VAALCO Energy announces first quarter 2024 results

VAALCO Energy has reported operational and financial results for the first quarter of 2024. 

First Quarter 2024 Highlights and Recent Key Items:

• Closed the accretive all cash acquisition of Svenska Petroleum Exploration AB (“Svenska”) for a net purchase price of $40.2 million;
  • Following the planned shutdown for maintenance in April, the Baobab field is back on production with a current rate in excess of 5,000 VAALCO working interest (“WI”)(1) barrels of oil equivalent per day (“BOEPD”) (99% oil);
  • Strategically expands West African focus area with a sizeable producing asset that has significant upside potential and future development opportunities in Cote d’Ivoire, a well-established and investment-friendly country;
• Reported Q1 2024 net income of $7.7 million ($0.07 per diluted share) and Adjusted Net Income(2) of $6.5 million ($0.06 per diluted share);
• Delivered strong Adjusted EBITDAX(2) of $61.7 million and funded $16.7 million in cash capital expenditures from cash on hand and cash from operations;
• Achieved production of 16,848 net revenue interest (“NRI”)(3) BOEPD and WI(1) production of 21,807 BOEPD;
• Reported NRI sales of 1,490,000 barrels of oil equivalent (“BOE”), or 16,373 BOEPD, near the high end of guidance;
• Posted unrestricted cash of $113.3 million after paying out $6.5 million in dividends in the quarter and completing $5.5 million in share buybacks;
  • Since inception of the share buyback program, VAALCO has purchased approximately $30 million in shares; and
• Announced quarterly cash dividend of $0.0625 per share of common stock to be paid on June 21, 2024.

George Maxwell, VAALCO’s Chief Executive Officer commented, 'We continue to deliver strong operational and financial results in line with or ahead of our guidance. Sales for the first quarter were near the high end of guidance and our costs were below the low end of guidance. Coupled with a strong pricing environment, VAALCO was able to generate solid earnings and Adjusted EBITDAX. We continued to return meaningful cash to our shareholders through our ongoing dividend program. Additionally, we finalized the agreements in Equatorial Guinea and are proceeding with our Front-End Engineering Design (“FEED”) study. We anticipate the completion of the FEED study will lead to an economic Final Investment Decision (“FID”) which will enable the development of the Venus Plan of Development (“POD”). In April, we closed the all cash Svenska acquisition, ahead of schedule, for a net purchase price of $40.2 million. It has been a very productive start to 2024."

'“We continue to enhance our diversified portfolio by building size and scale that allows VAALCO to generate significant free cash flow and execute our strategic vision. We are excited to be partnering with Petroci and CNR International, and believe the Baobab field in Cote d’Ivoire is an outstanding asset with significant upside potential. We have updated our full year 2024 guidance and released our second quarter guidance, both of which reflects the positive impact to production and production expense per barrel, which should lead to improved margins and greater Adjusted EBITDAX. As you can see, this acquisition is highly accretive on key metrics to our shareholder base and provides another strong asset to support future growth and returning value to shareholders.'

Operational Update 

Egypt

VAALCO focused on enhancing production in the first quarter 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 fraced and put online in January 2024. Three additional workover recompletions were completed in the first quarter 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 Q1 2024 is presented below:

Canada

The 2024 drilling campaign commenced in January with the drilling of 9-12-30-4W5, spud on January 17th. The 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 9th, and drilled to a total depth of 21,736 feet. The third well of the program, 11-12-30-4W5 was spud on February 23rd, and drilled to a total depth of 21,624 feet. The fourth well of the program was spud on March 9th, and drilled to a total depth of 20,669 feet. Each of these wells included a 2.75 mile lateral. The drilling rig was released on March 24th. Completion of the wells was initiated in late March, and was completed in April, followed by equipping and tie-in, with first production forecasted to be in May 2024.

Gabon

VAALCO is currently finalizing locations and planning for the next drilling campaign at Etame that is expected to occur late in 2024 and into 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 emphasize operational excellence, production uptime and enhancement in 2024 to minimize decline until the next drilling campaign.

The focus is on the continued production optimization of the new flow line configurations through the Etame Facility, for final processing before being pumped to the FSO. This continued optimization and understanding of the post-reconfiguration process dynamics of the Etame platform, have resulted in a very high uptime of the Etame Facility and, in turn, the complete Etame field during the first quarter of 2024. Combining this with focus on individual well and facility chemical injection optimization and facility pipelines has provided more stable operations resulting in lower downtime. Through the end of 2023 and in the first quarter of 2024, this continued to be a focus with positive results in production rates and uptime.

Click here for full announcement

Source: VAALCO Energy