VAALCO Energy has reported operational and financial results for the second quarter of 2024.
Second Quarter 2024 Highlights and Recent Key Items:
- Closed the accretive all cash acquisition of Svenska Petroleum Exploration for a net purchase price of $40.2 million;
- Updated third-party reserve engineer's calculation of proved reserves as of December 31, 2023 for Svenska that shows significant increase of SEC proved reserves to 16.9 million barrels of oil equivalent (“MMBOE”) (93% oil);
- Realized a $19.9 million bargain purchase gain on the transaction;
- Reported strong Q2 2024 net income of $28.2 million ($0.27 per diluted share) and, Adjusted Net Income(1) of $22.6 million ($0.22 per diluted share);
- Increased Adjusted EBITDAX(1) by 17% to $72.5 million compared to Q1 2024, driven by sales increase associated with Côte d’Ivoire lifting in May following the closing of the Svenska acquisition;
- Achieved production of 20,588 net revenue interest (“NRI”)(2) barrels of oil equivalent per day (“BOEPD”) and working interest (“WI”)(3) production of 25,411 BOEPD; second quarter 2024 included new production of 3,329 NRI BOEPD (3,329 WI BOEPD) from Côte d’Ivoire;
- Delivered better than expected results from the Canadian drilling program with three wells averaging 30 day initial production (“IP”)1 rates of 464 barrels of oil per day (“BOPD”), significantly increasing the liquid ratio in Canada;
- Reported NRI sales of 1,764,000 barrels of oil equivalent (“BOE”), or 19,386 BOEPD, above the midpoint of guidance; and 18% above the first quarter of 2024 due to the Côte d’Ivoire lifting;
- Posted unrestricted cash of $62.9 million which is after $40.2 million paid for the Svenska acquisition, $6.5 million paid for quarterly dividend and $32.5 million in cash capital spending for the quarter;
- Received $8 million payment post quarter-end of back dated accounts receivables (“AR”) in Egypt from EGPC. And, in July, written confirmation that the invoice was recognized in their June Accounts Payable as owed to us for our Merged Concession effective date adjustment;
- Settled $30.2 million in foreign income taxes for Gabon through the government taking its oil in-kind during a Q2 2024 lifting; and
- Announced quarterly cash dividend of $0.0625 per share of common stock to be paid on September 20, 2024.
| (1) | Adjusted EBITDAX, Adjusted Net Income, Adjusted Working Capital and Free Cash Flow2 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 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. | ||
George Maxwell, VAALCO’s Chief Executive Officer commented, 'We had another strong quarter operationally and financially, closed on a highly accretive acquisition and continue to focus on profitably generating cash flow to fund future projects, while maintaining our commitment to meaningful shareholder returns through our quarterly dividend policy. We are very pleased with the solid results from our Canadian drilling program, which improved our liquid mix considerably in the second quarter as we had three of the four wells come in with higher-than-expected IP30 rates. We closed the Côte d‘Ivoire transaction on April 30, had a lifting there in May and collected payment in June.'
'Looking at our highly accretive Côte d’Ivoire acquisition, we recognized a $19.9 million non-cash bargain purchase gain, which benefited our second quarter earnings, but it’s the strategic opportunities that provide VAALCO another strong asset to support future growth that we are most excited about. We are very pleased with the results of our third-party reserve engineer’s calculation of proved reserves as of December 31, 2023 that shows even greater reserves than we initially disclosed, up approximately 30% from our initial disclosure. This strategic and highly cost-effective acquisition strategically expands our West African focus area with a sizeable producing asset that has significant upside potential and considerable future development opportunities in Côte d’Ivoire, a well-established and investment-friendly country.'
'The focus for the second half of 2024 will be the preparation for major projects expected to deliver a step-change in organic growth across the portfolio in 2025. We expect to see an increase in capex investment through the second half of the year associated with these numerous projects including the drilling campaign in Gabon and the FPSO upgrade in Cote d’Ivoire. We are excited about the future and plan to continue to generate strong operational cash flow to fund our impressive organic opportunities moving forward, while continuing to return capital to our shareholders through the quarterly dividend.'
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Source: VAALCO Energy
