VAALCO Energy, Inc. (NYSE:EGY) today reported operational and
financial results for the second quarter 2017.
Second Quarter 2017 and recent key items:
- Reported income from continuing operations of $2.5
million or $0.04 earnings per share for the second quarter of 2017,
compared with a loss from continuing operations of $0.5 million or
a loss of $0.01 per share in the same period in 2016
- Generated operating income of $5.6 million in the
second quarter of 2017, up 21% compared with $4.6 million in the
same period in 2016
- Grew Adjusted EBITDAX to $8.6 million, up 11% from $7.7
million in the second quarter of 2016
- Produced an average of 4,363 barrels of oil per day
(BOPD) in the second quarter of 2017, at the high end of the
guidance range of 4,100 to 4,400 BOPD
- Completed the planned 2017 maintenance turnaround with
no environmental or safety issues in July 2017
For the second quarter of 2017, VAALCO reported
income from continuing operations of $2.5 million, or $0.04 per
diluted share. In the same period in 2016, the Company reported a
loss from continuing operations of $0.5 million, or a loss of $0.01
per diluted share, and in the first quarter of 2017 reported income
from continuing operations of $4.4 million, or $0.07 earnings per
diluted share. The average realized price for crude oil in
the second quarter of 2017 was $46.83 per barrel, up 15% from
$40.79 per barrel in the second quarter of 2016. In the first
quarter of 2017, the average realized price for crude oil was
$51.99 per barrel. Adjusted EBITDAX totaled $8.6 million in the
second quarter of 2017 compared with $7.7 million in the same
period of 2016, and $10.4 million in the first quarter of 2017.
Adjusted EBITDAX is a Non-GAAP financial measure
and is described and reconciled to net income (loss) in the
attached table under “Non-GAAP Financial Measures.”
Cary Bounds, VAALCO’s Chief Executive Officer
commented: “We remain focused on delivering strong operational and
financial results, and I am pleased with our second quarter
earnings. We reported earnings per share of $0.04, generated strong
operating results and production rates came in at the high end of
our guidance range. Our focus in 2017 is to maximize margins
through operational excellence and execute on our corporate
strategy. As we look to the future, we remain confident in the
development opportunities on our offshore Gabon asset, and we are
seeking similar growth opportunities in West Africa, where we can
leverage our strong operational and technical expertise.”
Gabon and Equatorial Guinea
In the second quarter of 2017, production decreased
to 4,363 BOPD compared with 4,622 BOPD in the first quarter of 2017
primarily due to natural decline.
On July 18, the electrical submersible pump (ESP)
in the South Tchibala 2-H well failed, resulting in the well being
temporarily shut-in. The well was producing approximately
1,300 barrels of oil per day gross, or 350 barrels of oil net to
the Company, prior to being shut-in. VAALCO is working to
mobilize a hydraulic workover unit to move onto the Avouma platform
and replace the ESP system in the well, which is expected to be
back on production by the fourth quarter 2017. The Company
successfully utilized a hydraulic workover unit to replace the ESP
in the well late last year at a significantly lower cost rather
than mobilizing a jackup rig. As a result of recent
diagnostic work, the Company believes it has determined the cause
of the 2016 ESP failures in this well, and a newly designed pair of
ESPs will be installed in the South Tchibala 2-H well during the
upcoming workover operation. VAALCO is currently evaluating
performing one to two additional workovers in conjunction with the
South Tchibala 2-H workover to replace the ESPs.
During July 2017, VAALCO completed its planned 2017
maintenance turnaround for the Etame Marin FPSO and four
platforms. The entire work scope was successfully completed
with no environmental or safety issues. The field was shut-in
for nine days during the turnaround and is now back on production.
The results of the maintenance and inspection work confirmed the
Company’s asset integrity programs continue to be effective.
The next turnaround will be in 2018.
The Company continues to examine alternative, lower
cost development options for discoveries in the Mutamba Iroru
permit onshore Gabon, and in Block P offshore Equatorial Guinea.
These discoveries present unique development opportunities that
will be re-evaluated as prices continue to recover.
Discontinued Operations –
Angola
The small loss of $0.2 million from discontinued
operations for this quarter related to ongoing administrative
costs. In the second quarter of 2016, there was a minimal
loss of $20 thousand from discontinued operations, or $0.00 loss
per diluted share. Since September 2016, the Company has
reflected an accrual of $15.0 million for a potential payment which
represents what VAALCO believes to be the maximum potential amount
attributable to VAALCO Angola’s interest under the Block 5 PSA. The
Company is in active discussions with representatives from Sonangol
E.P. regarding this potential payment and other possible solutions
and believe that the ultimate amount paid will be substantially
less than the accrued amount.
Sale of U.S. Properties
On October 17, 2016, the Company signed a letter of
intent to sell its entire acreage interests in the East Poplar Unit
in Montana for $250,000 and the assumption of asset retirement
obligations. The transaction closed on April 3, 2017.
2017 Second Quarter Financial
Results
Total oil and natural gas sales for the second
quarter of 2017 were $20.4 million, compared to $18.8 million for
the same period in 2016, and $21.3 million in the first quarter of
2017. During the second quarter of 2017, VAALCO sold approximately
414,000 net barrels of oil at an average price of $46.83 per
barrel, compared to 436,000 net barrels at an average price of
$40.79 per barrel in the second quarter of 2016. Second quarter
2017 revenue was positively impacted by the increase in realized
pricing which was offset in part by a decrease in sales volumes
compared to the same period in 2016.
Costs and Expenses
Total production expense, excluding workovers, was
$9.7 million, or $23.41 per barrel of oil equivalent (BOE) of
sales, in the second quarter of 2017, compared to $8.0 million, or
$18.16 per BOE of sales, in the second quarter of 2016, and $8.1
million, or $20.44 per BOE of sales in the first quarter of 2017.
The second quarter of 2017 costs, excluding workovers, were higher
than the second quarter of 2016 primarily due to VAALCO’s increased
ownership interest as a result of the November 2016 Sojitz
acquisition, costs associated with certain regulatory requirements
and FPSO cost escalation.
Depreciation, depletion and amortization (DD&A)
expense was $2.0 million, or $4.76 per BOE of sales in the three
months ended June 30, 2017 compared to $1.9 million, or $4.39 per
BOE in the comparable period in 2016, and $1.9 million, or $4.74
per BOE in the first quarter of 2017.
General and administrative (G&A) expense for
the three months ended June 30, 2017 was $3.0 million, or $7.36 per
BOE, as compared to $4.0 million, or $9.06 per BOE in the three
months ended June 2016, and $3.1 million, or $7.94 per BOE in the
first quarter of 2017. General and administrative expense includes
$0.6 million, $1.0 million, and $0.2 million of non-cash
compensation expense for the quarters ended June 30, 2017, June 30,
2016, and March 31, 2017.
Income tax expense for the second quarter of 2017
was $3.1 million compared to $3.0 million for the same period in
2016, and $3.2 million in the first quarter of 2017. The
increase in tax compared to the same period a year ago is primarily
attributable to higher revenues from the Company’s operations in
Gabon.
Hedging
In order to limit VAALCO’s commodity price risk, in
2016 the Company purchased crude oil puts for part of its 2017
volume. As of June 30, 2017, VAALCO had unexpired crude oil put
contracts covering 360,000 barrels of anticipated sales volumes for
the period from July 2017 through December 31, 2017 at a weighted
average price of $50.00. The Company recorded a non-cash
mark-to-market gain of $0.1 million related to the puts during the
second quarter of 2017 which was included in “Other, net” in the
Condensed Consolidated Statements of Operations. The Company has
not entered into additional derivative contracts since June 30,
2017.
Capital Investments/Balance
Sheet
During the three months ended June 30, 2017, VAALCO
invested approximately $0.3 million in capital expenditures on a
cash basis, primarily for equipment and enhancements. The Company
has no material commitments for capital expenditures for the
balance of 2017.
At the end of the second quarter, VAALCO had an
unrestricted cash balance of $20.6 million. This does not
include an additional $0.8 million in restricted cash (related
primarily to deposits in Gabon) classified as current assets or the
additional $0.9 million of restricted cash classified as long
term.
At June 30, 2017, debt, net of deferred financing
costs, totaled $13.0 million, of which $8.3 million was classified
as current, reflecting the repayment terms of the loan agreement
with the IFC.
Conference Call
As previously announced, the Company will hold a
conference call to discuss its second quarter financial and
operating results August 9th, 2017, at 9:00 a.m. Central Time
(10:00 a.m. Eastern Time). Interested parties may participate by
dialing (844) 841-1668. International parties may dial (661)
378-9859. The confirmation code is 61829267. This call
will also be webcast on VAALCO’s website at
www.vaalco.com.
An audio replay will be available beginning
approximately two hours after the end of the call and be available
through August 14, 2017 by dialing (855) 859-2056.
International parties may dial (404) 537-3406. The
confirmation code is 61829267.
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. All statements, other than statements of historical
facts, included in this document that address activities, events,
plans, expectations, objectives or developments that VAALCO
expects, believes or anticipates will or may occur in the future
are forward-looking statements. These statements may include
amounts due in connection with the Company’s withdrawal from
Angola, expected sources of future capital funding and future
liquidity, future operating losses, future changes in oil and
natural gas prices, future strategic alternatives, capital
expenditures, future drilling plans, prospect evaluations,
negotiations with governments and third parties including with the
government of the Republic of Gabon in connection with a revised
production sharing contract, expectations regarding processing
facilities, reserve growth, and other issues related to our exit
from Angola. 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,
decisions by our current lender or future lenders, the risks
associated with liquidity, the risk that our negotiations with the
governments of the Republic of Gabon and the Republic of Angola
will be unsuccessful, lack of availability of goods, services and
capital, environmental risks, drilling risks, foreign regulatory
and 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, 2016 and quarterly report on
Form 10-Q for the quarter ended June 30, 2017, which will be filed
shortly, 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.
About VAALCO
VAALCO Energy, Inc. is a Houston, Texas 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
development and exploitation of international oil and natural gas
properties. The Company's properties and exploration acreage are
located primarily in Gabon and Equatorial Guinea in West
Africa.
Investor Contact
Phil Patman 713-623-0801
VAALCO ENERGY, INC AND SUBSIDIARIES |
Condensed Consolidated Balance Sheets (Unaudited) |
(in thousands, except share and per share amounts) |
|
|
|
June 30, |
|
December 31, |
|
|
2017 |
|
|
2016 |
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
20,640 |
|
|
$ |
20,474 |
|
Restricted cash |
|
|
802 |
|
|
|
741 |
|
Receivables: |
|
|
|
|
|
|
Trade |
|
|
8,062 |
|
|
|
6,751 |
|
Accounts
with partners, net of allowance |
|
|
978 |
|
|
|
3,297 |
|
Other,
net of allowance |
|
|
1 |
|
|
|
120 |
|
Crude oil
inventory |
|
|
952 |
|
|
|
913 |
|
Prepayments and other |
|
|
4,392 |
|
|
|
4,040 |
|
Current
assets - discontinued operations |
|
|
2,578 |
|
|
|
2,139 |
|
Total
current assets |
|
|
38,405 |
|
|
|
38,475 |
|
Property and equipment
- successful efforts method: |
|
|
|
|
|
|
Wells,
platforms and other production facilities |
|
|
389,192 |
|
|
|
389,231 |
|
Undeveloped acreage |
|
|
10,000 |
|
|
|
10,000 |
|
Equipment
and other |
|
|
10,283 |
|
|
|
9,779 |
|
|
|
|
409,475 |
|
|
|
409,010 |
|
Accumulated
depreciation, depletion and amortization |
|
|
(384,209 |
) |
|
|
(380,991 |
) |
Net
property and equipment |
|
|
25,266 |
|
|
|
28,019 |
|
Other noncurrent
assets: |
|
|
|
|
|
|
Restricted cash |
|
|
918 |
|
|
|
918 |
|
Value
added tax and other receivable, net of allowance |
|
|
6,044 |
|
|
|
5,110 |
|
Abandonment funding |
|
|
8,510 |
|
|
|
8,510 |
|
Total
assets |
|
$ |
79,143 |
|
|
$ |
81,032 |
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts
payable |
|
$ |
14,968 |
|
|
$ |
19,096 |
|
Accrued
liabilities and other |
|
|
9,568 |
|
|
|
10,506 |
|
Current
portion of long-term debt |
|
|
8,333 |
|
|
|
7,500 |
|
Accounts
with partners |
|
|
291 |
|
|
|
- |
|
Current
liabilities - discontinued operations |
|
|
15,186 |
|
|
|
18,452 |
|
Total
current liabilities |
|
|
48,346 |
|
|
|
55,554 |
|
Asset retirement
obligations |
|
|
18,947 |
|
|
|
18,612 |
|
Other long term
liabilities |
|
|
283 |
|
|
|
284 |
|
Long-term debt,
excluding current portion |
|
|
4,642 |
|
|
|
6,940 |
|
Total
liabilities |
|
|
72,218 |
|
|
|
81,390 |
|
Commitments and
contingencies |
|
|
|
|
|
|
Shareholders’ equity
(deficit): |
|
|
|
|
|
|
Preferred
stock, none issued, 500,000 shares authorized, $25 par value |
|
|
- |
|
|
|
- |
|
Common
stock, 66,348,910 and 66,109,565 shares issued, $0.10 par
value, 100,000,000 shares authorized |
|
|
6,635 |
|
|
|
6,611 |
|
Additional paid-in capital |
|
|
70,985 |
|
|
|
70,268 |
|
Less
treasury stock, 7,555,095 shares at cost |
|
|
(37,933 |
) |
|
|
(37,933 |
) |
Retained
deficit |
|
|
(32,762 |
) |
|
|
(39,304 |
) |
Total
shareholders' equity (deficit) |
|
|
6,925 |
|
|
|
(358 |
) |
Total
liabilities and shareholders' equity (deficit) |
|
$ |
79,143 |
|
|
$ |
81,032 |
|
VAALCO
ENERGY, INC AND SUBSIDIARIES |
Consolidated Statements of Operations |
(Unaudited) |
(in
thousands, except per share amounts) |
|
|
|
Three Months Ended |
|
|
June 30, 2017 |
|
June 30, 2016 |
|
March 31, 2017 |
Revenues: |
|
|
|
|
|
|
|
|
|
Oil and
gas sales |
|
$ |
20,425 |
|
|
$ |
18,847 |
|
|
$ |
21,266 |
|
Operating costs and
expenses: |
|
|
|
|
|
|
|
|
|
Production expense |
|
|
9,866 |
|
|
|
7,341 |
|
|
|
7,946 |
|
Exploration expense |
|
|
- |
|
|
|
2 |
|
|
|
- |
|
Depreciation, depletion and amortization |
|
|
1,970 |
|
|
|
1,942 |
|
|
|
1,869 |
|
General
and administrative expense |
|
|
3,049 |
|
|
|
4,004 |
|
|
|
3,127 |
|
Other
operating expense |
|
|
- |
|
|
|
754 |
|
|
|
- |
|
General
and administrative related to shareholder matters |
|
|
- |
|
|
|
18 |
|
|
|
15 |
|
Bad debt
expense and other |
|
|
183 |
|
|
|
171 |
|
|
|
98 |
|
Total
operating costs and expenses |
|
|
15,068 |
|
|
|
14,232 |
|
|
|
13,055 |
|
Other
operating income (loss), net |
|
|
230 |
|
|
|
- |
|
|
|
(63 |
) |
Operating income |
|
|
5,587 |
|
|
|
4,615 |
|
|
|
8,148 |
|
Other
income (expense): |
|
|
|
|
|
|
|
|
|
Interest
expense, net |
|
|
(378 |
) |
|
|
(1,470 |
) |
|
|
(403 |
) |
Other,
net |
|
|
338 |
|
|
|
(642 |
) |
|
|
(116 |
) |
Total
other income (expense) |
|
|
(40 |
) |
|
|
(2,112 |
) |
|
|
(519 |
) |
Income from continuing
operations before income taxes |
|
|
5,547 |
|
|
|
2,503 |
|
|
|
7,629 |
|
Income tax expense |
|
|
3,096 |
|
|
|
3,001 |
|
|
|
3,194 |
|
Income (loss) from
continuing operations |
|
|
2,451 |
|
|
|
(498 |
) |
|
|
4,435 |
|
Loss from discontinued
operations, net of tax |
|
|
(168 |
) |
|
|
(20 |
) |
|
|
(176 |
) |
Net income (loss) |
|
$ |
2,283 |
|
|
$ |
(518 |
) |
|
$ |
4,259 |
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss)
per share |
|
|
|
|
|
|
|
|
|
Income
(loss) from continuing operations |
|
$ |
0.04 |
|
|
$ |
(0.01 |
) |
|
$ |
0.07 |
|
Income
(loss) from discontinued operations |
|
|
(0.00 |
) |
|
|
(0.00 |
) |
|
|
(0.00 |
) |
Net
income (loss) |
|
$ |
0.04 |
|
|
$ |
(0.01 |
) |
|
$ |
0.07 |
|
Basic
weighted average shares outstanding |
|
|
58,658 |
|
|
|
58,464 |
|
|
|
58,567 |
|
Diluted net income
(loss) per share |
|
|
|
|
|
|
|
|
|
Income
(loss) from continuing operations |
|
$ |
0.04 |
|
|
$ |
(0.01 |
) |
|
$ |
0.07 |
|
Income
(loss) from discontinued operations |
|
|
(0.00 |
) |
|
|
(0.00 |
) |
|
|
(0.00 |
) |
Net
income (loss) |
|
$ |
0.04 |
|
|
$ |
(0.01 |
) |
|
$ |
0.07 |
|
Basic
weighted average shares outstanding |
|
|
58,658 |
|
|
|
58,464 |
|
|
|
58,580 |
|
VAALCO
ENERGY, INC AND SUBSIDIARIES |
Consolidated Statements of Cash Flows |
(Unaudited) |
(in
thousands) |
|
|
|
Six Months Ended |
|
|
June 30, 2017 |
|
June 30, 2016 |
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income (loss) |
|
$ |
6,542 |
|
|
$ |
(8,142 |
) |
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities: |
|
|
|
|
|
|
Loss
(income) from discontinued operations |
|
|
344 |
|
|
|
(7,786 |
) |
Depreciation, depletion and amortization |
|
|
3,839 |
|
|
|
4,180 |
|
Other
amortization |
|
|
201 |
|
|
|
1,076 |
|
Unrealized foreign exchange gain |
|
|
(580 |
) |
|
|
(102 |
) |
Stock-based compensation |
|
|
783 |
|
|
|
1,434 |
|
Commodity
derivatives loss |
|
|
50 |
|
|
|
578 |
|
Bad debt
provision |
|
|
281 |
|
|
|
514 |
|
Other
operating income, net |
|
|
(167 |
) |
|
|
(18 |
) |
Change in
operating assets and liabilities: |
|
|
|
|
|
|
Trade
receivables |
|
|
(1,314 |
) |
|
|
(2,010 |
) |
Accounts
with partners |
|
|
2,610 |
|
|
|
9,043 |
|
Other
receivables |
|
|
58 |
|
|
|
(52 |
) |
Crude oil
inventory |
|
|
(39 |
) |
|
|
(65 |
) |
Value
added tax and other receivable |
|
|
(1,130 |
) |
|
|
(1,236 |
) |
Prepayments and other |
|
|
395 |
|
|
|
(334 |
) |
Accounts
payable |
|
|
(4,274 |
) |
|
|
(11,591 |
) |
Accrued
liabilities and other |
|
|
(977 |
) |
|
|
144 |
|
Net cash
provided by (used in) continuing operating activities |
|
|
6,622 |
|
|
|
(14,367 |
) |
Net cash
provided by (used in) discontinued operating activities |
|
|
(4,049 |
) |
|
|
15,996 |
|
Net cash
provided by operating activities |
|
|
2,573 |
|
|
|
1,629 |
|
CASH FLOWS
FROM INVESTING ACTIVITIES: |
|
|
|
|
(Increase) decrease in restricted cash |
|
|
(61 |
) |
|
|
265 |
|
Acquisitions |
|
|
64 |
|
|
|
- |
|
Property
and equipment expenditures |
|
|
(1,032 |
) |
|
|
(10,448 |
) |
Proceeds
from the sale of oil and gas properties |
|
|
250 |
|
|
|
- |
|
Premiums
paid |
|
|
- |
|
|
|
(824 |
) |
Net cash
used in continuing investing activities |
|
|
(779 |
) |
|
|
(11,007 |
) |
Net cash
used in discontinued investing activities |
|
|
- |
|
|
|
(2,221 |
) |
Net cash
used in investing activities |
|
|
(779 |
) |
|
|
(13,228 |
) |
CASH FLOWS
FROM FINANCING ACTIVITIES: |
|
|
|
|
Proceeds
from the issuances of common stock |
|
|
38 |
|
|
|
- |
|
Borrowings |
|
|
4,167 |
|
|
|
- |
|
Debt
repayment |
|
|
(5,833 |
) |
|
|
- |
|
Debt
issuance costs |
|
|
- |
|
|
|
(77 |
) |
Net cash used in
continuing financing activities |
|
|
(1,628 |
) |
|
|
(77 |
) |
Net cash provided by
discontinued financing activities |
|
|
- |
|
|
|
- |
|
Net cash used in
financing activities |
|
|
(1,628 |
) |
|
|
(77 |
) |
NET CHANGE IN CASH AND
CASH EQUIVALENTS |
|
|
166 |
|
|
|
(11,676 |
) |
CASH AND CASH
EQUIVALENTS: |
|
|
|
|
|
|
BEGINNING
OF PERIOD |
|
|
20,474 |
|
|
|
25,357 |
|
END OF
PERIOD |
|
$ |
20,640 |
|
|
$ |
13,681 |
|
VAALCO
ENERGY, INC AND SUBSIDIARIES |
Selected
Financial and Operating Statistics |
(Unaudited) |
|
|
|
|
Three Months Ended |
|
|
June 30, 2017 |
|
June 30, 2016 |
|
March 31, 2017 |
NET SALES DATA: |
|
|
|
|
|
|
|
|
|
Oil
(MBbls) |
|
|
414 |
|
|
436 |
|
|
394 |
Natural
Gas (MMcf) |
|
|
- |
|
|
35 |
|
|
- |
Oil
equivalents (MBOE) |
|
|
414 |
|
|
442 |
|
|
394 |
Average
daily sales volumes (BOE/day) |
|
|
4,549 |
|
|
4,857 |
|
|
4,378 |
NET PRODUCTION
DATA |
|
|
|
|
|
|
|
|
|
Oil
(MBbls) |
|
|
397 |
|
|
430 |
|
|
416 |
Natural
Gas (MMcf) |
|
|
- |
|
|
35 |
|
|
- |
Oil
equivalents (MBOE) |
|
|
397 |
|
|
436 |
|
|
416 |
Average
daily production volumes (BOE/day) |
|
|
4,363 |
|
|
4,796 |
|
|
4,622 |
AVERAGE SALES
PRICES: |
|
|
|
|
|
|
|
|
|
Oil
($/Bbl) |
|
$ |
46.83 |
|
$ |
40.79 |
|
$ |
51.99 |
Natural
Gas ($/Mcf) |
|
|
0.00 |
|
|
1.64 |
|
|
0.00 |
Weighted
average price ($/BOE) |
|
|
46.83 |
|
|
40.14 |
|
|
51.99 |
COSTS AND EXPENSES (PER
BOE OF SALES): |
|
|
|
|
|
|
|
|
|
Production expense |
|
$ |
23.83 |
|
$ |
16.61 |
|
$ |
20.17 |
Production expense, excluding workovers* |
|
|
23.41 |
|
|
18.16 |
|
|
20.44 |
Depreciation, depletion and amortization |
|
|
4.76 |
|
|
4.39 |
|
|
4.74 |
General
and administrative expense** |
|
|
7.36 |
|
|
9.06 |
|
|
7.94 |
Property and equipment
expenditures, cash basis |
|
$ |
264 |
|
$ |
8,965 |
|
$ |
768 |
|
*Workover
costs excluded from the three months ended June 30, 2017, June 30,
2016 and March 31, 2017 are $0.2 million, ($0.7) million and ($0.1)
million. |
|
**General
and administrative expenses include $1.52, $2.29 and $0.39 per BOE
of non-cash stock-based compensation expense in the three months
ended June 30, 2017, June 30, 2016 and March 31, 2017. |
|
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 discontinued
operations, interest income (expense) net, income tax expense,
depletion, depreciation and amortization, impairment of proved
properties, exploration expense, non-cash and other items including
stock compensation expense and commodity derivative loss.
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.
The table below reconciles the most directly
comparable GAAP financial measures to Adjusted EBITDAX.
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, 2017 |
|
June 30, 2016 |
|
March 31, 2017 |
Net income (loss) |
|
$ |
2,283 |
|
|
$ |
(518 |
) |
|
|
4,259 |
Add back: |
|
|
|
|
|
|
|
|
|
Impact of
discontinued operations |
|
|
168 |
|
|
|
20 |
|
|
|
176 |
Interest
(income) expense, net |
|
|
378 |
|
|
|
1,470 |
|
|
|
403 |
Income
tax expense |
|
|
3,096 |
|
|
|
3,001 |
|
|
|
3,194 |
Depreciation, depletion and amortization |
|
|
1,970 |
|
|
|
1,942 |
|
|
|
1,869 |
Exploration expense |
|
|
- |
|
|
|
2 |
|
|
|
- |
Non-cash or unusual
items: |
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
629 |
|
|
|
1,014 |
|
|
|
154 |
Shareholder matters |
|
|
- |
|
|
|
18 |
|
|
|
15 |
Commodity
derivative loss (gain) |
|
|
(130 |
) |
|
|
578 |
|
|
|
180 |
Equipment
write-offs |
|
|
- |
|
|
|
- |
|
|
|
63 |
Bad debt
expense |
|
|
183 |
|
|
|
171 |
|
|
|
98 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDAX |
|
$ |
8,577 |
|
|
$ |
7,698 |
|
|
$ |
10,411 |
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