VAALCO Energy Announces Successful Completion of the FSO Installation and Field Reconfiguration Project at Etame and Strong Production and Sales Volumes for Q3 2022
October 19 2022 - 2:00AM
VAALCO Energy Inc. (NYSE: EGY; LSE: EGY) ("
VAALCO"
or the "
Company")
today
announced successful completion of the Floating Storage and
Offloading vessel (“FSO”) installation and field reconfiguration at
Etame. Additionally, the Company disclosed strong third quarter
2022 production which was above the high-end of quarterly guidance
and sales volumes that were above the midpoint of quarterly
guidance.
Highlights
- Related to the FSO and field
reconfiguration, VAALCO successfully completed:
- All diving, subsea connections,
subsea infrastructure and reconfigurations;
- All pipeline tie-ins and pressure
testing;
- All the new riser connections to
the Teli FSO;
- Disconnected all production lines
from the Petroleo Nautipa Floating Production, Storage and
Offloading unit (“FPSO”) and performed a lifting of export oil from
the FPSO on September 26 of 300,510 barrels followed by a lifting
from the FPSO on October 5 of 275,817 barrels;
- Delivered first oil from the Etame field to the Teli FSO on
October 18;
- Completed the annual field-wide maintenance turnaround
concurrently with the FSO and field reconfiguration;
- Disclosed preliminary third quarter 2022 production of
approximately 9,150 net revenue interest (“NRI”) barrels of oil per
day (“BOPD”), or 10,525 working interest (“WI”) BOPD, which was
above the high-end of third quarter guidance;
- Announced third quarter 2022 sales volumes of 731,000 net
barrels of oil or 7,952 net BOPD, which was 8% above the midpoint
of guidance; and
- Provided update on third quarter financial impacts due to
successful TransGlobe transaction.
George Maxwell, VAALCO’s Chief Executive
Officer, commented, "We are very pleased to have successfully
delivered this highly complex, full field reconfiguration,
maintenance turnaround and upgraded FSO installation, as planned
and on time. This project was completed despite a difficult global
supply chain environment and is a testament to the dedication of
our workforce and partners who helped complete the project,
underlining VAALCO’s status as a quality Operator. The new FSO
provides us with additional flexibility and has an effective
capacity for storage that is 50% larger than our relinquished FPSO.
It also reduces our expected storage and offloading costs by 50%
which should lead to an extension of the economic field life,
resulting in a corresponding increase in recovery and reserves at
Etame.
Additionally, we reported very strong VAALCO
standalone third quarter 2022 production and sales volumes both
above the midpoint of our guidance ranges. Production for the third
quarter was approximately 9,150 net BOPD and sales volumes were
approximately 7,952 net BOPD. Our team worked tirelessly to ensure
that we maximized our production and sales in the third quarter. We
were able to complete three liftings during the quarter plus an
additional smaller one on October 5, shortly before the FPSO was
decommissioned. The team successfully overlapped the maintenance
turnaround with the field reconfiguration to minimize downtime and
deliver operating efficiencies. We continue to execute on our
strategy and remain focused on generating meaningful free cash flow
to enhance shareholder value."
Since the strategic combination with TransGlobe
Energy did not close until October 14, 2022, production volumes and
associated revenues and expenses will not be included in VAALCO’s
financial results until post-closing in the fourth quarter of 2022.
However, the Company said that the majority of the transaction
costs associated with the strategic combination were incurred in
the third quarter and will be recognized as special, one-time
expenses in third quarter financial results. The Company also
expects to incur a realized derivative loss in the third quarter as
a result of the settlement of the remaining derivative swaps. Both
the transaction costs and realized derivative losses are not
deductible for Gabonese taxes, so the effective tax rate will be
higher than normal during the third quarter. Additionally, costs
associated with the relinquishment of the FPSO and transition to
the FSO will be included in the third quarter.
About VAALCO
VAALCO, founded in 1985, is a Houston, USA
based, independent energy company with production, development and
exploration assets in the West African region.
The Company is an established operator within
the region, holding a 63.6% participating interest in the Etame
Marin block, located offshore Gabon, which to date has produced
over 126 million barrels of crude oil and of which the Company is
the operator.
For Further Information
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VAALCO Energy, Inc.
(General and Investor Enquiries) |
+00 1 713 623 0801 |
Website: |
www.vaalco.com |
|
|
|
|
Al Petrie Advisors (US
Investor Relations) |
+00 1 713 543 3422 |
Al Petrie / Chris Delange |
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Buchanan (UK Financial
PR) |
+44 (0) 207 466 5000 |
Ben Romney / Jon Krinks |
VAALCO@buchanan.uk.com |
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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 statements related to the impact of the COVID-19 pandemic,
including the recent sharp decline in the global demand for and
resulting global oversupply of crude oil and the resulting steep
decline in oil prices, production quotas imposed by Gabon,
disruptions in global supply chains, quarantines of our workforce
or workforce reductions and other matters related to the pandemic,
well results, wells anticipated to be drilled and placed on
production, future levels of drilling and operational activity and
associated expectations, the implementation of the Company’s
business plans and strategy, prospect evaluations, prospective
resources and reserve growth, its activities in Equatorial Guinea,
expected sources of and potential difficulties in obtaining future
capital funding and future liquidity, its ability to restore
production in non-producing wells, our ability to find a
replacement for the FPSO or to renew the FPSO charter, future
operating losses, future changes in crude oil and natural gas
prices, future strategic alternatives, future and pending
acquisitions, capital expenditures, future drilling plans,
acquisition and interpretation of seismic data and costs thereof,
negotiations with governments and third parties, timing of the
settlement of Gabon income taxes, and expectations regarding
processing facilities, production, sales and financial projections.
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, crude oil and natural gas price volatility, the
impact of production quotas imposed by Gabon in response to
production cuts agreed to as a member of OPEC, inflation, general
economic conditions, the outbreak of COVID-19, 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,
lack of availability of goods, services and capital, environmental
risks, drilling risks, foreign regulatory and operational risks,
and regulatory changes.
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.
Inside Information
This announcement contains inside information as
defined in Regulation (EU) No. 596/2014 on market abuse which is
part of UK domestic law by virtue of the European
Union (Withdrawal) Act 2018 (“MAR”) and is made in accordance
with the Company’s obligations under article 17 of MAR. The person
responsible for arranging the release of this announcement on
behalf of VAALCO is Michael Silver, Corporate Secretary of
VAALCO.
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