VAALCO Energy Reports Strong 2024 Financial and Operational Results, Provides 2025 Guidance

VAALCO Energy reports Q4 2024 results, highlighting increased production, income, and significant reserve growth. 2025 guidance provided.

Quiver AI Summary

VAALCO Energy, Inc. announced its fourth-quarter and full-year 2024 operational and financial results on March 13, 2025. The company reported a fourth-quarter net income of $11.7 million and generated a record Adjusted EBITDAX of $76.2 million, with oil production averaging 20,775 barrels per day. For the entire year, VAALCO's net income totaled $58.5 million and cash from operations reached $113.7 million. The company significantly increased its year-end reserves by 57% to 45.0 million barrels of oil equivalent, supported by the acquisition of Svenska Petroleum for $40.2 million. In 2025, VAALCO plans a capital budget of $270 to $330 million and anticipates returning over $25 million to shareholders through its dividend program. Additionally, the company has secured a new revolving credit facility of up to $300 million to fund its growth initiatives across its operating regions in West Africa, Egypt, and Canada.

Potential Positives

• Reported a significant increase in year-end 2024 reserves, up 57% to 45.0 million barrels of oil equivalent (MMBOE), indicating strong asset growth.
• Generated record Adjusted EBITDAX of $303.0 million for the full year 2024, demonstrating robust operational performance.
• Successfully closed an accretive acquisition of Svenska Petroleum for $40.2 million, enhancing Vaalco's portfolio and production capacity.
• Maintained a commitment to return value to shareholders, having returned $33 million in 2024 and $83.4 million over the past two years through dividends and buybacks.

Potential Negatives

• Net income for Q4 2024 of $11.7 million is significantly lower than the $44.0 million reported in Q4 2023, indicating a downturn in profitability.
• Adjusted EBITDAX decreased by 18% from the previous quarter and 20% year-over-year, suggesting declining operational performance and revenue generation.
• The company's revenue dropped 13% compared to the previous quarter and 18% year-over-year, primarily due to lower sales volumes and pricing, which may raise concerns about future growth and financial stability.

FAQ

What are VAALCO Energy's 2024 financial highlights?

VAALCO reported a net income of $58.5 million and record Adjusted EBITDAX of $303.0 million for 2024.

How much oil did VAALCO produce in Q4 2024?

In Q4 2024, VAALCO produced 20,775 net revenue interest barrels of oil equivalent per day.

What is the outlook for VAALCO in 2025?

VAALCO plans a capital budget of $270 to $330 million and targets over $25 million in shareholder returns.

How much did VAALCO return to shareholders in 2024?

VAALCO returned $33 million to shareholders in 2024 through dividends and buybacks.

What were VAALCO's year-end 2024 reserves?

VAALCO's year-end 2024 SEC proved reserves increased by 57% to 45.0 million barrels of oil equivalent.

Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.

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$EGY insiders have traded $EGY stock on the open market 1 times in the past 6 months. Of those trades, 1 have been purchases and 0 have been sales.

Here’s a breakdown of recent trading of $EGY stock by insiders over the last 6 months:

• GEORGE W.M. MAXWELL (Chief Executive Officer) purchased 4,500 shares for an estimated $21,060

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• MILLENNIUM MANAGEMENT LLC added 1,490,850 shares (+inf%) to their portfolio in Q4 2024, for an estimated $6,515,014
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• STATE STREET CORP removed 877,537 shares (-20.5%) from their portfolio in Q4 2024, for an estimated $3,834,836
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Full Release

HOUSTON, March 13, 2025 (GLOBE NEWSWIRE) -- VAALCO Energy, Inc. (NYSE: EGY, LSE: EGY) ("Vaalco" or the "Company") today reported operational and financial results for the fourth quarter and full year of 2024 and year-end 2024 reserves. The Company also provided 2025 operational and financial guidance for the first quarter and full year of 2025.

Fourth Quarter 2024 Highlights:

• 
  
  Reported net income of
  
  
  $11.7 million
  
  
  (
  
  
  $0.11
  
  
  per diluted share) and Adjusted EBITDAX
  
  
  
  ⁽¹⁾
  
  
  
  of
  
  
  $76.2
  
  
  million;
  
  


• 
  
  Produced
  
  
  20,775
  
  
  net revenue interest (
  
  “
  
  NRI
  
  ”
  
  )
  
  
  
  ⁽²⁾
  
  
  
  barrels of oil equivalent per day ("BOEPD") or
  
  
  25,300
  
  
  Working interest (
  
  “
  
  WI
  
  ”
  
  )
  
  
  
  ⁽³⁾
  
  
  
  BOEPD, both at the midpoint of guidance; and
  
  


• 
  
  Sold
  
  
  20,352
  
  
  NRI BOEPD in Q4 2024, toward the high end of guidance.
  
  
  
  

2024 Full Year Highlights:

• 
  
  Reported full year ("FY") 2024 net income of
  
  
  $58.5
  
  
  million (
  
  
  $0.56
  
  
  per diluted share) and net cash from operating activities of $
  
  
  113.7
  
  
  million;
  
  


• 
  
  Generated record Adjusted EBITDAX
  
  
  
  ⁽¹⁾
  
  
  
  of $
  
  
  303.0
  
  
  million in FY 2024;
  
  


• 
  
  Grew production in 2024 by
  
  
  7%
  
  
  year-over-year to
  
  
  19,936
  
  
  NRI
  
  
  
  ⁽²⁾
  
  
  
  BOEPD, at the midpoint of the
  
  
  Company's increased guidance;
  
  
  
  
  • 
    
    WI
    
    
    
    ⁽³⁾
    
    
    
    production of
    
    
    24,738
    
    
    BOEPD, was also at the midpoint of Vaalco's
    
    
    increased
    
    
    guidance;
    
    
  
  
  
  


• 
  
  Sold
  
  
  19,843
  
  
  NRI BOEPD, above the midpoint of the Company's
  
  
  increased
  
  
  guidance;
  
  


• 
  
  Increased year-end 2024 SEC proved reserves by 57% to 45.0 million barrels of oil equivalent (“MMBOE”);
  
  


• 
  
  Closed the accretive all cash acquisition of Svenska Petroleum Exploration AB (“Svenska”) for a net purchase price of $40.2 million;
  
  
  
  
  • 
    
    Strategically expanded West African focus area with a sizeable producing asset that has significant upside potential and future development opportunities in Cote d’Ivoire, a well-established and investment-friendly country;
    
    
  
  
  • 
    
    Paid back 1.8x
    
    
    
    ⁽⁴⁾
    
    
    
    Vaalco's initial net investment in Côte d’Ivoire in the eight months since closing and the performance of the asset has tracked well ahead of the Company's expectations at the time of the acquisition;
    
    
  
  
  
  


• 
  
  Completed Production Sharing Contracts (“PSCs”) with the Government of Gabon for the offshore Niosi Marin and Guduma Marin exploration blocks; and
  
  


• 
  
  Returned $33 million to shareholders in 2024, as well as $83.4 million over the past two years through dividends and buybacks.
  
  
  
  

2025 Key Items and Outlook:

• 
  
  Entered into new revolving credit facility with an initial commitment
  
  
  of $190 million with the ability to grow to $300 million
  
  
  , secured by Vaalco’s Gabon, Egypt and Côte d’Ivoire assets;
  
  


• 
  
  Acquired 70% WI
  
  
  
  ⁽³⁾
  
  
  
  in and will operate the CI-705 block in offshore Côte D’Ivoire
  
  
  ;
  
  


• 
  
  Planning
  
  
  a 2025 capital budget of $270 to $330 million, including a drilling campaign at Etame, Côte d’Ivoire Floating Production Storage and Offloading vessel ("FPSO") Dry Dock Refurbishment
  
  
  Project and continued
  
  
  drilling in Egypt and Canada; and
  
  


• 
  
  Target to return over $25 million to shareholders through Vaalco’s dividend program.
  
  

(1)


Adjusted EBITDAX, Adjusted Net Income, Adjusted Working 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)


Payback of 1.8x is based on unaudited operational cash flow for the Côte d’Ivoire assets compared to the acquisition price of $40.2 million as of December 31, 2024.

George Maxwell, Vaalco’s Chief Executive Officer commented, “We have delivered another successful and record setting performance in 2024, where we continued to execute our strategic vision of maintaining operational excellence and profitably growing production and reserves. Since 2021, we have transformed Vaalco through acquisitions and organic growth, expanding our asset base, nearly tripling production and quadrupling proved reserves. We have consistently delivered operationally and financially, meeting or exceeding our guidance and generating record production, sales and Adjusted EBITDAX. We have accomplished all of this without losing sight of our commitment to sustainably return value to our shareholders and over the past two years have returned over $83 million through dividends and buybacks.”

“As we look forward to 2025, we are excited about the major projects that we have planned which are expected to deliver a step-change in organic growth across our portfolio in the coming years. We have another drilling campaign at Etame that we believe will expand our production and reserves considerably. In Côte D’Ivoire, we have commenced the FPSO refurbishment project and are preparing for a drilling campaign in 2026 to augment the production and economic life of the Baobab field. In Egypt and Canada, we continue to drill, recomplete and workover wells adding to our production base and cash flows. We also have exciting opportunities in offshore Gabon with the Niosi Marin and Guduma Marin exploration blocks that are located in close proximity to the prolific producing fields of Etame and Dussafu. We have farmed into and are operator of the CI-705 block, in offshore Côte D’Ivoire, which is favorably located in a proven petroleum system, near existing infrastructure with access to a strong growing domestic market and attractive upside potential. We are also excited to proceed with our plans to develop, operate, and begin producing from the discovery in Block P offshore Equatorial Guinea over the next few years. Financially, we are well-positioned to fund the meaningful growth and opportunities that we plan to pursue. Last week we announced a new credit facility that will supplement our internally generated cash flow and cash balance to assist in funding our robust organic growth projects.”

Mr. Maxwell concluded, “I am proud of all that we have accomplished and would like to thank our hard-working employees for helping us to achieve these milestones. We believe that we are well positioned to continue to execute operationally and financially to achieve even greater growth and value for the rest of the decade. Our focus remains fixed 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 our quarterly dividend policy.”

Operational Update

Egypt

Vaalco focused on enhancing production in 2024 through a series of planned workovers, as well as through interventions using the OGS-10 rig. Two additional workover recompletions were completed in the fourth quarter of 2024. With the low cost of workovers, the well economics are strongly positive.

A summary of the Egyptian workover campaign's impact in fourth quarter of 2024 is presented below:

a)  Initial Production; 30 day duration

The fourth quarter 2024 drilling campaign started with Arta-92 and Arta-93, in December 2024. The Arta-92 well successfully increased production levels, achieving an initial 30-day average rate of 428 barrels of oil per day ("BOPD") and the Arta-93 has recently come online with an initial 30-day average rate of 95 BOPD.

a)  Initial Production; 30 day duration

Canada

The 2024 drilling campaign commenced in January 2024 with all four wells drilled, completed and brought onto production by Q2 2024. In the fourth quarter of 2024, the Company drilled a step-out well in its southern acreage. Vaalco has minimal horizontal subsurface information in this area and the well, if successful, could prove up additional long lateral wells in the future with the potential to add proved undeveloped locations. The Company is continuing to monitor the well's flowback as it has only recently come online in the first quarter of 2025.

Gabon

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.

In December 2024, Vaalco secured a rig for the 2025/26 drilling campaign at Etame. Vaalco is currently finalizing locations and planning for the next drilling campaign, which is expected to commence in Q3 2025.

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 fourth quarter, three liftings took place. In October 2024, 671,166 gross barrels were lifted or 142,674 net barrels to Vaalco. In November 2024, 514,559 gross barrels were lifted or 154,249 net barrels to Vaalco. In December 2024, 286,904 gross barrels were lifted or 81,569 net barrels to Vaalco.

Work with Modec, the operator of the Baobab FPSO, on the dry docking project for the FPSO, continued in the fourth quarter of 2024. In alignment with the project timeline, the FPSO Baobab Ivoirien MV10, ceased hydrocarbon operations as scheduled on January 31, 2025. The final lifting of crude oil from the vessel took place in early February 2025. The project team has commenced mobilization efforts, deploying the necessary workforce support vessels and equipment to facilitate the safe disconnection of the FPSO. The vessel is planned to be towed to the shipyard in Dubai for refurbishment upon departure from the field in March 2025. Significant development drilling is expected to begin in 2026 after the FPSO returns to service with meaningful additions to production from the main Baobab field in CI-40.

In March 2025, Vaalco announced that it has farmed into the CI-705 block offshore Côte d’Ivoire. Vaalco is the operator of the block with a 70% working interest and a 100% paying interest though a commercial carry arrangement and is partnering with Ivory Coast Exploration Oil & Gas SAS and PETROCI. The CI-705 block is located in the prolific Tano basin and is approximately 70 kilometers (“km”) to the west of Vaalco’s CI-40 Block, where the Baobab and Kossipo oil fields are located, and 60 km west of ENI’s recent Calao discovery. Block CI-705 covers approximately 2,300 km

²

and is lightly explored with three wells drilled to date on the block. The water depth across the block ranges from zero to 2,500 meters. Vaalco has invested $3 million to acquire its interest in the new block which it believes has significant prospectivity.

Year-End 2024 Reserves

Vaalco’s SEC proved reserves at December 31, 2024 increased by 57% to 45.0 MMBOE from 28.6 MMBOE at year-end 2023. Year-end 2024 reserves included 20.9 MMBOE in proved developed reserves and 24.1 MMBOE in proved undeveloped reserves. The Company’s SEC reserves were prepared by its third-party independent reserve engineers, Netherland, Sewell & Associates, Inc., (“NSAI”) that has provided annual independent estimates of Vaalco’s year-end SEC reserves for over 15 years and evaluates Vaalco's Gabonese, Ivorian and Egyptian reserves while GLJ Ltd. (“GLJ”) evaluates Vaalco's Canadian reserves. In 2024, the Company added 16.5 MMBOE of SEC proved reserves through the Svenska Acquisition and 7.2 MMBOE due to positive revisions. These additions were partially offset by 7.3 MMBOE of full year 2024 production. VAALCO had a reserve replacement ratio of 324% compared to the 7.3 MMBOE of production in 2024.

The standardized measure of Vaalco’s SEC proved reserves, utilizing SEC pricing increased to $379.4 million at December 31, 2024 from $341.9 million at December 31, 2023. This was primarily driven by the additions of reserves from the Svenska acquisition, offset by a decrease in year over year SEC prices which were utilized for the calculation and can be found in the Company’s Annual Report on Form 10-K disclosure, which is expected to be filed with the SEC on March 17, 2025.

At year-end 2024, NSAI and GLJ provided the 2P WI CPR estimates of proven and probable reserves which were prepared in accordance with the definitions and guidelines set forth in the 2018 Petroleum Resources Management Systems approved by the Society of Petroleum Engineers as of December 31, 2024 using VAALCO’s management assumptions for future commodity pricing and costs shown below under “WI CPR Reserves”. The 2P WI CPR reserves attributable to VAALCO’s ownership are reported on a WI basis prior to deductions for government royalties. Management's year-end 2024 2P WI CPR estimate of reserves is 96.1 MMBOE to VAALCO’s WI, an increase of 24% from 77.3 MMBOE at December 31, 2023. The present value discounted at 10% (“PV-10”) of VAALCO’s 2P WI CPR reserves at year-end 2024, utilizing management timing assumptions and escalated pricing and cost assumptions, is $686.6 million, up 9% from $630.9 million at December 31, 2023. The PV-10 increase is due to additional reserves from the Svenska acquisition, offset by a decrease due to pricing, natural decline in reserves and cost inflation.

See

“PV-10 Value and Probable Reserves” and “WI CPR Reserves” for additional information related to

2P WI CPR reserves and 2P PV-10.

Financial Update

–

Fourth Quarter of


2024

Vaalco reported net income of $11.7 million ($0.11 per diluted share) for the fourth quarter of 2024, which was up 6% compared with net income of $11.0 million ($0.10 per diluted share) in the third quarter of 2024 and down compared to $44.0 million ($0.41 per diluted share) in the fourth quarter of 2023. The increase in earnings compared with the third quarter of 2024 was driven by lower production expenses, lower depreciation, depletion and amortization and significantly lower income tax expense, partly offset by lower sales volume in Q4 2024 of 1,872,000 BOE compared to a sales volume of 2,134,000 BOE in Q3 2024.

Adjusted EBITDAX totaled $76.2 million in the fourth quarter of 2024, an 18% decrease from $92.8 million in the third quarter of 2024 and down 20% from $95.9 million generated in the same period in 2023. The decrease was primarily due to lower sales and realized pricing.

In Q4 2024, Vaalco had a net revenue decrease of $18.6 million or 13% compared to Q3 2024 as total NRI sales volumes of 1,872,000 BOE was 12% lower than the Q3 2024 volumes of 2,134,000 BOE and 6% lower compared to 1,994,000 BOE for Q4 2023, primarily due to timing of offshore cargoes. Q4 2024 NRI sales were toward the higher end of Vaalco's guidance.

Q4 2024 realized pricing (net of royalties) was slightly lower compared to Q3 2024 and also 12% lower compared to Q4 2023.

Total production expense (excluding offshore workovers and stock compensation) of $36.5 million in Q4 2024 was a 14% decrease compared to Q3 2024 and a 21% decrease compared to the same period in 2023. The decrease in Q4 2024 was primarily driven by lower production expense in Egypt and Côte d'Ivoire in the quarter.

Q4 2024 and Q3 2024 had minimal offshore workover expense, while Q4 2023 had no workover expense.

Q4 2024 production expense per BOE, excluding offshore workover expense, was $19.52 per BOE which was lower than Q4 2023 primarily due to the increased sales associated with the purchase of the Côte d'Ivoire asset and slightly lower than Q3 2024.

Depreciation, depletion and amortization (“DD&A”) expense for Q4 2024 was $37.0 million which was lower than $47.0 million in Q3 2024 and higher than $20.3 million in Q4 2023. The decrease in Q4 2024 DD&A expense compared to Q3 2024 is due primarily to the impact of the year end depletion adjustments based on the year end reserve reports. The increase in Q4 2024 DD&A expense compared to Q4 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, increased to $7.1 million in Q4 2024 from $6.0 million in Q3 2024 and from $6.1 million in Q4 2023. The increase in G&A expenses compared to both Q3 2024 and Q4 2023 was primarily due to higher professional service fees, salaries and wages, and accounting and legal fees. Q4 2024 cash G&A was within the Company’s guidance.

Non-cash stock-based compensation expense was $1.4 million for Q4 2024 compared to $0.9 million for Q4 2023. Non-cash stock-based compensation expense for Q3 2024 was $0.9 million.

Other income (expense), net, was an expense of $9.7 million for Q4 2024, compared to other income of $0.6 million during Q4 2023 and an expense of $0.5 million for Q3 2024. Other income (expense), net, normally consists of foreign currency losses. Also in Q4 2024, Vaalco recorded a reduction in the bargain purchase gain of $6.4 million as a result of the change in fair value estimates of the net assets acquired in the Svenska acquisition.

Foreign income taxes for Gabon are settled by the government taking oil in-kind. Q4 2024 income tax expense was an expense of $17.2 million and is comprised of current tax expense of $26.2 million and deferred tax benefit of $9.0 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. 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. Q4 2023 income tax expense was an expense of $37.6 million, comprised of $41.1 million of current tax expense and a deferred tax benefit of $3.5 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 paid by jurisdiction are as follows:

Financial Update

–

Full Year 2024

The Company reported net income for the year ended December 31, 2024 of $58.5 million, which is a decrease from the $60.4 million reported for the same period in 2023. The decrease in net income was primarily due to increased DD&A expense, production expenses and credit losses partially offset by higher revenues and a bargain purchase gain related to the Svenska acquisition.

NRI production volumes for full year 2024 were up 6.8% to 7.3 MMBOE compared to 6.8 MMBOE production for the prior year. The increase was driven primarily by production from the assets acquired in the Svenska Acquisition. NRI sales volumes for full year 2024 were up 6.3% to 7.3 MMBOE compared to 6.8 MMBOE sales for the prior year. 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 year ended December 31, 2024 was $65.64 per barrel, representing a decrease of 0.3% from $65.83 realized in the twelve months of 2023. This slight decrease in crude oil price reflects the softening in commodity pricing over the past year.