EGY Vaalco Energy Inc

2022 was a productive year for VAALCO.

Our share price increased by 43%, production was up by 44% and SEC proved reserves were nearly 2.5 times over 2021 levels.

We had Net Income of $51.9 million and record Adjusted EBITDAX of $186.6 million.⁽¹⁾

We initiated both a dividend and a share buyback program that returned more than $12 million to our shareholders in 2022, and approximately $25 million to our shareholders since inception.

And we continue to have no bank debt on our balance sheet.

2022 was a transformational year for VAALCO.

We closed a strategic business combination with TransGlobe Energy Corporation in October. The scaling, balance sheet strength, and geographic diversification that this affords us will buttress our opportunities for sustainable shareholder returns, continued growth and success.

In addition to acquiring assets in Canada and Egypt, our work in 2022 allowed us to finalize, in the first quarter of this year, multiple substantive documents with the government and our partners in Equatorial Guinea, where we anticipate a strong, efficient and economic development of our exciting discovery, with first oil projected for 2026.

We successfully delivered a highly complex full field reconfiguration, maintenance turnaround, and upgraded Floating Storage and Offloading vessel (“FSO”) installation in Gabon, which significantly increased our storage capacity, reduces our expected storage and offloading costs, and should result in corresponding increased recovery and reserves from our Gabon assets.

We are optimistic for the future.

We remain intent on generating meaningful cash flow to fund increased shareholder dividends, share buybacks, capital expenditures and potential additional acquisitions.

We are constantly reviewing opportunities to improve efficiency and safety within our operations, in addition to screening opportunities for accretive growth within our strategic area of focus.

We remain committed to driving total shareholder return.

Your vote is important.

VAALCO is your company. Even if you plan to attend the meeting in person, please follow the instructions provided to you and vote your shares today.

We thank you sincerely for your continued belief, support and interest in our business.

We, the Board, thank you for your continued support of, and interest in, our business.

The 2023 Annual Meeting of Shareholders of VAALCO Energy, Inc. (the “Company”) will be held at the Hilton Houston Westchase, 9999 Westheimer Road, Houston, Texas 77042, on Thursday, June 8, 2023, at 8:30 a.m. Central Time (the “Annual Meeting”). We intend to hold our annual meeting in person.

The Annual Meeting is being held:

These proposals are described in the accompanying proxy materials. You will be able to vote at the Annual Meeting, or any adjournment, postponement or recess thereof, only if you were a shareholder of record at the close of business on April 21, 2023.

We are providing our shareholders access to our proxy materials over the Internet. To do this, we are mailing a Notice of Internet Availability of Proxy Materials (the “Notice”). The Notice contains instructions on how to access those documents over the Internet, and how to request a paper copy of our proxy materials.

Shareholders may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis. Shareholders who receive future proxy materials by email will save us the cost of printing and mailing documents and will reduce the impact of meetings of shareholders on the environment. A shareholder’s election to receive proxy materials by email will remain in effect until the shareholder terminates that election.

The Proxy Statement and our Annual Report for 2022 are available at www.proxyvote.com.

If you have any questions or need assistance voting your shares, please call our proxy solicitor:

This Proxy Statement is provided in connection with the solicitation of proxies by our Board of Directors (the “Board”) to be voted at our 2023 Annual Meeting of Shareholders (our “Annual Meeting”), and at any postponement, adjournment or recess of the Annual Meeting. In this Proxy Statement, VAALCO Energy, Inc. is referred to as the “Company,” “our company,” “we,” “our,” “us” or “VAALCO.”

The Board’s Corporate Governance Principles, which include guidelines for determining director independence and qualifications for directors, are published on VAALCO’s website at www.VAALCO.com. This website also makes available the charters for each of the Audit Committee, Compensation Committee, and Environmental, Social and Governance (“ESG”) Committee, and other corporate governance materials. These materials are also available in print to any shareholder upon request. The Board regularly reviews corporate governance developments and modifies its Corporate Governance Principles, committee charters and key practices as warranted.

The Board is soliciting proxies for our 2023 Annual Meeting and any adjournment, postponement or recess thereof.

We are a Houston, Texas-based independent energy company primarily engaged in the acquisition, development and production of crude oil, natural gas and natural gas liquids (“NGL”). Historically, our primary source of revenue was from a production sharing contract that we entered into with the Republic of Gabon related to the Etame Marin block located offshore Gabon in West Africa. As a result of our transformational acquisition of TransGlobe Energy Corporation (“TransGlobe”), we are a leading African-focused operator with a strong production and reserve base and a diverse portfolio of assets in Gabon, Egypt, Canada, and Equatorial Guinea.

Throughout 2022, we continued to deliver operationally and generate significant cash flow. Our 2022 results firmly place VAALCO in a financially stronger position, poised to execute accretive growth initiatives in the future. Key highlights of our business and our performance in 2022 and the first part of 2023 include:

We focus on supporting sustainable shareholder returns and growth. We have no bank debt and remain firmly focused on our strategic vision of achieving significant shareholder returns by maximizing the value of, and free cash flow from, our existing resource base, coupled with highly accretive inorganic growth opportunities.

We put in place practices to support the rule of law, transparency and good governance, and to oppose corruption. We believe it is also important to contribute to society through business activities, social investment and philanthropic programs. Our core values are supporting and developing our employees and communities, promoting and practicing good environmental stewardship, and improving the quality of life of the people we interact with. Below are highlights of steps we have taken to help promote these values.

In October 2020, we mandated that our ESG Committee oversee policies and programs relating to social responsibility and environmental sustainability. In early 2022, we hired a full-time ESG Engineer to coordinate technical aspects of the Company’s ESG initiatives. Last year we also created a committee comprised of a cross section of employees, with full participation by our executive team, charged with monitoring adherence to our ESG standards and communicating findings on an ongoing basis to our ESG Committee.

In June 2022 we released our 2021 ESG Report, which included key ESG sustainability metrics and a detailed analysis of our accomplishments and dedication to our people, the environment, and the countries where we operate.

We prioritize ESG metrics in our executive compensation program to drive execution on these issues. The compensation plan’s ESG score considers total recordable incident rate, carbon footprint reduction targets and company-wide participation in ESG training.

Corporate Governance. We believe our director nominees exhibit a robust mix of skills, experience, diversity and perspectives. We value building diverse teams, embracing different perspectives, fostering an inclusive environment, and supporting diversity of thought, perspective, sexual orientation, gender, gender identity and expression, race, ethnicity, culture and professional experience. Our governance highlights include:

Diversity of our Workforce. We have a long-standing commitment to equal employment opportunity and a robust and rigorously enforced Equal Employment Opportunity policy. We are proud to disclose that, as of December 31, 2022:

We are fully committed to the health and safety of our employees and contractors. We maintain a goal of zero accidents, injuries, unsafe work practices or unsafe conditions for our employees. We prioritize and assure adequate employee training on health and safety issues. We have designed health and safety training programs to reduce risk across our operations, communicated high and insistent expectations of our partners, and created systems that support conformance to these standards.

We are committed to responsible environmental stewardship. We take precautions to protect natural resources and to prevent accidents from occurring. We have consistently operated our facilities within the International Convention for the Prevention of Pollution from Ships (“MARPOL”) water discharge standard. In 2022, we had no regulatory reportable spills or loss of containment that impacted the environment.

Health, Safety and Environmental Management Systems. Our Internal Resources for Administering Safety (“IRAS”) system was developed to effectively communicate across the various levels and functions within VAALCO safety and environmental objectives, goals and performance measures set by management. Our IRAS system is designed to align with International Organization for Standardization (“ISO”) 45001. Our program incorporates numerous elements in order to achieve the highest level of risk mitigation possible. These elements include:

Greenhouse Gas Emissions. We are committed to managing our emissions and seek to identify, evaluate and measure climate-related risks by incorporating them in our management process and field development plans. During 2022, we continued to build upon our work from the previous year and have identified several areas in which we were able to achieve significant impacts on overall emissions.

Water Management. Because we operate offshore, we have a limited impact on water availability. All produced water is treated to meet or exceed MARPOL standards.

Biodiversity and Decommissioning. Conservation of biodiversity is an integral part of our commitment to the communities with which we work. In 2022, we progressed initiatives related to tracking wildlife inventory levels and managing interaction of wildlife and communities to minimize the impact of development on critical species.

We take pride in our reputation as a good corporate citizen, and we continue to support the communities where we operate. We view our support and involvement in local communities as being critical to our “social license to operate.”

On March 10, 2023, the Board, upon recommendation of the ESG Committee, voted to nominate the individuals named in the table below for election, which will result in a reduction of the number of directorships from seven to five after the Annual Meeting. The Board asks you to elect the five nominees named below as directors for a term that expires at the 2024 annual meeting of shareholders. The table below provides summary information about the five director nominees. For more information about the director nominees, see page 18.

The five nominees who receive the greatest number of “FOR” votes cast by the shareholders, a plurality, will be elected as our directors. There is no cumulative voting. Abstentions and broker non-votes will not be taken into account for purposes of determining the outcome of the election of directors. Accordingly, if you own your shares through a broker, you must give the broker instructions to vote your shares in the election of directors. Otherwise, your shares will not be voted.

The Board is asking you to ratify the selection of BDO USA, LLP (“BDO”) as our independent registered public accounting firm for the fiscal year ending December 31, 2023. Even if our shareholders ratify the appointment of BDO, the Audit Committee may, in its sole discretion, terminate such engagement and direct the appointment of another independent registered public accounting firm at any time during the year. For additional information concerning BDO, including the fees billed to us for services provided by BDO during 2022 and 2021, see page 39.

The approval of the ratification of the appointment of BDO as the Company’s independent registered public accounting firm requires the vote of a majority of votes cast affirmatively or negatively. For this proposal, abstentions will have no effect on the vote. Broker non-votes are not applicable to the proposal because your broker has discretionary authority to vote your common stock in the absence of affirmative instructions from you with respect to this proposal.

Pursuant to Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we are asking our shareholders to approve, on an advisory or non-binding basis, the compensation of our named executive officers (“NEOs”) as disclosed in this Proxy Statement. For a detailed description of our executive compensation program, see “Compensation Discussion and Analysis” beginning on page 44.

The approval, on an advisory basis, of the compensation of our NEOs requires the vote of a majority of votes cast affirmatively or negatively. For this proposal, abstentions and broker non-votes will have no effect on the vote.

Pursuant to Section 14A of the Exchange Act, we are asking our shareholders to vote, on an advisory or non-binding basis, whether future advisory votes on compensation of our NEOs should occur every year, every two years or every three years. For a detailed description of our executive compensation program, see “Compensation Discussion and Analysis” beginning on page 44. We recommend that such future advisory votes continue to be held every year.

The approval, on an advisory basis, of the frequency of future advisory votes on the compensation of our NEOs requires the vote of a majority of votes cast affirmatively or negatively. For this proposal, abstentions and broker non-votes will have no effect on the vote.

The Board has set the close of business on April 21, 2023 as the record date for shareholders entitled to notice of and to vote at the meeting. At the close of business on the record date, there were 107,473,582 shares of VAALCO common stock outstanding and entitled to vote at the Annual Meeting. Each share of common stock is entitled to one vote.

Your Notice or (if you received paper copies of the proxy materials) your proxy card will contain instructions on how to view our proxy materials for the Annual Meeting on the Internet. Our proxy materials are also available at www.proxyvote.com.

The Board encourages you to exercise your right to vote. Shareholders can vote in person at the Annual Meeting or by proxy. Giving us your proxy means you authorize us to vote your shares at the Annual Meeting in the manner you direct. If you are a shareholder of record (you own shares in your name), there are three ways to vote by proxy:

Telephone and Internet voting will be available 24 hours a day and will close at 11:59 p.m. Eastern Daylight time on June 7, 2023.

Voting by proxy will not limit your right to vote at the Annual Meeting if you decide to attend in person. The Board recommends that you vote by proxy since it is not practical for most shareholders to attend the Annual Meeting.

If you are a street name shareholder (that is, if your shares are held of record in the name of a bank, broker or other holder of record), you will receive instructions from the bank, broker or other record holder of your shares. You must follow the instructions of the holder of record in order for your shares to be voted. If you are a street name shareholder, you must obtain a proxy, executed in your favor, from the holder of record to be able to vote at the Annual Meeting.

The shares represented by all valid proxies received by telephone, by Internet or by mail will be voted in the manner specified. Where specific choices are not indicated, the shares represented by all valid proxies will be voted:

If you are a shareholder of record, you may later revoke your proxy instructions by:

If you are a street name shareholder, you may later revoke your proxy instructions by following the procedures provided by your bank, broker or other nominee.

Your stock is counted as present at the Annual Meeting if you attend the Annual Meeting and vote in person or if you properly vote by Internet, telephone or mail. In order for us to hold our Annual Meeting, holders of a majority of the stock issued and outstanding and entitled to vote at the Annual Meeting must be present in person or represented by proxy at the Annual Meeting. This is referred to as a quorum. Abstentions and broker non-votes will be counted as present for purposes of determining a quorum.

The New York Stock Exchange (“NYSE”) permits brokers to vote their customers’ stock held in street name on “routine matters” when the brokers have not received voting instructions from their customers. The NYSE does not, however, allow brokers to vote their customers’ stock held in street name on non-routine matters unless they have received voting instructions from their customers. In such cases, the uninstructed shares that the broker is unable to vote are called “broker non-votes.”

The ratification of the appointment of the independent registered public accounting firm is a routine matter on which brokers may vote in their discretion on behalf of customers who have not provided voting instructions.

The election of directors, the advisory vote to approve our executive compensation and the advisory vote on the frequency of future advisory votes to approve our executive compensation are non-routine matters on which brokers are not allowed to vote unless they have received voting instructions from their customers.

However, if you submit a proxy card, any proposals for which you do not provide instructions will be voted in accordance with the Board’s recommendations.

In addition to sending you these materials or otherwise providing you access to these materials, some of our directors and officers as well as management and non-management employees may contact you by telephone, mail, e-mail or in person. You may also be solicited by our proxy solicitor, D.F. King & Co., by means of press releases issued by VAALCO, postings on our website at www.VAALCO.com, advertisements in periodicals, or other media forms. None of our officers or employees will receive any extra compensation for soliciting you. We will also reimburse banks, nominees, fiduciaries, brokers and other custodians for their costs of sending the proxy materials to the beneficial owners of our common stock. In addition, to assist us with our solicitation efforts, we have retained the services of D.F. King & Co., Inc. for a fee of approximately $6,500, plus out-of-pocket expenses.

Our General Counsel will tabulate and certify the vote at the Annual Meeting.

We will announce the preliminary voting results at the Annual Meeting and disclose the final voting results in a current report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) within four business days of the date of the Annual Meeting unless only preliminary voting results are available at the time of filing the Form 8-K. To the extent necessary, we will file an amended report on Form 8-K to disclose the final voting results within four business days after the final voting results are known. You may access or obtain a copy of these and other reports free of charge on the Company’s website at www.VAALCO.com. The reports we file with the SEC are also available on the SEC’s website at www.sec.gov.

A complete list of all shareholders entitled to vote at the Annual Meeting will be open for examination by any shareholder during normal business hours for a period of ten days prior to the Annual Meeting at our offices, 9800 Richmond Avenue, Suite 700, Houston, Texas, 77042.

On March 10, 2023, the Board, upon recommendation of the ESG Committee, voted to nominate the individuals named in the table below for election, which will also result in a reduction of the number of directorships from seven to five after the Annual Meeting. The Board asks you to elect the five nominees named below as directors for a term that expires at the 2024 annual meeting of shareholders and until either they are reelected or their successors are elected and qualified:

Each nominee currently serves as a director. Biographical information for each is contained below. Biographical information for our current directors not standing for election is included under “Board Compensation and Communications – Directors Not Standing for Election” on page 23. No proposed nominee is being nominated for election pursuant to any arrangement or understanding between the nominee and any other person.

The Board has no reason to believe that any nominee will be unable or unwilling to serve if elected. If a nominee becomes unable or unwilling to accept nomination or election, the number of the Company’s directors will be reduced or the persons named as proxies on the accompanying proxy card, or their substitutes, will vote for the election of a substitute nominee that the Board recommends. Only the nominees designated by the Board will be eligible to stand for election as directors at the Annual Meeting.

The following table provides information with respect to each nominee (each is also a current director). Each director will be elected to serve until the next annual meeting or his or her earlier death or resignation or until his or her successor is elected and qualified.

The following is a brief description of the background and principal occupation of each director nominee:

The director nominees shall be elected by a plurality of the votes cast . For this proposal, abstentions and broker non-votes will not be taken into account. If you own your shares through a broker, you must give the broker instructions to vote your shares in the election of directors. Otherwise, your shares will not be voted. However, if you submit a proxy card, any proposals for which you do not provide instructions will be voted in accordance with the Board’s recommendations.

The Board recommends that shareholders vote “FOR” the election of each of the nominees.

The following table provides information about each director currently serving on our Board:

The directors’ experiences, qualifications and skills that the Board considered in their re-nomination are included in their individual biographies set forth above under “Proposal No. 1—Election of Directors.”

It is VAALCO’s policy that a majority of the members of the Board be independent. Our common stock is listed on the NYSE and the London Stock Exchange (the “LSE”) under the symbol “EGY.” The rules of the NYSE require that a majority of the members of our Board be independent and the LSE recommends that at least a majority of the members of the Board be independent.

In assessing independence, the Board has determined that, with respect to each of Messrs. Fawthrop, LaFehr and Nze-Bekale, and Ms. Stubbs, no material relationship exists that, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out their responsibilities as directors. In addition, the Board considered relationships and transactions involving directors or their affiliates or immediate family members that would be required to be disclosed as related party transactions and described under “—Related Party Transactions” below, of which there were none; and other relationships and transactions involving directors or their affiliates or immediate family members that would rise to the level of requiring such disclosure, of which there were none.

Based on the foregoing, the Board affirmatively determined that each of Messrs. Fawthrop, LaFehr and Nze-Bekale and Ms. Stubbs qualifies as “independent” for purposes of the Company’s Corporate Governance Principles and NYSE listing rules. Mr. Maxwell does not qualify as “independent” because he is an employee of the Company.

The Board has also determined that each member of the Audit Committee qualifies as independent under the audit committee independence rules established by the SEC, and meets the NYSE’s financial literacy requirements. In addition, each member of the Compensation Committee qualifies as a “non-employee director” under SEC rules.

There are no family relationships between any of our directors or executive officers.

General Criteria and Process. We require that our directors display the highest personal and professional ethics and integrity, and be committed to representing the long-term interests of our shareholders. They must also have an inquisitive and objective perspective, practical wisdom, and mature

judgment. Our directors should have a complimentary range of experience in business areas that are relevant to the Company’s global activities. The evaluation of director nominees takes into account diversity of background, race, ethnicity, gender, age, skills, and professional experience that enhance the quality of the deliberations and decisions of the Board.

Under its charter, the ESG Committee is responsible for determining criteria and qualifications for Board nominees to be used in reviewing and selecting director candidates, including those described in our Corporate Governance Principles. The criteria and qualifications include:

These criteria and qualifications are not exhaustive, and the ESG Committee and the Board may consider other qualifications and attributes which they believe are appropriate. Other than ensuring that at least one member of the Board is a financial expert and a majority of the Board members meet all applicable independence requirements, the ESG Committee retains broad discretion in determining the composition and experience of the Board as a whole. The ESG Committee evaluates potential nominees based on the contribution such nominee’s background and skills could have upon the overall functioning of the Board in light of the perceived needs of the Company at the time such evaluation is made.

The ESG Committee identifies nominees by first evaluating the current members of the Board willing to continue their service. Current members with qualifications and skills that are consistent with the ESG Committee’s criteria for Board service are frequently re-nominated. In certain circumstances, such as this year’s decision to reduce the Board size, not all directors can be re-nominated, and this should not be taken as an indication that unnominated directors were not excellent candidates.

As to new candidates, the ESG Committee will generally poll the Board and members of management for recommendations. The ESG Committee may also review the composition and qualification of the boards of directors of VAALCO’s peer group and competitors and may seek input from search firms or from industry experts or analysts. The ESG Committee then reviews the qualifications, experience and background of the candidates. Final candidates are interviewed by the independent directors and executive management. In making its determinations, the ESG Committee evaluates each

individual in the context of the Board as a whole, with the objective of assembling a group with diverse backgrounds that can best represent shareholder interests through the exercise of sound judgment. After review and deliberation of all feedback and data, the ESG Committee makes its recommendation to the Board.

Shareholder Recommendation of Director Candidates. The ESG Committee considers all candidates recommended by our shareholders in accordance with the advance notice provisions of our bylaws. Shareholders may recommend candidates by writing to the Corporate Secretary at VAALCO Energy, Inc., 9800 Richmond Avenue, Suite 700, Houston, Texas 77042, stating the recommended candidate’s name and qualifications for Board membership and otherwise providing all of the information required by the advance notice provisions in our bylaws, and complying with the deadlines and timelines specified therein. When considering candidates recommended by shareholders, the ESG Committee follows the same Board membership qualifications evaluation and nomination procedures that are outlined above. Our ESG Committee has not established a minimum number of shares of common stock that a shareholder must own, or a minimum length of time during which the shareholder must own its shares of common stock, in order to recommend a director candidate for consideration.

In order to provide our shareholders and other interested parties with a direct and open line of communication to the Board, the Board has adopted procedures for communications to directors. Our shareholders and other interested persons may communicate with the Chair of our Audit Committee or with our non-employee directors as a group, by written communications addressed in care of Corporate Secretary, VAALCO Energy, Inc., 9800 Richmond Avenue, Suite 700, Houston, Texas 77042.

All communications received in accordance with these procedures will be reviewed initially by our Corporate Secretary who will relay all such communications to the appropriate director or directors unless it is determined that the communication:

A director who receives any such communication will have discretion to determine whether the subject matter of the communication should be brought to the attention of the full Board or one or more of its committees and whether any response to the person sending the communication is appropriate. Any such response will be made only in accordance with applicable law and regulations relating to the disclosure of information.

The Corporate Secretary will retain copies of all communications received pursuant to these procedures for a period of at least one year. The Board will review the effectiveness of these procedures from time to time and, if appropriate, recommend changes.

While the Board, with input from each of its committees, oversees VAALCO’s risk management function, VAALCO’s management team is responsible for the execution of our day-to-day risk management process. The Audit Committee reviews with management, as well as internal and external auditors, the Company’s business risk management process, including the adequacy of VAALCO’s overall control environment and controls in selected areas representing significant financial and business risk, including cybersecurity. The Audit Committee periodically discusses its assessment with management and considers the impact of risk on our financial position and the adequacy of our risk-related internal controls. Our Compensation Committee also considers risks that could be implicated by our compensation programs, our Technical and Reserves Committee oversees the evaluation and reporting of the Company’s oil, gas and NGL reserves, and our ESG Committee annually reviews the effectiveness of our leadership structure and manages succession planning. Each Board committee as well as senior management, reports regularly to the full Board.

A key responsibility of our CEO and Board is ensuring that an effective process is in place to provide continuity of leadership over the long-term. Each year, a review of senior leadership succession is conducted by the Board based upon the recommendation of the ESG Committee. During this review, the CEO and the independent directors discuss candidates for senior leadership positions, succession timing for those positions, and development plans for the highest-potential candidates. This process forms the basis for ongoing leadership assignments.

Our current board structure separates the roles of Chief Executive Officer and Chairman of the Board, with Mr. Maxwell serving as Chief Executive Officer and Mr. Fawthrop serving as Chairman of the Board. We believe this leadership structure allows Mr. Maxwell to focus primarily on our day-to-day operations and the implementation of our strategic, financial and management policies and allows Mr. Fawthrop to lead our Board in identifying strategic priorities and discussing execution of strategy. The Board currently believes that this distribution of oversight is the best method of ensuring optimal Company performance and risk management.

Our Corporate Governance Principles provide that, in the event the Chairman of the Board is not an independent director, or when the independent directors determine that it is in the best interests of the Company, the independent directors will also appoint a lead independent director. The primary role of the lead independent director would be to ensure independent leadership of the Board, as well as to act as a liaison between the non-management directors and our Chief Executive Officer. Because our Chair of the Board is an independent director, our Board has determined that a lead independent director is not necessary at this time.

We believe a rigorous Board evaluation process is important to ensure the ongoing effectiveness of our Board. To that end, our ESG Committee is responsible for annually assessing the performance of the Board. As part of the evaluation, the ESG Committee reviews areas in which the ESG Committee or our management believe the Board can make a better contribution to the governance of the Company. Additionally, each of our Board committees conducts an annual self-evaluation of its performance.

We have an insider trading policy that prohibits our officers, directors and employees from purchasing or selling our securities in the open market while being aware of material, non-public information about the Company and disclosing such information to others who may trade in securities of the Company.

Our insider trading policy also prohibits our officers, directors and employees from engaging in hedging activities or other short-term or speculative transactions in the Company’s securities such as zero-cost collars and forward sale contracts. We believe that these hedging transactions would allow the persons covered by our insider trading policy to own our securities without the full risks and rewards of ownership, which could result in misalignment between our general shareholders and the individual engaging in the hedge. In addition, our insider trading policy prohibits all covered persons from pledging our securities or using them as collateral for a loan or as part of a margin account without the consent of our Board. For additional information, see “Compensation Discussion and Analysis—Other Compensation Information—Prohibition on Hedges and Pledges.”

The Board believes that it is in the best interests of the Company and its shareholders to align the financial interests of the officers of the Company and of the Board with those of the Company’s shareholders. To effect this, the Board enforces minimum stock ownership guidelines that require that the individuals noted below hold an interest in the Company’s stock as follows:

In general, the forms of equity ownership that can be used to satisfy the ownership requirements include shares held directly, unvested shares of restricted stock and vested share-settled equity awards that have been deferred. Our guidelines do not count unexercised stock options, vested and unexercised stock appreciation rights (“SARs”) and cash-settled awards, among other things, towards the ownership requirements.

Each officer or non-employee director has five years from the adoption of the policy or date of appointment, whichever is later, to attain compliance with the ownership requirement and, until a covered individual is in compliance, that individual must retain an amount equal to 60% of the net shares received since appointment as a result of the exercise, vesting or payment of any Company equity awards granted. If, for any reason, an individual’s ownership falls below the requirement, that individual is again required to retain 60% of any future awards until the ownership requirement is again attained. The 60% threshold was determined based on an estimate of the number of shares that would remain after disposing of enough shares to satisfy tax withholding requirements for the vesting of restricted shares.

Compliance with this policy is reviewed by the ESG Committee on an annual basis, and the ESG Committee may exercise its discretion in response to any violation of this policy. In addition, the Compensation Committee will take into account compliance with the requirements in determining grants of long term incentive plan awards or annual equity retainers. To date, the ESG Committee has not found any violations under the policy.

We have adopted a Code of Business Conduct and Ethics for Directors, Officers and Employees and a Code of Ethics for the Chief Executive Officer and Senior Financial Officers. Both codes are available on our website at www.VAALCO.com. Our website also includes copies of the other corporate governance policies we have adopted, including our Corporate Governance Principles, as well as the charters of our Audit, Compensation and ESG Committees. Print copies of these documents are available upon request by contacting our investor relations group.

We have not granted any waivers to our codes of ethics to any of our directors or executive officers. To the extent required by law or regulation, we intend to post any waivers or amendments to our codes of ethics on our website.

We believe that in addition to being the right thing, operating our business ethically and responsibly is the foundation of our long-term success. Social and environmental values guide how we manage our business, and allow us to help local economies thrive. In addition to the ESG matters highlighted above, we are focused on three principle values: (i) a commitment to the safety of our employees and the environment, (ii) a commitment to society and local communities, and (iii) a commitment to high ethical standards. Our Board’s experience in the oil and gas sector and Africa provides a strong foundation to oversee ESG issues facing VAALCO and our industry.

Commitment to World-Class Safety. We have the highest regard for the health and safety of our employees, our contractors and the communities where we operate. Our commitment to safe operations is foundational to our business strategy, and reflects our unwavering commitment to the highest HSE standards as an operator. In light of this commitment, we have undertaken efforts to align our safety management systems with international standards, such as ISO 45001, which is the International Organization for Standardization’s standard for management systems of occupational health, and safety published in March 2018. In addition, we regularly engage in process safety management training and have developed our own “people-based” safety program.

We foster environmental stewardship through continuous training programs, dedicated emergency environmental response capabilities and being wholly conscious of any environmental impact of our operations, including impacts on carbon emissions and biodiversity. During 2020, we undertook a comprehensive baseline study to more fully understand and manage our carbon footprint. This baseline allows us to make better and more informed decisions that will shape our carbon reduction strategy and refine targets. The baseline study comprised building a greenhouse gas emissions inventory and diagnostic across the entire operating base and asset integrity audits.

Our commitment to safety is also directly reflected in our compensation philosophy. Our Compensation Committee considers safety performance as a significant factor in determining the annual bonus payable to our NEOs. We believe that linking executive officer remuneration to safety performance helps directly incentivize our executives to instill a safety-first culture.

Commitment to Society and Local Communities. We are committed to supporting the development of the local communities where we operate. Our local workforce in Gabon comprises 93% national representation, and 19% of those serving in management roles in Gabon are female. Our local workforce in Egypt comprises 90% national representation, and 25% of our Egyptian management team is female. Within our Houston offices, 33% of our workforce is female and 20% of those in Houston serving

in management roles are female. Approximately 33% of our workforce in Canada is female, and approximately 16% of the management in Canada is female. Our company hiring practices are based on the foundation that we do not discriminate based on race, religion, color, national origin, physical disability, sex, sexual orientation or age in hiring.

We regularly support, promote and participate in a number of community initiatives in the Houston area and in the countries where we operate that involve a mix of charitable contributions, training and workforce participation. These initiatives include:

We continued to serve as a sponsor for the MISSION NISSI center in Gabon for young women who are at risk of human trafficking. In Houston, we support the Krause Children’s Center that serves young women between the ages of 12 to 17 on their road to recovery from difficult domestic situations. Our Houston employees also volunteer with Junior Achievement programs that help students realize the value of education.

Commitment to Ethics. We hold our business and employees to the highest ethical standards. Our corporate governance policies are designed to conform to both SEC guidelines and the U.K. Corporate Governance Code and are overseen by our majority independent Board. We do not tolerate bribery or corruption and we rigorously educate our employees on compliance with applicable anticorruption laws.

We believe a commitment to high ethical standards benefits all of our stakeholders, including investors, employees, customers, suppliers, governments, communities, business partners and others who have a stake in how we operate.

ESG Report. It is right, and it is necessary for our long-term success, to operate our business ethically and responsibly. This includes operating in a manner that takes into account our environmental impact. We encourage you to review the “Sustainability” section of our website, www.VAALCO.com, for details. You can also view our 2022 ESG Report there.⁽¹⁾

The current members of the Compensation Committee are Andrew L. Fawthrop, Fabrice Nze-Bekale, and Cathy Stubbs. In 2022, Bradley L. Radoff served on the Compensation Committee until his resignation on January 28, 2022, at which time Mr. Radoff was replaced by Mr. Nze-Bekale.

None of our executive officers serves as a member of the compensation committee of any other company that has an executive officer serving as a member of our Compensation Committee or our Board. None of our executive officers serves as a member of the board of directors of any other company that has an executive officer serving as a member of our Compensation Committee. There are no Compensation Committee interlocks or relationships with any company our directors are affiliated with.

Our Board has three standing, regular committees: the Audit Committee, the Compensation Committee and the ESG Committee. Each has a charter that governs the duties and responsibilities of the committee, which is available on VAALCO’s website at www.VAALCO.com. Each committee is operated according to the rules of the NYSE and each committee member meets the applicable independence requirements of the NYSE and SEC. Our Board has also determined that each member of the Compensation Committee constitutes a “non-employee director” for purposes of Rule 16b-3 promulgated under the Exchange Act.

In addition to our three regular committees, the Board has a Strategic Committee that was formed to oversee evaluations of certain strategic alternatives for our Company. In 2022, the Board formed a Technical and Reserves Committee to oversee the review, evaluation and reporting of the Company’s oil, gas and NGL reserves and production.

Each of our Board committees reports to the Board. The composition, duties and responsibilities of our Board committees are described below.

The Board has determined that each Audit Committee member is financially literate within the meaning of NYSE listing standards. In addition, the Board has determined that Ms. Stubbs qualifies as an “audit committee financial expert” in accordance with SEC rules and the professional experience requirements of the NYSE. Designation as an “audit committee financial expert” does not impose upon the designee any duties, obligations, or liabilities that are greater than those imposed on other members of the Audit Committee and the Board, and such designation does not affect the duties, obligations, or liability of any other member of the Audit Committee or the Board.

Under the terms of its charter, the Audit Committee is authorized to engage independent advisors at the Company’s expense for advice on any matters within the scope of the Audit Committee’s duties. The Audit Committee may also form subcommittees and delegate its authority to those subcommittees as it deems appropriate.

Under the terms of its charter, the Compensation Committee is authorized to engage independent advisors at the Company’s expense for advice on any matters within the scope of the Compensation Committee’s duties. The Compensation Committee may also form subcommittees and delegate its authority to those subcommittees as it deems appropriate.

Under the terms of its charter, the ESG Committee is authorized to engage independent advisors at the Company’s expense for advice on any matters within the scope of the ESG Committee’s duties. The ESG Committee may also form subcommittees and delegate its authority to those subcommittees as it deems appropriate.

We do not maintain a separate charter governing the duties and responsibilities of the Strategic Committee. Instead, our Board delegates authority to the Strategic Committee to take such actions as are deemed necessary or appropriate by the Board. The Strategic Committee is primarily responsible for reviewing strategic alternatives available to the Company, including potential transactions involving business combinations, recapitalizations, asset or securities sales and other extraordinary transactions, and making recommendations to the Board.

Under the terms of its charter, the Technical and Reserves Committee is authorized to engage independent advisors at the Company’s expense for advice on any matters within the scope of the Technical and Reserves Committee’s duties. The Technical and Reserves Committee may also form subcommittees and delegate its authority to those subcommittees as it deems appropriate.

In 2022, there were 31 Board meetings, five Audit Committee meetings, four Compensation Committee meetings, seven ESG Committee meetings, nine Strategic Committee meetings, and one meeting of the Technical and Reserve Committee. In 2022, each director attended at least 75% of the meetings of the Board held during their period of service, other than Mr. Cook, who attended 66%, or two of the three, Board meetings held while he served as a director. In 2022, each committee member

attended at least 75% of the meetings of each committee he or she was on. We do not have a policy on whether directors are required to attend the Annual Meeting. Messrs. Fawthrop and Maxwell and Ms. Stubbs attended the 2022 Annual Meeting of Shareholders.

Pursuant to our Corporate Governance Principles, executive sessions of non-management directors are to be held, at a minimum, in conjunction with each regularly scheduled Board meeting. Any director can request that an executive session be scheduled. The sessions are scheduled and presided over by the Chairman of the Board.

All of our employees and directors are expected to avoid situations and transactions that conflict with their ability to act in the best interests of VAALCO. This policy is included in our Code of Business Conduct and Ethics. Each director and executive officer is instructed to inform the Chairman of the Board and the Corporate Secretary when confronted with any situation that may be perceived as a conflict of interest. In addition, at least annually, each director and executive officer completes a detailed questionnaire specifying any business relationship that may give rise to a conflict of interest. The Audit Committee reviews all relevant information, including the amount of all business transactions involving VAALCO and entities with which the director is associated, and makes recommendations, as appropriate, to the Board as to whether a transaction involving an actual or perceived conflict of interest should be permitted.

Under SEC rules, related party transactions are those in which the Company is a participant, the amount exceeds $120,000, and in which any “related person” has a direct or indirect material interest. Executive officers, directors, 5% beneficial owners of our common stock, and their respective immediate family members are considered to be related parties under SEC rules. Any related party transactions that occurred since the beginning of fiscal year 2022, and any currently proposed transactions, are required to be disclosed in this Proxy Statement. Other than with respect to Mr. Pruckl, the Company’s Chief Operations Officer, as discussed below, we are not aware of any related party transactions during 2022. The Audit Committee reviews and approves or ratifies any related person transaction that is required to be disclosed. In the course of its review and approval or ratification of a disclosable related person transaction, the Audit Committee considers:

Any member of the Audit Committee who is a related person with respect to a transaction under review may not participate in the deliberations or vote for approval or ratification of the transaction.

On March 14, 2022, the Company entered into a professional services agreement (the “Pruckl Services Agreement”) with J. Pruckl Holdings Ltd. (“Pruckl Holdings”), an entity owned and controlled by James Pruckl, the son of Thor Pruckl, our Chief Operating Officer. Under the Pruckl Services Agreement, Pruckl Holdings designates James Pruckl to render project contract engineering services for the Company that include pipeline in-line data analysis, jacket structures and subsea pipeline inspections and other related services in connection with the Etame Marin concession located at offshore Gabon in West Africa. As of December 31, 2022, the Company had been invoiced approximately $177 thousand in the aggregate and approximately $33 thousand was still outstanding under the Pruckl Services Agreement.

Our compensation for non-employee directors is designed to be competitive with our peer group and to link rewards to business results and shareholder returns to align our directors’ interests with those of our shareholders. We do not have a retirement plan for non-employee directors. Mr. Maxwell, the only employee who serves as a director, is not paid additional compensation for his service on the Board or any committee.

The Compensation Committee is responsible for evaluating and recommending to the independent members of the Board the compensation for non-employee directors, and the independent members of the Board set the compensation. As part of this review, the Compensation Committee considers the significant amount of time expended, and the skill level required, by each non-employee director in fulfilling his or her duties on the Board, each director’s role and involvement on the Board and its committees, and market data compiled from the Company’s peers and competitors.

The following table sets forth our policy with respect to the annual cash compensation payable to our non-employee directors in 2022:

Effective October 1, 2022, at the recommendation of the Compensation Committee, the Board resolved to increase the cash compensation to the Chairman of the Board from $25,000 to $100,000; to increase the cash compensation of the Audit Committee Chair from $15,000 to $20,000; and to increase the cash compensation to each of the Compensation Committee Chair and the ESG Committee Chair from $10,000 to $15,000.

Under our director compensation policy, each member of the Board is also entitled to an annual equity award in an amount determined by the independent members of the Board. For 2022, our independent directors determined to grant each then non-employee member of the Board equity awards with an aggregate grant date fair market value of $8.31, consisting of 10,229 shares of restricted common stock, with such restricted common stock vesting on the earlier of the first anniversary of the date of grant or the first annual meeting of shareholders following the date of grant (but in no event less than 50 weeks following the date of grant), subject to a continuous service requirement.

We also reimburse directors for reasonable out-of-pocket expenses incurred in connection with the performance of their duties as directors, including travel expenses in connection with Board and committee meetings. We do not provide any perquisites to our directors.

The following table shows compensation paid to each of our non-employee directors who served during the fiscal year ended December 31, 2022.

The Audit Committee has selected BDO USA, LLP (“BDO”) as the independent registered public accounting firm to audit the consolidated financial statements and the internal control over financial reporting of VAALCO and its subsidiaries for 2023. The Board has endorsed this appointment. BDO has served as the Company’s independent registered public accounting firm since 2016. Representatives of BDO will not be present at the Annual Meeting and available to respond to questions.

Although shareholder approval of this appointment is not required by law and is not binding on the Company, if our shareholders do not ratify the appointment of BDO, the Audit Committee will consider the failure to ratify the appointment when appointing an independent registered public accounting firm for the following year. Even if our shareholders ratify the appointment of BDO, the Audit Committee may, in its sole discretion, terminate BDO’s engagement and direct the appointment of another independent registered public accounting firm at any time during the year.

Information regarding fees billed by BDO during 2022 and 2021 is set forth below in “Fees Billed by Independent Registered Public Accounting Firm.”

The approval of the ratification of the appointment of BDO as the Company’s independent registered public accounting firm requires a majority of votes cast affirmatively or negatively at the Annual Meeting.

For this proposal, abstentions will have no effect on the vote. Broker non-votes are not applicable to the proposal because your broker has discretionary authority to vote your shares of common stock in the absence of affirmative instructions from you with respect to this proposal.

The Board recommends that shareholders vote “FOR” the ratification of the appointment of BDO as the Company’s independent registered public accounting firm.

The proxy holders will vote all duly submitted proxies “FOR” the ratification of the appointment of BDO as the Company’s independent registered public accounting firm unless duly instructed otherwise.

Aggregate fees for professional services billed by BDO to VAALCO during 2022 and 2021 are as follows:

The table above does not include certain unbilled fees of BDO that, as of the date of this proxy statement, are the subject of negotiation with the Company.

For the year ended December 31, 2022, audit fees paid by us to BDO were for the integrated audit of our annual financial statements, registration statements, regulatory filings in the UK, and the review of our quarterly financial statements. For the year ended December 31, 2021, audit fees paid by us to BDO were for the audit of our annual financial statements, registration statements, and the review of our quarterly financial statements.

For the year ended December 31, 2022, audit-related fees paid by us to BDO were for the agreed upon procedures. For the year ended December 31, 2021, audit-related fees paid by us to BDO were for the financial statement audits of an acquired business and agreed upon procedures. There were no tax fees or other fees paid by us to BDO for the years ended December 31, 2022 and 2021.

Our Audit Committee has in place pre-approval policies and procedures related to the provision of audit and non-audit services. Under these procedures, the Audit Committee pre-approves both the type of services to be provided by our independent registered public accounting firm and the estimated fees related to these services. During the approval process, the Audit Committee considers the impact of the types of services and the related fees on the independence of our independent registered public accounting firm. The services and fees must be deemed compatible with the maintenance of the independent registered public accounting firm’s independence, including compliance with SEC rules and regulations. Throughout the year, the Audit Committee also reviews any revisions to the estimates of audit and non-audit fees initially approved.

During 2022 and 2021, all audit services provided by BDO were pre-approved by the Audit Committee. In addition, during 2022 and 2021, no fees for services outside the audit or review that exceeded the waiver provisions of 17 CFR 210.2-01(o)(7)(i)(c) were approved by the Audit Committee.

The Board has determined that all current Audit Committee members are (i) independent, as defined in Section 10A of the Exchange Act, (ii) independent under the standards set forth by the NYSE and (iii) financially literate. In addition, Ms. Stubbs qualifies as an audit committee financial expert under the applicable rules adopted under the Exchange Act. The Audit Committee is a separately designated standing committee of the Board, as defined in Section 3(a)(58)(A) of the Exchange Act and operates under a written charter approved by the Board, which is reviewed annually.

Management is responsible for our system of internal controls and the financial reporting process. The Audit Committee is responsible for monitoring (i) the integrity of our financial statements, (ii) our compliance with legal and regulatory requirements, and (iii) the independence and performance of our independent registered public accounting firm.

The Audit Committee has reviewed and discussed with management and the independent registered public accounting firm the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2022, including a discussion of the quality, not just the acceptability, of the accounting principles applied, the reasonableness of significant judgments and the clarity of disclosures in the consolidated financial statements. Management represented to the Audit Committee that our consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America. The Audit Committee discussed with the independent registered public accounting firm the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC.

Our independent registered public accounting firm also provided to the Audit Committee the written disclosure required by applicable rules of the PCAOB regarding the independent registered public accounting firms’ communications with the Audit Committee concerning independence. The Audit Committee discussed with the independent registered public accounting firm regarding the firm’s independence.

Based on the Audit Committee’s discussions with management and the independent registered public accounting firm, and the Audit Committee’s review of the representations of management and the report of the independent registered public accounting firm to the Audit Committee, the Audit Committee recommended that the Board include the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC.

The forgoing information contained in this Audit Committee Report and references in this Proxy Statement to the independence of the Audit Committee members shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

Pursuant to Section 14A(a)(1) of the Exchange Act, we are asking our shareholders to approve, on an advisory or non-binding basis, the compensation of our NEOs as disclosed in this Proxy Statement. The vote on this matter is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the policies and practices described in this Proxy Statement.

Our Board and the Compensation Committee believe that we maintain a compensation program that is tied to performance, aligns with shareholder interests, and merits shareholder support. Accordingly, we are asking our shareholders to approve the compensation of our NEOs as disclosed in this Proxy Statement by voting FOR the following resolution:

Although this vote is non-binding, the Board and the Compensation Committee value the views of our shareholders and will review the results. If there are a significant number of negative votes, we will take steps to understand those concerns that influenced the vote, and consider them in making future decisions about executive compensation.

We believe that our NEO compensation program described throughout the “Compensation Discussion and Analysis” aligns the interests of our executives with those of our shareholders. Our compensation programs are designed to provide a competitive level of compensation to attract, motivate and retain talented and experienced executives and reward our NEOs for the achievement of short- and long-term strategic and operational goals and increased total shareholder return (“TSR”), while at the same time avoiding the encouragement of unnecessary or excessive risk-taking. We believe we have implemented a number of executive compensation practices and policies that reflect sound governance and promote the long-term interests of our shareholders.

The approval, on an advisory basis, of the compensation of our NEOs requires the vote of a majority of votes cast affirmatively or negatively.

For this proposal, abstentions and broker non-votes will have no effect on the vote. If you own your shares through a broker, you must give the broker instructions to vote your shares with respect to this proposal. Otherwise, your shares will not be voted. However, if you submit a proxy card, any proposals for which you do not provide instructions will be voted in accordance with the Board’s recommendation.

The Board recommends that shareholders vote “FOR” the approval, on an advisory basis, of the compensation of our named executive officers.

The following table provides information with respect to current executive officers of VAALCO.

The following is a brief description of the background and principal occupation of each current non-director executive officer:

The biography of Mr. Maxwell, who currently serves as a director, is set forth above under “Proposal No. 1—Election of Directors—Director Nominee Information and Qualifications.”

Overview. The purpose of this Compensation Discussion and Analysis is to provide a clear understanding of our compensation philosophy and objectives, compensation-setting process, and 2022 compensation programs and decisions for our NEOs. For 2022, our NEOs were:

Throughout 2022, we continued to deliver operationally and generate significant cash flow. Our 2022 results firmly place VAALCO in a financially stronger position, poised to execute accretive growth initiatives in the future. Key highlights of our business and our performance in 2022 and the first part of 2023 include:

We strive to be a leading independent exploration and production company in Africa and Canada focused on supporting sustainable shareholder returns and growth. We have no bank debt and remain firmly focused on our strategic vision of achieving significant shareholder returns by maximizing the value of, and free cash flow from, our existing resource base, coupled with highly accretive inorganic growth opportunities.

Our executive compensation program is intended to attract, retain and motivate high caliber executives who are committed to supporting the growth of our business, and to align our executives’ goals with those of our shareholders. Our compensation program is designed:

It is the intention of the Compensation Committee to compensate our NEOs competitively, and to align performance-based incentives with shareholder interests. The Compensation Committee retains complete authority to determine the actual amounts paid to our NEOs.

Our executive compensation program includes a number of shareholder-friendly features that align with contemporary governance practices, promote alignment with our pay-for-performance philosophy and mitigate risk to our shareholders. The table below summarizes our key executive compensation practices, including practices that we do not follow:

We hold an advisory vote on executive compensation annually and actively review the results of these votes when we make compensation decisions. At our annual meeting of shareholders in 2022, the advisory proposal on our 2021 executive compensation program received approximately 63% support.

In light of this shareholder support, our Compensation Committee did not make any changes to the structure of our executive compensation program. The Compensation Committee will continue to consider shareholder feedback, input from our independent compensation consultant and the outcomes of future say-on-pay votes when assessing our executive compensation programs and policies and making compensation decisions for our NEOs.

Designing Compensation to Reward Pay for Performance. Our compensation program is designed to reward performance that contributes to the achievement of our business strategy on both a short-term and long-term basis. In addition, we reward qualities such as:

We also take into account labor market demands and tailor compensation to retain our talent. We believe that we ask more of a smaller group of leaders, with each executive having a broader role and impact than they otherwise might at other companies.

Elements of Our Compensation Program. To accomplish our objectives, our compensation program is comprised of four elements: base salary, cash bonus, long-term equity-based compensation and benefits. The table below sets forth a summary of the principal elements of our compensation program and why we believe each form of compensation fits within our overall compensation philosophy:

Our NEOs are entitled to participate in the standard employee benefit plans and programs generally available to our employees, including our 401(k) plan with matching contributions.

How We Determine Each Element of Compensation. In designing the Company’s executive compensation policies, the Compensation Committee considers pay as a whole, and there is no specific weight given to any particular component of compensation. The Compensation Committee reviews competitive market compensation data but does not set NEO compensation at any pre-determined percentile of competitive data that it reviews.

In practice, the total direct compensation opportunity for each of our NEOs is based on many factors including competitive market data, the executive’s experience, importance of the role within the Company and the executive’s contribution to the Company’s long-term success. In addition, the Compensation Committee considers various measures of Company and industry performance, including Adjusted EBITDAX, Adjusted Net Income, revenue and cash flow from operations and other measures, in order to determine earned compensation for each of our NEOs.

Role of the Compensation Committee. The Compensation Committee charter contains several important mandates: (i) to review and approve corporate goals and objectives relevant to the compensation of our executives; (ii) to evaluate our executives’ performance in light of those goals and objectives; (iii) to determine and approve our executives’ compensation level, including annual base salary, annual incentives and long-term incentives, based on such evaluation; and (iv) to exercise oversight with respect to the Company’s compensation philosophy, incentive compensation plans and equity-based plans.

Role of the Independent Consultant. For 2022, the Compensation Committee continued to engage Meridian Compensation Partners, LLC (“Meridian”) as its independent consultant on executive compensation. Meridian’s engagement is to act as the Compensation Committee’s independent advisor on executive compensation, and in this role, Meridian assisted the Compensation Committee with requests from time-to-time throughout the year. The Compensation Committee did not direct Meridian to perform its services in any particular manner or under any particular method, and all decisions with respect to our executives compensation are made by the Compensation Committee. The Compensation Committee has the final authority to retain and terminate the compensation consultant and evaluates the consultant annually. The Company has no relationship with Meridian (other than the relationship undertaken by the Compensation Committee) and, after consideration of NYSE listing standards pertaining to the independence of compensation consultants, the Compensation Committee determined that Meridian is independent. Meridian does not provide any additional services to the Company.

Role of Management. In the course of its review, the Compensation Committee considered the advice and input of the Company’s management. Specifically, the Compensation Committee leverages the Company’s management, human resources department and legal department to assist the Compensation Committee in the timely and cost-effective fulfillment of its duties. The Compensation Committee solicits input from the Chief Executive Officer and human resources department regarding compensation policies and levels. The legal department assists the Compensation Committee in the documentation of compensation decisions. The Compensation Committee does not permit members of the Company’s management to materially participate in the determination of their particular compensation, nor does the Compensation Committee permit the Chief Executive Officer or other members of management to be present for those portions of Compensation Committee meetings during which the particular member of the management team’s performance and compensation are reviewed and determined.

The Compensation Committee meets at least annually to review the base salaries of our executive officers.

In setting base salaries, the Compensation Committee seeks to maintain stability and predictability from year-to-year, and usually makes percentage increases based on its view of the cost of living and competitive conditions for executive talent in the market. The Compensation Committee also considers subjective factors in setting base salary, including individual achievements, our performance, level of responsibility, experience, leadership abilities, increases or changes in duties and responsibilities and contributions to our performance.

We believe that a significant portion of an NEO’s compensation should be variable, based on the performance of the Company. Accordingly, base salary is a minority portion of the overall total compensation of the NEOs.

The following table provides information concerning the annual base salary of each of our NEOs:

Our NEOs, senior management and other non-management personnel have the potential to receive a meaningful cash bonus if annual financial and operational objectives or goals, pre-established by the Compensation Committee, are met and the Board approves the payment of bonuses.

In determining the incentive bonuses earned, the Compensation Committee considers both Company and individual performance and, in its discretion, any other context or unforeseen circumstances that contributed to overall performance. Each NEO has a pre-established target bonus opportunity, defined as a percentage of salary. Such executives can earn between 0% and 200% of that target opportunity based on Company and individual performance. The target bonus percentages for 2022 were as follows:

The payout of each executive target bonus is based on Company performance and on individual performance.

Early in the fiscal year, the Compensation Committee sets various performance targets for corporate financial and non-financial measures such as oil and gas production levels, operating expenses, safety performance, resource additions and TSR for the current year. These performance measures are based in part on, and intended to align with, the annual operating budget, the financial forecast and the business plan approved by our Board shortly before the start of our fiscal year.

The Compensation Committee assigns a different weight to each performance goal based on the relative importance of each performance target in light of the Company’s overall strategic goals for the year. For our NEOs, the overall achievement of VAALCO’s non-executive scorecard is a performance measure under the executive officer scorecard.

Executive scorecards are evaluated on an individual basis with respect to the individual component of each executive officer’s incentive bonus, and an enterprise-wide basis with respect to the corporate component of each executive officer’s bonus.

In early 2022, the Company established the performance goals set forth below as the components of the executive scorecard for 2022. A description of each performance goal, and the Company’s results with respect to each goal is set forth below:

After the Company’s performance against the goals set forth above is calculated, the total achievement is subject to a TSR modifier based on a comparison of the Company’s TSR against a peer group identified by the Company’s management. For 2022, the Company’s TSR compared to the peer group resulted in an overall modifier of 150%. After applying the TSR modifier, the Company’s total score against the corporate performance component of the annual incentive bonuses was 100.73%.

With respect to the individual performance component of the Company’s annual incentive bonuses, the Compensation Committee evaluates the performance of each executive officer in light of the goals set forth in the executive scorecard, taking into account the specific duties and responsibilities of each officer. In addition, the Compensation Committee considers each executive officer’s performance with respect to his or her critical duties, as well as the achievements each executive officer made during the year towards the Company’s strategic and financial goals. Finally, the Compensation Committee considers self-assessments from each executive officer and the Chief Executive Officer’s feedback concerning his reports.

After combining the corporate performance and individual performance components of the annual incentive bonuses, our Compensation Committee determined that our NEOs would receive the following bonuses for their performance during 2022:

Our annual incentive bonuses were paid in March 2023.

Overview and 2022 Equity Compensation. We believe formal long-term equity incentive programs are valuable compensation tools and are consistent with the compensation programs of the companies in our peer group.

We maintain (i) the 2020 Long Term Incentive Plan (as amended, the “2020 LTIP”), which permits the grant of stock, options, restricted stock, restricted stock units, phantom stock, SARs and other awards, any of which may be designated as performance awards or be made subject to other conditions and (ii) the VAALCO Energy, Inc. 2016 Stock Appreciation Rights Plan (the “SAR Plan”), which permits the grant of cash settled SARs that give the holder the right to receive an amount of cash equal to the difference between the exercise price and the fair market value of the SAR on the date of exercise. We believe that long-term equity-based incentive compensation is an important component of our overall compensation program because it:

The Compensation Committee administers our long-term incentive plans. The Committee confirms eligible recipients, determines grant type timing, assigns the number of shares subject to each award, fixes the time and manner in which awards are exercisable and sets exercise prices and vesting and expiration dates.

For compensation decisions regarding the grant of equity compensation to executive officers, our Compensation Committee considers recommendations from our Chief Executive Officer. Typically, awards vest over multiple years, but the Compensation Committee maintains the discretionary authority to vest the equity grant immediately if the individual situation merits, subject to the terms and conditions of the applicable plan documents. In recent years, the Compensation Committee has generally granted awards that vest ratably over a three-year period. In the event of a change of control, all outstanding equity-based awards will immediately vest.

In general, our Compensation Committee attempts to provide a mix of awards to our executives that is appropriately balanced between incentivizing performance and retention. For 2022, our Compensation Committee determined to grant our NEOs a mix of restricted stock and stock options with performance hurdles, thereby encouraging high-level performance by our executives and aligning their interests with those of our shareholders, and awards of restricted stock with service-based vesting requirements that vest ratably over three years, promoting long-term retention of our NEOs.

Equity awards are generally granted to our NEOs and other employees on an annual basis. The Compensation Committee determines the actual award values at its discretion based on individual factors including the individual’s previous and expected future performance, level of responsibilities, retention considerations and internal parity. Under the employment agreement with Mr. Silver, he was entitled to receive an annual equity grant consisting of stock options or other incentive awards with a value of up to 200% of his base salary, all as determined by the Compensation Committee in its discretion.

Based on these factors, the Compensation Committee determined to grant the following equity incentive awards to our NEOs in 2022:

The vesting of our equity awards is generally contingent on continued service. However, vesting of awards is generally accelerated in the event of a change of control. For additional information, see “Executive Compensation—Potential Payments upon Termination or Change in Control” below.

The equity awards granted to our NEOs are subject to forfeiture in accordance with the terms of the grant agreements if the executive terminates employment before the award vests, the executive is terminated for cause, or the executive otherwise fails to comply with the terms of his or her award agreement. As noted above, Mr. Silver’s awards were forfeited in connection with his separation from the Company in November 2022. Pursuant to VAALCO’s 2020 LTIP, Mr. DesAutels’ awards were not forfeited upon his cessation of being an employee of the Company as a result of his becoming a Contractor (as defined in the LTIP) on March 14, 2023.

We provide company benefits that we believe are standard in the industry to all of our employees, including our NEOs. These benefits consist of a group medical and dental insurance program for employees and their qualified dependents, the majority of which is currently paid for by the Company, and a 401(k) employee savings plan. We also currently make matching contributions to our 401(k) plan of up to 6% of each participant’s salary. The Company pays all administrative costs to maintain the 401(k) plan. We do not provide employee life insurance amounts surpassing the Internal Revenue Service maximum.

We utilize employment agreements to retain and attract highly qualified executive officers in a competitive market. We currently have employment agreements with Mr. Maxwell, our Chief Executive Officer, and Mr. Bain, our Chief Financial Officer. The employment agreement with Mr. Silver, our former Executive Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary, was terminated in connection with his separation from the Company. See “—Severance and Change in Control Payments” below for additional information.

George W. M. Maxwell — In connection with the appointment of Mr. Maxwell as our Chief Executive Officer, we entered into an employment agreement effective as of April 19, 2021, which was amended on January 27, 2022 and November 1, 2022, (as amended, the “Maxwell Employment Agreement”), pursuant to which Mr. Maxwell is entitled to receive an annual base salary of $550,000. The Maxwell Employment Agreement also provides that Mr. Maxwell is eligible to receive an annual cash bonus with a target percentage equal to 100% of his base salary and stock options and other long-term incentive awards up to 150% of his base salary. Pursuant to the Maxwell Employment Agreement, the Company pays Mr. Maxwell $22,000 per year for health benefits and $17,000 per year for pension benefits and provides other customary employment benefits, including paid vacation and sick leave.

Ronald Y. Bain — In connection with the appointment of Mr. Bain as Chief Financial Officer, we entered into an employment agreement with Mr. Bain effective as of June 18, 2021, which was amended on January 27, 2022 and November 1, 2022 (as amended, the “Bain Employment Agreement”). Pursuant to the Bain Employment Agreement, Mr. Bain is entitled to receive an annual base salary of $400,000. The Bain Employment Agreement also provides that Mr. Bain is eligible to receive an annual cash bonus with a target percentage equal to 75% of his base salary and stock options and other long-term incentive awards up to 75% of his base salary. Pursuant to the Bain Employment Agreement, the Company pays Mr. Bain $22,000 per year for health benefits and $17,000 per year for pension benefits, and provides other customary employment benefits including paid vacation and sick leave.

Michael G. Silver — On May 25, 2021, the Company entered into an employment agreement with Mr. Silver (the “Silver Employment Agreement”), which superseded and replaced the change in control agreement between the Company and Mr. Silver dated May 2, 2019. Pursuant to the Silver Employment Agreement, Mr. Silver was entitled to receive a minimum annual base salary of $330,000. The Silver Employment Agreement also provided that Mr. Silver was eligible to receive an annual cash bonus in an amount to be determined by the Compensation Committee, based on performance goals established by the Compensation Committee and with a target percentage equal to 50% of his base salary. Mr. Silver was eligible to receive stock options and other incentive awards on a basis no less favorable than the process and approach used for the Company’s other senior executives, and his annual long-term incentive award was up to seventy-five percent (75%) of his base salary. In addition, Mr. Silver was entitled to other customary employment benefits, including reimbursement for business and entertainment expenses and paid vacation.

On August 30, 2022, we entered into the First Amendment to Amended and Restated Executive Employment Agreement with Mr. Silver (the “Amended Silver Employment Agreement”), which amended the Silver Employment Agreement, and provided that Mr. Silver’s employment with the Company would terminate five (5) calendar days after the earlier of (i) the consummation of the business combination with TransGlobe; (ii) the termination of the arrangement agreement with TransGlobe in accordance with its terms; or (iii) a date as may be mutually agreed by the Company and Mr. Silver. Under the Amended Silver Employment Agreement, (i) Mr. Silver’s employment from Company terminated without Good Reason, as defined in the Silver Employment Agreement, (ii) Mr. Silver was not eligible for or entitled to receive severance or termination benefits under the Silver Employment Agreement, other than the Retention Bonus and Minimum Payments described below, and (iii) Mr. Silver waived any right to terminate his employment with the Company for Good Reason (as defined under the Silver Employment Agreement). In accordance with the terms of the Amended Silver Employment Agreement, Mr. Silver’s employment with the Company terminated on November 3, 2022 (the “Termination Date”).

In accordance with the Minimum Payments, as set forth under the Silver Employment Agreement, Mr. Silver was entitled to receive (i) the base salary earned before the Termination Date, (ii) his accrued and unused vacation days through the Termination Date and (iii) any unreimbursed reasonable business expenses that were incurred but unpaid as of the Termination Date. Additionally, pursuant to the Amended Silver Employment Agreement, Mr. Silver was entitled to receive a cash bonus equal to the product of (y) fifty percent (50%) of Mr. Silver’s base salary, multiplied by (z) a fraction, the numerator of which is the number of days from and after January 1, 2022 through the Termination Date, and the denominator of which is 365, payable by the Company, which payment is in addition to, and not in lieu of, any other bonuses, compensation and benefits to which Mr. Silver may be entitled from the Company. Mr. Silver also entered into a release that provided for certain customary covenants regarding confidentiality and non-disparagement of the Company.

We believe that employment agreements ensure continued dedication of executives in case of personal uncertainties or risk of job loss and ensure that compensation and benefits expectations are understood and satisfied. We may enter into employment agreements governing compensatory terms such as base salary, target incentive bonus percentage, annual equity target and equity grants upon hire. Employment agreements may also include specific terms regarding relocation (where appropriate), severance payments and other benefits, if any, due to the executive under various employment termination circumstances.

We believe that an important aspect of attracting and retaining qualified individuals to serve as executive officers involves providing market termination protection benefits. In May 2019 we adopted a form of change in control agreement for certain of our executives that provides for certain benefits upon a termination following a change in control. For additional information, see “Executive Compensation—Potential Payments upon Termination or Change in Control.”

As discussed above, on August 30, 2022, we entered into the Amended Silver Employment Agreement which provided for certain benefits upon his separation from the Company. For additional information, see “Executive Compensation—Employment Agreements—Michael G. Silver.”

On March 8, 2023, Mr. DesAutels and the Company entered into a separation and release agreement (the “DesAutels Separation Agreement”). Pursuant to the DesAutels Separation Agreement, Mr. DesAutels is entitled to receive (i) a cash severance payment equal to $145,917, less applicable withholdings and taxes, payable in a lump sum; and (ii) a cash payment of $98,914, which is the amount of the annual cash bonus amount that Mr. DesAutels otherwise might have received if employed through the date of payment. The DesAutels Separation Agreement provides for certain customary terms and conditions relating to separation from employment including, without limitation, releases from liability, cooperation, assistance, non-disparagement and confidentiality provisions.

On March 8, 2023, Mr. DesAutels and the Company entered into a consulting agreement, (the “DesAutels Consulting Agreement”), pursuant to which Mr. DesAutels has agreed to perform transition consulting services with respect to business development and Company’s petroleum operations for up to 13 months from the date of the DesAutels Consulting Agreement unless the DesAutels Consulting Agreement is terminated earlier. Pursuant to the DesAutels Consulting Agreement, the Company will pay Mr. DesAutels $5,000 per full month, subject to increase in the event Mr. DesAutels is required to perform the services for more than three days during any workweek, and provide for customary expense reimbursements. The DesAutels Consulting Agreement provides for customary terms and conditions relating to the provision of services from Mr. DesAutels including, without limitation, confidentiality and non-competition provisions.

Pursuant to the terms of the DesAutels Separation Agreement and the DesAutels Consulting Agreement, Mr. DesAutels will not be deemed to be terminated for purposes of equity awards granted to Mr. DesAutels in accordance with the terms of the 2020 LTIP until the termination of the DesAutels Consulting Agreement.

We do not typically provide perquisites to our NEOs that are not available to employees generally. However, pursuant to our organizational documents, we are required to indemnify, to the fullest extent permitted by applicable law, any person who was or is made, or is threatened to be made, a party, or is otherwise involved in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that he or she, or a person for whom he or she is a legal representative, is or was a director or an officer of the Company, including our NEOs.

From time to time, we may provide perquisites for recruitment or retention purposes, or in connection with a relocation.

Prohibition on Hedges and Pledges. Our insider trading policy prohibits hedging and pledging transactions and broadly applies to all directors, officers and employees of the Company. Such persons are prohibited from (i) executing transactions in Company securities that involve puts, calls or other derivative securities on an exchange or other organized market, (ii) holding Company securities in margin accounts or pledging the Company securities as collateral for loans or other obligations, without the prior consent of the Board, or (iii) engaging in hedging transactions with respect to Company securities, including trading in any derivative security, zero-cost collars, forward sale contracts, or other forms of hedging or monetization transactions, including those that allow such person to own the securities without the full risks and rewards of ownership.

Assessment of Risk. It is important to take risk into account when making compensation decisions. Our Compensation Committee has designed our compensation program for executive officers to avoid excessive risk taking. In particular, incentive awards are not locked into specific metrics, but rather, after review of performance relative to these metrics, the Compensation Committee determines final incentive awards at its discretion.

Stock Ownership Guidelines. We have adopted stock ownership guidelines that apply to our officers and directors. Pursuant to the guidelines, our directors and officers must own a multiple of their annual base salary or their cash retainer, as applicable, in our common stock or certain qualifying derivatives. For additional information, see “Corporate Governance—Stock Ownership Guidelines.”

Accounting and Tax Considerations. We may from time to time pay compensation amounts to our executive officers that are not deductible under the Internal Revenue Code of 1986 (the “Code”). Although we consider tax deductibility in the design and administration of our executive compensation plans and programs, we believe that our interests are best served by providing competitive levels of compensation to our NEOs even if it results in the non-deductibility of certain amounts under the Code.

Section 409A of the Code sets forth limitations on the deferral and payment of certain benefits. Generally, the Compensation Committee intends to administer our executive compensation program and design individual compensation components, and the compensation plans and arrangements for our employees generally, so that they are either exempt from, or satisfy the requirements of, Section 409A. Equity awards granted to our employees, including NEOs, and to our directors, have been granted and reflected in our consolidated financial statements, based upon the applicable accounting guidance, at fair market value on the grant date (and each subsequent reporting date, as applicable) in accordance with ASC Topic 718.

Recoupment Policy. We have a customary clawback policy that provides for the recoupment or forfeiture of incentive compensation paid to our executives in the event that we are required to prepare an accounting restatement due to our material noncompliance with any financial reporting requirement under the federal securities laws.

The Compensation Committee of the Company has reviewed and discussed the foregoing Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the foregoing Compensation Discussion and Analysis be included in the Company’s Proxy Statement for the 2023 annual meeting of shareholders, and also incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

The information contained in this Compensation Committee Report shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities or the Exchange Act, except to the extent that the Company specifically incorporates such information.

The following sets forth the annual compensation elements of VAALCO’s NEOs for the years ended December 31, 2022, December 31, 2021 and December 31, 2020.

The following table presents grants of plan-based awards during the fiscal year ending December 31, 2022:

The following table sets forth specific information with respect to unexercised options and unvested awards for each of our NEOs outstanding as of December 31, 2022. Except as otherwise noted in the footnotes thereto, all awards reported in the following table vest ratably over a three-year period beginning on the first anniversary of the date of grant.