VAALCO Energy, Inc. Announces Fourth Quarter and Record Full Year 2024 Financial and Operating Results and Year-End 2024 Reserves

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.

• 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.
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• 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.

(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:

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.

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.

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 km² 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.

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.