VAALCO Energy has reported its operational and financial results for the first quarter of 2023.
First Quarter 2023 Highlights and Key Items:
- Paid first quarter 2023 cash dividend of $0.0625 per share of common stock and announced quarterly cash dividend of $0.0625 per share of common stock ($0.25 annualized) to be paid on June 23, 2023, an increase of 92% compared to 2022;
- Returned $10.5 million to shareholders by purchasing 2.2 million shares since inception of share buy back in November 2022 through May 9, 2023;
- Increased average daily production by 27% to 18,306 net revenue interest ('NRI')(1) barrels of oil equivalent per day ('BOEPD'), or 23,152 working interest ('WI')(2) BOEPD compared to the fourth quarter of 2022;
- Reported Q1 2023 net income of $3.5 million ($0.03 per diluted share) and Adjusted Net Income(3) of $7.3 million ($0.07 per diluted share);
- Sold 1,224,000 barrels of oil equivalent in Q1 2023, which were impacted by timing of liftings;
- Expect Q2 2023 NRI sales to be between 1,420,000 and 1,570,000 barrels of oil equivalent;
- Generated Adjusted EBITDAX(3) of $47.8 million and funded $27.7 million in cash capital expenditures from cash on hand and cash from operations during the first quarter 2023;
- Increased cash and cash equivalents to $52.1 million, generated $42.0 million in cash flow from operating activities and reported Adjusted Working Capital1 of $40.2 million at March 31, 2023; and
- Finalized multiple substantive documents with VAALCO's partners and the Ministry of Mines & Hydrocarbons ('MMH') in Equatorial Guinea for Block P which includes the Venus development.
George Maxwell, VAALCO’s Chief Executive Officer commented:
'In October 2022, we completed the transformational combination with TransGlobe Energy Corporation that has grown VAALCO into a diversified, multi-country company focused on sustainable growth and returning value to shareholders. The first quarter of 2023 is the first full quarter of reporting as a combined company. We delivered strong daily production growth of 27% compared to Q4 2022, and generated significant cash flow and Adjusted EBITDAX, despite lower sales due to timing of liftings and lower commodity pricing. Remaining committed to returning value to shareholders, we increased our quarterly dividend by 92% to $0.0625 per share and have paid the first quarter dividend and announced the second quarter dividend. In addition, we have returned $10.5 million in share buy backs through May 9th. We are well positioned and financially stronger with more reserves, production and future potential than at any other time in our history. We are a diversified, multinational exploration and production company with significant 2P WI CPR reserves across four countries and heavily weighted to oil. We have no bank debt, a growing cash flow position and meaningful upside opportunities that we are evaluating for future organic growth. We have built a company of size and scale that is capable of supporting sustainable shareholder returns.'
'Following our meetings with the MMH and our partners in March regarding our development plans for Equatorial Guinea, we continue to work towards the finalization of documents between the partners, having completed the production sharing contract ("PSC") documentation with the MMH. We are now moving forward with the project, subject to finalization of JOA documentation, with a more detailed review of the drilling and topsides development of the Venus project with the objective of reducing the overall project costs in conjunction with our partners. Following a detailed peer review, we are considering options where the drilling of all three wells (two producers and one water injector) are drilled as a single campaign which will reduce the overall drilling costs through lower mobilization costs. We are also building detailed options for the production and evacuation facilities throughout the second and third quarters of 2023. Planned activity includes a detailed seabed survey to identify the prime location for the development facilities. We are excited about the future in Equatorial Guinea as we begin to develop the vast resource potential at Block P.'
(1 ) All NRI 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
(3 ) Adjusted EBITDAX, Adjusted Net Income and Adjusted Working Capital are Non-GAAP financial measures and are described and reconciled to the closest GAAP measure in the attached table under “Non-GAAP Financial Measures.”
Source: VAALCO Energy
