VAALCO Energy has reported operational and financial results for the second quarter of 2025.
Second Quarter 2025 Highlights and Recent Key Items:
- Reported net income of $8.4 million ($0.08 per diluted share), Adjusted Net Income(1) of $2.3 million ($0.02 per diluted share) and Adjusted EBITDAX(1) of $49.9 million;
- Produced 16,956 net revenue interest (“NRI”)(2) barrels of oil equivalent per day (“BOEPD”), above the high end of guidance, or 21,654 working interest (“WI”)(3) BOEPD, toward the high end of guidance;
- Sold 19,393 NRI BOEPD, above the high end of guidance;
- Reported a net cash(4) position of $7.9 million that did not include approximately $24.0 million of cash receivables that was collected in July 2025;
- Reiterated full year guidance which previously included a reduction to capital expenditures in Q1 2025 by approximately 10%, without impacting full year production or sales guidance; and
- Declared quarterly cash dividend of $0.0625 per share of common stock to be paid on September 19, 2025.
(1) Adjusted EBITDAX, Adjusted Net Income Capital and Free Cash Flow 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.
(4) Net cash is defined as cash and cash equivalents less long-term debt.
George Maxwell, Vaalco’s Chief Executive Officer, commented, 'We continue to consistently deliver successful quarterly results that either meet or exceed our guidance. Both our sales and NRI production for the second quarter of 2025 were above the high end of guidance, leading to solid net income of $0.08 per diluted share and Adjusted EBITDAX of $49.9 million. We continue to execute our strategic vision as we prepare for multiple production enhancing drilling campaigns across our diversified asset base. In Côte d’Ivoire, the FPSO refurbishment project is well underway, with the vessel at the shipyard in Dubai and we are preparing for a drilling campaign in 2026 to augment the production and economic life of the Baobab field. In Gabon, we are preparing for the 2025/2026 drilling program which is expected to begin near the end of Q3 2025 as we wait for the drilling rig to complete its current commitments. In Egypt, we continue to efficiently drill wells and the success of the program in the first half of the year is expected to lead to incremental projects in the second half of 2025. As a reminder, in the first quarter, we entered into a new reserves-based credit facility that will supplement our internally-generated cash flow and cash balance to assist in funding our robust organic growth projects. In the second quarter we drew on this facility, as planned, and will continue to utilize it to assist in our growth plans.'
'We believe that we are well positioned to fund the significant growth and opportunities that we have planned over the next few years which should lead to even greater growth and value for the remainder of the decade. In May, we provided additional details at our Capital Markets Day regarding the meaningful upside that we believe is available to drive future organic growth and support our commitment to consistent shareholder returns. Our track record of success in delivering results at or above expectations should provide our investors with assurance that we will execute on the portfolio of opportunities we discussed in the Capital Markets Day presentation.'
Operational Update
Gabon
The Company secured a drilling rig in December 2024 for its 2025/2026 drilling program, which is expected to begin near the end of Q3 2025 as we wait for the drilling rig to complete its current commitments. The program includes drilling multiple development wells, and appraisal or exploration wells, and perform workovers, with options to drill additional wells. Vaalco plans to drill the wells at both the Etame platform and at its Seent platform, as well as a re-drill and several workovers in the Ebouri field to access production and reserves that were previously removed from proved reserves due to the presence of hydrogen sulfide.
In July 2025, the Company performed planned, staged shutdowns of the Gabon platforms to perform safety inspections and necessary maintenance to increase the integrity and reliability of the assets.
Egypt
The drilling campaign in Egypt, which commenced in December 2024, continued through Q2 2025. During the quarter, Vaalco completed six wells and three of the wells drilled during Q2 2025 will be hydraulically fractured in Q3 2025. Based on detailed analysis completed in Q1 2025 to evaluate the well inventory potential, a series of workover re-completions, re-activations and well optimizations have also been carried out resulting in an incremental production gain.
Canada
In 2024, Vaalco drilled and completed five horizontal wells in Canada, with all laterals being greater than two miles long. These wells continue to meet production expectations and the Company is monitoring their longer-term performance for future drilling opportunities. In 2025, the Company has decided to defer the drilling of additional wells in Canada to reduce the Company's overall capital expenditures.
Côte d'Ivoire
As part of the planned dry dock refurbishment, the Baobab Floating Production, Storage and Offloading (“FPSO”) vessel ceased hydrocarbon production on January 31, 2025 and the final lifting of crude oil from the FPSO took place in February 2025. The vessel departed from the field in late March 2025 and arrived at the shipyard in Dubai ahead of schedule in mid-May 2025. The FPSO refurbishment is now underway in the shipyard. A rig has been secured for significant development drilling which is expected to begin in 2026 after the FPSO returns to service bringing meaningful additions to production from the main Baobab field in CI-40. The Company is also evaluating the anticipated impact of the potential future development of the Kossipo field, which is also on the CI-40 license.
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 completed a Front End Engineering and Design study and is currently targeting a Final Investment Decision by the end of 2025.
Financial Update – Second Quarter of 2025
Vaalco reported net income of $8.4 million ($0.08 per diluted share) for Q2 2025 which was up compared with net income of $7.7 million ($0.07 per diluted share) in Q1 2025 and down 70% compared with net income of $28.2 million ($0.27 per diluted share) in Q2 2024. The increase in earnings compared with Q1 2025 was driven by higher sales volume in Q2 2025 of 1,765 MBOE compared to a sales volume of 1,717 MBOE in Q1 2025 and lower production expense, depreciation, depletion and amortization (“DD&A”) and lower income tax expense partially offset by lower realized pricing driven by a decrease in oil market index prices.
Adjusted EBITDAX totaled $49.9 million in Q2 2025, a 12% decrease from $57.0 million in Q1 2025. The decrease was primarily due to lower realized pricing offset by higher sales volumes and lower production expense. Adjusted EBITDAX was down 31% from $72.5 million generated in Q2 2024 primarily due to lower realized pricing.
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Source: Vaalco
