Press Release: VAALCO Energy, Inc. Announces Third Quarter 2024 Results

VAALCO Energy, Inc. Announces Third Quarter 2024 Results

HOUSTON, Nov. 11, 2024 (GLOBE NEWSWIRE) -- VAALCO Energy, Inc. (NYSE: EGY, LSE: EGY) ("Vaalco" or the "Company") today reported operational and financial results for the third quarter of 2024.

Third Quarter 2024 Highlights and Recent Key Items:

-- Grew net revenue interest ("NRI")(2) sales to 2,134,000 barrels of oil equivalent ("BOE"), or 23,198 barrels of oil equivalent per day ("BOEPD"), toward the upper end of guidance; and 20% above the second quarter of 2024 due to additional Côte d'Ivoire liftings; -- Reported Q3 2024 net income of $11.0 million ($0.10 per diluted share) and Adjusted Net Income(1) of $7.9 million ( $0.08 per diluted share); -- Increased Adjusted EBITDAX(1) by 28% to $92.8 million compared to Q2 2024, driven by sales increase associated with Côte d'Ivoire liftings; -- Achieved production of 21,770 NRI(2) BOEPD and working interest ("WI")(3) production of 26,709 BOEPD; both were higher than Q2 2024 by 5%; -- Posted unrestricted cash of $89.1 million which is after $6.6 million paid for quarterly dividend and $12.4 million in cash capital spending for the quarter; -- Decreased production expense per BOE by 33% quarter-over-quarter to $19.80 per BOE, at the low end of the Q3 2024 guidance range ; -- Completed Production Sharing Contracts ("PSCs") with the Government of Gabon for the offshore Niosi Marin and Guduma Marin exploration blocks; and -- Announced quarterly cash dividend of $0.0625 per share of common stock to be paid on December 20, 2024. (1) Adjusted EBITDAX, Adjusted Net Income, Adjusted Working Capital and Free Cash Flow(2) 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.

George Maxwell, Vaalco's Chief Executive Officer commented, "We continue to deliver strong quarterly results, both operationally and financially, that are generating significant Adjusted EBITDAX and building cash on hand to fund organic growth. In addition, we remain committed to shareholder returns through our quarterly dividend policy. Our production, sales and Adjusted EBITDAX all improved compared to Q2 2024 as we realize the positive impacts from the highly accretive Côte d'Ivoire acquisition, the solid results from our Canadian drilling program, and the focus on optimizing production in Gabon and Egypt."

"In the third quarter, we announced that the results of our independent, third-party reserve engineer's calculation of proved reserves associated with the Côte d'Ivoire acquisition as of December 31, 2023 was approximately 30% greater than our initial disclosure. This strategically complementary and highly cost-effective acquisition expands our West African focus area through the addition of 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. Additionally, the documentation has been completed on the production sharing contracts for two offshore Gabon exploration blocks where Vaalco holds a 37.5% working interest."

"We are excited about the major projects planned for 2025 that are expected to deliver a step-change in organic growth across the portfolio in the coming years. As we work to finalize the timing of our projects, we will provide more details in early 2025. We have delivered on our focused strategy over the past three years and believe we will continue to do so with the organic growth programs across our diversified portfolio over the next few years. We remain focused on maximizing value and generating strong operational cash flow to fund our numerous organic opportunities moving forward, all while continuing to return capital to our shareholders through the quarterly dividend policy."

Operational Update

Egypt

Vaalco focused on enhancing production in the first nine months 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 fracked and put online in January 2024. Three additional workover recompletions were completed in the third quarter of 2024 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 the first nine months of 2024 is presented below:

Vaalco Egypt 2024 Workover Wells -------------------------------------------------------------------------- Perforation IP-30 Workover Completion Interval Rate Well date Type Zone (ft) (BOPD)(a) ---------- ------------- ----------- ----------- --------- K-81 1-Jan-24 Recompletion Asl-D 13.1 154 Frac & Hydraulic EA-55 10-Jan-24 Complete Redbed Frac 143 H-22 7-Feb-24 Recompletion Yusr-A 9.8 82 K-65_ST1 14-Feb-24 Recompletion Asl-D 13.1 43* K-85 16-Mar-24 Recompletion Asl-D 13.1 420 K-84 27-Mar-24 Recompletion Asl-G 16.4 58* Water Shut-off K-74 3-Apr-24 Recompletion Asl-A 8.2 108 K-77 7-Apr-24 Recompletion Asl-A 26.2 100 K-84 13-Jun-24 Recompletion Asl-D 19.7 430 K-80 19-Jun-24 Recompletion Asl-D 13.1 188 K-72A 24-Jul-24 Recompletion Asl-A 9.8 150 ALS Change to HE-04 27-Jul-24 SRP Asl-B2 0.0 170 K-65ST1 31-Aug-24 Recompletion Asl-B 6.6 100

a) Initial Production; 30 day duration

* Production - impacted by sand production - Possible workover with sand screen required

Canada

The 2024 drilling campaign commenced in January 2024 with the drilling of 9-12-30-4W5, which was spud on January 17, 2024. The first 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 9, 2024, and drilled to a total depth of 21,736 feet. The third well in the program, 11-12-30-4W5 was spud on February 23, 2024, and drilled to a total depth of 21,624 feet. The fourth well on the program 1-18-30-3W5 was spud on March 9, 2024, and drilled to a total depth of 20,669 feet. The drilling rig was released on March 24, 2024.

Completion of the wells began in late March and was completed in April. By early May all wells were on production with strong initial rates as noted below:

Vaalco Canada 2024 Wells Perforation IP-30 Net Pay Penetrated Completion Interval Rate Well Spud date (ft) Pay Zones Zone (ft) (BOEPD) 2.75-Mile 115 Stg x 15T Hz Upper Hydraulic (4,400m, Bioturbated Fracture 09-12-30-4W5 1/17/2024 14,430ft) Cardium Cardium Treatment 479 2.75-Mile 100 Stg x 15T Hz Upper Hydraulic (4,400m, Bioturbated Fracture 10-12-30-4W5 2/9/2024 14,430ft) Cardium Cardium Treatment 469 2.75-Mile 108 Stg x 15T Hz Upper Hydraulic (4,400m, Bioturbated Fracture 11-12-30-4W5 2/23/2024 14,430ft) Cardium Cardium Treatment 444 2.75-Mile 106 Stg x 15T Hz Upper Hydraulic (4,400m, Bioturbated Fracture 1-18-30-3W5 3/9/2024 14,430ft) Cardium Cardium Treatment 182

Gabon

Vaalco is currently finalizing locations and planning for the next drilling campaign at Etame that is expected to occur in mid-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 demonstrate operational excellence, production uptime and enhancement in 2024 to optimize production until the next drilling campaign.