VAALCO Energy Announces Acquisition of Additional Working Interest in the Etame Marin Permit Offshore Gabon
August 01 2016 - 4:30PM
VAALCO Energy, Inc. (NYSE:EGY) today announced that it has signed a
purchase and sale agreement to acquire an additional 3.23%
participating interest in the Etame Marin Permit located offshore
of the Republic of Gabon from Sojitz Etame Limited, which
represents the full interest owned by Sojitz in the
concession. The transaction has an effective date of August
1, 2016.
VAALCO is operator of and, prior to the
acquisition, owned a 30.35% participating interest (28.1% working
interest) in the fields in the Etame Marin block which encompasses
approximately 28,700 gross acres in shallow water. There are
four production platforms and nine wells currently producing in the
concession, including three subsea well tiebacks. Production
from the fields averaged about 19,000 barrels of oil per day in the
second quarter of 2016 and over 93 million barrels of oil have been
produced since production commenced in 2002. This acquisition
is expected to boost VAALCO’s net production by nearly 11%,
effective as of August 1, 2016.
The transaction is expected to close within 90
days, subject to customary closing conditions. The Company
intends to fund the acquisition with the additional $5 million loan
capacity available under the new term loan agreement announced in
early July with the International Finance Corporation (IFC),
subject to their approval, and with cash on hand.
Steve Guidry, VAALCO’s Chief Executive Officer
commented, “We are very pleased to increase our participating
interest in our flagship producing asset in offshore Gabon to
33.58%. VAALCO, operator of the Etame Marin block, drilled
the first discovery in the field in 1997, so our technical team
knows the area extremely well. We believe it has significant
upside potential remaining. We have identified at least 17
future drilling opportunities we can pursue when prices recover
that we estimate could include about 65 million barrels of gross
unrisked recoverable contingent resources.”
Guidry continued, “This is an ideal acquisition for
us as it is anticipated to increase our production by nearly 11%
and not require any additional staffing or cash overhead costs to
assimilate into the Company. One of the goals of our
strategic review process we announced earlier this year was to seek
opportunities to grow the Company in a cost effective manner to
enhance shareholder value and we believe this acquisition fits
perfectly within that strategy.”
About VAALCO
VAALCO Energy, Inc. is a Houston-based independent
energy company principally engaged in the acquisition, exploration,
development and production of crude oil. The Company's properties
and exploration acreage are located primarily in Gabon, Equatorial
Guinea and Angola in West Africa.
This news release includes "forward-looking
statements" within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements are those concerning VAALCO's plans,
expectations, and objectives for the purchase and sale agreement
with Sojitz, the timing and completion of the purchase of assets
from Sojitz, liquidity and capital resources, future drilling,
completion, workover and other operations and activities. All
statements, other than statements of historical facts, included in
this release 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 may include
the completion and timing of the purchase of assets from Sojitz,
expected capital expenditures, future drilling plans, prospect
evaluations, liquidity, 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, 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, the risk that the purchase of assets from Sojitz
may not be consummated, or may not be consummated in a timely
manner, 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 annual report on Form 10-K for the year ended
December 31, 2015, subsequent quarterly reports on Form 10-Q, and
other reports filed with the SEC. 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.
Investor Contact
Al Petrie
Investor Relations Coordinator
713-543-3422
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