VAALCO Energy Announces Closing of Acquisition of Additional Working Interest in the Etame Marin Permit Offshore Gabon
November 28 2016 - 6:45AM
Workovers on Avouma Platform Now
Underway
VAALCO Energy, Inc. (NYSE:EGY) today announced that it has closed
on the purchase of an additional 3.23% participating interest
(2.98% working interest) in the Etame Marin Permit located offshore
of the Republic of Gabon from Sojitz Etame Limited, which
represented the full interest owned by Sojitz Etame Limited in the
concession. The transaction had an effective date of August
1, 2016.
VAALCO is operator of the fields in the Etame
Marin block which encompass approximately 28,700 gross acres in
shallow water and, prior to the acquisition, owned a 30.35%
participating interest (28.1% working interest) in the block. There
are four production platforms and nine wells currently producing in
the concession, including three subsea well tiebacks. Production
from the fields currently averages about 13,500 barrels of oil per
day and over 94 million barrels of oil have been produced since
production commenced in 2002.
The acquisition will boost VAALCO’s net
production by approximately 11% post-closing and will not require
any additional staffing. The transaction was funded with cash on
hand. VAALCO may issue a request to the International Finance
Corporation (IFC) to borrow the $5.0 million potentially available
under its term loan agreement in the near future.
VAALCO has also mobilized a hydraulic workover
unit onto the Avouma platform offshore Gabon and work is underway
to replace failed electric submersible pumps (ESPs). The
failed ESPs will be inspected by the original equipment
manufacturer, who also installed the ESPs, to determine what caused
the failures.
Cary Bounds, VAALCO’s Chief Operating Officer
and Interim CEO commented, “We are very pleased to have closed our
transaction with Sojitz and increased our participating interest in
our flagship producing asset in offshore Gabon to 33.58%. One of
our key strategic goals is to seek opportunities to grow the
Company in a cost-effective manner that enhances shareholder value.
We believe this acquisition is an excellent example of the
execution of that strategy. It immediately increases our
production in a field we know extremely well and enhances our
option value due to the significant upside potential
remaining. At Etame, we have identified 21 low risk
development and step-out drilling opportunities with about 65
million barrels of gross unrisked recoverable contingent resources.
We are working with our partners on a schedule to develop these
opportunities as soon as practical. We are also very pleased
to have initiated the workover program at Avouma and hope to
restore production at Avouma before year end.”
About VAALCO
VAALCO Energy, Inc. is a Houston-based
independent energy company principally engaged in the acquisition,
development and production of crude oil. The Company's properties
and acreage are located primarily in Gabon and Equatorial Guinea 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 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 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 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
Elizabeth Prochnow
713-623-0801
Vaalco Energy (NYSE:EGY)
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