VAALCO Energy, Inc. Announces 10-Year Extension of Etame Exclusive Exploitation Areas Through 2028
September 25 2018 - 4:45PM
VAALCO Energy, Inc. (NYSE: EGY) through its wholly owned
subsidiary, VAALCO Gabon S.A. (“VAALCO” or “the Company”) and the
other Etame Participating Interest owners today announced the
receipt of the Presidential Decree approving the successful
execution of an Amendment to the Etame Marin Production Sharing
Contract (“PSC”) in Gabon between the Government of Gabon and the
Etame Participating Interest owners. The Amendment provides
for a 10-year extension of the three Exclusive Exploitation Areas
under the PSC (“the Extension”). VAALCO is the Operator with
a 33.575% Participating Interest under the terms of the applicable
Joint Operating Agreement. The remaining owners of
Participating Interests under the Joint Operating Agreement are
Addax Petroleum Etame, Inc. (33.900%), Sasol Gabon S.A. (30.000%),
and PetroEnergy Resources Corp. (2.525%). VAALCO and the
other Participating Interest Owners are referred to as the
“Contractor Parties”.
Key Highlights of the
Extension:
- Extends each of the
existing three Exclusive Exploitation Authorizations under the
Etame PSC for 10 years from the date of the signing of the
Amendment, with two additional five-year option
periods;
- Provides the opportunity to
make future investments that will yield benefit to both the
Contractor Parties and the government of Gabon through further
development of the resource potential within the Exploitation
Areas;
- Commits the Contractor
Parties to complete, within two years of the Amendment coming into
force, a drilling program to drill two development wells and two
appraisal wells, as well as undertake technical
studies;
- In addition, VAALCO has
agreed individually to provide an increased commitment to corporate
social responsibility projects in Gabon.
Cary Bounds, Chief Executive Officer, commented,
“VAALCO, together with the other Contractor Parties, are very
excited to announce this extension of our Exclusive Exploitation
Authorizations in the Etame Marin Permit. The Extension will
further strengthen our strategic partnership with the Government of
Gabon and ensures the long-term viability of our premier Etame
asset, which has produced more than 100 million barrels of oil
since inception. This extension stabilizes VAALCO’s outlook for the
future, removes uncertainty, and allows us to focus on generating
further value and extracting additional reserves from the Etame
block. We are now ready to move forward with our 2019 development
and appraisal drilling program. We will provide additional details
once the locations and timing are finalized. As we look to the
future, we remain focused on creating substantial value for our
shareholders by operating safely and efficiently, and continuing to
execute on our growth strategy. The remaining opportunities
in Etame are significant and we are well positioned to strengthen
our financial and operational positions. We are also very
pleased to continue our long-term relationship with the Government
of Gabon and look forward to many more years of successful
operations in the country.”
Representatives of Sasol Gabon, Addax and
PetroEnergy have also executed the Amendment. The Contractor
Parties have also agreed to their respective Participating Interest
share of the work commitment and other obligations, including the
drilling commitments, under the terms of the Extension. The
Contractor Parties are optimistic that these wells will be part of
a broader, long-term program to develop the economically
recoverable portion of the hydrocarbon resources remaining in the
field which will jointly benefit VAALCO, the other Contractor
Parties and the Republic of Gabon.
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 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 and quarterly report on Form 10-Q for the quarter ended June
30, 2018, 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, Jr.
713-623-0801
Vaalco Energy (NYSE:EGY)
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