VAALCO ENERGY INC /DE/ Q3 FY2024 earnings call

• Past 2 years met or exceeded quarterly production guidance, leading to strong operational and financial results. Q3 2024 adjusted EBITDAX was $92.8 million, cumulative $227 million in first 9 months of 2024.
• Maintained quarterly dividend in Q3 2024 and announced Q4 dividend.
• Svenska acquisition increased reserves in Cote d'ivoire by 30%. Canadian drilling program improved production mix. Egypt had successful workovers and strong safety performance with over 2.9 million-man hours without lost time incident. Gabon had positive production results. Equatorial Guinea advanced FEED study for Venus Block P

Cote d'ivoire

• Secured Svenska acquisition in April 2024 with SEC net proved reserves as of year-end 2023 of 16.9 million barrels of oil equivalent (93% oil). Q3 had 3 loadings driving total VAALCO sales 20% higher vs Q2. FPSO shutdown and sale away scheduled for Q1 2025.

Canada

• Drilled 4 wells in Q1 2024, completed and brought online in March-April. Canadian production mix shifted to more liquids, with Q1 ~60% liquids, Q2-Q3 ~75% liquids.

Egypt

• Focused on high-rate-of-return capital workover projects in 2024, had 3 recompletions in Q3. Has a 10-15 well program, contracted rig in Q4, expects to complete at least 1 well prior to year-end, with another well starting production in Jan 2025. Plans to fracture a well in Q4.

Gabon

• Despite no drilling in 2024, had positive production results. FSO and field reconfiguration projects reduced downtime and OpEx. 2025 plans to initiate drilling campaign.

Equatorial Guinea

• Finalized Venus Block P plan of development documents in March 2024, began FEED study in summer, anticipating FID after FEED completion

• Q4 2024 production guidance: Working interest barrels of oil equivalent per day 23,800-26,700; NRI barrels of oil equivalent per day 19,400-22,000.
• Full year 2024 production guidance: Working interest barrels of oil equivalent per day 24,100-25,400; NRI barrels of oil equivalent per day 19,300-20,600.
• 2024 CapEx between $110 million and $130 million. Q4 CapEx range $40 million-$60 million

• Operational risks: Uncertainty in FPSO shutdown and sale away timing in Cote d'ivoire, drilling project execution risks in various regions.
• Market risks: Price fluctuations, foreign exchange risks. Government-related risks: Uncertainty in Egyptian backdated receivables recovery

Q: Jeff Robertson asked about natural production decline in Gabon in 2025 A: George Maxwell said decline expected between 7%-9% due to reservoir performance and planned maintenance, and mentioned evaluating reserve booking Q: Jeff Robertson asked if reducing back pressure and performance gain impact reserve booking in Gabon A: George Maxwell said there's a meeting next week to consider, and CPR report in Jan will be updated Q: Jeff Robertson asked about production contribution from Gabon drilling campaign in 2025 A: George Maxwell said there will be production wells at the front of the sequence, depending on well sequencing Q: Christopher Wheaton asked about clarity on timing and spending for Cote d'ivoire FPSO restart and drilling campaign A: George Maxwell said will provide detailed project timelines and costings by early Q1 2025, and the company is adequately funded Q: Christopher Wheaton asked about working capital and DD&A A: Ron Bain explained working capital outflows due to various factors and DD&A was high due to acquisition valuation of proven developed producing reserves Q: Charlie Sharp asked about Gabon drilling campaign timing, cost per well A: George Maxwell said timing due to rig economics, Ron Bain estimated ~$40 million for D&C of a new well, ~$35 million for a redrill, ~$17 million-$20 million for exploration well Q: Charlie Sharp asked about Gabon new licenses A: George Maxwell said licenses have been awarded, just administrative issues Q: Stephane Foucaud asked about Canada 2025 plans and production data difference A: Ron Bain said likely due to average data differences of individual assets Q: Bill Dezellem asked about Cote d'ivoire production growth reason and Egyptian receivables A: George Maxwell explained production growth due to well performance and Egyptian receivables settlement discussions ongoing Q: Jeff Robertson asked about rig situation for Cote d'ivoire development drilling campaign A: George Maxwell said operator is actively seeking rig, will discuss in early Q1