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 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 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 |
|
Well |
Workover date |
Type |
Completion Zone |
|
Perforation Interval (ft) |
|
IP-30 Rate (BOPD)(a) |
|
K-81 |
1-Jan-24 |
Recompletion |
Asl-D |
|
13.1 |
|
154 |
|
EA-55 |
10-Jan-24 |
Frac & Complete |
Redbed |
|
Hydraulic 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* |
|
K-74 |
3-Apr-24 |
Water Shut-off 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 |
|
HE-04 |
27-Jul-24 |
ALS Change to 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 |
|
Well |
Spud date |
Net Pay (ft) |
Penetrated Pay Zones |
Completion Zone |
|
Perforation Interval (ft) |
|
IP-30 Rate (BOEPD) |
|
09-12-30-4W5 |
1/17/2024 |
2.75-Mile Hz (4,400m, 14,430ft) |
Upper Bioturbated Cardium |
Cardium |
|
115 Stg x 15T Hydraulic Fracture Treatment |
|
479 |
|
10-12-30-4W5 |
2/9/2024 |
2.75-Mile Hz (4,400m, 14,430ft) |
Upper Bioturbated Cardium |
Cardium |
|
100 Stg x 15T Hydraulic Fracture Treatment |
|
469 |
|
11-12-30-4W5 |
2/23/2024 |
2.75-Mile Hz (4,400m, 14,430ft) |
Upper Bioturbated Cardium |
Cardium |
|
108 Stg x 15T Hydraulic Fracture Treatment |
|
444 |
|
1-18-30-3W5 |
3/9/2024 |
2.75-Mile Hz (4,400m, 14,430ft) |
Upper Bioturbated Cardium |
Cardium |
|
106 Stg x 15T Hydraulic Fracture 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.
The Company recently completed the documentation
with the Government of Gabon for the offshore Niosi Marin and
Guduma Marin exploration blocks. This follows the technical
provisional award announced in October 2021 granting Vaalco a 37.5%
non-operating working interest in the Niosi Marin Block (previously
G12-13) and the Guduma Marin Block (previously H12-13) located in
shallow waters offshore Gabon, with BW Energy as operator (also
holding a 37.5% working interest) and Panoro Energy as a
non-operating joint owner with a 25% working interest. The Niosi
and Guduma blocks cover areas of 2,974 square kilometers (“km²) and
1,927 km², respectively. The Niosi Block is located adjacent to the
Etame Marin Permit, where Vaalco operates a successful ongoing
exploration and production campaign. To date, the Etame Marin
partners have produced and discovered over 150 million barrels of
oil, with multiple fields brought online. The area benefits from
significant infrastructure investments, including processing
facilities and a new FSO vessel installed by Vaalco in 2022 which
is located adjacent to the Niosi Marin blocks. The blocks are also
adjacent to BW Energy and Panoro Energy’s Dussafu PSC offshore
Southern Gabon, which is another area of significant successful
exploration and development.
Côte d'Ivoire
During the third quarter, three liftings took
place. In July, 612,773 gross barrels were lifted or 197,457 net
barrels to Vaalco. In August, 681,584 gross barrels were lifted or
219,630 net barrels to Vaalco. And in September, 667,871 gross
barrels were lifted or 215,211 net barrels to Vaalco.
Work with Modec, the operator of the Baobab
Floating Production and Offloading Vessel (“FPSO”), on the dry
docking project for the FPSO, projected to be offline in 2025,
continued in the third quarter of 2024. The operator is currently
preparing detailed project timetable and costings for the partners
and regulator; however preliminary work including the execution of
a letter of intent with Modec on April 4, 2024 which covers the key
contracts to be executed, including vessel purchase, EPC, and
O&M amendments, as well as selection of the disconnect and
reconnect contractor, and support for the revised yard bid from
Dubai dry docks among other activities.
Financial Update –
Third Quarter of 2024
Vaalco reported net income of $11.0 million
($0.10 per diluted share) for the third quarter of 2024 which was
down compared with net income of $28.2 million ($0.27 per diluted
share) in the second quarter of 2024 and up compared to $6.1
million ($0.06 per diluted share) in the third quarter of 2023. The
decrease in earnings compared with the second quarter of 2024 is
driven primarily by the non-cash bargain purchase gain on the
Svenska acquisition in the second quarter.
Adjusted EBITDAX totaled $92.8 million in the
third quarter of 2024, a 28% increase from $72.5 million in the
second quarter of 2024 and up 30% from $71.4 million generated in
the same period in 2023. The increase was primarily due to
additional sales volumes from Côte d'Ivoire.
| Quarterly Summary
- Sales and Net Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
| $ in
thousands |
Three Months Ended September 30, 2024 |
|
Three Months Ended June 30, 2024 |
| |
Gabon |
|
Egypt |
|
Canada |
|
Côte d'Ivoire |
|
Total |
|
Gabon |
|
Egypt |
|
Canada |
|
Côte d'Ivoire |
|
Total |
|
Oil Sales |
$ |
54,934 |
|
|
$ |
63,431 |
|
|
$ |
8,038 |
|
|
$ |
49,795 |
|
$ |
176,198 |
|
|
$ |
62,327 |
|
|
$ |
65,314 |
|
|
$ |
9,547 |
|
|
$ |
17,240 |
|
$ |
154,428 |
|
| NGL Sales |
|
— |
|
|
|
— |
|
|
|
2,007 |
|
|
|
— |
|
|
2,007 |
|
|
|
— |
|
|
|
— |
|
|
|
1,922 |
|
|
|
— |
|
|
1,922 |
|
| Gas Sales |
|
— |
|
|
|
— |
|
|
|
225 |
|
|
|
— |
|
|
225 |
|
|
|
— |
|
|
|
— |
|
|
|
384 |
|
|
|
— |
|
|
384 |
|
| Gross Sales |
|
54,934 |
|
|
|
63,431 |
|
|
|
10,270 |
|
|
|
49,795 |
|
|
178,429 |
|
|
|
62,327 |
|
|
|
65,314 |
|
|
|
11,853 |
|
|
|
17,240 |
|
|
156,734 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Selling Costs & carried
interest |
|
651 |
|
|
|
(173 |
) |
|
|
(351 |
) |
|
|
— |
|
|
127 |
|
|
|
— |
|
|
|
(117 |
) |
|
|
(318 |
) |
|
|
— |
|
|
(435 |
) |
| Royalties & taxes |
|
(7,977 |
) |
|
|
(28,714 |
) |
|
|
(1,532 |
) |
|
|
— |
|
|
(38,223 |
) |
|
|
(8,653 |
) |
|
|
(29,716 |
) |
|
|
(1,152 |
) |
|
|
— |
|
|
(39,521 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Revenue |
|
47,608 |
|
|
|
34,544 |
|
|
|
8,387 |
|
|
|
49,795 |
|
|
140,334 |
|
|
|
53,674 |
|
|
|
35,481 |
|
|
|
10,383 |
|
|
|
17,240 |
|
|
116,778 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Oil Sales MMB (working
interest) |
|
709 |
|
|
|
964 |
|
|
|
112 |
|
|
|
632 |
|
|
2,418 |
|
|
|
759 |
|
|
|
953 |
|
|
|
130 |
|
|
|
211 |
|
|
2,053 |
|
| Average Oil Price
Received |
$ |
77.45 |
|
|
$ |
65.79 |
|
|
$ |
71.55 |
|
|
$ |
78.75 |
|
$ |
72.87 |
|
|
$ |
82.13 |
|
|
$ |
68.52 |
|
|
$ |
73.52 |
|
|
$ |
81.70 |
|
$ |
75.22 |
|
| Change |
|
|
|
|
|
|
|
|
|
-3 |
% |
|
|
|
|
|
|
|
|
|
|
| Average Brent Price |
|
|
|
|
|
|
|
|
$ |
79.84 |
|
|
|
|
|
|
|
|
|
|
$ |
84.65 |
|
| Change |
|
|
|
|
|
|
|
|
|
-6 |
% |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gas Sales MMCF (working
interest) |
|
— |
|
|
|
— |
|
|
|
449 |
|
|
|
— |
|
|
449 |
|
|
|
— |
|
|
|
— |
|
|
|
423 |
|
|
|
— |
|
|
423 |
|
| Average Gas Price
Received |
|
— |
|
|
|
— |
|
|
$ |
0.50 |
|
|
|
— |
|
$ |
0.50 |
|
|
|
— |
|
|
|
— |
|
|
$ |
0.91 |
|
|
|
— |
|
$ |
0.91 |
|
| Change |
|
|
|
|
|
|
|
|
|
-45 |
% |
|
|
|
|
|
|
|
|
|
|
| Average Aeco Price ($USD) |
|
— |
|
|
|
— |
|
|
$ |
0.57 |
|
|
|
— |
|
$ |
0.57 |
|
|
|
— |
|
|
|
— |
|
|
$ |
0.84 |
|
|
|
— |
|
$ |
0.84 |
|
| Change |
|
|
|
|
|
|
|
|
|
-32 |
% |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NGL Sales MMB (working
interest) |
|
— |
|
|
|
— |
|
|
|
82 |
|
|
|
— |
|
|
82 |
|
|
|
— |
|
|
|
— |
|
|
|
76 |
|
|
|
— |
|
|
76 |
|
| Average Liquids Price
Received |
|
— |
|
|
|
— |
|
|
$ |
24.58 |
|
|
|
— |
|
$ |
24.58 |
|
|
|
— |
|
|
|
— |
|
|
$ |
25.16 |
|
|
|
— |
|
$ |
25.16 |
|
| Change |
|
|
|
|
|
|
|
|
|
-2 |
% |
|
|
|
|
|
|
|
|
|
|
| Revenue and Sales |
Q3 2024 |
|
Q3 2023 |
|
% Change Q3 2024 vs. Q3 2023 |
|
Q2 2024 |
|
% Change Q3 2024 vs. Q2 2024 |
|
Production (NRI BOEPD) |
|
21,770 |
|
|
18,845 |
|
16 |
% |
|
|
20,588 |
|
6 |
% |
| Sales (NRI BOE) |
|
2,134,000 |
|
|
1,812,000 |
|
18 |
% |
|
|
1,764,000 |
|
21 |
% |
| Realized commodity price
($/BOE) |
$ |
65.41 |
|
$ |
63.41 |
|
3 |
% |
|
$ |
66.05 |
|
(1)% |
| Commodity (Per BOE including
realized commodity derivatives) |
$ |
65.42 |
|
$ |
63.38 |
|
3 |
% |
|
$ |
66.03 |
|
(1)% |
| Total commodity sales
($MM) |
$ |
140.3 |
|
$ |
116.3 |
|
21 |
% |
|
$ |
116.5 |
|
20 |
% |
Vaalco had net revenues increase by $24.1
million or 21% as total NRI sales volumes of 2,134,000 BOE was 21%
higher than Q2 2024 and increased 18% compared to 1,812,000 BOE for
Q3 2023. Q3 2024 NRI sales were toward the upper end of Vaalco's
guidance. The Company expects fourth quarter 2024 NRI sales to be
between 18,600 and 20,800 BOEPD.
Q3 2024 realized pricing (net of royalties) was
slightly lower compared to Q2 2024 and 3% higher compared to Q3
2023.
| Costs and Expenses |
Q3 2024 |
|
Q3 2023 |
|
% Change Q3 2024 vs. Q3 2023 |
|
Q2 2024 |
|
% Change Q3 2024 vs. Q2 2024 |
|
Production expense, excluding offshore workovers and stock comp
($MM) |
$ |
42.2 |
|
|
$ |
39.9 |
|
|
6 |
% |
|
$ |
52.4 |
|
|
(19 |
%) |
| Production expense, excluding
offshore workovers ($/BOE) |
$ |
19.80 |
|
|
$ |
22.07 |
|
|
(10 |
%) |
|
$ |
29.70 |
|
|
(33 |
%) |
| Offshore workover expense
($MM) |
$ |
0.1 |
|
|
$ |
— |
|
|
— |
% |
|
$ |
0.1 |
|
|
— |
% |
| Depreciation, depletion and
amortization ($MM) |
$ |
47.0 |
|
|
$ |
32.5 |
|
|
44 |
% |
|
$ |
33.1 |
|
|
42 |
% |
| Depreciation, depletion and
amortization ($/BOE) |
$ |
22.04 |
|
|
$ |
18.00 |
|
|
22 |
% |
|
$ |
18.78 |
|
|
17 |
% |
| General and administrative
expense, excluding stock-based compensation ($MM) |
$ |
6.0 |
|
|
$ |
5.2 |
|
|
15 |
% |
|
$ |
6.6 |
|
|
(9 |
%) |
| General and administrative
expense, excluding stock-based compensation ($/BOE) |
$ |
2.8 |
|
|
$ |
2.90 |
|
|
(3 |
%) |
|
$ |
3.8 |
|
|
(26 |
%) |
| Stock-based compensation
expense ($MM) |
$ |
0.9 |
|
|
$ |
1.0 |
|
|
(10 |
%) |
|
$ |
0.9 |
|
|
— |
% |
| Current income tax expense
(benefit) ($MM) |
$ |
33.7 |
|
|
$ |
2.1 |
|
|
1505 |
% |
|
$ |
13.3 |
|
|
153 |
% |
| Deferred income tax expense
(benefit) ($MM) |
$ |
(1.1 |
) |
|
$ |
(2.6 |
) |
|
(58 |
%) |
|
$ |
(4.0 |
) |
|
(73 |
%) |
Total production expense (excluding offshore
workovers and stock compensation) of $42.2 million in Q3 2024 was a
19% decrease compared to Q2 2024 and a 6% increase compared to the
same period in 2023. The decrease in Q3 2024 was primarily driven
by a non-cash purchase price adjustment for the Svenska acquisition
flowing through production expense and decreased operating
expenditure associated with the addition of Côte d'Ivoire in the
quarter. Vaalco has seen withholding tax, inflationary and industry
supply chain pressure on personnel and contractor costs.
Q3 2024 and Q2 2024 had minimal offshore
workover expense, while Q3 2023 had no workover expense.
Q3 2024 production expense per BOE, excluding
offshore workover expense, decreased to $19.80 per BOE which was
lower than Q3 2023 and Q2 2024 primarily due to the increased sales
associated with the purchase of the Côte d'Ivoire asset.
DD&A expense for Q3 2024 was $47.0 million
which was higher than $33.1 million in Q2 2024 and higher than
$32.5 million in Q3 2023. The increase in Q3 2024 DD&A expense
compared to Q2 2024 is due primarily to increased depletion
associated with the addition of Côte d'Ivoire. The increase in Q3
2024 DD&A expense compared to Q3 2023 is due to higher
depletable costs in Côte d'Ivoire partially offset by lower
depletable costs in Gabon, Egypt, and Canada.
General and administrative (“G&A”) expense,
excluding stock-based compensation, decreased to $6.0 million in Q3
2024 from $6.6 million in Q2 2024 and increased from $5.2 million
in Q3 2023. The decrease in G&A expenses compared to Q2 2024
was primarily due to lower professional, accounting and legal fees.
The increase in G&A expenses compared to Q3 2023 was primarily
due to higher professional service fees, salaries and wages, and
accounting and legal fees due to growth associated with the
acquisition. Q3 2024 cash G&A was within the Company’s
guidance.
Non-cash stock-based compensation expense was
$0.9 million for Q3 2024 compared to $1.0 million for Q3 2023.
Non-cash stock-based compensation expense for Q2 2024 was $0.9
million.
Other income (expense), net, was an expense of
$0.1 million for Q3 2024, compared to other income of $0.2 million
during Q3 2023 and an expense of $2.0 million for Q2 2024. Other
income (expense), net, normally consists of foreign currency
losses. Also included in Q3 2024 amount are $0.3 million in
transaction costs related to the Svenska acquisition.
Foreign income taxes for Gabon are settled by
the government taking oil in-kind. Q3 2024 income tax expense was
an expense of $32.6 million and is comprised of current tax expense
of $33.7 million and deferred tax benefit of $1.1 million. Current
quarter tax was impacted by non-deductible items (such as the
Svenska transaction costs) and the change in market value of tax
barrels due to Gabon State mark-to-market at quarter end. Q2 2024
income tax expense was an expense of $9.3 million and is comprised
of current tax expense of $13.3 million and deferred tax benefit of
$4.0 million. Q3 2023 income tax expense was an expense of $25.8
million, comprised of $26.8 million of current tax expense and a
deferred tax benefit of $1.0 million. For all periods, Vaalco’s
overall effective tax rate was impacted by non-deductible items
associated with tax rates in foreign jurisdictions higher than the
US statutory rate and by non-deductible items associated with
operations.
Taxes extinguished by jurisdiction are as follows:
| (in
thousands) |
|
Gabon |
|
Egypt |
|
Canada |
|
Equatorial Guinea |
|
Cote d'Ivoire |
|
Corporate and Other |
|
Total |
|
Cash/In Kind Taxes Paid: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, 2004 |
|
— |
|
$ |
7,235 |
|
— |
|
— |
|
$ |
4,531 |
|
— |
|
$ |
11,766 |
Financial Update –
First Nine Months of
2024
WI Sales for the first nine months of 2024
increased to 6,709 MBOE compared to 6,594 MBOE in the first nine
months of 2023. The increase was driven primarily by the Côte
d'Ivoire acquisition. Crude oil sales are a function of the number
and size of crude oil liftings in each quarter and do not always
coincide with volumes produced in any given period.
The average realized crude oil price for the first nine months
of 2024 was $65.99 per barrel, representing an increase of 6.0%
from $62.48 realized in the first nine months of 2023. This
increase in crude oil price reflects the increase in commodity
pricing over the past year.
The Company reported net income for the nine
months ended September 30, 2024 of $46.8 million, which compares to
$16.4 million for the same period of 2023. The increase in net
income for the nine months ended September 30, 2024 compared to the
same period in 2023 was primarily due to the bargain purchase gain
related to the Svenska acquisition in April, as well as higher
sales and realized pricing.
| Year to Date
Summary - Sales and Net Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
| $ in
thousands |
Nine Months Ended September 30, 2024 |
|
Nine Months Ended September 30, 2023 |
| |
Gabon |
|
Egypt |
|
Canada |
|
Côte d'Ivoire |
|
Total |
|
Gabon |
|
Egypt |
|
Canada |
|
Côte d'Ivoire |
|
Total |
|
Oil Sales |
$ |
182,048 |
|
|
$ |
191,938 |
|
|
$ |
21,739 |
|
|
$ |
67,035 |
|
$ |
462,760 |
|
|
$ |
194,179 |
|
|
$ |
193,570 |
|
|
$ |
22,811 |
|
|
$ |
— |
|
$ |
410,560 |
|
| NGL Sales |
|
— |
|
|
|
— |
|
|
|
5,905 |
|
|
|
— |
|
|
5,905 |
|
|
|
— |
|
|
|
— |
|
|
|
6,421 |
|
|
|
— |
|
|
6,421 |
|
| Gas Sales |
|
— |
|
|
|
— |
|
|
|
1,429 |
|
|
|
— |
|
|
1,429 |
|
|
|
— |
|
|
|
— |
|
|
|
2,649 |
|
|
|
— |
|
|
2,649 |
|
| Gross Sales |
|
182,048 |
|
|
|
191,938 |
|
|
|
29,073 |
|
|
|
67,035 |
|
|
470,094 |
|
|
|
194,179 |
|
|
|
193,570 |
|
|
|
31,881 |
|
|
|
— |
|
|
419,630 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Selling Costs & carried
interest |
|
1,825 |
|
|
|
(401 |
) |
|
|
(812 |
) |
|
|
— |
|
|
612 |
|
|
|
3,590 |
|
|
|
(995 |
) |
|
|
— |
|
|
|
— |
|
|
2,595 |
|
| Royalties & taxes |
|
(25,088 |
) |
|
|
(84,550 |
) |
|
|
(3,801 |
) |
|
|
— |
|
|
(113,439 |
) |
|
|
(25,833 |
) |
|
|
(86,176 |
) |
|
|
(4,304 |
) |
|
|
— |
|
|
(116,313 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Revenue |
|
158,786 |
|
|
|
106,986 |
|
|
|
24,460 |
|
|
|
67,035 |
|
|
357,267 |
|
|
|
171,936 |
|
|
|
106,399 |
|
|
|
27,577 |
|
|
|
— |
|
|
305,912 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Oil Sales MMB (working
interest) |
|
2,238 |
|
|
|
2,867 |
|
|
|
303 |
|
|
|
844 |
|
|
6,252 |
|
|
|
2,404 |
|
|
|
3,032 |
|
|
|
317 |
|
|
|
— |
|
|
5,753 |
|
| Average Oil Price
Received |
$ |
81.35 |
|
|
$ |
66.94 |
|
|
$ |
71.75 |
|
|
$ |
79.46 |
|
$ |
74.02 |
|
|
$ |
80.76 |
|
|
$ |
63.85 |
|
|
$ |
72.01 |
|
|
$ |
— |
|
$ |
71.36 |
|
| Change |
|
|
|
|
|
|
|
|
|
4 |
% |
|
|
|
|
|
|
|
|
|
|
| Average Brent Price |
|
|
|
|
|
|
|
|
$ |
82.50 |
|
|
|
|
|
|
|
|
|
|
$ |
81.99 |
|
| Change |
|
|
|
|
|
|
|
|
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gas Sales MMCF (working
interest) |
|
— |
|
|
|
— |
|
|
|
1,341 |
|
|
|
— |
|
|
1,341 |
|
|
|
— |
|
|
|
— |
|
|
|
1,327 |
|
|
|
— |
|
|
1,327 |
|
| Average Gas Price
Received |
|
— |
|
|
|
— |
|
|
$ |
1.07 |
|
|
|
— |
|
$ |
1.07 |
|
|
|
— |
|
|
|
— |
|
|
$ |
2.00 |
|
|
|
— |
|
$ |
2.00 |
|
| Change |
|
|
|
|
|
|
|
|
|
-47 |
% |
|
|
|
|
|
|
|
|
|
|
| Average Aeco Price ($USD) |
|
|
|
|
$ |
0.95 |
|
|
|
|
$ |
0.95 |
|
|
|
|
|
|
$ |
1.94 |
|
|
|
|
$ |
— |
|
| Change |
|
|
|
|
|
|
|
|
|
-51 |
% |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NGL Sales MMB (working
interest) |
|
— |
|
|
|
— |
|
|
|
234 |
|
|
|
— |
|
|
234 |
|
|
|
— |
|
|
|
— |
|
|
|
237 |
|
|
|
— |
|
|
237 |
|
| Average Liquids Price
Received |
|
— |
|
|
|
— |
|
|
$ |
25.26 |
|
|
|
— |
|
$ |
25.26 |
|
|
|
— |
|
|
|
— |
|
|
$ |
27.10 |
|
|
|
— |
|
$ |
27.10 |
|
| Change |
|
|
|
|
|
|
|
|
|
-7 |
% |
|
|
|
|
|
|
|
|
|
|
Capital Investments/Balance Sheet
For the third quarter of 2024, net capital
expenditures totaled $12.4 million on a cash basis and $26.6
million on an accrual basis. These expenditures were primarily
related to costs associated with the development drilling programs
in Egypt and Canada, as well as maintenance, project costs and long
lead items for Gabon and Côte d'Ivoire.
At the end of the third quarter of 2024, Vaalco
had an unrestricted cash balance of $89.1 million. Working capital
at September 30, 2024 was $60.6 million compared with $100.7
million at December 31, 2023, while Adjusted Working Capital at
September 30, 2024 totaled $73.4 million.
In Egypt, the Company received written
confirmation from EGPC that $51.7 million was recognized in their
June Accounts Payable as owed to Company for its Merged Concession
effective date adjustment, from which they will offset $11.2
million to satisfy any obligation of Vaalco or its subsidiaries in
connection with the TransGlobe combination. The Company invoiced
EGPC for the final receivable amount in June 2024.
Quarterly Cash Dividend
Vaalco paid a quarterly cash dividend of $0.0625
per share of common stock for the third quarter of 2024 on
September 20, 2024. The Company also announced its next quarterly
cash dividend of $0.0625 per share of common stock for the fourth
quarter of 2024 ($0.25 annualized), to paid on December 20, 2024 to
stockholders of record at the close of business on November 22,
2024. Future declarations of quarterly dividends and the
establishment of future record and payment dates are subject to
approval by the Vaalco Board of Directors (the "Board").
Hedging
The Company continued to opportunistically hedge
a portion of its expected future production to lock in strong cash
flow generation to assist in funding its capital and shareholder
returns programs.
The following includes hedges remaining in place
as of the end of the third quarter of 2024:
|
Settlement Period |
Type of Contract |
Index |
|
Average Monthly Volumes |
|
Weighted Average Put Price |
|
|
|
|
|
|
(Bbls)a |
|
(per Bbl) |
|
|
July 2024 - December 2024 |
Put Options |
Dated Brent |
|
125,000 |
|
$ |
65.00 |
|
|
Settlement Period |
Type of Contract |
Index |
|
Average Monthly Volumes |
|
Weighted Average SWAP Price in CAD |
|
|
|
|
|
|
(GJ)b |
|
(per GJ) |
|
|
November 2024 - March 2025 |
Swap |
AECO (7A) |
|
67,000 |
|
$ |
2.80 |
|
a) One gigajoule (GJ) equals one billion joules (J).
A gigajoule of natural gas is about 25.5 cubic metres at standard
conditions.
Subsequent to September 30, 2024, the
Company entered into the following additional derivative contracts
to cover its future anticipated production:
| |
|
|
|
|
|
|
|
Weighted Average Hedge Price ($/Bbl) |
|
Settlement Period |
|
Type of Contract |
|
Index |
|
Average Volumes Hedged (Bbl) |
|
Floor |
|
Ceiling |
|
January 2025 - March 2025 |
|
Collars |
|
Dated Brent |
|
70,000 |
|
$ |
65.00 |
|
$ |
85.00 |
| April 2025 - June 2025 |
|
Collars |
|
Dated Brent |
|
70,000 |
|
$ |
65.00 |
|
$ |
81.00 |
2024 Guidance:
The Company has provided third quarter 2024
guidance and updated its full year 2024 guidance. All of the
quarterly and annual guidance is detailed in the tables below.
|
|
|
|
FY 2024 |
|
Gabon |
|
Egypt |
|
Canada |
|
Côte d'Ivoire |
|
|
Production (BOEPD) |
WI |
|
24100 - 25400 |
|
8500 - 8900 |
|
10100 - 10600 |
|
2600 - 2800 |
|
2900 - 3100 |
|
| Production (BOEPD) |
NRI |
|
19300 - 20600 |
|
7400 - 7800 |
|
6800 - 7300 |
|
2200 - 2400 |
|
2900 - 3100 |
|
| Sales Volume (BOEPD) |
WI |
|
23500 - 25100 |
|
7700 - 8300 |
|
10100 - 10600 |
|
2600 - 2800 |
|
3100 - 3400 |
|
| Sales Volume (BOEPD) |
NRI |
|
18800 - 20300 |
|
6700 - 7200 |
|
6800 - 7300 |
|
2200 - 2400 |
|
3100 - 3400 |
|
| Production Expense
(millions) |
WI & NRI |
|
$162.5 - $176.5 MM |
|
|
|
|
|
|
|
|
|
| Production Expense per
BOE |
WI |
|
$18.00 - $20.00 |
|
|
|
|
|
|
|
|
|
| Production Expense per
BOE |
NRI |
|
$22.50 - $25.50 |
|
|
|
|
|
|
|
|
|
| Offshore Workovers
(millions) |
WI & NRI |
|
$0 - $0 MM |
|
|
|
|
|
|
|
|
|
| Cash G&A (millions) |
WI & NRI |
|
$21.0 - $25.0 MM |
|
|
|
|
|
|
|
|
|
| CAPEX excluding acquisitions
(millions) |
WI & NRI |
|
$110 - $130 MM |
|
|
|
|
|
|
|
|
|
| DD&A ($/BOE) |
NRI |
|
$19.00 - $23.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 2024 |
|
Gabon |
|
Egypt |
|
Canada |
|
Côte d'Ivoire |
|
| Production (BOEPD) |
WI |
|
23800 - 26700 |
|
7900 - 9100 |
|
9500 - 10500 |
|
2400 - 2700 |
|
4000 - 4400 |
|
| Production (BOEPD) |
NRI |
|
19400 - 22000 |
|
6900 - 7900 |
|
6500 - 7500 |
|
2000 - 2200 |
|
4000 - 4400 |
|
| Sales Volume (BOEPD) |
WI |
|
22900 - 25300 |
|
7300 - 8000 |
|
9500 - 10500 |
|
2400 - 2700 |
|
3700 - 4100 |
|
| Sales Volume (BOEPD) |
NRI |
|
18600 - 20800 |
|
6400 - 7000 |
|
6500 - 7500 |
|
2000 - 2200 |
|
3700 - 4100 |
|
| Production Expense
(millions) |
WI & NRI |
|
$40.8 - $47.3 MM |
|
|
|
|
|
|
|
|
|
| Production Expense per
BOE |
WI |
|
$17.50 - $22.50 |
|
|
|
|
|
|
|
|
|
| Production Expense per
BOE |
NRI |
|
$21.00 - $27.50 |
|
|
|
|
|
|
|
|
|
| Offshore Workovers
(millions) |
WI & NRI |
|
$0 - $0 MM |
|
|
|
|
|
|
|
|
|
| Cash G&A (millions) |
WI & NRI |
|
$4.5 - $6.5 MM |
|
|
|
|
|
|
|
|
|
| CAPEX excluding acquisitions
(millions) |
WI & NRI |
|
$40 - $60 MM |
|
|
|
|
|
|
|
|
|
| DD&A ($/BOE) |
NRI |
|
$21.00 - $24.00 |
|
|
|
|
|
|
|
|
|
Conference Call
As previously announced, the Company will hold a
conference call to discuss its third quarter 2024 financial and
operating results tomorrow, Tuesday, November 12, 2024, at 9:00
a.m. Central Time (10:00 a.m. Eastern Time and 3:00 p.m. London
Time). Interested parties may participate by dialing (833)
685-0907. Parties in the United Kingdom may participate toll-free
by dialing 08082389064 and other international parties may dial
(412) 317-5741. Participants should request to be joined to the
“Vaalco energy Third Quarter 2024 Conference Call.” This call will
also be webcast on Vaalco’s website at www.vaalco.com. An archived
audio replay will be available on Vaalco’s website.
A “Q3 2024 Supplemental Information” investor
deck will be posted to Vaalco’s website prior to its conference
call on November 12, 2024 that includes additional financial and
operational information.
About Vaalco
Vaalco, founded in 1985 and incorporated under
the laws of Delaware, is a Houston, Texas, USA based, independent
energy company with a diverse portfolio of production, development
and exploration assets across Gabon, Egypt, Côte d'Ivoire,
Equatorial Guinea, Nigeria and Canada.
For Further Information
|
Vaalco Energy, Inc. (General and Investor
Enquiries) |
+00 1 713 543 3422 |
| Website: |
www.vaalco.com |
| |
|
| Al Petrie Advisors (US
Investor Relations) |
+00 1 713 543 3422 |
| Al Petrie / Chris Delange |
|
| |
|
| Buchanan (UK Financial
PR) |
+44 (0) 207 466 5000 |
| Ben Romney / Barry Archer |
VAALCO@buchanan.uk.com |
Forward Looking StatementsThis
press release includes “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended
(the “Securities Act”) and Section 21E of the Securities Exchange
Act of 1934, as amended, which are intended to be covered by the
safe harbors created by those laws and other applicable laws and
“forward-looking information” within the meaning of applicable
Canadian securities laws. Where a forward-looking statement
expresses or implies an expectation or belief as to future events
or results, such expectation or belief is expressed in good faith
and believed to have a reasonable basis. All statements other than
statements of historical fact may be forward-looking statements.
The words “anticipate,” “believe,” “estimate,” “expect,” “intend,”
“forecast,” “outlook,” “aim,” “target,” “will,” “could,” “should,”
“may,” “likely,” “plan” and “probably” or similar words may
identify forward-looking statements, but the absence of these words
does not mean that a statement is not forward-looking.
Forward-looking statements in this press release include, but are
not limited to, statements relating to (i) estimates of future
drilling, production, sales and costs of acquiring crude oil,
natural gas and natural gas liquids; (ii) expectations regarding
VAALCO's ability to effectively integrate assets and properties it
has acquired as a result of the Svenska acquisition into its
operations; (iii) expectations regarding future exploration and the
development, growth and potential of VAALCO’s operations, project
pipeline and investments, and schedule and anticipated benefits to
be derived therefrom; (iv) expectations regarding future
acquisitions, investments or divestitures; (v) expectations of
future dividends; (vi) expectations of future balance sheet
strength; and (vii) expectations of future equity and enterprise
value. Any forward-looking statement made by Vaalco in this
press release is based only on information currently available to
Vaalco and speaks only as of the date on which it is made. Except
as may be required by applicable securities laws, Vaalco undertakes
no obligation to publicly update any forward-looking statement,
whether written or oral, that may be made from time to time,
whether as a result of new information, future developments or
otherwise.
Such forward-looking statements are subject to
risks, uncertainties and other factors, which could cause actual
results to differ materially from future results expressed,
projected or implied by the forward-looking statements. These risks
and uncertainties include, but are not limited to: risks relating
to any unforeseen liabilities of VAALCO; the ability to generate
cash flows that, along with cash on hand, will be sufficient to
support operations and cash requirements; risks relating to the
timing and costs of completion for scheduled maintenance of the
FPSO servicing the Baobab field; and the risks described under the
caption “Risk Factors” in VAALCO’s 2023 Annual Report on Form 10-K
filed with the SEC on March 15, 2024 and subsequent Quarterly
Reports on Form 10-Q filed with the SEC.
Dividends beyond the fourth quarter of 2024
have not yet been approved or declared by the Board of Directors
for VAALCO. The declaration and payment of future dividends remains
at the discretion of the Board and will be determined based on
VAALCO’s financial results, balance sheet strength, cash and
liquidity requirements, future prospects, crude oil and natural gas
prices, and other factors deemed relevant by the Board. The Board
reserves all powers related to the declaration and payment of
dividends. Consequently, in determining the dividend to be declared
and paid on VAALCO common stock, the Board may revise or terminate
the payment level at any time without prior notice.
Any forward-looking statement made by Vaalco in
this press release is based only on information currently available
to Vaalco and speaks only as of the date on which it is made.
Except as may be required by applicable securities laws, Vaalco
undertakes no obligation to publicly update any forward-looking
statement, whether written or oral, that may be made from time to
time, whether as a result of new information, future developments
or otherwise.
WI CPR Reserves
WI CPR reserves represent proved (1P) and proved
plus probable (2P) estimates as reported by Petroleum Development
Consultants Limited and prepared in accordance with the definitions
and guidelines set forth in the 2018 Petroleum Resources Management
Systems approved by the Society of Petroleum Engineers. The SEC
definitions of proved and probable reserves are different from the
definitions contained in the 2018 Petroleum Resources Management
Systems approved by the Society of Petroleum Engineers. As a
result, 1P and 2P WI CPR reserves may not be comparable to United
States standards. The SEC requires United States oil and gas
reporting companies, in their filings with the SEC, to disclose
only proved reserves after the deduction of royalties and
production due to others but permits the optional disclosure of
probable and possible reserves in accordance with SEC
definitions.
1P and 2P WI CPR reserves, as disclosed herein,
may differ from the SEC definitions of proved and probable reserves
because:
- Pricing for SEC is
the average closing price on the first trading day of each month
for the prior year which is then held flat in the future, while the
1P and 2P WI CPR pricing assumption was $79.79 per barrel of oil
beginning in 2024, $69.79 in 2025, and inflating 2%
thereafter;
- Lease operating expenses are
typically not escalated under the SEC’s rules, while for the WI CPR
reserves estimates, they are escalated at 2% annually beginning in
2024.
Management uses 1P and 2P WI CPR reserves as a
measurement of operating performance because it assists management
in strategic planning, budgeting and economic evaluations and in
comparing the operating performance of Svenska to other companies.
Management believes that the presentation of 1P and 2P WI CPR
reserves is useful to its international investors, particularly
those that invest in companies trading on the London Stock
Exchange, in order to better compare reserve information to other
London Stock Exchange-traded companies that report similar
measures. However, 1P and 2P WI CPR reserves should not be used as
a substitute for proved reserves calculated in accordance with the
definitions prescribed by the SEC. In evaluating VAALCO’s business,
investors should rely on VAALCO’s SEC proved reserves and consider
1P and 2P WI CPR reserves only supplementally.
Other Oil and Gas
Advisories
Investors are cautioned when viewing BOEs in
isolation. The Svenska reserves estimates as of October 1, 2023
were calculated using a BOE conversion ratio of six thousand cubic
feet of natural gas to one barrel of oil equivalent (6 MCF: 1 Bbl).
The Svenska reserves estimates as of December 31, 2023 were
calculated using a BOE conversion ratio of five thousand eight
hundred cubic feet of natural gas to one barrel of oil equivalent
(5.8 MCF: 1 Bbl). BOE conversion ratio is based on an energy
equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the wellhead.
Given that the value ratio based on the current price of crude oil
as compared to natural gas is significantly different from the
energy equivalencies described above, utilizing such equivalencies
may be incomplete as an indication of value.
Inside Information
This announcement contains inside information as
defined in Regulation (EU) No. 596/2014 on market abuse which is
part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 (“MAR”) and is made in accordance with the
Company’s obligations under article 17 of MAR. The person
responsible for arranging the release of this announcement on
behalf of VAALCO is Matthew Powers, Corporate Secretary of
VAALCO.
VAALCO ENERGY, INC AND SUBSIDIARIESConsolidated
Balance Sheets (Unaudited)
| |
As of September 30, 2024 |
|
As of December 31, 2023 |
| |
(in thousands) |
| ASSETS |
|
|
|
| Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
89,101 |
|
|
$ |
121,001 |
|
|
Restricted cash |
|
146 |
|
|
|
114 |
|
|
Receivables: |
|
|
|
|
Trade, net of allowances for credit loss and other of $0.7 million
and $0.5 million, respectively |
|
84,344 |
|
|
|
44,888 |
|
|
Accounts with joint venture owners, net of allowance for credit
losses of $1.2 million and $0.8 million, respectively |
|
1,131 |
|
|
|
1,814 |
|
|
Egypt receivables and other, net of allowances for credit loss and
other of $0.0 million and $4.6 million as of December 31,
2023 |
|
42,163 |
|
|
|
45,942 |
|
|
Crude oil inventory |
|
4,776 |
|
|
|
1,948 |
|
|
Prepayments and other |
|
15,138 |
|
|
|
12,434 |
|
|
Total current assets |
|
236,799 |
|
|
|
228,141 |
|
| Crude oil, natural gas and
NGLs properties and equipment, net |
|
531,589 |
|
|
|
459,786 |
|
| Other noncurrent assets: |
|
|
|
|
Restricted cash |
|
9,462 |
|
|
|
1,795 |
|
|
Value added tax and other receivables, net of allowances for credit
loss and other of $0.0 million |
|
10,228 |
|
|
|
4,214 |
|
|
Right of use operating lease assets |
|
2,320 |
|
|
|
2,378 |
|
|
Right of use finance lease assets |
|
83,093 |
|
|
|
89,962 |
|
|
Deferred tax assets |
|
57,035 |
|
|
|
29,242 |
|
|
Abandonment funding |
|
6,268 |
|
|
|
6,268 |
|
|
Other long-term assets |
|
1,109 |
|
|
|
1,430 |
|
|
Total assets |
$ |
937,903 |
|
|
$ |
823,216 |
|
| LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
| Current liabilities: |
|
|
|
|
Accounts payable |
$ |
15,047 |
|
|
$ |
22,152 |
|
|
Accounts with joint venture owners |
|
984 |
|
|
|
5,990 |
|
|
Accrued liabilities and other |
|
103,848 |
|
|
|
67,597 |
|
|
Operating lease liabilities - current portion |
|
335 |
|
|
|
2,396 |
|
|
Finance lease liabilities - current portion |
|
12,560 |
|
|
|
10,079 |
|
|
Foreign income taxes payable |
|
43,473 |
|
|
|
19,261 |
|
|
Total current liabilities |
|
176,247 |
|
|
|
127,475 |
|
| Asset retirement
obligations |
|
65,868 |
|
|
|
47,343 |
|
| Operating lease liabilities -
net of current portion |
|
2,006 |
|
|
|
33 |
|
| Finance lease liabilities -
net of current portion |
|
70,912 |
|
|
|
78,293 |
|
| Deferred tax liabilities |
|
103,356 |
|
|
|
73,581 |
|
| Other long-term
liabilities |
|
18,482 |
|
|
|
17,709 |
|
|
Total liabilities |
|
436,871 |
|
|
|
344,434 |
|
| Commitments and
contingencies |
|
|
|
| Shareholders’ equity: |
|
|
|
|
Preferred stock, $25 par value; 500,000 shares authorized, none
issued |
|
— |
|
|
|
— |
|
|
Common stock, $0.10 par value; 160,000,000 shares authorized,
122,304,124 and 121,397,553 shares issued, 103,743,163 and
104,346,233 shares outstanding, respectively |
|
12,230 |
|
|
|
12,140 |
|
|
Additional paid-in capital |
|
361,147 |
|
|
|
357,498 |
|
|
Accumulated other comprehensive income |
|
1,013 |
|
|
|
2,880 |
|
| Less treasury stock,
18,560,961 and 17,051,320 shares, respectively, at cost |
|
(78,024 |
) |
|
|
(71,222 |
) |
|
Retained earnings |
|
204,666 |
|
|
|
177,486 |
|
|
Total shareholders' equity |
|
501,032 |
|
|
|
478,782 |
|
|
Total liabilities and shareholders' equity |
$ |
937,903 |
|
|
$ |
823,216 |
|
VAALCO ENERGY, INC AND SUBSIDIARIESConsolidated
Statements of Operations (Unaudited)
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30, 2024 |
|
September 30, 2023 |
|
June 30, 2024 |
|
September 30, 2024 |
|
September 30, 2023 |
| |
(in thousands except per share amounts) |
| Revenues: |
|
|
|
|
|
|
|
|
|
|
Crude oil, natural gas and natural gas liquids sales |
$ |
140,334 |
|
|
$ |
116,269 |
|
|
|
116,778 |
|
|
$ |
357,267 |
|
|
$ |
305,912 |
|
| Operating costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
Production expense |
|
42,324 |
|
|
|
39,956 |
|
|
|
52,446 |
|
|
|
126,859 |
|
|
|
106,760 |
|
|
FPSO demobilization and other costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,647 |
|
|
Exploration expense |
|
— |
|
|
|
1,194 |
|
|
|
— |
|
|
|
48 |
|
|
|
1,259 |
|
|
Depreciation, depletion and amortization |
|
47,031 |
|
|
|
32,538 |
|
|
|
33,132 |
|
|
|
105,987 |
|
|
|
94,958 |
|
|
General and administrative expense |
|
6,929 |
|
|
|
6,216 |
|
|
|
7,591 |
|
|
|
21,230 |
|
|
|
16,835 |
|
|
Credit losses and other |
|
69 |
|
|
|
822 |
|
|
|
3,341 |
|
|
|
5,222 |
|
|
|
2,437 |
|
|
Total operating costs and expenses |
|
96,353 |
|
|
|
80,726 |
|
|
|
96,510 |
|
|
|
259,346 |
|
|
|
227,896 |
|
|
Other operating income (expense), net |
|
102 |
|
|
|
5 |
|
|
|
132 |
|
|
|
68 |
|
|
|
(298 |
) |
| Operating income |
|
44,083 |
|
|
|
35,548 |
|
|
|
20,400 |
|
|
|
97,989 |
|
|
|
77,718 |
|
| Other income (expense): |
|
|
|
|
|
|
|
|
|
|
Derivative instruments gain (loss), net |
|
210 |
|
|
|
(2,320 |
) |
|
|
257 |
|
|
|
(380 |
) |
|
|
(2,268 |
) |
|
Interest expense, net |
|
(588 |
) |
|
|
(1,426 |
) |
|
|
(1,117 |
) |
|
|
(2,640 |
) |
|
|
(5,375 |
) |
|
Bargain purchase gain |
|
— |
|
|
|
— |
|
|
|
19,898 |
|
|
|
19,898 |
|
|
|
(1,412 |
) |
|
Other income (expense), net |
|
(141 |
) |
|
|
183 |
|
|
|
(1,984 |
) |
|
|
(3,925 |
) |
|
|
(97 |
) |
|
Total other income (expense), net |
|
(519 |
) |
|
|
(3,563 |
) |
|
|
17,054 |
|
|
|
12,953 |
|
|
|
(9,152 |
) |
| Income before income
taxes |
|
43,564 |
|
|
|
31,985 |
|
|
|
37,454 |
|
|
|
110,942 |
|
|
|
68,566 |
|
|
Income tax expense |
|
32,574 |
|
|
|
25,844 |
|
|
|
9,303 |
|
|
|
64,115 |
|
|
|
52,203 |
|
| Net income |
$ |
10,990 |
|
|
$ |
6,141 |
|
|
$ |
28,151 |
|
|
$ |
46,827 |
|
|
$ |
16,363 |
|
| Other comprehensive income
(loss) |
|
|
|
|
|
|
|
|
|
|
Currency translation adjustments |
|
1,655 |
|
|
|
(2,216 |
) |
|
|
(1,068 |
) |
|
|
(1,867 |
) |
|
|
(335 |
) |
| Comprehensive income |
$ |
12,645 |
|
|
$ |
3,925 |
|
|
$ |
27,083 |
|
|
$ |
44,960 |
|
|
$ |
16,028 |
|
| |
|
|
|
|
|
|
|
|
|
| Basic net income (loss) per
share: |
|
|
|
|
|
|
|
|
|
| Net income (loss) per
share |
$ |
0.10 |
|
|
$ |
0.06 |
|
|
$ |
0.27 |
|
|
$ |
0.45 |
|
|
$ |
0.15 |
|
| Basic weighted average shares
outstanding |
|
103,743 |
|
|
|
106,289 |
|
|
|
103,528 |
|
|
|
103,644 |
|
|
|
106,876 |
|
| Diluted net income (loss) per
share: |
|
|
|
|
|
|
|
|
|
| Net income (loss) per
share |
$ |
0.10 |
|
|
$ |
0.06 |
|
|
$ |
0.27 |
|
|
$ |
0.45 |
|
|
$ |
0.15 |
|
| Diluted weighted average
shares outstanding |
|
103,842 |
|
|
|
106,433 |
|
|
|
103,676 |
|
|
|
103,728 |
|
|
|
107,072 |
|
| |
|
|
|
|
|
|
|
|
|
VAALCO ENERGY, INC AND SUBSIDIARIESConsolidated
Statements of Cash Flows (Unaudited)
| |
Nine Months Ended September 30, |
|
|
|
2024 |
|
|
|
2023 |
|
| |
|
|
|
| |
(in thousands) |
| CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
| Net income |
$ |
46,827 |
|
|
$ |
16,363 |
|
| Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
Depreciation, depletion and amortization |
|
105,987 |
|
|
|
94,958 |
|
|
Bargain purchase gain |
|
(19,898 |
) |
|
|
1,412 |
|
|
Exploration expense |
|
48 |
|
|
|
1,194 |
|
|
Deferred taxes |
|
(7,762 |
) |
|
|
(2,305 |
) |
|
Unrealized foreign exchange loss |
|
(613 |
) |
|
|
932 |
|
|
Stock-based compensation |
|
3,362 |
|
|
|
2,332 |
|
|
Cash settlements paid on exercised stock appreciation rights |
|
(154 |
) |
|
|
(282 |
) |
|
Derivative instruments (gain) loss, net |
|
209 |
|
|
|
2,268 |
|
|
Cash settlements paid on matured derivative contracts, net |
|
(15 |
) |
|
|
(62 |
) |
|
Cash settlements paid on asset retirement obligations |
|
(315 |
) |
|
|
(4,796 |
) |
|
Credit losses and other |
|
5,222 |
|
|
|
2,437 |
|
|
Other operating loss, net |
|
34 |
|
|
|
317 |
|
|
Equipment and other expensed in operations |
|
1,589 |
|
|
|
2,560 |
|
|
Change in operating assets and liabilities: |
|
|
|
|
Trade, net |
|
(39,456 |
) |
|
|
29,364 |
|
|
Accounts with joint venture owners, net |
|
(4,739 |
) |
|
|
15,090 |
|
|
Egypt receivables and other, net |
|
(394 |
) |
|
|
694 |
|
|
Crude oil inventory |
|
12,153 |
|
|
|
(5,952 |
) |
|
Prepayments and other |
|
(1,847 |
) |
|
|
1,198 |
|
|
Value added tax and other receivables |
|
(5,713 |
) |
|
|
(3,719 |
) |
|
Other long-term assets |
|
1,808 |
|
|
|
2,942 |
|
|
Accounts payable |
|
(9,034 |
) |
|
|
(10,083 |
) |
|
Foreign income taxes receivable/(payable) |
|
24,327 |
|
|
|
36,025 |
|
|
Accrued liabilities and other |
|
(42,441 |
) |
|
|
(11,076 |
) |
|
Net cash provided by (used in) operating activities |
|
69,185 |
|
|
|
171,811 |
|
| CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
Property and equipment expenditures |
|
(61,530 |
) |
|
|
(77,365 |
) |
|
Cash paid in business combination |
|
(40,166 |
) |
|
|
— |
|
|
Cash received in business combination |
|
40,578 |
|
|
|
— |
|
|
Net cash provided by (used in) investing activities |
|
(61,118 |
) |
|
|
(77,365 |
) |
| CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
Proceeds from the issuances of common stock |
|
447 |
|
|
|
593 |
|
|
Dividend distribution |
|
(19,647 |
) |
|
|
(20,153 |
) |
|
Treasury shares |
|
(6,803 |
) |
|
|
(17,493 |
) |
|
Deferred financing costs |
|
— |
|
|
|
(83 |
) |
|
Payments of finance lease |
|
(6,261 |
) |
|
|
(5,246 |
) |
|
Net cash provided by (used in) in financing activities |
|
(32,264 |
) |
|
|
(42,382 |
) |
|
Effects of exchange rate changes on cash |
|
(4 |
) |
|
|
(321 |
) |
| NET CHANGE IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH |
|
(24,201 |
) |
|
|
51,743 |
|
| CASH, CASH EQUIVALENTS AND
RESTRICTED CASH AT BEGINNING OF PERIOD |
|
129,178 |
|
|
|
59,776 |
|
| CASH, CASH EQUIVALENTS AND
RESTRICTED CASH AT END OF PERIOD |
$ |
104,977 |
|
|
$ |
111,519 |
|
VAALCO ENERGY, INC AND SUBSIDIARIESSelected Financial and
Operating Statistics(Unaudited)
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30, 2024 |
|
September 30, 2023 |
|
June 30, 2024 |
|
September 30, 2024 |
|
September 30, 2023 |
| NRI SALES DATA |
|
|
|
|
|
|
|
|
|
|
Crude oil, natural gas and natural gas liquids sales (MBOE) |
|
2,134 |
|
|
1,812 |
|
|
1,764 |
|
|
5,388 |
|
|
4,839 |
|
Average daily sales volumes (BOE) |
|
23,198 |
|
|
19,696 |
|
|
19,386 |
|
|
19,664 |
|
|
17,725 |
| |
|
|
|
|
|
|
|
|
|
| WI PRODUCTION DATA |
|
|
|
|
|
|
|
|
|
|
Etame Crude oil (MBbl) |
|
810 |
|
|
911 |
|
|
780 |
|
|
2,408 |
|
|
2,787 |
|
Egypt Crude oil (MBbl) |
|
964 |
|
|
1,076 |
|
|
953 |
|
|
2,867 |
|
|
3,032 |
|
Canada Crude Oil (MBbl) |
|
112 |
|
|
101 |
|
|
130 |
|
|
303 |
|
|
317 |
|
Canada Natural Gas (Mcf) |
|
449 |
|
|
470 |
|
|
423 |
|
|
1,341 |
|
|
1,327 |
|
Canada Natural Gas Liquid (MBOE) |
|
82 |
|
|
82 |
|
|
76 |
|
|
234 |
|
|
237 |
|
Canada Crude oil, natural gas and natural gas liquids (MBOE) |
|
269 |
|
|
261 |
|
|
277 |
|
|
761 |
|
|
775 |
|
Côte d'Ivoire Crude oil (MBbl) |
|
415 |
|
|
— |
|
|
303 |
|
|
717 |
|
|
— |
|
Total Crude oil, natural gas and natural gas liquids production
(MBOE) |
|
2,458 |
|
|
2,248 |
|
|
2,313 |
|
|
6,753 |
|
|
6,594 |
|
Gabon Average daily production volumes (BOEPD) |
|
8,800 |
|
|
9,901 |
|
|
8,566 |
|
|
8,789 |
|
|
10,209 |
|
Egypt Average daily production volumes (BOEPD) |
|
10,480 |
|
|
11,691 |
|
|
10,474 |
|
|
10,465 |
|
|
11,106 |
|
Canada Average daily production volumes (BOEPD) |
|
2,923 |
|
|
2,835 |
|
|
3,041 |
|
|
2,776 |
|
|
2,838 |
|
Côte d'Ivoire Average daily production volumes (BOEPD) |
|
4,506 |
|
|
— |
|
|
3,329 |
|
|
2,619 |
|
|
— |
|
Average daily production volumes (BOEPD) |
|
26,709 |
|
|
24,427 |
|
|
25,411 |
|
|
24,649 |
|
|
24,153 |
| |
|
|
|
|
|
|
|
|
|
| NRI PRODUCTION DATA |
|
|
|
|
|
|
|
|
|
|
Etame Crude oil (MBbl) |
|
704 |
|
|
792 |
|
|
678 |
|
|
2,095 |
|
|
2,425 |
|
Egypt Crude oil (MBbl) |
|
657 |
|
|
732 |
|
|
643 |
|
|
1,941 |
|
|
2,074 |
|
Canada Crude Oil (MBbl) |
|
95 |
|
|
81 |
|
|
117 |
|
|
263 |
|
|
275 |
|
Canada Natural Gas (Mcf) |
|
380 |
|
|
376 |
|
|
381 |
|
|
1,161 |
|
|
1,151 |
|
Canada Natural Gas Liquid (MBOE) |
|
69 |
|
|
66 |
|
|
69 |
|
|
202 |
|
|
206 |
|
Canada Crude oil, natural gas and natural gas liquids (MBOE) |
|
227 |
|
|
210 |
|
|
250 |
|
|
656 |
|
|
673 |
|
Côte d'Ivoire Crude oil (MBbl) |
|
415 |
|
|
— |
|
|
303 |
|
|
717 |
|
|
— |
|
Total Crude oil, natural gas and natural gas liquids production
(MBOE) |
|
2,003 |
|
|
1,734 |
|
|
1,874 |
|
|
5,410 |
|
|
5,172 |
|
Gabon Average daily production volumes (BOEPD) |
|
7,652 |
|
|
8,609 |
|
|
7,451 |
|
|
7,647 |
|
|
8,883 |
|
Egypt Average daily production volumes (BOEPD) |
|
7,141 |
|
|
7,957 |
|
|
7,066 |
|
|
7,084 |
|
|
7,598 |
|
Canada Average daily production volumes (BOEPD) |
|
2,471 |
|
|
2,279 |
|
|
2,742 |
|
|
2,395 |
|
|
2,462 |
|
Côte d'Ivoire Average daily production volumes (BOEPD) |
|
4,506 |
|
|
— |
|
|
3,329 |
|
|
2,619 |
|
|
— |
|
Average daily production volumes (BOEPD) |
|
21,770 |
|
|
18,845 |
|
|
20,588 |
|
|
19,745 |
|
|
18,943 |
| |
|
|
|
|
|
|
|
|
|
| AVERAGE SALES PRICES: |
|
|
|
|
|
|
|
|
|
|
Crude oil, natural gas and natural gas liquids sales (per BOE) - WI
basis |
$ |
69.07 |
|
$ |
70.78 |
|
$ |
70.92 |
|
$ |
69.90 |
|
$ |
67.40 |
| |
|
|
|
|
|
|
|
|
|
| Crude oil, natural gas and
natural gas liquids sales (per BOE) - NRI basis |
$ |
65.41 |
|
$ |
63.41 |
|
$ |
66.05 |
|
$ |
65.99 |
|
$ |
62.48 |
| Crude oil, natural gas and
natural gas liquids sales (Per BOE including realized commodity
derivatives) |
$ |
65.39 |
|
$ |
63.38 |
|
$ |
66.03 |
|
$ |
65.98 |
|
$ |
62.47 |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| COSTS AND EXPENSES (Per BOE of
sales): |
|
|
|
|
|
|
|
|
|
| Production expense |
$ |
19.83 |
|
$ |
22.05 |
|
$ |
29.74 |
|
$ |
23.54 |
|
$ |
22.06 |
| Production expense, excluding
offshore workovers and stock compensation* |
$ |
19.80 |
|
$ |
22.04 |
|
$ |
29.68 |
|
$ |
23.52 |
|
$ |
22.32 |
| Depreciation, depletion and
amortization |
$ |
22.04 |
|
$ |
17.96 |
|
$ |
18.78 |
|
$ |
19.67 |
|
$ |
19.62 |
| General and administrative
expense** |
$ |
3.25 |
|
$ |
3.43 |
|
$ |
4.34 |
|
$ |
3.94 |
|
$ |
3.48 |
| Property and equipment
expenditures, cash basis (in thousands) |
$ |
12,431 |
|
$ |
22,533 |
|
$ |
32,481 |
|
$ |
61,530 |
|
$ |
77,365 |
*Offshore workover costs excluded from the three months ended
September 30, 2024 and 2023 and June 30, 2024 are $0.1 million, $0
million and $0.1 million, respectively.*Stock compensation
associated with production expense excluded from the three months
ended September 30, 2024 and 2023 and June 30, 2024 are
immaterial.**General and administrative expenses include $0.52,
$0.57 and $0.51 per barrel of oil related to stock-based
compensation expense in the three months ended September 30, 2024
and 2023 and June 30, 2024, respectively.
NON-GAAP FINANCIAL MEASURES
Management uses Adjusted Net Income to evaluate operating and
financial performance and believes the measure is useful to
investors because it eliminates the impact of certain non-cash
and/or other items that management does not consider to be
indicative of the Company’s performance from period to period.
Management also believes this non-GAAP measure is useful to
investors to evaluate and compare the Company’s operating and
financial performance across periods, as well as facilitating
comparisons to others in the Company’s industry. Adjusted Net
Income is a non-GAAP financial measure and as used herein
represents net income, deferred income tax expense (benefit),
unrealized commodity derivative loss (gain), bargain purchase gain
on the Svenska Acquisition, FPSO demobilization, transaction costs
related to the Svenska acquisition and non-cash and other
items.
Adjusted EBITDAX is a supplemental non-GAAP financial measure
used by VAALCO’s management and by external users of the Company’s
financial statements, such as industry analysts, lenders, rating
agencies, investors and others who follow the industry, as an
indicator of the Company’s ability to internally fund exploration
and development activities and to service or incur additional debt.
Adjusted EBITDAX is a non-GAAP financial measure and as used herein
represents net income, interest expense (income) net, income tax
expense (benefit), depletion, depreciation and amortization,
exploration expense, FPSO demobilization, non-cash and other items
including stock compensation expense, Bargain purchase gain on the
Svenska Acquisition, other operating (income) expense, net,
non-cash purchase price adjustment, transaction costs related to
acquisition, credit losses and other and unrealized commodity
derivative loss (gain).
Management uses Adjusted Working Capital as a transition tool to
assess the working capital position of the Company’s continuing
operations excluding leasing obligations because it eliminates the
impact of discontinued operations as well as the impact of lease
liabilities. Under the lease accounting standards, lease
liabilities related to assets used in joint operations include both
the Company’s share of expenditures as well as the share of lease
expenditures which its non-operator joint venture owners’ will be
obligated to pay under joint operating agreements. Adjusted Working
Capital is a non-GAAP financial measure and as used herein
represents working capital excluding working capital attributable
to discontinued operations and current liabilities associated with
lease obligations.
Management uses Free Cash Flow to evaluate financial performance
and to determine the total amount of cash over a specified period
available to be used in connection with returning cash to
shareholders, and believes the measure is useful to investors
because it provides the total amount of net cash available for
returning cash to shareholders by adding cash generated from
operating activities, subtracting amounts used in financing and
investing activities, effects of exchange rate changes on cash and
adding back amounts used for dividend payments and stock
repurchases. Free Cash Flow is a non-GAAP financial measure and as
used herein represents net change in cash, cash equivalents and
restricted cash and adds the amounts paid under dividend
distributions and share repurchases over a specified period.
Free Cash Flow has significant limitations, including that it
does not represent residual cash flows available for discretionary
purposes and should not be used as a substitute for cash flow
measures prepared in accordance with GAAP. Free Cash Flow should
not be considered as a substitute for cashflows from operating
activities before discontinued operations or any other liquidity
measure presented in accordance with GAAP. Free Cash Flow may vary
among other companies. Therefore, the Company’s Free Cash Flow may
not be comparable to similarly titled measures used by other
companies.
Adjusted EBITDAX and Adjusted Net Income have significant
limitations, including that they do not reflect the Company’s cash
requirements for capital expenditures, contractual commitments,
working capital or debt service. Adjusted EBITDAX, Adjusted Net
Income, Adjusted Working Capital and Free Cash Flow should not be
considered as substitutes for net income (loss), operating income
(loss), cash flows from operating activities or any other measure
of financial performance or liquidity presented in accordance with
GAAP. Adjusted EBITDAX and Adjusted Net Income exclude some, but
not all, items that affect net income (loss) and operating income
(loss), and the calculation of these measures may vary among other
companies. Therefore, the Company’s Adjusted EBITDAX, Adjusted Net
Income, Adjusted Working Capital and Free Cash Flow may not be
comparable to similarly titled measures used by other
companies.
The tables below reconcile the most directly
comparable GAAP financial measures to Adjusted Net Income, Adjusted
EBITDAX, Adjusted Working Capital and Free Cash Flow.
VAALCO ENERGY, INC AND SUBSIDIARIESReconciliations of Non-GAAP
Financial Measures(Unaudited)(in thousands)
| |
Three Months Ended |
|
Nine Months Ended |
| Reconciliation of Net
Income to Adjusted Net Income |
September 30, 2024 |
|
September 30, 2023 |
|
June 30, 2024 |
|
September 30, 2024 |
|
September 30, 2023 |
|
Net income |
$ |
10,990 |
|
|
$ |
6,141 |
|
|
$ |
28,151 |
|
|
$ |
46,827 |
|
|
$ |
16,363 |
| Adjustment for discrete
items: |
|
|
|
|
|
|
|
|
|
|
Unrealized derivative instruments loss (gain) |
|
(192 |
) |
|
|
2,321 |
|
|
|
(266 |
) |
|
|
365 |
|
|
|
2,206 |
|
Bargain purchase gain |
|
— |
|
|
|
— |
|
|
|
(19,898 |
) |
|
|
(19,898 |
) |
|
|
— |
|
FPSO demobilization |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,647 |
|
Deferred income tax expense (benefit) |
|
(3,089 |
) |
|
|
(985 |
) |
|
|
(2,021 |
) |
|
|
(8,551 |
) |
|
|
673 |
| Non-cash purchase price
adjustment |
|
— |
|
|
|
— |
|
|
|
14,981 |
|
|
|
14,981 |
|
|
|
— |
| Transaction costs related to
acquisition |
|
327 |
|
|
|
— |
|
|
|
1,762 |
|
|
|
3,402 |
|
|
|
— |
| Other operating (income)
expense, net |
|
(102 |
) |
|
|
(5 |
) |
|
|
(132 |
) |
|
|
(68 |
) |
|
|
313 |
| Adjusted Net Income |
$ |
7,934 |
|
|
$ |
7,472 |
|
|
$ |
22,577 |
|
|
$ |
37,058 |
|
|
$ |
25,202 |
| |
|
|
|
|
|
|
|
|
|
| Diluted Adjusted Net Income
per Share |
$ |
0.08 |
|
|
$ |
0.07 |
|
|
$ |
0.22 |
|
|
$ |
0.36 |
|
|
$ |
0.24 |
| Diluted weighted average
shares outstanding (1) |
|
103,842 |
|
|
|
106,433 |
|
|
|
103,676 |
|
|
|
103,728 |
|
|
|
107,072 |
(1) No adjustments to weighted average shares
outstanding
| |
Three Months Ended |
|
Nine Months Ended |
| Reconciliation of Net
Income to Adjusted EBITDAX |
September 30, 2024 |
|
September 30, 2023 |
|
June 30, 2024 |
|
September 30, 2024 |
|
September 30, 2023 |
|
Net income |
$ |
10,990 |
|
|
$ |
6,141 |
|
|
$ |
28,151 |
|
|
$ |
46,827 |
|
|
$ |
16,363 |
| Add back: |
|
|
|
|
|
|
|
|
|
|
Interest expense (income), net |
|
588 |
|
|
|
1,426 |
|
|
|
1,117 |
|
|
|
2,640 |
|
|
|
5,375 |
|
Income tax expense (benefit) |
|
32,574 |
|
|
|
25,844 |
|
|
|
9,303 |
|
|
|
64,115 |
|
|
|
52,203 |
|
Depreciation, depletion and amortization |
|
47,031 |
|
|
|
32,538 |
|
|
|
33,132 |
|
|
|
105,987 |
|
|
|
94,958 |
|
Exploration expense |
|
— |
|
|
|
1,194 |
|
|
|
— |
|
|
|
48 |
|
|
|
1,259 |
|
FPSO demobilization |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,647 |
| Non-cash or unusual
items: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
1,479 |
|
|
|
1,078 |
|
|
|
984 |
|
|
|
3,362 |
|
|
|
2,332 |
|
Unrealized derivative instruments loss (gain) |
|
(192 |
) |
|
|
2,321 |
|
|
|
(266 |
) |
|
|
365 |
|
|
|
2,206 |
|
Bargain purchase gain |
|
— |
|
|
|
— |
|
|
|
(19,898 |
) |
|
|
(19,898 |
) |
|
|
— |
|
Other operating (income) expense, net |
|
(102 |
) |
|
|
(5 |
) |
|
|
(132 |
) |
|
|
(68 |
) |
|
|
313 |
|
Non-cash purchase price adjustment |
|
— |
|
|
|
— |
|
|
|
14,981 |
|
|
|
14,981 |
|
|
|
— |
|
Transaction costs related to acquisition |
|
327 |
|
|
|
— |
|
|
|
1,762 |
|
|
|
3,402 |
|
|
|
— |
|
Credit losses and other |
|
69 |
|
|
|
822 |
|
|
|
3,341 |
|
|
|
5,222 |
|
|
|
2,437 |
| Adjusted EBITDAX |
$ |
92,764 |
|
|
$ |
71,359 |
|
|
$ |
72,475 |
|
|
$ |
226,983 |
|
|
$ |
183,093 |
VAALCO ENERGY, INC AND SUBSIDIARIESReconciliations of Non-GAAP
Financial Measures(Unaudited)(in thousands)
| Reconciliation of
Working Capital to Adjusted Working Capital |
As of September 30, 2024 |
|
As of December 31, 2023 |
|
Change |
|
Current assets |
|
236,799 |
|
|
|
228,141 |
|
|
$ |
8,658 |
|
|
Current liabilities |
|
(176,247 |
) |
|
|
(127,475 |
) |
|
|
(48,772 |
) |
| Working
capital |
|
60,552 |
|
|
|
100,666 |
|
|
|
(40,114 |
) |
|
Add: lease liabilities - current portion |
|
12,895 |
|
|
|
12,475 |
|
|
|
420 |
|
|
Add: current liabilities - discontinued operations |
|
— |
|
|
|
673 |
|
|
|
(673 |
) |
| Adjusted Working
Capital |
$ |
73,447 |
|
|
$ |
113,814 |
|
|
$ |
(40,367 |
) |
| |
Nine Months Ended September 30, 2024 |
| Reconciliation of Free
Cash Flow |
|
|
Net cash provided by Operating activities |
$ |
69,185 |
|
|
Net cash used in Investing activities |
|
(61,118 |
) |
|
Net cash used in Financing activities |
|
(32,264 |
) |
|
Effects of exchange rate changes on cash |
|
(4 |
) |
| Total net cash
change |
|
(24,201 |
) |
| |
|
| Add back shareholder cash
out: |
|
|
Dividends paid |
|
19,647 |
|
|
Stock buyback |
|
5,502 |
|
| Total cash returned to
shareholders |
|
25,149 |
|
| |
|
| Free Cash
Flow |
$ |
947 |
|
This press release was published by a CLEAR® Verified
individual.
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