VAALCO Energy, Inc. (NYSE:EGY) today reported operational and
financial results for the third quarter 2017.
Third Quarter 2017:
- Reported loss from continuing operations of $0.1
million or $0.00 loss per diluted share for the third quarter of
2017, which includes a loss associated with the Company’s put
contracts of $0.9 million
- Generated operating income of $3.7 million in the third
quarter of 2017 which was consistent compared with $3.7 million in
the same period in 2016
- Grew Adjusted EBITDAX to $5.7 million, up 33% from $4.2
million in the third quarter of 2016
- Produced an average of 3,707 barrels of oil per day
(BOPD) in the third quarter of 2017, at the high end of the
guidance range of 3,500 to 3,800 BOPD
- Completed the planned 2017 maintenance turnaround with
no environmental or safety issues in July 2017
Recent key items:
- Mobilized a hydraulic workover unit to the Avouma
platform to replace electrical submersible pumps (“ESPs”) in the
South Tchibala 1-HB and South Tchibala 2-H wells
- On November 3, production from the South Tchibala 1-HB
was restored at a rate of 1,100 BOPD gross (300 BOPD
net)
- Current production has increased to approximately
15,300 BOPD gross (4,150 net)
For the third quarter of 2017, VAALCO reported
loss from continuing operations of $0.1 million, or $0.00 loss per
diluted share. The Company recorded a loss of $0.9
million related to the puts during the third quarter of 2017 which
was comprised of a $1.1 million non-cash mark-to-market loss and a
$0.2 million realized settlement gain. The loss on our
derivatives is included in “Other, net” in the Condensed
Consolidated Statements of Operations. In the same period in
2016, the Company reported income from continuing operations of
$1.0 million, or of $0.02 earnings per diluted share, and in the
second quarter of 2017 reported income from continuing operations
of $2.5 million, or $0.04 earnings per diluted share. The
average realized price for crude oil in the third quarter of 2017
was $51.10 per barrel, an increase of 28% from $40.00 per barrel in
the third quarter of 2016. In the second quarter of 2017, the
average realized price for crude oil was $46.83 per barrel.
Adjusted EBITDAX totaled $5.7 million in the third quarter of 2017
compared with $4.2 million in the same period of 2016, and $8.6
million in the second 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 third quarter results
with daily production rates at the upper end of our guidance range.
We generated strong operating income and adjusted EBITDAX by
overcoming the challenges of a field wide six-day turnaround and an
ESP failure at Avouma. Our focus in 2017 remains on maximizing
margins through operational excellence and executing on our
corporate strategy. We are encouraged by the recent strengthening
of oil prices, in particular Brent, as it will positively impact
our future cash flows and full cycle economics. We
remain confident in the development opportunities on our offshore
Gabon asset, and we are continuing to seek growth opportunities in
West Africa to add to our portfolio, where we can leverage our
strong operational and technical expertise.”
Gabon and Equatorial Guinea
In the third quarter of 2017, production
decreased to 3,707 BOPD compared with 4,363 BOPD in the second
quarter of 2017 primarily due to a planned maintenance turnaround,
an ESP failure in the Avouma field and natural decline.
During July 2017, VAALCO completed its planned
2017 maintenance turnaround for the Etame Marin floating,
production, storage, and offloading vessel (“FPSO”) and four
platforms. The entire work scope was completed successfully
with no adverse environmental or safety incidents. The field
was shut-in for six days during the turnaround and then returned to
production. The results of the maintenance and inspection work
confirmed the Company’s asset integrity programs continue to be
effective.
On July 18, the 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 mobilized a hydraulic workover unit in
early October to move onto the Avouma platform and replace the ESP
system in the South Tchibala 2-H and the South Tchibala 1-HB wells.
The workover on the South Tchibala 1-HB well was completed
successfully, and the well is producing at approximately 1,100 BOPD
gross. This is an improvement of approximately 200 BOPD gross
versus the production rate prior to the ESP failure.
Operations are under way to replace the ESP system and restore
production at the South Tchibala 2-H well.
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, or $0.01 loss per diluted share,
from discontinued operations for third quarter 2017 was related to
ongoing administrative costs. In the third quarter of 2016,
there was a loss of $15.8 million from discontinued operations, or
$0.27 loss per diluted share, primarily related to the $15.0
million accrual for the potential payment of the drilling
obligations in exploration costs and $0.4 million in ongoing
administration costs. 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 believes that the ultimate amount paid will be substantially
less than the accrued amount.
2017 Third Quarter Financial
Results
Total oil and natural gas sales for the third
quarter of 2017 were $18.2 million, compared to $14.6 million for
the same period in 2016, and $20.4 million in the second quarter of
2017. During the third quarter of 2017, VAALCO sold approximately
336,000 net barrels of oil at an average price of $51.10 per
barrel, compared to 344,000 net barrels at an average price of
$40.00 per barrel in the third quarter of 2016. Third quarter 2017
revenue was positively impacted by the increase in realized pricing
and volumes attributable to the Sojitz acquisition 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 $10.2 million, or $30.39 per barrel of oil equivalent (BOE) of
sales, in the third quarter of 2017, compared to $7.3 million, or
$21.04 per BOE of sales, in the third quarter of 2016, and $9.7
million, or $23.41 per BOE of sales in the second quarter of 2017.
The third quarter of 2017 costs, excluding workovers, were higher
than the third quarter of 2016 primarily due to VAALCO’s increased
ownership interest as a result of the November 2016 Sojitz
acquisition, costs related to the planned maintenance turnaround,
asset integrity work and costs associated with certain regulatory
requirements.
Depreciation, depletion and amortization
(DD&A) expense was $1.7 million, or $5.06 per BOE of sales in
the three months ended September 30, 2017 compared to $1.6 million,
or $4.60 per BOE in the comparable period in 2016, and $2.0
million, or $4.76 per BOE in the second quarter of 2017.
General and administrative (G&A) expense for
the third quarter 2017 was $2.5 million, or $7.33 per BOE, as
compared to $1.6 million, or $4.55 per BOE in the third quarter
2016 and $3.0 million, or $7.36 per BOE in the second quarter of
2017. General and administrative expense includes $0.2 million, $
(1.3) million, and $0.6 million of non-cash compensation expense
for the quarters ended September 30, 2017 and 2016 and June 30,
2017.
Income tax expense for the third quarter of 2017
was $2.7 million compared to $2.2 million for the same period in
2016, and $3.1 million in the second 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 September 30, 2017, VAALCO had unexpired crude oil
put contracts covering 180,000 barrels of anticipated sales volumes
for the period from October 2017 through December 31, 2017 at a
weighted average price of $50.00. The Company recorded a loss of
$0.9 million related to the puts during the third quarter of 2017
which was comprised of a $1.1 million non-cash mark-to-market loss
and a $0.2 million realized settlement gain. The derivative
loss was included in “Other, net” in the Condensed Consolidated
Statements of Operations. The Company has not entered into
additional derivative contracts since September 30, 2017.
Capital Investments/Balance
Sheet
During the three months ended September 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 third quarter, VAALCO had an
unrestricted cash balance of $18.9 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 $1.0 million of restricted cash classified as long
term.
At September 30, 2017, debt, net of deferred
financing costs, totaled $11.0 million, of which $7.5 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 third quarter financial and
operating results November 9, 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 3295977. 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 November 16, 2017 by dialing (855) 859-2056.
International parties may dial (404) 537-3406. The
confirmation code is 3295977.
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 September 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 ContactPhil Patman
713-623-0801
|
VAALCO
ENERGY, INC AND SUBSIDIARIESCondensed Consolidated Balance Sheets
(Unaudited) (in thousands, except share and per share amounts) |
|
|
|
|
|
|
|
|
|
September 30, 2017 |
|
December 31, 2016 |
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
18,863 |
|
|
$ |
20,474 |
|
Restricted cash |
|
|
829 |
|
|
|
741 |
|
Receivables: |
|
|
|
|
|
|
Trade |
|
|
7,203 |
|
|
|
6,751 |
|
Accounts
with partners, net of allowance of $0.5 million at September 30,
2017 and December 31, 2016 |
|
|
2,748 |
|
|
|
3,297 |
|
Other |
|
|
1 |
|
|
|
120 |
|
Crude oil
inventory |
|
|
1,160 |
|
|
|
913 |
|
Prepayments and other |
|
|
2,952 |
|
|
|
4,040 |
|
Current
assets - discontinued operations |
|
|
2,773 |
|
|
|
2,139 |
|
Total
current assets |
|
|
36,529 |
|
|
|
38,475 |
|
Property and equipment
- successful efforts method: |
|
|
|
|
|
|
Wells,
platforms and other production facilities |
|
|
389,204 |
|
|
|
389,231 |
|
Undeveloped acreage |
|
|
10,000 |
|
|
|
10,000 |
|
Equipment
and other |
|
|
10,318 |
|
|
|
9,779 |
|
|
|
|
409,522 |
|
|
|
409,010 |
|
Accumulated
depreciation, depletion, amortization and impairment |
|
|
(385,617 |
) |
|
|
(380,991 |
) |
Net
property and equipment |
|
|
23,905 |
|
|
|
28,019 |
|
Other noncurrent
assets: |
|
|
|
|
|
|
Restricted cash |
|
|
967 |
|
|
|
918 |
|
Value
added tax and other receivables, net of allowance of $6.2 million
and $4.7 million at September 30, 2017 and December 31, 2016,
respectively |
|
|
6,624 |
|
|
|
5,110 |
|
Abandonment funding |
|
|
8,510 |
|
|
|
8,510 |
|
Total
assets |
|
$ |
76,535 |
|
|
$ |
81,032 |
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY (DEFICIT) |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts
payable |
|
$ |
13,849 |
|
|
$ |
19,096 |
|
Accrued
liabilities and other |
|
|
10,098 |
|
|
|
10,506 |
|
Current
portion of long term debt |
|
|
7,500 |
|
|
|
7,500 |
|
Current
liabilities - discontinued operations |
|
|
15,400 |
|
|
|
18,452 |
|
Total
current liabilities |
|
|
46,847 |
|
|
|
55,554 |
|
Asset retirement
obligations |
|
|
19,202 |
|
|
|
18,612 |
|
Other long term
liabilities |
|
|
284 |
|
|
|
284 |
|
Long term debt,
excluding current portion |
|
|
3,483 |
|
|
|
6,940 |
|
Total
liabilities |
|
|
69,816 |
|
|
|
81,390 |
|
Commitments and
contingencies |
|
|
|
|
|
|
Shareholders’ equity
(deficit): |
|
|
|
|
|
|
Preferred
stock, none issued, 500,000 shares authorized, $25 par value |
|
|
— |
|
|
|
— |
|
Common
stock, 66,382,243 and 66,109,565 shares issued $0.10 par value,
100,000,000 shares authorized |
|
|
6,638 |
|
|
|
6,611 |
|
Additional paid-in capital |
|
|
71,106 |
|
|
|
70,268 |
|
Less
treasury stock, 7,564,212 and 7,555,095 shares at cost |
|
|
(37,941 |
) |
|
|
(37,933 |
) |
Accumulated deficit |
|
|
(33,084 |
) |
|
|
(39,304 |
) |
Total
shareholders' equity (deficit) |
|
|
6,719 |
|
|
|
(358 |
) |
Total
liabilities and shareholders' equity (deficit) |
|
$ |
76,535 |
|
|
$ |
81,032 |
|
|
|
|
|
|
|
|
|
|
VAALCO
ENERGY, INC AND SUBSIDIARIESConsolidated Statements of
Operations(Unaudited)(in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
September 30, 2017 |
|
September 30, 2016 |
|
June 30, 2017 |
Revenues: |
|
|
|
|
|
|
|
|
|
Oil and
natural gas sales |
|
$ |
18,178 |
|
|
$ |
14,635 |
|
|
$ |
20,425 |
|
Operating costs and
expenses: |
|
|
|
|
|
|
|
|
|
Production expense |
|
|
10,336 |
|
|
|
7,162 |
|
|
|
9,866 |
|
Exploration expense |
|
|
4 |
|
|
|
2 |
|
|
|
— |
|
Depreciation, depletion and amortization |
|
|
1,700 |
|
|
|
1,607 |
|
|
|
1,970 |
|
General
and administrative expense |
|
|
2,463 |
|
|
|
1,588 |
|
|
|
3,049 |
|
Impairment of proved properties |
|
|
— |
|
|
|
88 |
|
|
|
— |
|
Other
operating expense |
|
|
— |
|
|
|
324 |
|
|
|
— |
|
General
and administrative related to shareholder matters |
|
|
— |
|
|
|
85 |
|
|
|
— |
|
Bad debt
expense and other |
|
|
(49 |
) |
|
|
63 |
|
|
|
183 |
|
Total
operating costs and expenses |
|
|
14,454 |
|
|
|
10,919 |
|
|
|
15,068 |
|
Other
operating income (expense), net |
|
|
(3 |
) |
|
|
(26 |
) |
|
|
230 |
|
Operating income |
|
|
3,721 |
|
|
|
3,690 |
|
|
|
5,587 |
|
Other
expense: |
|
|
|
|
|
|
|
|
|
Interest
expense, net |
|
|
(327 |
) |
|
|
(327 |
) |
|
|
(378 |
) |
Other,
net |
|
|
(793 |
) |
|
|
(149 |
) |
|
|
338 |
|
Total
other expense |
|
|
(1,120 |
) |
|
|
(476 |
) |
|
|
(40 |
) |
Income from continuing
operations before income taxes |
|
|
2,601 |
|
|
|
3,214 |
|
|
|
5,547 |
|
Income tax expense |
|
|
2,749 |
|
|
|
2,198 |
|
|
|
3,096 |
|
Income from continuing
operations |
|
|
(148 |
) |
|
|
1,016 |
|
|
|
2,451 |
|
Loss from discontinued
operations |
|
|
(174 |
) |
|
|
(15,783 |
) |
|
|
(168 |
) |
Net income (loss) |
|
$ |
(322 |
) |
|
$ |
(14,767 |
) |
|
$ |
2,283 |
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss)
per share: |
|
|
|
|
|
|
|
|
|
Income
from continuing operations |
|
$ |
0.00 |
|
|
$ |
0.02 |
|
|
$ |
0.04 |
|
Loss from
discontinued operations |
|
|
(0.01 |
) |
|
|
(0.27 |
) |
|
|
0.00 |
|
Net
income (loss) |
|
$ |
(0.01 |
) |
|
$ |
(0.25 |
) |
|
$ |
0.04 |
|
Basic
weighted average shares outstanding |
|
|
58,817 |
|
|
|
58,708 |
|
|
|
58,658 |
|
Diluted net income
(loss) per share: |
|
|
|
|
|
|
|
|
|
Income
from continuing operations |
|
$ |
0.00 |
|
|
$ |
0.02 |
|
|
$ |
0.04 |
|
Loss from
discontinued operations |
|
|
(0.01 |
) |
|
|
(0.27 |
) |
|
|
0.00 |
|
Net
income (loss) |
|
$ |
(0.01 |
) |
|
$ |
(0.25 |
) |
|
$ |
0.04 |
|
Diluted
weighted average shares outstanding |
|
|
58,817 |
|
|
|
58,708 |
|
|
|
58,658 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VAALCO
ENERGY, INC AND SUBSIDIARIESConsolidated Statements of Cash
Flows(Unaudited) |
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
2017 |
|
|
2016 |
|
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income (loss) |
|
$ |
6,220 |
|
|
$ |
(22,909 |
) |
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities: |
|
|
|
|
|
|
Loss from
discontinued operations |
|
|
518 |
|
|
|
7,997 |
|
Depreciation, depletion and amortization |
|
|
5,539 |
|
|
|
5,787 |
|
Other
amortization |
|
|
293 |
|
|
|
1,132 |
|
Unrealized foreign exchange (gain) loss |
|
|
(512 |
) |
|
|
2,175 |
|
Stock-based compensation |
|
|
933 |
|
|
|
93 |
|
Commodity
derivatives loss |
|
|
971 |
|
|
|
772 |
|
Cash
settlements received on matured derivative contracts |
|
|
195 |
|
|
|
— |
|
Bad debt
provision |
|
|
232 |
|
|
|
577 |
|
Other
operating (income) loss, net |
|
|
(164 |
) |
|
|
8 |
|
Impairment of proved properties |
|
|
— |
|
|
|
88 |
|
Change in
operating assets and liabilities: |
|
|
|
|
|
|
Trade
receivables |
|
|
(452 |
) |
|
|
(587 |
) |
Accounts
with partners |
|
|
542 |
|
|
|
18,126 |
|
Other
receivables |
|
|
274 |
|
|
|
12 |
|
Crude oil
inventory |
|
|
(247 |
) |
|
|
(131 |
) |
Value
added tax and other receivables |
|
|
(2,783 |
) |
|
|
(1,526 |
) |
Prepayments and other |
|
|
1,559 |
|
|
|
(503 |
) |
Accounts
payable |
|
|
(5,250 |
) |
|
|
(24,339 |
) |
Accrued
liabilities and other |
|
|
(432 |
) |
|
|
24 |
|
Net cash
provided by (used in) continuing operating activities |
|
|
7,436 |
|
|
|
(13,204 |
) |
Net cash
provided by (used in) discontinued operating activities |
|
|
(4,204 |
) |
|
|
13,168 |
|
Net cash
provided by (used in) operating activities |
|
|
3,232 |
|
|
|
(36 |
) |
CASH FLOWS
FROM INVESTING ACTIVITIES: |
|
|
|
|
(Increase) decrease in restricted cash |
|
|
(137 |
) |
|
|
15,260 |
|
Acquisitions |
|
|
64 |
|
|
|
— |
|
Property
and equipment expenditures |
|
|
(1,300 |
) |
|
|
(12,781 |
) |
Proceeds
from the sale of oil and gas properties |
|
|
250 |
|
|
|
— |
|
Premiums
paid |
|
|
— |
|
|
|
(824 |
) |
Net cash
provided by (used in) continuing investing activities |
|
|
(1,123 |
) |
|
|
1,655 |
|
Net cash
provided by discontinued investing activities |
|
|
— |
|
|
|
— |
|
Net cash
provided by (used in) investing activities |
|
|
(1,123 |
) |
|
|
1,655 |
|
CASH FLOWS
FROM FINANCING ACTIVITIES: |
|
|
|
|
Proceeds
from the issuances of common stock |
|
|
38 |
|
|
|
— |
|
Treasury
shares |
|
|
(8 |
) |
|
|
— |
|
Debt
issuance costs |
|
|
— |
|
|
|
(93 |
) |
Debt
repayment |
|
|
(7,917 |
) |
|
|
— |
|
Borrowings |
|
|
4,167 |
|
|
|
— |
|
Net cash used in
continuing financing activities |
|
|
(3,720 |
) |
|
|
(93 |
) |
Net cash provided by
discontinued financing activities |
|
|
— |
|
|
|
— |
|
Net cash used in
financing activities |
|
|
(3,720 |
) |
|
|
(93 |
) |
NET CHANGE IN CASH AND
CASH EQUIVALENTS |
|
|
(1,611 |
) |
|
|
1,526 |
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD |
|
|
20,474 |
|
|
|
25,357 |
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD |
|
$ |
18,863 |
|
|
$ |
26,883 |
|
|
|
|
|
|
|
|
|
|
VAALCO
ENERGY, INC AND SUBSIDIARIESSelected Financial and Operating
Statistics(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
September 30, 2017 |
|
September 30, 2016 |
|
June 30, 2017 |
|
|
(in thousands) |
NET SALES DATA: |
|
|
|
|
|
|
|
|
|
Oil
(MBbls) |
|
|
336 |
|
|
344 |
|
|
414 |
Natural
Gas (MMcf) |
|
|
— |
|
|
32 |
|
|
— |
Oil
equivalents (MBOE) |
|
|
336 |
|
|
349 |
|
|
414 |
Average
daily sales volumes (BOE/day) |
|
|
3,652 |
|
|
3,793 |
|
|
4,549 |
NET PRODUCTION
DATA |
|
|
|
|
|
|
|
|
|
Oil
(MBbls) |
|
|
341 |
|
|
348 |
|
|
397 |
Natural
Gas (MMcf) |
|
|
— |
|
|
32 |
|
|
— |
Oil
equivalents (MBOE) |
|
|
341 |
|
|
353 |
|
|
397 |
Average daily production volumes (BOE/day) |
3,707 |
|
|
3,836 |
|
|
4,363 |
AVERAGE SALES
PRICES: |
|
|
|
|
|
|
|
|
|
Oil
($/Bbl) |
|
$ |
51.10 |
|
$ |
40.00 |
|
$ |
46.83 |
Natural
Gas ($/Mcf) |
|
|
— |
|
|
2.37 |
|
|
— |
Weighted
average price ($/BOE) |
|
|
51.10 |
|
|
39.61 |
|
|
46.83 |
COSTS AND EXPENSES (PER
BOE OF SALES): |
|
|
|
|
|
|
|
|
|
Production expense |
|
$ |
30.76 |
|
$ |
20.52 |
|
$ |
23.83 |
Production expense, excluding workovers* |
|
|
30.39 |
|
|
21.04 |
|
|
23.41 |
Depreciation, depletion and amortization |
|
|
5.06 |
|
|
4.60 |
|
|
4.76 |
General
and administrative expense** |
|
|
7.33 |
|
|
4.55 |
|
|
7.36 |
Property and equipment
expenditures, cash basis |
|
$ |
268 |
|
$ |
— |
|
$ |
264 |
|
|
|
|
|
|
|
|
|
|
**General
and administrative expenses include $0.46, $ (3.84) and $1.52 BOE
of non-cash stock-based compensation expense in the three months
ended September 30, 2017, September 30, 2016 and June 30,
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 SUBSIDIARIESReconciliations of Non-GAAP
Measures(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
Reconciliation
of Net income (loss) to Adjusted EBITDAX |
|
September 30, 2017 |
|
September 30, 2016 |
|
June 30, 2017 |
|
|
(in thousands) |
Net income (loss) |
|
$ |
(322 |
) |
|
$ |
(14,767 |
) |
|
|
2,283 |
|
Add back: |
|
|
|
|
|
|
|
|
|
Impact of
discontinued operations |
|
|
174 |
|
|
|
15,783 |
|
|
|
168 |
|
Interest
expense, net |
|
|
327 |
|
|
|
327 |
|
|
|
378 |
|
Income
tax expense |
|
|
2,749 |
|
|
|
2,198 |
|
|
|
3,096 |
|
Depreciation, depletion and amortization |
|
|
1,700 |
|
|
|
1,607 |
|
|
|
1,970 |
|
Impairment of proved properties |
|
|
— |
|
|
|
88 |
|
|
|
— |
|
Exploration expense |
|
|
4 |
|
|
|
2 |
|
|
|
— |
|
Non-cash or unusual
items: |
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
154 |
|
|
|
(1,341 |
) |
|
|
629 |
|
Shareholder matters |
|
|
— |
|
|
|
85 |
|
|
|
— |
|
Commodity
derivative loss (gain) |
|
|
921 |
|
|
|
194 |
|
|
|
(130 |
) |
Bad debt
expense |
|
|
(49 |
) |
|
|
63 |
|
|
|
183 |
|
Adjusted EBITDAX |
|
$ |
5,658 |
|
|
$ |
4,239 |
|
|
$ |
8,577 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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