VAALCO Energy has 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.
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Source: Vaalco Energy
