VAALCO Energy has reported operational and financial results for the second quarter 2026. Additionally, the Company has provided operational and financial guidance for the third quarter and full year of 2026.
Second Quarter 2026 Highlights and Recent Key Items:
- Sold 17,812 net revenue interest (“NRI”)(1) barrels of oil equivalent per day (“BOEPD”), above the midpoint of guidance, and up 47% from Q1 2026;
- Forecasting Q3 2026 sales volumes to increase slightly to a range between 17,200 and 18,900 NRI barrels of oil per day (“BOPD”);
- Restarted production in June 2026 at the Baobab field in offshore Côte d’Ivoire, as planned, following a major refurbishment of the Floating Production Storage and Offloading vessel (“FPSO”);
- Produced 21,796 working interest (“WI”)(2) BOEPD or 16,688 NRI(1) BOEPD an increase of about 10% compared to Q1 2026;
- Including a full quarter of production from Côte d’Ivoire, Q3 2026 production is expected to be between 19,600 and 21,600 NRI BOPD, a 23% increase compared to Q2 2026 (at the midpoint of guidance);
- Reported net income of $42.4 million ($0.39 per diluted share), driven by significantly increased sales, lower exploration expense and a non-cash gain on derivative instruments, compared with Q1 2026;
- Generated Adjusted EBITDAX(3) of $54.8 million, an increase of almost five times from $11.6 million in Q1 2026;
- Q2 2026 included two liftings in Gabon and increased sales in Egypt;
- Q3 2026 is expected to have two liftings in Gabon, continued increased Egyptian sales and the first 2026 lifting in Côte d’Ivoire;
- Affirmed the elevated full year 2026 NRI production and sales volumes that were raised in May by 8% and 12%, respectively at the midpoint, while maintaining 2026 capital budget guidance unchanged even with additional drilling in Egypt included;
- Invested $103.6 million in capital expenditures, which included the successful start to the Gabon Phase Three Drilling Program, completion of Côte d’Ivoire FPSO Dry Dock refurbishment and key drilling materials and services for the upcoming 2026 drilling campaign in Côte d’Ivoire;
- Reduced trade receivables in Egypt even further from $31.6 million at December 31, 2025 to $12.9 million at June 30, 2026; and
- Declared quarterly cash dividend of $0.0625 per share of common stock to be paid on September 22, 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), 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, 'The first half of 2026 has seen material changes to Vaalco across our growing and diversified portfolio. We increased our future growth potential in Côte d’Ivoire by being confirmed as operator with a 60% WI in the Kossipo field and divested all of our Canadian assets adding material cash to the balance sheet. We have drilled and brought online multiple wells in our Gabon drilling campaign. The FPSO at the Baobab field in offshore Côte d’Ivoire was brought back online from a yearlong refurbishment and the field was successfully restarted with production commencing in June 2026. We also resumed our successful drilling program in Egypt in May 2026. In Q2 2026, we had strong sales volumes and increased realized pricing while we continued to positively progress our asset campaigns in Côte d’Ivoire, Gabon and Egypt. This drove improved earnings of $42.4 million or $0.39 per diluted share and $54.8 million in Adjusted EBITDAX. The strong first half results and our expectation of continued operational execution have given us the confidence to affirm our increased full year production and sales guidance for 2026. We have delivered positive results in 2026, meeting or exceeding expectations, driven by our successful drilling programs and capital investments.'
Mr. Maxwell concluded, 'As we look at the second half of 2026, we are projecting significant increases in production and strong sales, which coupled with continued attractive pricing should generate solid operational cash flow and Adjusted EBITDAX generation. We are completing the Gabon drilling campaign, expanding the successful Egyptian drilling campaign and starting the Phase Five Drilling Program at Baobab that should provide material production uplift in 2027. We remain confident in our strategic vision with continued operational success coupled with our recently increased full year 2026 production and sales guidance without increasing 2026 capital guidance. Vaalco is well positioned to deliver material organic production growth.'
Operational Update
Gabon
Vaalco successfully drilled and completed the Ebouri-5H development well, as part of its ongoing Phase Three Drilling Program, with production commencing in June 2026. Following the completion of operations at the Ebouri platform, the drilling rig was mobilized to the SEENT platform where the Company spudded the ETBNM-3 gas-supply well. This well was directionally drilled adjacent to a discovery well and targeted gas and condensate resources in the Dentale D15 reservoir. The well was successfully brought online and the natural gas produced from this successful well is now being utilized for operational purposes in the field to significantly reduce the costs of higher priced diesel that is currently transported to the field by vessel. Vaalco also continued the drilling campaign in offshore Gabon by moving the rig on July 27th to a new slot on the SEENT platform to drill the ETSEM-3PH pilot hole and development well. This development well is planned with a completion length of 300 meters within the Gamba sands. Through the remainder of the Phase Three Drilling Program, the objective is to continue growing production volumes and adding proved reserves through the successful execution of Vaalco’s development program.
In addition, the BWE Consortium completed its 3D seismic campaign across the Niosi and Guduma blocks in January 2026. The seismic data processing and interpretation are currently ongoing.
Egypt
The 2026 Egypt drilling program commenced in May 2026 with the drilling of the HE-9 development well, which was completed and brought on production in early June 2026. Vaalco subsequently initiated drilling two additional development wells in June 2026, both of which were successfully completed in July. The Company is continuing with its drilling program in Egypt in the third quarter of 2026. The Company also successfully executed a series of workovers, well interventions, well reactivations, water shut-off treatments, and production optimization activities that are contributing to the organic growth of its production and reserves in Egypt.
Côte d’Ivoire
Following completion of its planned dry dock refurbishment in February 2026, the Baobab FPSO returned to Côte d’Ivoire and was successfully reconnected to field infrastructure in early April 2026. Production resumed from all producing wells in June 2026. While production has restarted, Vaalco’s first crude oil lifting is scheduled for August 2026. A drilling rig has been mobilized and the drilling program is expected to start in September 2026. This development campaign is expected to provide meaningful production growth and further unlock the value of the main Baobab field in Block CI-40.
The Company is also the operator of exploration license CI-705 with a 70% WI. Currently in the first exploration period subsurface interpretation and prospect maturation continues with the Company and its partners scheduled to make the decision whether to enter into the second phase of the exploration period by year-end 2026.
In February 2026, the Company became the operator with a 60% WI in the Kossipo field on the CI-40 Block with a field development plan being actively progressed toward completion in the first half of 2027.
Equatorial Guinea
Vaalco owns a 60% working interest in an undeveloped portion of Block P offshore Equatorial Guinea where it is the designated operator. The Company has an existing plan of development of the Venus field discovery on Block P, which focuses on key areas of drilling evaluations, facilities design, market inquiries and metocean review. 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. Work is progressing towards Final Investment Decision expected in Q4 2026.
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 – Second Quarter of 2026
Vaalco reported net income of $42.4 million ($0.39 per diluted share) for Q2 2026 which was up compared with a net loss of $93.8 million ($0.90 per diluted share) in Q1 2026 and net income of $8.4 million ($0.08 per diluted share) in Q2 2025. The increase in earnings compared with Q1 2026 and Q2 2025 was driven primarily by hedging gains, higher realized pricing and lower exploration expenses, partially offset by increases in production expense, depletion and general and administrative expenses.
Adjusted EBITDAX totaled $54.8 million in Q2 2026, a nearly five-fold increase when compared with $11.6 million in Q1 2026 and up 10% from $49.9 million generated in Q2 2025. The increase was primarily the result of higher realized commodity prices, which increased sales revenue, partially offset by increases in production expense and general and administrative expenses.
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Source: Vaalco Energy
