VAALCO Energy, Inc. Provides Operational Update
December 09 2022 - 2:00AM
VAALCO Energy, Inc. (NYSE: EGY; LSE: EGY) (“VAALCO” or the
“Company”) today provided an operational update including
additional information on the North Tchibala 2H-ST well.
Highlights
- In Gabon, the North Tchibala 2H-ST
well was brought online in early November and flowed at a low,
controlled rate to allow for cleanup and to minimize negative
impact to the completion;
- Through early December, the well
has flowed, but with temporary interruptions for operational
activity and shut-ins for pressure build up analysis with the
following results:
- Produced approximately 8,000 gross
barrels of oil, or about 275 gross barrels of oil per day
(“BOPD”);
- Recovered about 33% of injected
completion fluid;
- Cleanup is continuing and pressure
transient analysis indicates the lower stimulated zones may not be
contributing;
- Conducting chemical analysis on oil
recovered from the well that will help determine if all zones that
were fracture stimulated are producing;
- Post-frac modeling suggests that
the well is capable of producing rates at or above 1,500 gross
BOPD;
- On December 4th, the first lifting
from the new FSO “TELI” was successfully completed at the same time
that the final remaining volumes from the Nautipa FPSO were
removed;
- In Egypt, VAALCO expects to spud
the first horizontal well on December 12th, with completion
operations planned for first quarter 2023;
- In Canada, the tie in of the 4-10
well is expected in late December with an expected flow rate of
about 200 barrels of oil equivalent per day before year end;
and
- Also in Canada, construction on the
14-25-29-04W5 surface lease has been completed with drilling
expected to start in early January 2023.
George Maxwell, Chief Executive Officer,
commented, “We continue to monitor the fluids flowing from the
North Tchibala 2H-ST well to better understand its results. During
cleanup, the well has been producing about 275 gross BOPD, however
our post-frac modeling indicates that the well is capable of
producing rates in excess of 1,500 gross BOPD. The well is not
cleaning up as expected, with only about 33% of completion fluid
recovered. We are continuing to gather information to understand
why the lower stimulated zones may not yet be contributing any
meaningful production. We will continue to monitor the well and
plan to provide additional information to the market once we have
analyzed all the data.
We are continuing to integrate the TransGlobe
team and assets into our strategic vision and with no debt and
strong free cash flow generation, we remain confident that VAALCO
will be able to deliver meaningful value to our shareholders.”
About VAALCO
VAALCO, founded in 1985 and incorporated under
the laws of Delaware, is a Houston, USA based, independent energy
company with production, development and exploration assets in
Africa and Canada.
Following its business combination with
TransGlobe in October 2022, VAALCO owns a diverse portfolio of
operated production, development and exploration assets across
Gabon, Egypt, Equatorial Guinea and Canada.
For Further Information
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 |
|
|
|
Buchanan (UK Financial
PR) |
+44 (0) 207 466 5000 |
Ben Romney / Jon Krinks |
VAALCO@buchanan.uk.com |
Forward Looking Statements
This press release includes “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended (the “Securities Act”) and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to
be covered by the safe harbors created by those laws and other
applicable laws and “forward-looking information” within the
meaning of applicable Canadian securities laws. Where a
forward-looking statement expresses or implies an expectation or
belief as to future events or results, such expectation or belief
is expressed in good faith and believed to have a reasonable basis.
All statements other than statements of historical fact may be
forward-looking statements. The words “anticipate,” “believe,”
“estimate,” “expect,” “intend,” “forecast,” “outlook,” “aim,”
“target,” “will,” “could,” “should,” “may,” “likely,” “plan” and
“probably” or similar words may identify forward-looking
statements, but the absence of these words does not mean that a
statement is not forward-looking. Forward-looking statements in
this press release include, but are not limited to, statements
relating to (i) the Arrangement and VAALCO’s ability to realize the
anticipated benefits and synergies expected from the Arrangement;
(ii) estimates of future drilling, production and sales of crude
oil and natural gas; (iii) estimates of future cost reductions,
synergies, including pre-tax synergies, savings and efficiencies;
(iv) expectations regarding VAALCO’s ability to effectively
integrate assets and properties it acquired as a result of the
Arrangement into its operations; (v) the amount and timing of stock
repurchases, if any, under the Company’s Stock Buyback Program and
VAALCO’s ability to enhance stockholder value through such plan;
(vi) expectations regarding future exploration and the development,
growth and potential of the combined company’s operations, project
pipeline and investments, and schedule and anticipated benefits to
be derived therefrom; (vii) expectations regarding future
investments or divestitures; (viii) expectations of future
dividends and returns to stockholders; (ix) expectations of future
balance sheet strength; (x) expectations of future equity and
enterprise value; (xi) expectations of the continued listing of
VAALCO’s common stock on the NYSE and LSE and (xii) VAALCO’s
ability to finalize documents and effectively execute the POD for
the Venus development in Block P.
Such forward-looking statements are subject to
risks, uncertainties and other factors, which could cause actual
results to differ materially from future results expressed,
projected or implied by the forward-looking statements. These risks
and uncertainties include, but are not limited to: risks relating
to any unforeseen liabilities of VAALCO or TransGlobe; the tax
treatment of the Arrangement in the United States and Canada;
declines in oil or natural gas prices; the level of success in
exploration, development and production activities; adverse weather
conditions that may negatively impact development or production
activities; the right of host governments in countries where
we operate to expropriate property and terminate contracts
(including the Etame PSC and the Block P PSC) for reasons of public
interest, subject to reasonable compensation, determinable by the
respective government in its discretion; the timing and costs of
exploration and development expenditures; inaccuracies of reserve
estimates or assumptions underlying them; revisions to reserve
estimates as a result of changes in commodity prices; impacts to
financial statements as a result of impairment write-downs; the
ability to generate cash flows that, along with cash on hand, will
be sufficient to support operations and cash requirements; the
ability to attract capital or obtain debt financing arrangements;
currency exchange rates and regulations; actions by joint venture
co-owners; hedging decisions, including whether or not to enter
into derivative financial instruments; international, federal and
state initiatives relating to the regulation of hydraulic
fracturing; failure of asses to yield oil or gas in commercially
viable quantities; uninsured or underinsured losses resulting from
oil and gas operations; inability to access oil and gas markets due
to market conditions or operational impediments; the impact and
costs of compliance with laws and regulations governing oil and gas
operations; the ability to replace oil and natural gas reserves;
any loss of senior management or technical personnel; competition
in the oil and gas industry; the risk that the Arrangement may not
increase VAALCO’s relevance to investors in the international
E&P industry, increase capital market access through scale and
diversification or provide liquidity benefits for stockholders; and
other risks described under the caption “Risk Factors” in VAALCO’s
2021 Annual Report on Form 10-K filed with the SEC on March 11,
2022 and in VAALCO’s Definitive Proxy Statement on Schedule 14A
filed with the SEC on August 30, 2022.
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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