypt and Canada, as well as maintenance, project costs and long lead items
for Gabon and Côte d'Ivoire.
At the end of the third quarter of 2024, Vaalco had an unrestricted cash
balance of $89.1 million. Working capital at September 30, 2024 was $60.6
million compared with $100.7 million at December 31, 2023, while Adjusted
Working Capital at September 30, 2024 totaled $73.4 million.
In Egypt, the Company received written confirmation from EGPC that $51.7
million was recognized in their June Accounts Payable as owed to Company for
its Merged Concession effective date adjustment, from which they will offset
$11.2 million to satisfy any obligation of Vaalco or its subsidiaries in
connection with the TransGlobe combination. The Company invoiced EGPC for
the final receivable amount in June 2024.
Quarterly Cash Dividend
Vaalco paid a quarterly cash dividend of $0.0625 per share of common stock for
the third quarter of 2024 on September 20, 2024. The Company also announced
its next quarterly cash dividend of $0.0625 per share of common stock for the
fourth quarter of 2024 ($0.25 annualized), to paid on December 20, 2024 to
stockholders of record at the close of business on November 22, 2024. Future
declarations of quarterly dividends and the establishment of future record and
payment dates are subject to approval by the Vaalco Board of Directors (the
"Board").
Hedging
The Company continued to opportunistically hedge a portion of its expected
future production to lock in strong cash flow generation to assist in funding
its capital and shareholder returns programs.
The following includes hedges remaining in place as of the end of the third
quarter of 2024:
Settlement Period Type of Contract Index Average Monthly Volumes Weighted Average Put Price
(Bbls)a (per Bbl)
July 2024 - December 2024 Put Options Dated Brent 125,000 $ 65.00
Settlement Period Type of Contract Index Average Monthly Volumes Weighted Average SWAP Price in CAD
(GJ)(b) (per GJ)
November 2024 - March 2025 Swap AECO (7A) 67,000 $
2.80
a) One gigajoule (GJ) equals one billion joules (J). A gigajoule
of natural gas is about 25.5 cubic metres at standard conditions.
Subsequent to September 30, 2024, the Company entered into the following
additional derivative contracts to cover its future anticipated production:
Weighted Average Hedge Price ($/Bbl)
Settlement Period Type of Contract Index Average Volumes Hedged (Bbl) Floor Ceiling
January 2025 - March 2025 Collars Dated Brent 70,000 $ 65.00 $ 85.00
April 2025 - June 2025 Collars Dated Brent 70,000 $ 65.00 $ 81.00
2024 Guidance:
The Company has provided third quarter 2024 guidance and updated its full year
2024 guidance. All of the quarterly and annual guidance is detailed in the
tables below.
FY 2024 Gabon Egypt Canada Côte d'Ivoire
Production (BOEPD) WI 24100 - 25400 8500 - 8900 10100 - 10600 2600 - 2800 2900 - 3100
Production (BOEPD) NRI 19300 - 20600 7400 - 7800 6800 - 7300 2200 - 2400 2900 - 3100
Sales Volume (BOEPD) WI 23500 - 25100 7700 - 8300 10100 - 10600 2600 - 2800 3100 - 3400
Sales Volume (BOEPD) NRI 18800 - 20300 6700 - 7200 6800 - 7300 2200 - 2400 3100 - 3400
Production Expense (millions) WI & NRI $162.5 - $176.5 MM
Production Expense per BOE WI $18.00 - $20.00
Production Expense per BOE NRI $22.50 - $25.50
Offshore Workovers (millions) WI & NRI $0 - $0 MM
Cash G&A (millions) WI & NRI $21.0 - $25.0 MM
CAPEX excluding acquisitions (millions) WI & NRI $110 - $130 MM
DD&A ($/BOE) NRI $19.00 - $23.00
Q4 2024 Gabon Egypt Canada Côte d'Ivoire
Production (BOEPD) WI 23800 - 26700 7900 - 9100 9500 - 10500 2400 - 2700 4000 - 4400
Production (BOEPD) NRI 19400 - 22000 6900 - 7900 6500 - 7500 2000 - 2200 4000 - 4400
Sales Volume (BOEPD) WI 22900 - 25300 7300 - 8000 9500 - 10500 2400 - 2700 3700 - 4100
Sales Volume (BOEPD) NRI 18600 - 20800 6400 - 7000 6500 - 7500 2000 - 2200 3700 - 4100
Production Expense (millions) WI & NRI $40.8 - $47.3 MM
Production Expense per BOE WI $17.50 - $22.50
Production Expense per BOE NRI $21.00 - $27.50
Offshore Workovers (millions) WI & NRI $0 - $0 MM
Cash G&A (millions) WI & NRI $4.5 - $6.5 MM
CAPEX excluding acquisitions (millions) WI & NRI $40 - $60 MM
DD&A ($/BOE) NRI $21.00 - $24.00
Conference Call
As previously announced, the Company will hold a conference call to discuss
its third quarter 2024 financial and operating results tomorrow, Tuesday,
November 12, 2024, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time and 3:00
p.m. London Time). Interested parties may participate by dialing (833)
685-0907. Parties in the United Kingdom may participate toll-free by dialing
08082389064 and other international parties may dial (412) 317-5741.
Participants should request to be joined to the "Vaalco energy Third Quarter
2024 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 "Q3 2024 Supplemental Information" investor deck will be posted to Vaalco's
website prior to its conference call on November 12, 2024 that includes
additional financial and operational information.
About Vaalco
Vaalco, founded in 1985 and incorporated under the laws of Delaware, is a
Houston, Texas, USA based, independent energy company with a diverse portfolio
of production, development and exploration assets across Gabon, Egypt, Côte
d'Ivoire, Equatorial Guinea, Nigeria and Canada.
For Further Information
Vaalco Energy, Inc. (General and Investor Enquiries) +00 1 713 543 3422
Website: www.vaalco.com
Al Petrie Advisors (US Investor Relations) +00 1 713 543 3422
Al Petrie / Chris Delange
Buchanan (UK Financial PR) +44 (0) 207 466 5000
Ben Romney / Barry Archer VAALCO@buchanan.uk.com
Forward Looking Statements
This press release includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act")
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. Where a forward-looking statement
expresses or implies an expectation or belief as to future events or results,
such expectation or belief is expressed in good faith and believed to have a
reasonable basis. All statements other than statements of historical fact may
be forward-looking statements. The words "anticipate," "believe," "estimate,"
"expect," "intend," "forecast," "outlook," "aim," "target," "will," "could,"
"should," "may," "likely," "plan" and "probably" or similar words may identify
forward-looking statements, but the absence of these words does not mean that
a statement is not forward-looking. Forward-looking statements in this press
release include, but are not limited to, statements relating to (i) estimates
of future drilling, production, sales and costs of acquiring crude oil,
natural gas and natural gas liquids; (ii) expectations regarding VAALCO's
ability to effectively integrate assets and properties it has acquired as a
result of the Svenska acquisition into its operations; (iii) expectations
regarding future exploration and the development, growth and potential of
VAALCO's operations, project pipeline and investments, and schedule and
anticipated benefits to be derived therefrom; (iv) expectations regarding
future acquisitions, investments or divestitures; (v) expectations of future
dividends; (vi) expectations of future balance sheet strength; and (vii)
expectations of future equity and enterprise value.
Such forward-looking statements are subject to risks, uncertainties and other
factors, which could cause actual results to differ materially from future
results expressed, projected or implied by the forward-looking statements.
These risks and uncertainties include, but are not limited to: risks relating
to any unforeseen liabilities of VAALCO; the ability to generate cash flows
that, along with cash on hand, will be sufficient to support operations and
cash requirements; risks relating to the timing and costs of completion for
scheduled maintenance of the FPSO servicing the Baobab field; and the risks
described under the caption "Risk Factors" in VAALCO's 2023 Annual Report on
Form 10-K filed with the SEC on March 15, 2024 and subsequent Quarterly
Reports on Form 10-Q filed with the SEC.
Dividends beyond the fourth quarter of 2024 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.
WI CPR Reserves
WI CPR reserves represent proved (1P) and proved plus probable (2P) estimates
as reported by Petroleum Development Consultants Limited 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 $79.79 per barrel of
oil beginning in 2024, $69.79 in 2025, and inflating 2% thereafter;
• 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 2024.
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 Svenska 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.
Other Oil and Gas Advisories
Investors are cautioned when viewing BOEs in isolation. The Svenska reserves
estimates as of October 1, 2023 were calculated using a BOE conversion ratio
of six thousand cubic feet of natural gas to one barrel of oil equivalent (6
MCF: 1 Bbl). The Svenska reserves estimates as of December 31, 2023 were
calculated using a BOE conversion ratio of five thousand eight hundred cubic
feet of natural gas to one barrel of oil equivalent (5.8 MCF: 1 Bbl). 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
Consolidated Balance Sheets (Unaudited)
As of September 30, 2024 As of December 31, 2023
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $ $ 121,001
89,101
Restricted cash 146 114
Receivables:
Trade, net of allowances for credit loss and other of $0.7 million and $0.5
million, respectively 84,344 44,888
Accounts with joint venture owners, net of allowance for credit losses of
$1.2 million and 1,131 1,814
$0.8 million, respectively
Egypt receivables and other, net of allowances for credit loss and other of
$0.0 million and $4.6 million as 42,163 45,942
of December 31, 2023
Crude oil inventory
4,776 1,948
Prepayments and other
15,138 12,434
Total current assets
236,799 228,141
Crude oil, natural gas and NGLs properties and equipment, net
531,589 459,786
Other noncurrent assets:
Restricted cash
9,462 1,795
Value added tax and other receivables, net of allowances for credit loss and
other of $0.0 million 10,228 4,214
Right of use operating lease assets
2,320 2,378
Right of use finance lease assets
83,093 89,962
Deferred tax assets
57,035 29,242
Abandonment funding
6,268 6,268
Other long-term assets
1,109 1,430
Total assets $ 937,903 $ 823,216
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ $
15,047 22,152
Accounts with joint venture owners 984
5,990
Accrued liabilities and other
103,848 67,597
Operating lease liabilities - current portion 335
2,396
Finance lease liabilities - current portion
12,560 10,079
Foreign income taxes payable
43,473 19,261
Total current liabilities
176,247 127,475
Asset retirement obligations
65,868 47,343
Operating lease liabilities - net of current portion 33
2,006
Finance lease liabilities - net of current portion
70,912 78,293
Deferred tax liabilities
103,356 73,581
Other long-term liabilities
18,482 17,709
Total liabilities
436,871 344,434
Commitments and contingencies
Shareholders' equity:
Preferred stock, $25 par value; 500,000 shares authorized, none issued - -
Common stock, $0.10 par value; 160,000,000 shares authorized, 122,304,124
and 121,397,553 shares issued, 12,230 12,140
103,743,163 and 104,346,233 shares outstanding, respectively
Additional paid-in capital
361,147 357,498
Accumulated other comprehensive income
1,013 2,880
Less treasury stock, 18,560,961 and 17,051,320 shares, respectively, (78,024) (71,222)
at cost
Retained earnings
204,666 177,486
Total shareholders' equity
501,032 478,782
Total liabilities and shareholders' equity $ 937,903 $ 823,216
VAALCO ENERGY, INC AND SUBSIDIARIES
Consolidated Statements of Operations (Unaudited)
Three Months Ended Nine Months Ended
September 30, 2024 September 30, 2023 June 30, 2024 September 30, 2024 September 30, 2023
(in thousands except per share amounts)
Revenues:
Crude oil, natural gas and natural gas liquids sales $ 140,334 $ 116,269 116,778 $ 357,267 $ 305,912
Operating costs and expenses:
Production expense 42,324 39,956 52,446 126,859 106,760
FPSO demobilization and other costs - - - - 5,647
Exploration expense - 1,194 - 48 1,259
Depreciation, depletion and amortization 47,031 32,538 33,132 105,987 94,958
General and administrative expense 6,929 6,216 7,591 21,230 16,835
Credit losses and other 69 822 3,341 5,222 2,437
Total operating costs and expenses 96,353 80,726 96,510 259,346 227,896
Other operating income (expense), net 102 5 132 68 (298)
Operating income 44,083 35,548 20,400 97,989 77,718
Other income (expense):
Derivative instruments gain (loss), net 210 (2,320) 257 (380) (2,268)
Interest expense, net (588) (1,426) (1,117) (2,640) (5,375)
Bargain purchase gain - - 19,898 19,898 (1,412)
Other income (expense), net (141) 183 (1,984) (3,925) (97)
Total other income (expense), net (519) (3,563) 17,054 12,953 (9,152)
Income before income taxes 43,564 31,985 37,454 110,942 68,566
Income tax expense 32,574 25,844 9,303 64,115 52,203
Net income $ 10,990 $ 6,141 $ 28,151 $ 46,827 $ 16,363
Other comprehensive income (loss)
Currency translation adjustments 1,655 (2,216) (1,068) (1,867) (335)
Comprehensive income $ 12,645 $ 3,925 $ 27,083 $ 44,960 $ 16,028
Basic net income (loss) per share:
Net income (loss) per share $ 0.10 $ 0.06 $ 0.27 $ 0.45 $ 0.15
Basic weighted average shares outstanding 103,743 106,289 103,528 103,644 106,876
Diluted net income (loss) per share:
Net income (loss) per share $ 0.10 $ 0.06 $ 0.27 $ 0.45 $ 0.15
Diluted weighted average shares outstanding 103,842 106,433 103,676 103,728 107,072
VAALCO ENERGY, INC AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended September 30,
2024 2023
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 46,827 $ 16,363
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation, depletion and amortization 105,987 94,958
Bargain purchase gain (19,898) 1,412
Exploration expense 48 1,194
Deferred taxes (7,762) (2,305)
Unrealized foreign exchange loss (613) 932
Stock-based compensation 3,362 2,332
Cash settlements paid on exercised stock appreciation rights (154) (282)
Derivative instruments (gain) loss, net 209 2,268
Cash settlements paid on matured derivative contracts, net (15) (62)
Cash settlements paid on asset retirement obligations (315) (4,796)
Credit losses and other 5,222 2,437
Other operating loss, net 34 317
Equipment and other expensed in operations 1,589 2,560
Change in operating assets and liabilities:
Trade, net (39,456) 29,364
Accounts with joint venture owners, net (4,739) 15,090
Egypt receivables and other, net (394) 694
Crude oil inventory 12,153 (5,952)
Prepayments and other (1,847) 1,198
Value added tax and other receivables (5,713) (3,719)
Other long-term assets 1,808 2,942
Accounts payable (9,034) (10,083)
Foreign income taxes receivable/(payable) 24,327 36,025
Accrued liabilities and other (42,441) (11,076)
Net cash provided by (used in) operating activities 69,185 171,811
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment expenditures (61,530) (77,365)
Cash paid in business combination (40,166) -
Cash received in business combination 40,578 -
Net cash provided by (used in) investing activities (61,118) (77,365)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuances of common stock 447 593
Dividend distribution (19,647) (20,153)
Treasury shares (6,803) (17,493)
Deferred financing costs - (83)
Payments of finance lease (6,261) (5,246)
Net cash provided by (used in) in financing activities (32,264) (42,382)
Effects of exchange rate changes on cash (4) (321)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH (24,201) 51,743
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD 129,178 59,776
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD $ 104,977 $ 111,519
VAALCO ENERGY, INC AND SUBSIDIARIES
Selected Financial and Operating Statistics
(Unaudited)
Three Months Ended Nine Months Ended
September 30, 2024 September 30, 2023 June 30, 2024 September 30, 2024 September 30, 2023
NRI SALES DATA
Crude oil, natural gas and natural gas liquids sales (MBOE) 2,134 1,812 1,764 5,388 4,839
Average daily sales volumes (BOE) 23,198 19,696 19,386 19,664 17,725
WI PRODUCTION DATA
Etame Crude oil (MBbl) 810 911 780 2,408 2,787
Egypt Crude oil (MBbl) 964 1,076 953 2,867 3,032
Canada Crude Oil (MBbl) 112 101 130 303 317
Canada Natural Gas (Mcf) 449 470 423 1,341 1,327
Canada Natural Gas Liquid (MBOE) 82 82 76 234 237
Canada Crude oil, natural gas and natural gas liquids (MBOE) 269 261 277 761 775
Côte d'Ivoire Crude oil (MBbl) 415 - 303 717 -
Total Crude oil, natural gas and natural gas liquids production (MBOE) 2,458 2,248 2,313 6,753 6,594
Gabon Average daily production volumes (BOEPD) 8,800 9,901 8,566 8,789 10,209
Egypt Average daily production volumes (BOEPD) 10,480 11,691 10,474 10,465 11,106
Canada Average daily production volumes (BOEPD) 2,923 2,835 3,041 2,776 2,838
Côte d'Ivoire Average daily production volumes (BOEPD) 4,506 - 3,329 2,619 -
Average daily production volumes (BOEPD) 26,709 24,427 25,411 24,649 24,153
NRI PRODUCTION DATA
Etame Crude oil (MBbl) 704 792 678 2,095 2,425
Egypt Crude oil (MBbl) 657 732 643 1,941 2,074
Canada Crude Oil (MBbl) 95 81 117 263 275
Canada Natural Gas (Mcf) 380 376 381 1,161 1,151
Canada Natural Gas Liquid (MBOE) 69 66 69 202 206
Canada Crude oil, natural gas and natural gas liquids (MBOE) 227 210 250 656 673
Côte d'Ivoire Crude oil (MBbl) 415 - 303 717 -
Total Crude oil, natural gas and natural gas liquids production (MBOE) 2,003 1,734 1,874 5,410 5,172
Gabon Average daily production volumes (BOEPD) 7,652 8,609 7,451 7,647 8,883
Egypt Average daily production volumes (BOEPD) 7,141 7,957 7,066 7,084 7,598
Canada Average daily production volumes (BOEPD) 2,471 2,279 2,742 2,395 2,462
Côte d'Ivoire Average daily production volumes (BOEPD) 4,506 - 3,329 2,619 -
Average daily production volumes (BOEPD) 21,770 18,845 20,588 19,745 18,943
AVERAGE SALES PRICES:
Crude oil, natural gas and natural gas liquids sales (per BOE) - WI basis $ 69.07 $ 70.78 $ 70.92 $ 69.90 $ 67.40
Crude oil, natural gas and natural gas liquids sales (per BOE) - NRI basis $ 65.41 $ 63.41 $ 66.05 $ 65.99 $ 62.48
Crude oil, natural gas and natural gas liquids sales (Per BOE including $ 65.39 $ 63.38 $ 66.03 $ 65.98 $ 62.47
realized commodity derivatives)
COSTS AND EXPENSES (Per BOE of sales):
Production expense $ 19.83 $ 22.05 $ 29.74 $ 23.54 $ 22.06
Production expense, excluding offshore workovers and stock compensation* $ 19.80 $ 22.04 $ 29.68 $ 23.52 $ 22.32
Depreciation, depletion and amortization $ 22.04 $ 17.96 $ 18.78 $ 19.67 $ 19.62
General and administrative expense** $ 3.25 $ 3.43 $ 4.34 $ 3.94 $ 3.48
Property and equipment expenditures, cash basis (in thousands) $ 12,431 $ 22,533 $ 32,481 $ 61,530 $ 77,365
* Offshore workover costs excluded from the three
months ended September 30, 2024 and 2023 and June 30, 2024 are $0.1 million,
$0 million and $0.1 million, respectively.
* Stock compensation associated with production
expense excluded from the three months ended September 30, 2024 and 2023 and
June 30, 2024 are immaterial.
** General and administrative expenses include $0.52,
$0.57 and $0.51 per barrel of oil related to stock-based compensation expense
in the three months ended September 30, 2024 and 2023 and June 30, 2024,
respectively.
NON-GAAP FINANCIAL MEASURES
Management uses Adjusted Net Income to evaluate operating and financial
performance and believes the measure is useful to investors because it
eliminates the impact of certain non-cash and/or other items that management
does not consider to be indicative of the Company's performance from period to
period. Management also believes this non-GAAP measure is useful to investors
to evaluate and compare the Company's operating and financial performance
across periods, as well as facilitating comparisons to others in the Company's
industry. Adjusted Net Income is a non-GAAP financial measure and as used
herein represents net income, deferred income tax expense (benefit),
unrealized commodity derivative loss (gain), bargain purchase gain on the
Svenska Acquisition, FPSO demobilization, transaction costs related to the
Svenska acquisition and non-cash and other items.
Adjusted EBITDAX is a supplemental non-GAAP financial measure used by VAALCO's
management and by external users of the Company's financial statements, such
as industry analysts, lenders, rating agencies, investors and others who
follow the industry, 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, interest expense (income) net, income tax expense
(benefit), depletion, depreciation and amortization, exploration expense, FPSO
demobilization, non-cash and other items including stock compensation expense,
Bargain purchase gain on the Svenska Acquisition, other operating (income)
expense, net, non-cash purchase price adjustment, transaction costs related to
acquisition, credit losses and other and unrealized commodity derivative 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 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.
VAALCO ENERGY, INC AND SUBSIDIARIES
Reconciliations of Non-GAAP Financial Measures
(Unaudited)
(in thousands)
Three Months Ended Nine Months Ended
Reconciliation of Net Income to Adjusted Net Income September 30, 2024 September 30, 2023 June 30, 2024 September 30, 2024 September 30, 2023
Net income $ 10,990 $ 6,141 $ 28,151 $ 46,827 $ 16,363
Adjustment for discrete items:
Unrealized derivative instruments loss (gain) (192) 2,321 (266) 365 2,206
Bargain purchase gain - - (19,898) (19,898) -
FPSO demobilization - - - - 5,647
Deferred income tax expense (benefit) (3,089) (985) (2,021) (8,551) 673
Non-cash purchase price adjustment - - 14,981 14,981 -
Transaction costs related to acquisition 327 - 1,762 3,402 -
Other operating (income) expense, net (102) (5) (132) (68) 313
Adjusted Net Income $ 7,934 $ 7,472 $ 22,577 $ 37,058 $ 25,202
Diluted Adjusted Net Income per Share $ 0.08 $ 0.07 $ 0.22 $ 0.36 $ 0.24
Diluted weighted average shares outstanding (1) 103,842 106,433 103,676 103,728 107,072
(1) No adjustments to weighted average shares outstanding
Three Months Ended Nine Months Ended
Reconciliation of Net Income to Adjusted EBITDAX September 30, 2024 September 30, 2023 June 30, 2024 September 30, 2024 September 30, 2023
Net income $ 10,990 $ 6,141 $ 28,151 $ 46,827 $ 16,363
Add back:
Interest expense (income), net 588 1,426 1,117 2,640 5,375
Income tax expense (benefit) 32,574 25,844 9,303 64,115 52,203
Depreciation, depletion and amortization 47,031 32,538 33,132 105,987 94,958
Exploration expense - 1,194 - 48 1,259
FPSO demobilization - - - - 5,647
Non-cash or unusual items:
Stock-based compensation 1,479 1,078 984 3,362 2,332
Unrealized derivative instruments loss (gain) (192) 2,321 (266) 365 2,206
Bargain purchase gain - - (19,898) (19,898) -
Other operating (income) expense, net (102) (5) (132) (68) 313
Non-cash purchase price adjustment - - 14,981 14,981 -
Transaction costs related to acquisition 327 - 1,762 3,402 -
Credit losses and other 69 822 3,341 5,222 2,437
Adjusted EBITDAX $ 92,764 $ 71,359 $ 72,475 $ 226,983 $ 183,093
VAALCO ENERGY, INC AND SUBSIDIARIES
Reconciliations of Non-GAAP Financial Measures
(Unaudited)
(in thousands)
Reconciliation of Working Capital to Adjusted Working Capital As of September 30, 2024 As of December 31, 2023 Change
Current assets 236,799 228,141 $ 8,658
Current liabilities (176,247) (127,475) (48,772)
Working capital 60,552 100,666 (40,114)
Add: lease liabilities - current portion 12,895 12,475 420
Add: current liabilities - discontinued operations - 673 (673)
Adjusted Working Capital $ 73,447 $ 113,814 $ (40,367)
Nine Months Ended September 30, 2024
Reconciliation of Free Cash Flow
Net cash provided by Operating activities $ 69,185
Net cash used in Investing activities (61,118)
Net cash used in Financing activities (32,264)
Effects of exchange rate changes on cash (4)
Total net cash change (24,201)
Add back shareholder cash out:
Dividends paid 19,647
Stock buyback 5,502
Total cash returned to shareholders 25,149
Free Cash Flow $ 947
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