In the news release, VAALCO Energy Announces Second Quarter 2015
Results, issued 06-Aug-2015 by VAALCO
Energy, Inc. over PR Newswire, we are advised by the company that
the Condensed Consolidated Statements of Cash Flows table was
originally issued with incorrect information inadvertently. The
table has been updated to reflect the correct information. The
complete, corrected release follows:
VAALCO Energy Announces Second Quarter 2015 Results
HOUSTON, Aug. 6, 2015 /PRNewswire/ -- VAALCO Energy,
Inc. (NYSE: EGY) today reported results for the second quarter of
2015.
Second Quarter and Recent Highlights:
- Reported second quarter 2015 GAAP net loss of $5.2 million, or $0.09 loss per diluted share; Adjusted Net Income
was $0.6 million, or $0.01 per diluted share and Adjusted EBITDAX was
$16.3 million, which excludes the
impact of a $5.8 million non-cash
impairment charge.
- Announced share repurchase program of up to 5.8 million shares
of the Company's common stock.
- Grew total Gabon production in
the second quarter of 2015 to 1,654,000 barrels of crude oil (Bbls)
gross (464,000 net to VAALCO's working interest (NWI)), up 7% from
the first quarter of 2015 due to successful development drilling in
the Etame field.
- Successfully drilled and completed the Southeast Etame 2-H
development well that was brought online in July on the new
Southeast Etame/North Tchibala (SEENT) platform at a rate of 3,400
gross barrels of oil per day (BOPD) (950 BOPD NWI).
- Achieved peak production rate of greater than 21,000 BOPD gross
(5,900 NWI) from the Etame Marin area, the highest production rate
since March 2012.
- Mobilized the rig to begin drilling the North Tchibala 1-H well
from the SEENT platform, the first development well in the North
Tchibala field.
- Reduced production expense per barrel of oil equivalent (BOE)
27% to $19.07 in the second quarter
of 2015 from $26.07 per BOE in the
first quarter of 2015 due to lower costs and higher
production.
- Announced borrowing base under IFC credit facility was
re-affirmed at full $65 million.
Adjusted EBITDAX and Adjusted Net Income are non-GAAP financial
measures. Each measure is defined and reconciled to the most
directly comparable GAAP measure under "Non-GAAP Financial
Measures" beginning on page 11.
For the second quarter of 2015, VAALCO's reported net loss was
$5.2 million, or a loss of
$0.09 per share. This includes
a $5.8 million non-cash impairment
charge primarily due to lower projected oil prices and additional
development costs as described below. Excluding this charge,
VAALCO reported Adjusted Net Income of $0.6
million, or $0.01 per diluted
share. The benefit of increased production in the second
quarter from the Company's Etame field following the successful
drilling of two development wells this year from its new Etame
platform was more than offset by lower crude oil prices. In the
second quarter of 2014, VAALCO reported net income of $24.7 million, or $0.43 per diluted share. Second quarter
2015 Adjusted EBITDAX totaled $16.3
million. Adjusted EBITDAX excludes non-cash and other
non-recurring items that are detailed in the reconciliation tables
below.
Steve Guidry, Chairman and CEO,
commented: "Our successful development program offshore
Gabon led to stronger production
and higher sales volumes in the second quarter. We benefited from
higher oil price realizations compared to the first quarter of
2015, lower production expense, lower general and administrative
expenses and higher volumes. We have implemented additional
initiatives to further reduce our production costs and G&A
expenses through a combination of improvement in efficiencies and
direct rate reductions for services and materials that will become
more evident as the year progresses.
Looking ahead, we anticipate that the third quarter will benefit
from production from the Southeast Etame 2-H well that we recently
placed online at 3,400 BOPD gross, a rate higher than we
expected. This is encouraging news as it is the first
development well drilled to a new field we discovered in 2010. We
are very pleased to have exceeded 21,000 BOPD gross from the Etame
Marin area, the highest level of production since March 2012. We expect to have results by late
September from the latest well in our drilling program, the North
Tchibala 1-H that is currently being drilled from the SEENT
platform. This well is the first development well in the North
Tchibala field that was discovered and delineated by prior wells
but had not been placed on production. We anticipate continued
production growth through 2015 from our development drilling and
workover program, which is why we are raising our full year
production guidance range to 4,100 BOEPD to 4,600 BOEPD. The
majority of our capital expenditures for the Etame and SEENT
development projects are behind us, and remaining outlays are for
development wells and workovers, all of which are expected to
generate attractive stand-alone returns even in the current price
environment."
Guidry continued, "We have engaged in constructive conversations
with our partners on both our Equatorial
Guinea and onshore Gabon
projects to resolve outstanding issues and find more cost effective
and efficient ways to move those development projects forward at
the appropriate pace considering the current oil price environment.
We are prudently adjusting our future capital investment outlook
beyond 2015 to maintain financial flexibility and be opportunistic
while we balance our desire to grow the Company with the reality of
potentially longer-term low oil prices. Our re-affirmed borrowing
base under our credit facility provides additional financial
security during this downturn in the industry."
Gabon
Offshore Gabon. In the
second quarter of 2015, the Company completed drilling the Etame
12-H development well offshore Gabon from the new Etame platform that was
installed in late 2014. The well was brought on production in
April 2015 at an initial rate of
approximately 2,000 BOPD gross (approximately 550 NWI). This well,
along with the Etame 10-H well drilled in the first quarter of
2015, confirmed the presence of an un-drained lower lobe of the
Gamba reservoir in this fault block, which VAALCO has estimated to
contain approximately 25 million gross Bbls of oil in place.
After the completion of the Etame 12-H well in April 2015, the Transocean Constellation II
jackup rig was moved to the SEENT platform to begin initial
drilling of development wells. The Company recently completed
drilling the first well from that platform, the Southeast Etame 2-H
well, which was brought online at the rate of approximately 3,400
barrels of oil per day (approximately 950 NWI). The well was
drilled to a measured depth of approximately 14,000 feet, targeting
a new reservoir that was discovered by an exploration well drilled
by VAALCO in 2010. It is producing from the Gamba formation which
is the source of all other current VAALCO production in the Etame
Marin area but this is the first production from this new,
previously-unproduced field. The Southeast Etame 2-H well is
not currently producing any formation water or hydrogen sulfide
(H2S), and is producing at the lowest setting on the ESP
(electrical submersible pump). The combination of good
reservoir pressure, productivity equivalent to or greater than
other nearby Gamba development wells and the lowest ESP setting
confirm the strength of this well. VAALCO plans to continue
to monitor wellhead and downhole pressure and optimize fluid
throughput at the recently commissioned production facilities on
the platform.
The rig has been moved to a second slot on the same eight-slot
platform and began drilling the North Tchibala 1-H development well
that is targeting the Dentale formation in another previously
unproduced field (North Tchibala), that was discovered and
delineated by four exploration and appraisal wells drilled by
previous block owners.
The Company and its partners have established an integrated
project team to evaluate potential options to design facilities for
the removal of H2S from impacted wells in the Ebouri and
Etame fields. The team is focusing on finding cost effective
options for processing the sour crude including chemical removal
options, construction of smaller facilities on existing structures,
or the use of surplus equipment and used structures. Should an
economic solution be identified, the project concept, timing and
start-up date could be known as early as the fourth quarter of 2015
with a goal of re-establishing production from the area impacted by
H2S as soon as practical.
Onshore Gabon. VAALCO
has met several times recently with its concession partner and the
government on the Mutamba Iroru block development project in an
effort to move the project forward and finalize a revised
production sharing contract (PSC). Progress has been made
designing a more cost effective development plan to improve the
returns on the investment contemplated which is not likely to occur
prior to 2017 based on current oil prices.
Angola
The Company has continued to interpret the 3-D seismic that it
previously acquired over the block and has developed a number of
very attractive pre-salt and post-salt prospects and leads.
Based on VAALCO's initial assessment of volumes, the top four
prospects/leads have an estimated total gross unrisked mean
recoverable resource potential of over 800 million barrels of oil.
The current concession extends through November 2017 with no additional exploratory
drilling in Angola expected before
late-2016.
Equatorial Guinea
The Company has met recently with the Ministry of Mines,
Industry and Energy and new leadership at GEPetrol, the operator of
the block, in an effort to continue to refine an operating model
and identify a cost-effective path forward. The Company
continues to re-evaluate the costs of development and timing to
take advantage of lower capital costs for equipment and services
resulting from the current industry downturn to improve the
economics of the Block P development.
2015 Second Quarter Financial Results
Total oil and gas sales for the second quarter of 2015 were
$27.1 million, compared to
$52.1 million for the same period in
2014, and $18.2 million in the first
quarter of 2015. Second quarter 2015 benefited from higher
sales volumes and higher oil price realizations compared with the
first quarter of 2015.
Oil Revenues
Gabon
Crude oil revenues for the three months ended June 30, 2015 were $27.0
million, as compared to revenues of $51.6 million for the same period in 2014, and
$18.1 million in the first quarter of
2015. During the second quarter of 2015, VAALCO sold
approximately 455,000 net Bbls at an average price of $59.16 per Bbl in Gabon compared to 477,000 net Bbls at an
average price of $108.24 per Bbl in
the second quarter of 2014, and 372,000 net Bbls at an average
price of $48.66 per Bbl in the first
quarter of 2015. Sales volumes (liftings) in the second quarter of
2015 exceeded production volumes due to oil that remained in the
FPSO at March 31, 2015 that was sold
in the second quarter.
Natural Gas Revenues
United States
Natural gas revenues (including revenues from natural gas
liquids) for the three months ended June 30,
2015 were $0.1 million
compared to $0.3 million for the
comparable period in 2014, and $0.1
million in the first quarter of 2015. Natural gas
sales were approximately 46 million cubic feet (MMcf) at an average
price of $2.70 per thousand cubic
feet (Mcf) including natural gas liquids for the three months ended
June 30, 2015. For the same
period of 2014, natural gas sales were approximately 56 MMcf at an
average price of $5.61 per Mcf
including natural gas liquids. In the first quarter of 2015,
natural gas sales were approximately 46 MMcf at an average price of
$2.82 per Mcf including natural gas
liquids.
Operating Costs and Expenses
Total production expense for the second quarter of 2015 was
$8.9 million, or $19.07 per BOE of sales, compared to $4.8 million, or $9.94 per BOE, in the second quarter of 2014, and
$9.9 million, or $26.07 per BOE in the first quarter of 2015.
There were no workover expenses during any of those periods.
The second quarter of 2014 benefited from non-operational
adjustments recorded during the period including an accrual
true-up, while the first quarter of 2015 included $3.60 per BOE related to the non-cash expensed
costs for design on a centralized processing facility.
Exploration expense was $1.1
million in the second quarter of 2015 compared to
$3.3 million in the comparable period
in 2014, and $27.5 million in the
first quarter of 2015. Second quarter 2014 expense included
costs related to the unsuccessful Dimba well offshore Gabon, and the first quarter of 2015 included
costs related to the unsuccessful Kindele well offshore
Angola.
Depreciation, depletion and amortization (DD&A) expenses
were $9.3 million, or $20.00 per BOE of sales in the three months ended
June 30, 2015 compared to
$7.0 million, or $14.35 per BOE in the three months ended
June 30, 2014, and $5.9 million, or $15.63 per BOE in the first quarter of 2015. The
higher DD&A in the second quarter of 2015 is primarily due to
the increase in the depletable asset base.
General and administrative expenses for the three months ended
June 30, 2015 were $2.8 million as compared to $3.1 million in the three months ended 2014, and
$4.9 million in the first quarter of
2015. The decline in general and administrative cost compared with
the first quarter of 2015 was primarily due to a decrease in
compensation expense and non-cash compensation. General and
administrative expense includes $0.7
million, $0.6 million, and
$1.6 million of non-cash compensation
expense for the quarters ended June 30,
2015, June 30, 2014, and
March 31, 2015, respectively.
In the three months ended June 30,
2015, the Company recorded an impairment loss of
$5.8 million to write down its
investment in the Southeast Etame and North Tchibala fields in the
Etame Marin Block, offshore Gabon. The impairment is
primarily due to lower projected oil prices and additional
development costs for the two drilled development wells used in the
impairment testing and calculation. In the three months ended
June 30, 2014, the Company recorded
no impairment losses, and in the first quarter of 2015 recorded
$5.4 million in impairment charges
related to the write-down of its investment in the Etame Marin
Block as a result of crude oil price declines.
Income tax expense for the second quarter of 2015 was
$4.3 million compared to $9.0 million for the same period in 2014, and
$3.4 million in the first quarter of
2015. Taxes in these periods were all paid in Gabon. The
decrease in tax compared with the 2014 period was primarily related
to the decrease in revenue resulting from lower oil prices and to
significant capital costs related to the construction of two new
platforms and the drilling of new wells from those platforms for
the majority of 2015 in the Etame Marin block. Income taxes
paid to the government of Gabon
are a function of taxation on the remaining profit oil value after
deducting the royalty and the cost oil values.
Capital Investments/Balance Sheet
During the three months ended June 30,
2015, the Company expended $13.1
million in net property and equipment additions, primarily
associated with the drilling of development wells from the new
Etame and SEENT platforms, offshore Gabon. The Company's
full year 2015 capital expenditures are now expected to be in the
range of $70 million to $80
million. The upward adjustment to guidance is
primarily due to the recognition of the previously announced cost
overruns on the Kindele exploration well in the first quarter of
2015.
The Company recently announced that the borrowing base under its
credit facility with the International Finance Corporation (IFC)
was re-affirmed at the full $65
million level, the maximum capacity provided for under the
facility. The covenants remain unchanged, including the
removal of the debt to equity covenant that was previously
announced in May 2015. At June 30,
2015, $15 million was
outstanding under the facility.
At the end of the second quarter, VAALCO had total liquidity of
$128.1 million comprised of
$78.1 million in cash (including cash
held as restricted primarily for future drilling commitments
offshore Angola) and $50 million in undrawn availability under the IFC
facility. The Company believes that its cash balance, combined with
cash flow from operations, will be more than sufficient to fund the
Company's 2015 and 2016 operations.
VAALCO announced on August 4, 2015
that its Board of Directors has authorized the repurchase of up to
5.8 million shares of the Company's common stock, which represents
approximately 10% of the Company's outstanding common stock, in
open market transactions from time to time during the upcoming 18
month period and in accordance with the requirements of the
Securities and Exchange Commission.
Conference Call
An investor handout will be posted to VAALCO's web site on
Friday morning that will be referenced in tomorrow's conference
call.
As previously announced, the Company will hold a conference call
to discuss its second quarter results on Friday, August 7, 2015, at 10:00 a.m. Central Time (11:00 a.m. Eastern Time). Interested
parties may participate by dialing 1 (800) 230-1092.
International parties may dial 1 (612) 234-9960. The
confirmation code is 364229. This call will also be webcast
on VAALCO's website at www.vaalco.com.
An audio replay will be available beginning approximately one
hour after the end of the conference call through September 7, 2015 on the Company's website and by
dialing 1 (800) 475-6701. International parties may dial 1
(320) 365-3844. The confirmation code is 364229.
Forward Looking Statements
This document includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements are those concerning
VAALCO's plans, expectations, and objectives for future drilling,
completion and other operations and activities. All
statements included in this document that address activities,
events or developments that VAALCO expects, believes or anticipates
will or may occur in the future are forward-looking
statements. These statements include expected capital
expenditures, future drilling plans, prospect evaluations,
negotiations with governments and third parties, expectations
regarding processing facilities, and reserve growth. These
statements are based on assumptions made by VAALCO based on its
experience and perception of historical trends, current conditions,
expected future developments and other factors it believes are
appropriate in the circumstances. Such statements are subject
to a number of assumptions, risks and uncertainties, many of which
are beyond VAALCO's control. These risks include, but are not
limited to, oil and gas price volatility, inflation, general
economic conditions, the Company's success in discovering,
developing and producing reserves, lack of availability of
goods, services and capital, environmental risks, drilling risks,
foreign operational risks, and regulatory changes. These and
other risks are further described in VAALCO's quarterly reports on
Form 10-Q for the three months ended March
31, 2015 and June 30, 2015,
annual report on Form 10-K for the years ended December 31, 2014, and other reports filed with
the SEC which can be reviewed at http://www.sec.gov, or which can
be received by contacting VAALCO at 9800 Richmond Avenue, Suite
700, Houston, Texas 77042, (713)
623-0801. Investors are cautioned that forward-looking
statements are not guarantees of future performance and that actual
results or developments may differ materially from those projected
in the forward-looking statements. VAALCO disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events,
or otherwise.
The SEC generally permits oil and natural gas companies, in
filings made with the SEC, to disclose proved reserves, which are
reserve estimates that geological and engineering data demonstrate
with reasonable certainty to be recoverable in future years from
known reservoirs under existing economic and operating conditions
and certain probable and possible reserves that meet the SEC's
definitions for such terms. In this press release and the
conference call, the Company may use the terms "resource potential"
and "oil in place", which the SEC guidelines restrict from being
included in filings with the SEC without strict compliance with SEC
definitions. These terms refer to the Company's internal estimates
of unbooked hydrocarbon quantities that may be potentially added to
proved reserves. Unbooked resource potential and oil in place do
not constitute reserves within the meaning of the Society of
Petroleum Engineer's Petroleum Resource Management System or SEC
rules and do not include any proved reserves. Actual quantities of
reserves that may be ultimately recovered from the Company's
interests may differ substantially from those presented herein.
Factors affecting ultimate recovery include the scope of the
Company's ongoing drilling program, which will be directly affected
by the availability of capital, decreases in oil and natural gas
prices, drilling and production costs, availability of drilling
services and equipment, drilling results, lease expirations,
transportation constraints, processing costs, regulatory approvals,
negative revisions to reserve estimates and other factors as well
as actual drilling results, including geological and mechanical
factors affecting recovery rates. Estimates of unproved reserves
may change significantly as development of the Company's assets
provides additional data. In addition, our production forecasts and
expectations for future periods are dependent upon many
assumptions, including estimates of production decline rates from
existing wells and the undertaking and outcome of future drilling
activity, which may be affected by significant commodity price
declines or drilling cost increases.
About VAALCO
VAALCO Energy, Inc. is a Houston based independent energy company
principally engaged in the acquisition, exploration, development
and production of crude oil. VAALCO's strategy is to increase
reserves and production through the exploration and exploitation of
oil and natural gas properties with high emphasis on international
opportunities. The company's properties and exploration
acreage are located primarily in Gabon, Angola
and Equatorial Guinea in
West Africa.
VAALCO ENERGY, INC
AND SUBSIDIARIES
|
Condensed
Consolidated Balance Sheets
|
(in thousands,
except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December
31,
|
|
|
2015
|
|
2014
|
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
61,048
|
|
$
|
69,051
|
Restricted
cash
|
|
|
1,194
|
|
|
1,584
|
Receivables:
|
|
|
|
|
|
|
Trade
|
|
|
8,165
|
|
|
19,527
|
Accounts with
partners, net of allowance
|
|
|
19,054
|
|
|
10,903
|
Other, net of
allowance
|
|
|
6,278
|
|
|
3,285
|
Crude oil
inventory
|
|
|
447
|
|
|
1,905
|
Materials and
supplies
|
|
|
254
|
|
|
286
|
Prepayments and
other
|
|
|
5,069
|
|
|
6,509
|
Total current
assets
|
|
|
101,509
|
|
|
113,050
|
Property and
equipment - successful efforts method:
|
|
|
|
|
|
|
Wells, platforms and
other production facilities
|
|
|
368,734
|
|
|
338,641
|
Undeveloped
acreage
|
|
|
18,787
|
|
|
22,133
|
Work in
progress
|
|
|
23,684
|
|
|
25,157
|
Equipment and
other
|
|
|
13,546
|
|
|
11,907
|
|
|
|
424,751
|
|
|
397,838
|
Accumulated
depreciation, depletion and amortization
|
|
|
(314,337)
|
|
|
(289,714)
|
Net property and
equipment
|
|
|
110,414
|
|
|
108,124
|
Other noncurrent
assets:
|
|
|
|
|
|
|
Restricted
cash
|
|
|
15,830
|
|
|
20,830
|
Deferred tax
asset
|
|
|
1,349
|
|
|
1,349
|
Deferred finance
charge
|
|
|
1,648
|
|
|
1,959
|
Abandonment
funding
|
|
|
3,537
|
|
|
3,537
|
Total
assets
|
|
$
|
234,287
|
|
$
|
248,849
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
60,939
|
|
$
|
38,540
|
Accounts with
partners
|
|
|
3,330
|
|
|
-
|
Total current
liabilities
|
|
|
64,269
|
|
|
38,540
|
Asset retirement
obligations
|
|
|
15,951
|
|
|
14,846
|
Long term
debt
|
|
|
15,000
|
|
|
15,000
|
Total
liabilities
|
|
|
95,220
|
|
|
68,386
|
Commitments and
contingencies
|
|
|
|
|
|
|
VAALCO Energy Inc.
shareholders' equity:
|
|
|
|
|
|
|
Common stock,
65,782,113 and 65,194,828 shares issued, $0.10 par value,
100,000,000 shares authorized
|
|
|
6,578
|
|
|
6,519
|
Additional paid-in
capital
|
|
|
67,677
|
|
|
64,351
|
Less treasury stock,
7,508,699 and 7,393,714 shares at cost
|
|
|
(37,871)
|
|
|
(37,299)
|
Retained
earnings
|
|
|
102,683
|
|
|
146,892
|
Total
equity
|
|
|
139,067
|
|
|
180,463
|
Total liabilities and
equity
|
|
$
|
234,287
|
|
$
|
248,849
|
VAALCO ENERGY, INC
AND SUBSIDIARIES
|
Condensed
Consolidated Statements of Operations
|
(Unaudited)
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
June 30,
2015
|
|
June 30,
2014
|
|
March 31,
2015
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Oil and gas
sales
|
|
$
|
27,137
|
|
$
|
52,098
|
|
$
|
18,239
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
Production
expense
|
|
|
8,867
|
|
|
4,848
|
|
|
9,911
|
Exploration
expense
|
|
|
1,113
|
|
|
3,293
|
|
|
27,459
|
Depreciation, depletion
and amortization
|
|
|
9,299
|
|
|
6,995
|
|
|
5,935
|
General and
administrative expense
|
|
|
2,829
|
|
|
3,134
|
|
|
4,873
|
Other costs and
expenses
|
|
|
296
|
|
|
-
|
|
|
280
|
Impairment of proved
properties
|
|
|
5,821
|
|
|
-
|
|
|
5,399
|
Total operating
costs and expenses
|
|
|
28,225
|
|
|
18,270
|
|
|
53,857
|
Other operating income,
net
|
|
|
58
|
|
|
-
|
|
|
340
|
Operating income
(loss)
|
|
|
(1,030)
|
|
|
33,828
|
|
|
(35,278)
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
5
|
|
|
17
|
|
|
4
|
Interest
expense
|
|
|
(344)
|
|
|
-
|
|
|
(310)
|
Other,
net
|
|
|
438
|
|
|
(125)
|
|
|
(56)
|
Total other income
(expense)
|
|
|
99
|
|
|
(108)
|
|
|
(362)
|
Income (loss) before
income taxes
|
|
|
(931)
|
|
|
33,720
|
|
|
(35,640)
|
Income tax
expense
|
|
|
4,273
|
|
|
9,009
|
|
|
3,365
|
Net income
(loss)
|
|
$
|
(5,204)
|
|
$
|
24,711
|
|
$
|
(39,005)
|
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per share
|
|
$
|
(0.09)
|
|
$
|
0.43
|
|
$
|
(0.67)
|
Diluted net income
(loss) per share
|
|
$
|
(0.09)
|
|
$
|
0.43
|
|
$
|
(0.67)
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average shares outstanding
|
|
|
58,302
|
|
|
56,951
|
|
|
57,981
|
Diluted weighted
average shares outstanding
|
|
|
58,302
|
|
|
57,537
|
|
|
57,981
|
VAALCO ENERGY, INC
AND SUBSIDIARIES
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
June 30,
2015
|
|
June 30,
2014
|
|
March 31,
2015
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
(5,204)
|
|
$
|
24,714
|
|
$
|
(39,005)
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion
and amortization
|
|
|
9,299
|
|
|
6,995
|
|
|
5,935
|
Amortization of debt
issuance cost
|
|
|
151
|
|
|
-
|
|
|
160
|
Unrealized foreign
exchange (gain) loss
|
|
|
18
|
|
|
-
|
|
|
-
|
Dry hole costs and
impairment loss on unproved leasehold
|
|
|
649
|
|
|
2,768
|
|
|
27,222
|
Stock-based
compensation
|
|
|
678
|
|
|
640
|
|
|
1,654
|
Gains on disposal of
oil and gas properties
|
|
|
(58)
|
|
|
-
|
|
|
(340)
|
Impairment
loss
|
|
|
5,821
|
|
|
-
|
|
|
5,399
|
Change in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Trade
receivables
|
|
|
11,044
|
|
|
(21,498)
|
|
|
318
|
Accounts with
partners
|
|
|
9,747
|
|
|
39,358
|
|
|
(14,568)
|
Other
receivables
|
|
|
218
|
|
|
(1,032)
|
|
|
(2,774)
|
Crude oil
inventory
|
|
|
1,245
|
|
|
780
|
|
|
213
|
Materials and
supplies
|
|
|
(21)
|
|
|
(35)
|
|
|
53
|
Prepayments and
other
|
|
|
862
|
|
|
3,784
|
|
|
655
|
Accounts
payable and other liabilities
|
|
|
(6,894)
|
|
|
7,628
|
|
|
14,476
|
Net cash provided by
operating activities
|
|
|
27,555
|
|
|
64,102
|
|
|
(602)
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Increase in restricted
cash
|
|
|
3
|
|
|
(142)
|
|
|
5,387
|
Property and equipment
expenditures
|
|
|
(13,127)
|
|
|
(26,541)
|
|
|
(28,069)
|
Proceeds from sales of
oil and gas properties
|
|
|
58
|
|
|
-
|
|
|
340
|
Net cash used in
investing activities
|
|
|
(13,066)
|
|
|
(26,683)
|
|
|
(22,342)
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Proceeds from the
issuances of common stock
|
|
|
7
|
|
|
620
|
|
|
445
|
Debt issuance costs
|
|
|
-
|
|
|
(192)
|
|
|
-
|
Purchases of treasury
stock
|
|
|
-
|
|
|
-
|
|
|
-
|
Net cash provided by
(used in) financing activities
|
|
|
7
|
|
|
428
|
|
|
445
|
NET CHANGE IN CASH
AND CASH EQUIVALENTS
|
|
|
14,496
|
|
|
37,847
|
|
|
(22,499)
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
|
|
46,552
|
|
|
80,721
|
|
|
69,051
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
|
$
|
61,048
|
|
$
|
118,568
|
|
$
|
46,552
|
VAALCO ENERGY, INC
AND SUBSIDIARIES
|
SELECTED FINANCIAL
AND OPERATING STATISTICS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
June 30,
2015
|
|
June 30,
2014
|
|
March 31,
2015
|
NET SALES
DATA:
|
|
|
|
|
|
|
|
|
|
Oil (MBbls)
|
|
|
457
|
|
|
479
|
|
|
372
|
Natural Gas
(MMcf)
|
|
|
46
|
|
|
56
|
|
|
46
|
Oil equivalents
(MBOE)
|
|
|
465
|
|
|
488
|
|
|
380
|
Average daily sales
volumes (BOE/day)
|
|
|
5,110
|
|
|
5,363
|
|
|
4,176
|
NET PRODUCTION
DATA
|
|
|
|
|
|
|
|
|
|
Oil (MBbls)
|
|
|
406
|
|
|
448
|
|
|
380
|
Natural Gas
(MMcf)
|
|
|
46
|
|
|
56
|
|
|
46
|
Oil equivalents
(MBOE)
|
|
|
414
|
|
|
457
|
|
|
388
|
Average daily
production volumes (BOE/day)
|
|
|
4,546
|
|
|
5,026
|
|
|
4,260
|
AVERAGE SALES
PRICES:
|
|
|
|
|
|
|
|
|
|
Oil ($/Bbl)
|
|
$
|
59.16
|
|
$
|
108.24
|
|
$
|
48.65
|
Natural Gas
($/Mcf)
|
|
|
2.70
|
|
|
5.61
|
|
|
2.82
|
Weighted average price
($/BOE)
|
|
|
58.45
|
|
|
106.81
|
|
|
48.01
|
COSTS AND EXPENSES
(PER BOE OF SALES):
|
|
|
|
|
|
|
|
|
|
Production
expense
|
|
$
|
19.07
|
|
$
|
9.94
|
|
$
|
26.07
|
Depreciation, depletion
and amortization
|
|
|
20.00
|
|
|
14.35
|
|
|
15.63
|
General and
administrative expense
|
|
|
6.08
|
|
|
6.42
|
|
|
12.82
|
Property and
equipment expenditures, cash basis
|
|
$
|
13,126
|
|
$
|
26,541
|
|
$
|
28,070
|
NON-GAAP FINANCIAL MEASURES
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 before interest expense, income tax
expense, depletion, depreciation and amortization, impairment of
proved properties, exploration expense and other non-cash or
unusual items.
Adjusted EBITDAX has significant limitations, including that it
does not reflect the Company's cash requirements for capital
expenditures, contractual commitments, working capital or debt
service. Adjusted EBITDAX should not be considered as a substitute
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
excludes some, but not all, items that affect net income (loss) and
operating income (loss) and these measures may vary among other
companies. Therefore, the Company's Adjusted EBITDAX may not be
comparable to similarly titled measures used by other
companies.
Adjusted Net Income, which excludes impairments of proved
properties, non-operational adjustments, including accrual true-up
loss, and costs of centralized processing facility to remove
H2S. Management uses this financial measure as an
indicator of the Company's operational trends and performance
relative to other oil and natural gas companies and believes it is
more comparable to earnings estimates provided by securities
analysts. Adjusted Net Income is not a measure of financial
performance under GAAP and should not be considered a substitute
for loss applicable to common stockholders.
The tables below reconcile the most directly comparable GAAP
financial measures to Adjusted EBITDAX and Adjusted Net Income.
VAALCO ENERGY, INC
AND SUBSIDIARIES
|
RECONCILIATIONS OF
NON-GAAP MEASURES
|
(Unaudited)
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net income (loss) to Adjusted EBITDAX
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
June 30,
2015
|
|
June 30,
2014
|
|
March 31,
2015
|
Net income
(loss)
|
|
$
|
(5,204)
|
|
$
|
24,711
|
|
$
|
(39,005)
|
Add back:
|
|
|
|
|
|
|
|
|
|
Interest income
(expense), net
|
|
|
339
|
|
|
(17)
|
|
|
306
|
Income tax
expense
|
|
|
4,273
|
|
|
9,009
|
|
|
3,365
|
Depreciation, depletion
and amortization
|
|
|
9,299
|
|
|
6,995
|
|
|
5,935
|
Impairment of proved
properties
|
|
|
5,821
|
|
|
-
|
|
|
5,399
|
Exploration
expense
|
|
|
1,113
|
|
|
3,293
|
|
|
27,459
|
Non-cash or unusual
items:
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
678
|
|
|
640
|
|
|
1,654
|
Non-operational
adjustments, including accrual true-up
|
|
|
-
|
|
|
(963)
|
|
|
-
|
Costs of centralized
processing facility to remove H2S
|
|
|
-
|
|
|
-
|
|
|
1,357
|
Adjusted
EBITDAX
|
|
$
|
16,319
|
|
$
|
43,668
|
|
$
|
6,470
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net income (loss) to Adjusted Net Income (Loss)
|
|
|
Three Months
Ended
|
|
|
June 30,
2015
|
|
June 30,
2014
|
|
March 31,
2015
|
Net income
(loss)
|
|
$
|
(5,204)
|
|
$
|
24,711
|
|
$
|
(39,005)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Impairment of proved
properties
|
|
|
5,821
|
|
|
-
|
|
|
5,399
|
Non-operational
adjustments, including accrual true-up
|
|
|
-
|
|
|
(963)
|
|
|
-
|
Costs of centralized
processing facility to remove H2S
|
|
|
-
|
|
|
-
|
|
|
1,357
|
Adjusted net income
(loss)
|
|
$
|
617
|
|
$
|
23,748
|
|
$
|
(32,249)
|
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SOURCE VAALCO Energy, Inc.