VAALCO Energy, Inc. (NYSE:EGY) today reported operational and
financial results for the fourth quarter and full year of 2017.
Highlights and Recent Key
Items:
- Reported income from continuing operations of $3.5
million ($0.06 per diluted share) for the fourth quarter of 2017
compared with a loss from continuing operations of $3.4 million
($0.06 per diluted share) in the same period of 2016 and a loss
from continuing operations of $0.1 million ($0.00 per diluted
share) in the third quarter of 2017;
- Reported income from continuing operations of $10.3
million ($0.17 per diluted share) for the full year of 2017
compared with a loss from continuing operations of $18.3 million
($0.31 per diluted share) in the same period of 2016;
- Generated operating income of $2.5 million in the
fourth quarter of 2017, which was 205% higher compared with $0.8
million in the same period in 2016;
- Grew Adjusted EBITDAX to $3.9 million, up 83% from $2.2
million in the fourth quarter of 2016;
- Produced an average of 3,957 net barrels of oil per day
(BOPD) in the fourth quarter of 2017, slightly below the guidance
range, despite two electrical submersible pump (“ESP”) failures on
the Avouma platform in the quarter;
- Realized pricing of $59.89 per barrel of oil in the
fourth quarter of 2017 compared with $51.10 per barrel in the third
quarter of 2017 and $41.88 per barrel in the fourth quarter of
2016;
- Reduced debt by $10 million in 2017, resulting in total
debt (principal amount) at year-end 2017 of $9.2
million;
- Grew unrestricted cash balance from $19.7 million at
December 31, 2017 to greater than $26.0 million as of February 28,
2018 (this balance has been adjusted to exclude a non-operating
partner’s advance of $6.6 million for March 2018 joint operating
agreement expenditures);
- Projecting significant increases in first quarter 2018
sales and revenue compared to fourth quarter 2017, due to stronger
Brent pricing, no hedges in place for 2018 and year-end split
lifting; (split lifting resulted in approximately 34% of revenues
for the December 31, 2017 portion of the lifting and 66% of
revenues for the January 1, 2018 portion of the
lifting);
- Increased proved reserves to 3.0 million barrels of oil
(MMBO) (determined under SEC guidelines) with a PV-10 of $22.5
million at year-end 2017, up 15% and 138%, respectively from
December 31, 2016;
- Replaced 127% of 2017 production of 1.5 MMBO with
proved reserve additions of 1.9 MMBO due to reservoir performance
and positive pricing revisions;
- Forecasts full year 2018 production guidance of 3,500
to 4,100 BOPD, 2018 production expense (excluding workovers)
guidance of $24.00 to $28.00 per barrel, and 2018 cash G&A
expense guidance of $6.00 to $7.50 per barrel; and
- Estimates that its operational breakeven price in 2018
is approximately $30 per barrel of oil sales and its free cash flow
breakeven price in 2018 is approximately $40 per barrel of oil
sales. (See investor presentation on website for full details
and definitions).
For the fourth quarter of 2017, VAALCO reported
income from continuing operations of $3.5 million, or $0.06 per
diluted share. In the same period in 2016, the Company
reported a loss from continuing operations of $3.4 million, or a
loss of $0.06 per diluted share, and in the third quarter of 2017
reported a loss from continuing operations of $0.1 million, or
$0.00 per diluted share. The average realized price for crude
oil in the fourth quarter of 2017 was $59.89 per barrel, an
increase of 43% from $41.88 per barrel in the fourth quarter of
2016. In the third quarter of 2017, the average realized
price for crude oil was $51.10 per barrel. Adjusted EBITDAX totaled
$3.9 million in the fourth quarter of 2017 compared with $2.2
million in the same period of 2016, and $5.7 million in the third
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: “The recent recovery in crude oil pricing combined with
our efficient operations have enabled us to substantially improve
our financial flexibility by increasing cash on hand to $19.7
million and reducing the principal amount of debt to $9.2 million
at year end 2017. In the first quarter of 2018, we continue
to generate substantial free cash flow with current production
averaging approximately 3,500 BOPD net to VAALCO. We are
evaluating opportunities to increase production through workovers
and development drilling at Etame. While we have experienced
unexpected ESP failures on our Avouma platform, we have seen no
similar failures of the ESPs operating on our other three
platforms. I am confident that the combined efforts of the
VAALCO engineering team, outside industry experts and the
Schlumberger artificial lift team will lead to significant
improvements in run times for ESPs on the Avouma platform.”
Bounds continued, “Our subsurface team has
identified several drilling opportunities at Etame that we may
consider drilling later this year, subject to approvals from the
Gabon government and our partners. In Angola, we continue to
have productive discussions with officials from Sonangol in
anticipation of reaching a fair and equitable agreement that allows
VAALCO to exit Block 5 at a reasonable cost. With our realized
pricing correlated to Brent, no hedges in place for 2018 and a
forecasted free cash flow breakeven price in 2018 of approximately
$40 per barrel of oil sales, VAALCO is well positioned to add to
its cash position. At year-end 2017, unrestricted cash was $19.7
million and that has grown to greater than $26.0 million as of
February 28, 2018, excluding a non-operating partner’s advance of
$6.6 million for March 2018 joint operating agreement expenditures.
In summary, I am optimistic that we will create substantial
value for our shareholders in 2018 by enhancing our operations and
improving our balance sheet.”
Gabon and Equatorial Guinea
In the fourth quarter of 2017, production
increased to 3,957 BOPD compared with 3,707 BOPD in the third
quarter of 2017. The third quarter was impacted by a planned
maintenance turnaround that reduced volumes during that
period.
During November 2017, VAALCO completed workover
operations on the South Tchibala 2-H and the South Tchibala 1-HB
wells on the Avouma platform. However, on November 24, the ESP in a
different well on the same platform, the Avouma 2-H well, failed,
and on December 24, the ESP in the South Tchibala 1-HB well
failed. Both wells have been temporarily shut-in since the
ESP failures. Pending partner approval, VAALCO plans to mobilize a
hydraulic workover unit in April to move onto the Avouma platform
and replace the ESP system in the Avouma 2-H and the South Tchibala
1-HB wells and restore production to both wells during the second
quarter of 2018.
The Company continues to examine alternative,
lower cost development options for discoveries on 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 loss of $0.1 million from discontinued operations for fourth
quarter 2017 and $0.3 million in the fourth quarter of 2016 was
primarily related to ongoing administration costs.
2017 Fourth Quarter Financial
Results
Total oil and natural gas sales for the fourth
quarter of 2017 were $17.2 million, compared to $15.3 million for
the same period in 2016, and $18.2 million in the third quarter of
2017. During the fourth quarter of 2017, VAALCO sold approximately
280,000 net barrels of oil at an average price of $59.89 per
barrel, compared to 326,000 net barrels at an average price of
$41.88 per barrel in the fourth quarter of 2016. In late December,
the normal monthly sales lifting from the floating production
facility that stores oil produced in the Etame block was not able
to be completed by December 31 due to adverse sea and weather
conditions. As a result, the December lifting took place
during the period from December 31, 2017 to January 1, 2018 with
53,300 net barrels of oil sold in December and the balance of
95,500 net barrels of oil sold in January 2018. The Company
will benefit financially from the split-lifting. VAALCO’s December
2017 pricing was $63.67 per barrel of oil sales while January is
approximately $68.00.
Costs and Expenses
Total production expense, excluding workovers,
was $8.2 million, or $29.12 per barrel of oil equivalent (BOE) of
sales, in the fourth quarter of 2017, compared to $8.4 million, or
$25.60 per BOE of sales, in the fourth quarter of 2016, and $10.2
million, or $30.39 per BOE of sales in the third quarter of
2017. Workover expense in the fourth quarter of 2017 was $3.4
million.
Depreciation, depletion and amortization
(DD&A) expense was $0.9 million, or $3.28 per BOE of sales in
the three months ended December 31, 2017 compared to $1.1 million,
or $3.45 per BOE in the comparable period in 2016, and $1.7
million, or $5.06 per BOE in the third quarter of 2017. The
decrease in DD&A per BOE reflects the favorable impact of the
upward revisions to reserves at December 31, 2017.
General and administrative (G&A) expense for
the fourth quarter 2017 was $1.7 million, or $6.15 per BOE, as
compared to $1.7 million, or $5.22 per BOE in the fourth quarter
2016 and $2.5 million, or $7.33 per BOE in the third quarter of
2017. General and administrative expense includes $0.2 million,
$0.1 million, and $0.2 million of non-cash compensation expense for
the quarters ended December 31, 2017, December 31, 2016 and
September 30, 2017, respectively.
Income tax expense for the fourth quarter of
2017 was $1.3 million compared to $2.4 million for the same period
in 2016, and $2.7 million in the third quarter of 2017. Due
to the Tax Cuts and Jobs Act enacted in December 2017, a $1.3
million income tax benefit associated with the reversal of the
valuation allowance related to AMT credits was recorded during
fourth quarter 2017. The decrease in income tax expense is
partially offset by the $0.2 million increase in Gabon income tax
expense resulting from a 12% increase in revenue in fourth quarter
2017 compared to the same period in 2016.
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 December 31, 2017, VAALCO’s crude oil put contracts
expired. The expired puts covered 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 $0.1 million related to the puts during the fourth quarter
of 2017 which was comprised of a $0.1 million non-cash
mark-to-market. The derivative loss was included in “Other,
net” in the Consolidated Statements of Operations. The Company
currently has no derivative contracts for 2018 and beyond.
Year-End 2017 Reserves
The Company’s 2017 year end reserves are 100%
related to oil in Gabon. As oil prices improve in the future,
which should extend the economic limit of the Etame Marin block,
the Company would expect reserves to increase. VAALCO has a
number of identified development drilling locations that would also
become economic in a higher pricing environment, which would also
potentially reclassify reserves from probable to proved.
The present value of the proved reserves
discounted at 10% (“PV-10 Value”) at year-end 2017, utilizing SEC
pricing of $54.42 per barrel of oil (average of monthly prices on
the first of each month for calendar year 2017), more than doubled
to $22.5 million from $9.4 million at December 31, 2016. Utilizing
forward strip pricing at year-end 2017 of $65.38 for 2018, $61.65
for 2019, $59.10 for 2020, and $57.96 for 2021, per barrel of oil,
the PV-10 value would have been $39.3 million. VAALCO
receives pricing for its crude that is correlated to Brent oil
prices.
|
|
|
|
|
MMBO |
Proved
Reserves at December 31, 2016 |
2.6 |
|
2017
Production |
(1.5 |
) |
Revisions
of previous estimates |
1.9 |
|
Proved
Reserves at December 31, 2017 |
3.0 |
|
|
|
|
Capital Investments/Balance
Sheet
During the three months ended December 31, 2017,
VAALCO invested approximately $0.5 million in capital expenditures
on a cash basis, primarily for equipment and enhancements. For the
full year 2017, cash basis capital expenditures totaled $1.8
million, also primarily for equipment and enhancements. The Company
does not currently have any material commitments for capital
investments in 2018 but is considering development drilling
offshore Gabon later in 2018.
At the end of the fourth quarter, VAALCO had an
unrestricted cash balance of $19.7 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 February 28, 2018, VAALCO had grown its unrestricted
cash balance to greater than $26.0 million, excluding a
non-operating partner’s advance of $6.6 million for March 2018
joint operating agreement expenditures.
During 2017, VAALCO reduced its debt by $10
million. At December 31, 2017, debt, net of deferred financing
costs, totaled $9.0 million, of which $6.7 million is expected to
be repaid during 2018 and was classified as current, reflecting the
repayment terms of the loan agreement with the IFC.
2018 Guidance
VAALCO currently estimates full year 2018
production to be between 3,500 and 4,100 BOPD, with production
during the first quarter of 2018 forecasted between 3,400 and 3,600
BOPD. Sales volumes for 2018 are currently estimated to average
3,700 to 4,300 BOPD, higher than 2018 production due to the
split-lifting impact in January. VAALCO’s production expense
guidance (excluding workovers) for full year 2018 is $36 to $42
million or $24.00 to $28.00 per barrel, with production expense for
the first quarter of 2018 projected to be between $10 and $12
million or $24.00 to $26.00 per barrel. VAALCO plans to incur
workover costs on the Avouma platform during the second quarter of
2018 in the range of $3.5 to $4.5 million. The Company forecasts
between $9 and $11 million in cash G&A expense for full year
2018.
For 2018, the Company estimates that its
operational cash flow breakeven is about $30 per barrel of oil
sales while its free cash flow breakeven is about $40 per barrel of
oil sales. At $60 realized prices, VAALCO realizes $24.90 per
barrel in operational margin and $16.20 per barrel in free cash
flow. At $70 realized prices, VAALCO realizes $33.30 per
barrel in operational margin and $24.70 per barrel in free cash
flow. The Company estimates that each $5 increase in realized
oil price increases annual cash flow by $6 million.
Conference Call
As previously announced, the Company will hold a
conference call to discuss its fourth quarter financial and
operating results March 8, 2018, 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 3769327. 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 March 15, 2018 by dialing (855) 859-2056.
International parties may dial (404) 537-3406. The
confirmation code is 3769327.
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, production and sales projections, 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, production and sales differences
due to timing of liftings, 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,
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
|
|
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|
|
|
|
VAALCO
ENERGY, INC AND SUBSIDIARIES |
Consolidated Balance Sheets |
(in
thousands, except share and per share amounts) |
|
|
|
|
|
|
|
|
|
December 31, |
|
|
2017 |
|
|
2016 |
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
19,669 |
|
|
$ |
20,474 |
|
Restricted cash |
|
|
842 |
|
|
|
741 |
|
Receivables: |
|
|
|
|
|
|
Trade |
|
|
3,556 |
|
|
|
6,751 |
|
Accounts
with partners, net of allowance of $0.5 million at December 31,
2017 and December 31, 2016 |
|
|
3,395 |
|
|
|
3,297 |
|
Other |
|
|
100 |
|
|
|
120 |
|
Crude oil
inventory |
|
|
3,263 |
|
|
|
913 |
|
Prepayments and other |
|
|
2,791 |
|
|
|
4,040 |
|
Current
assets - discontinued operations |
|
|
2,836 |
|
|
|
2,139 |
|
Total
current assets |
|
|
36,452 |
|
|
|
38,475 |
|
Property and equipment
- successful efforts method: |
|
|
|
|
|
|
Wells,
platforms and other production facilities |
|
|
389,935 |
|
|
|
389,231 |
|
Undeveloped acreage |
|
|
10,000 |
|
|
|
10,000 |
|
Equipment
and other |
|
|
9,432 |
|
|
|
9,779 |
|
|
|
|
409,367 |
|
|
|
409,010 |
|
Accumulated
depreciation, depletion, amortization and impairment |
|
|
(386,146 |
) |
|
|
(380,991 |
) |
Net
property and equipment |
|
|
23,221 |
|
|
|
28,019 |
|
Other noncurrent
assets: |
|
|
|
|
|
|
Restricted cash |
|
|
967 |
|
|
|
918 |
|
Value
added tax and other receivables, net of allowance of $6.5 million
and $4.7 million at December 31, 2017 and December 31, 2016,
respectively |
|
|
6,925 |
|
|
|
5,110 |
|
Deferred
tax asset |
|
|
1,260 |
|
|
|
— |
|
Abandonment funding |
|
|
10,808 |
|
|
|
8,510 |
|
Total
assets |
|
$ |
79,633 |
|
|
$ |
81,032 |
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY (DEFICIT) |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts
payable |
|
$ |
11,584 |
|
|
$ |
19,096 |
|
Accrued
liabilities and other |
|
|
12,991 |
|
|
|
10,506 |
|
Current
portion of long term debt |
|
|
6,666 |
|
|
|
7,500 |
|
Current
liabilities - discontinued operations |
|
|
15,347 |
|
|
|
18,452 |
|
Total
current liabilities |
|
|
46,588 |
|
|
|
55,554 |
|
Asset retirement
obligations |
|
|
20,163 |
|
|
|
18,612 |
|
Other long term
liabilities |
|
|
284 |
|
|
|
284 |
|
Long term debt,
excluding current portion, net |
|
|
2,309 |
|
|
|
6,940 |
|
Total
liabilities |
|
|
69,344 |
|
|
|
81,390 |
|
Commitments and
contingencies |
|
|
|
|
|
|
Shareholders’ equity
(deficit): |
|
|
|
|
|
|
Preferred
stock, none issued, 500,000 shares authorized, $25 par value |
|
|
— |
|
|
|
— |
|
Common
stock, $0.10 par value; 100,000,000 shares authorized, 66,443,971
and 66,109,565 shares issued, 58,862,876 and 58,554,470 shares
outstanding |
|
|
6,644 |
|
|
|
6,611 |
|
Additional paid-in capital |
|
|
71,251 |
|
|
|
70,268 |
|
Less
treasury stock, 7,581,095 and 7,555,095 shares at cost |
|
|
(37,953 |
) |
|
|
(37,933 |
) |
Accumulated deficit |
|
|
(29,653 |
) |
|
|
(39,304 |
) |
Total
shareholders' equity (deficit) |
|
|
10,289 |
|
|
|
(358 |
) |
Total
liabilities and shareholders' equity (deficit) |
|
$ |
79,633 |
|
|
$ |
81,032 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VAALCO
ENERGY, INC AND SUBSIDIARIES |
Consolidated Statements of Operations |
(in
thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31, 2017 |
|
December 31, 2016 |
|
September 30, 2017 |
|
|
December 31, 2017 |
|
December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and
natural gas sales |
|
$ |
17,156 |
|
|
$ |
15,326 |
|
|
$ |
18,178 |
|
|
|
$ |
77,025 |
|
|
$ |
59,784 |
|
Operating costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production expense |
|
|
11,549 |
|
|
|
11,830 |
|
|
|
10,336 |
|
|
|
|
39,697 |
|
|
|
37,586 |
|
Exploration expense |
|
|
3 |
|
|
|
1 |
|
|
|
4 |
|
|
|
|
7 |
|
|
|
5 |
|
Depreciation, depletion and amortization |
|
|
918 |
|
|
|
1,139 |
|
|
|
1,700 |
|
|
|
|
6,457 |
|
|
|
6,926 |
|
General
and administrative expense |
|
|
1,723 |
|
|
|
1,722 |
|
|
|
2,463 |
|
|
|
|
10,377 |
|
|
|
9,561 |
|
Impairment of proved properties |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
88 |
|
Other
operating expense |
|
|
— |
|
|
|
(1,106 |
) |
|
|
— |
|
|
|
|
— |
|
|
|
8,853 |
|
General
and administrative related to shareholder matters |
|
|
— |
|
|
|
18 |
|
|
|
— |
|
|
|
|
— |
|
|
|
(332 |
) |
Bad debt
expense and other |
|
|
220 |
|
|
|
645 |
|
|
|
(49 |
) |
|
|
|
452 |
|
|
|
1,222 |
|
Total
operating costs and expenses |
|
|
14,413 |
|
|
|
14,249 |
|
|
|
14,454 |
|
|
|
|
56,990 |
|
|
|
63,909 |
|
Other
operating income (expense), net |
|
|
(248 |
) |
|
|
(258 |
) |
|
|
(3 |
) |
|
|
|
(84 |
) |
|
|
(266 |
) |
Operating income
(loss) |
|
|
2,495 |
|
|
|
819 |
|
|
|
3,721 |
|
|
|
|
19,951 |
|
|
|
(4,391 |
) |
Other
income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense, net |
|
|
(306 |
) |
|
|
(328 |
) |
|
|
(327 |
) |
|
|
|
(1,414 |
) |
|
|
(2,613 |
) |
Other,
net |
|
|
2,684 |
|
|
|
(1,482 |
) |
|
|
(793 |
) |
|
|
|
2,113 |
|
|
|
(2,015 |
) |
Total
other income (expense) |
|
|
2,378 |
|
|
|
(1,810 |
) |
|
|
(1,120 |
) |
|
|
|
699 |
|
|
|
(4,628 |
) |
Income (loss) from
continuing operations before income taxes |
|
|
4,873 |
|
|
|
(991 |
) |
|
|
2,601 |
|
|
|
|
20,650 |
|
|
|
(9,019 |
) |
Income tax expense |
|
|
1,339 |
|
|
|
2,364 |
|
|
|
2,749 |
|
|
|
|
10,378 |
|
|
|
9,248 |
|
Income (loss) from
continuing operations |
|
|
3,534 |
|
|
|
(3,355 |
) |
|
|
(148 |
) |
|
|
|
10,272 |
|
|
|
(18,267 |
) |
Loss from discontinued
operations |
|
|
(103 |
) |
|
|
(286 |
) |
|
|
(174 |
) |
|
|
|
(621 |
) |
|
|
(8,283 |
) |
Net income (loss) |
|
$ |
3,431 |
|
|
$ |
(3,641 |
) |
|
$ |
(322 |
) |
|
|
$ |
9,651 |
|
|
$ |
(26,550 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss)
per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) from continuing operations |
|
$ |
0.06 |
|
|
$ |
(0.06 |
) |
|
$ |
0.00 |
|
|
|
$ |
0.17 |
|
|
$ |
(0.31 |
) |
Loss from
discontinued operations |
|
|
0.00 |
|
|
|
0.00 |
|
|
|
(0.01 |
) |
|
|
|
(0.01 |
) |
|
|
(0.14 |
) |
Net
income (loss) per share |
|
$ |
0.06 |
|
|
$ |
(0.06 |
) |
|
$ |
(0.01 |
) |
|
|
$ |
0.16 |
|
|
$ |
(0.45 |
) |
Basic
weighted average shares outstanding |
|
|
58,819 |
|
|
|
58,554 |
|
|
|
58,517 |
|
|
|
|
58,717 |
|
|
|
58,384 |
|
Diluted net income
(loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) from continuing operations |
|
$ |
0.06 |
|
|
$ |
(0.06 |
) |
|
$ |
0.00 |
|
|
|
$ |
0.17 |
|
|
$ |
(0.31 |
) |
Loss from
discontinued operations |
|
|
0.00 |
|
|
|
0.00 |
|
|
|
(0.01 |
) |
|
|
|
(0.01 |
) |
|
|
(0.14 |
) |
Net
income (loss) per share |
|
$ |
0.06 |
|
|
$ |
(0.06 |
) |
|
$ |
(0.01 |
) |
|
|
$ |
0.16 |
|
|
$ |
(0.45 |
) |
Diluted
weighted average shares outstanding |
|
|
58,819 |
|
|
|
58,554 |
|
|
|
58,817 |
|
|
|
|
58,720 |
|
|
|
58,384 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VAALCO ENERGY, INC AND
SUBSIDIARIES |
|
|
|
|
|
|
Consolidated Statements
of Cash Flows |
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
2017 |
|
|
2016 |
|
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income (loss) |
|
$ |
9,651 |
|
|
$ |
(26,550 |
) |
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities: |
|
|
|
|
|
|
Loss from
discontinued operations |
|
|
621 |
|
|
|
8,283 |
|
Depreciation, depletion and amortization |
|
|
6,457 |
|
|
|
6,926 |
|
Other
amortization |
|
|
369 |
|
|
|
1,424 |
|
Deferred
taxes |
|
|
(1,260 |
) |
|
|
— |
|
Unrealized foreign exchange gain |
|
|
(576 |
) |
|
|
(32 |
) |
Stock-based compensation |
|
|
1,098 |
|
|
|
192 |
|
Commodity
derivatives loss |
|
|
1,032 |
|
|
|
1,711 |
|
Cash
settlements received on matured derivative contracts |
|
|
195 |
|
|
|
— |
|
Bad debt
provision |
|
|
452 |
|
|
|
1,222 |
|
Other
operating (income) loss, net |
|
|
84 |
|
|
|
266 |
|
Operational expenses associated with equipment and other |
|
|
1,189 |
|
|
|
— |
|
Impairment of proved properties |
|
|
— |
|
|
|
88 |
|
Change in
operating assets and liabilities: |
|
|
|
|
|
|
Trade
receivables |
|
|
3,195 |
|
|
|
(1,050 |
) |
Accounts
with partners |
|
|
(108 |
) |
|
|
16,284 |
|
Other
receivables |
|
|
(43 |
) |
|
|
(18 |
) |
Crude oil
inventory |
|
|
(2,350 |
) |
|
|
(192 |
) |
Value
added tax and other receivables |
|
|
(3,025 |
) |
|
|
(1,937 |
) |
Other
long-term assets |
|
|
(2,298 |
) |
|
|
(2,827 |
) |
Prepayments and other |
|
|
1,646 |
|
|
|
517 |
|
Accounts
payable |
|
|
(7,297 |
) |
|
|
(15,459 |
) |
Accrued
liabilities and other |
|
|
2,050 |
|
|
|
(4,586 |
) |
Net cash
provided by (used in) continuing operating activities |
|
|
11,082 |
|
|
|
(15,738 |
) |
Net cash
provided by (used in) discontinued operating activities |
|
|
(4,423 |
) |
|
|
12,286 |
|
Net cash
provided by (used in) operating activities |
|
|
6,659 |
|
|
|
(3,452 |
) |
CASH FLOWS
FROM INVESTING ACTIVITIES: |
|
|
|
|
(Increase) decrease in restricted cash |
|
|
(150 |
) |
|
|
15,219 |
|
Acquisitions |
|
|
64 |
|
|
|
(5,692 |
) |
Property
and equipment expenditures |
|
|
(1,813 |
) |
|
|
(8,705 |
) |
Proceeds
from the sale of oil and gas properties |
|
|
250 |
|
|
|
830 |
|
Premiums
paid for put options |
|
|
— |
|
|
|
(2,939 |
) |
Net cash
used in continuing investing activities |
|
|
(1,649 |
) |
|
|
(1,287 |
) |
Net cash
used in discontinued investing activities |
|
|
— |
|
|
|
— |
|
Net cash
used in investing activities |
|
|
(1,649 |
) |
|
|
(1,287 |
) |
CASH FLOWS
FROM FINANCING ACTIVITIES: |
|
|
|
|
Proceeds
from the issuances of common stock |
|
|
39 |
|
|
|
— |
|
Treasury
shares |
|
|
(20 |
) |
|
|
(51 |
) |
Debt
issuance costs |
|
|
— |
|
|
|
(93 |
) |
Debt
repayment |
|
|
(10,001 |
) |
|
|
— |
|
Borrowings |
|
|
4,167 |
|
|
|
— |
|
Net cash used in
continuing financing activities |
|
|
(5,815 |
) |
|
|
(144 |
) |
Net cash provided by
discontinued financing activities |
|
|
— |
|
|
|
— |
|
Net cash used in
financing activities |
|
|
(5,815 |
) |
|
|
(144 |
) |
NET CHANGE IN CASH AND
CASH EQUIVALENTS |
|
|
(805 |
) |
|
|
(4,883 |
) |
CASH AND CASH
EQUIVALENTS AT BEGINNING OF YEAR |
|
|
20,474 |
|
|
|
25,357 |
|
CASH AND CASH
EQUIVALENTS AT END OF YEAR |
|
$ |
19,669 |
|
|
$ |
20,474 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VAALCO ENERGY, INC AND
SUBSIDIARIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial and
Operating Statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31,2017 |
|
December 31,2016 |
|
September 30, 2017 |
|
|
December 31, 2017 |
|
December 31, 2016 |
NET SALES DATA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
(MBbls) |
|
|
280 |
|
|
326 |
|
|
|
336 |
|
|
|
1,423 |
|
|
1,488 |
Natural
Gas (MMcf) |
|
|
— |
|
|
25 |
|
|
|
— |
|
|
|
— |
|
|
124 |
Oil
equivalents (MBOE) |
|
|
280 |
|
|
330 |
|
|
|
336 |
|
|
|
1,423 |
|
|
1,509 |
Average
daily sales volumes (BOE/day) |
|
|
3,043 |
|
|
3,587 |
|
|
|
3,652 |
|
|
|
3,899 |
|
|
4,134 |
NET PRODUCTION
DATA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
(MBbls) |
|
|
364 |
|
|
335 |
|
|
|
341 |
|
|
|
1,518 |
|
|
1,518 |
Natural
Gas (MMcf) |
|
|
— |
|
|
25 |
|
|
|
— |
|
|
|
— |
|
|
124 |
Oil
equivalents (MBOE) |
|
|
364 |
|
|
339 |
|
|
|
341 |
|
|
|
1,518 |
|
|
1,538 |
Average daily production volumes (BOE/day) |
3,957 |
|
|
3,682 |
|
|
|
3,707 |
|
|
|
4,159 |
|
|
4,214 |
AVERAGE SALES
PRICES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
($/Bbl) |
|
$ |
59.89 |
|
$ |
41.88 |
|
|
$ |
51.10 |
|
|
$ |
52.58 |
|
$ |
40.13 |
Natural
Gas ($/Mcf) |
|
|
— |
|
|
2.35 |
|
|
|
— |
|
|
|
— |
|
|
1.95 |
Weighted
average price ($/BOE) |
|
|
59.89 |
|
|
41.76 |
|
|
|
51.10 |
|
|
|
52.58 |
|
|
39.62 |
COSTS AND EXPENSES (PER
BOE OF SALES): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production expense |
|
$ |
41.25 |
|
$ |
35.85 |
|
|
$ |
30.76 |
|
|
$ |
27.90 |
|
$ |
24.91 |
Production expense, excluding workovers* |
|
|
29.12 |
|
|
25.60 |
|
|
|
30.39 |
|
|
|
25.37 |
|
|
20.43 |
Depreciation, depletion and amortization |
|
|
3.28 |
|
|
3.45 |
|
|
|
5.06 |
|
|
|
4.54 |
|
|
4.59 |
General
and administrative expense** |
|
|
6.15 |
|
|
5.22 |
|
|
|
7.33 |
|
|
|
7.29 |
|
|
0.06 |
Property and equipment
expenditures, cash basis (in thousands) |
|
$ |
513 |
|
$ |
(1,764 |
) |
|
$ |
268 |
|
|
$ |
1,813 |
|
$ |
8,705 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Workover
costs excluded from the three months ended December 31, 2017,
December 31, 2016 and September 30, 2017 are $3.4 million, $3.4
million and $0.2 million. |
**General
and administrative expenses include $0.59, $ 0.22 and $0.46 BOE of
non-cash stock-based compensation expense in the three months ended
December 31, 2017, December 31, 2016 and September 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
SUBSIDIARIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliations of
Non-GAAP Measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Year Ended |
Reconciliation
of Net income (loss) to Adjusted EBITDAX |
|
December 31, 2017 |
|
December 31, 2016 |
|
September 30, 2017 |
|
|
December 31, 2017 |
|
December 31, 2016 |
Net income (loss) |
|
$ |
3,431 |
|
|
$ |
(3,641 |
) |
|
|
(322 |
) |
|
|
$ |
9,651 |
|
|
$ |
(26,550 |
) |
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of
discontinued operations |
|
|
103 |
|
|
|
286 |
|
|
|
174 |
|
|
|
|
621 |
|
|
|
8,283 |
|
Interest
expense, net |
|
|
306 |
|
|
|
328 |
|
|
|
327 |
|
|
|
|
1,414 |
|
|
|
2,613 |
|
Income
tax expense |
|
|
1,339 |
|
|
|
2,364 |
|
|
|
2,749 |
|
|
|
|
10,378 |
|
|
|
9,248 |
|
Depreciation, depletion and amortization |
|
|
918 |
|
|
|
1,139 |
|
|
|
1,700 |
|
|
|
|
6,457 |
|
|
|
6,926 |
|
Impairment of proved properties |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
88 |
|
Exploration expense |
|
|
3 |
|
|
|
1 |
|
|
|
4 |
|
|
|
|
7 |
|
|
|
5 |
|
Non-cash or unusual
items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
165 |
|
|
|
72 |
|
|
|
154 |
|
|
|
|
1,098 |
|
|
|
192 |
|
Accrued
liabilities reversal |
|
|
(2,614 |
) |
|
|
— |
|
|
|
— |
|
|
|
|
(2,614 |
) |
|
|
— |
|
Shareholder matters |
|
|
— |
|
|
|
18 |
|
|
|
— |
|
|
|
|
— |
|
|
|
(332 |
) |
Commodity
derivative loss |
|
|
61 |
|
|
|
939 |
|
|
|
921 |
|
|
|
|
1,032 |
|
|
|
1,711 |
|
Equipment
write-offs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
266 |
|
Bad debt
expense (recovery) |
|
|
220 |
|
|
|
645 |
|
|
|
(49 |
) |
|
|
|
452 |
|
|
|
1,222 |
|
Adjusted EBITDAX |
|
$ |
3,932 |
|
|
$ |
2,151 |
|
|
$ |
5,658 |
|
|
|
$ |
28,496 |
|
|
$ |
3,672 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vaalco Energy (NYSE:EGY)
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From Aug 2024 to Sep 2024
Vaalco Energy (NYSE:EGY)
Historical Stock Chart
From Sep 2023 to Sep 2024