Published: Saturday, March 15, 2025 · 7:03 AM | Updated: Saturday, March 15, 2025 · 7:03 AM
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Release Date: March 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- VAALCO Energy Inc (EGY, Financial) achieved record adjusted EBITDAX of $303 million for the full year 2024, marking a new company record.
- The company reported record production of nearly 25,000 working interest barrels equivalent per day and record sales of almost 20,000 net interest barrels per day.
- VAALCO Energy Inc (EGY) successfully completed the Svenska acquisition in April 2024, achieving a 1.8 times payback on the initial investment by year-end.
- The company’s SEC proved reserves grew 57% year-over-year to 45 million BOE, and 2P CPR reserves increased to 96.1 million BOE.
- VAALCO Energy Inc (EGY) returned $83 million to shareholders over the past two years through dividends and share buybacks, demonstrating a commitment to shareholder returns.
Negative Points
- The FPSO in Cote d’Ivoire ceased hydrocarbon operations as scheduled on January 31st, 2025, leading to a temporary shutdown of production in the region.
- Production and sales for 2025 are expected to be lower than 2024 due to the FPSO shutdown and natural decline, with a significant impact on realized pricing and revenue.
- The company anticipates an increase in per barrel operating expenses in 2025 due to lower sales, projecting a range between $24 and $28 per BOE.
- VAALCO Energy Inc (EGY) faces challenges with outstanding receivables in Egypt, although collections have improved in early 2025.
- The company is undertaking significant capital expenditures in 2025, projected between $270 million and $330 million, which may impact cash flow despite the potential for future growth.
Q & A Highlights
Q: Can you discuss the cycle times for exploration projects in Gabon and Cote d’Ivoire, and when you might be able to produce if a discovery is made?
A: George Maxwell, CEO: In Gabon, seismic acquisition is expected in Q1 2026, with processing and interpretation taking most of the year. Drilling might start late 2026 or early 2027. In Cote d’Ivoire, we plan to acquire and interpret existing seismic data by Q2 or Q3 this year, with potential drilling options thereafter.
Q: How will the capital campaign in 2026 impact your cost recovery pools?
A: George Maxwell, CEO: In Gabon, capital recovery begins as soon as wells are on production, reducing the cash sink. In Cote d’Ivoire, the PSC offers a 25% uplift on investments, making it attractive as production recommences in early 2026.
Q: Could you achieve similar production growth in Gabon as seen in 2022 with the upcoming drilling campaign?
A: George Maxwell, CEO: Yes, the enhanced performance post-field reconfiguration has led to a five-well campaign with options for more. This should support production longevity into the mid-2030s.
Q: What are the critical path items for the FPSO refurbishment in Cote d’Ivoire, and when will the Baobab field come back online?
A: Unidentified Company Representative: The turret bearing is a key milestone, expected to arrive in Dubai soon. The FPSO should leave the quayside in January 2026, with commissioning starting in early May and first oil expected by mid to late May 2026.
Q: Does the ability to process H2S open up more acreage for exploration?
A: George Maxwell, CEO: Yes, it unlocks additional locations, including a planned well in the Ebouri area. This could allow exploration of previously isolated wells between Ebouri and Etame.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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