Summary of VAALCO Energy Fireside Chat Company Overview - **Company**: VAALCO Energy - **Industry**: Oil and Gas Exploration - **Assets**: Located in Gabon, Egypt, Canada, Ivory Coast, and Equatorial Guinea - **Focus**: Short-cycle and long-cycle development projects, exploration prospects, and returning cash to shareholders [1][2] Key Points and Arguments Capital Expenditure (CapEx) and Production Outlook - **2025 CapEx Guidance**: Originally estimated at $270-$330 million, revised to $243 million, a 20% decrease from the original midpoint [3][4] - **Production Estimates**: NRI production midpoint increased to 16,500 BOE per day, a 6% increase from the original estimate [3] - **CapEx Savings**: Savings primarily from a softening commodity price, removal of $20 million in discretionary CapEx, and delays in drilling rigs [4][5] Production Performance - **Gabon Production**: Improved performance from the Etamé field, with significant contributions from the Ebouri well [5][6] - **Reservoir Performance**: 60% of production increase attributed to reduced back pressure and 40% to enhanced field performance [6] - **Reserve Revisions**: Anticipated significant revisions in reserves due to improved production performance, pending year-end evaluation [8] Efficiency Gains in Egypt - **Drilling Efficiency**: Completion of 14 new wells in 2025, exceeding the original plan of 8-13 wells, due to continuous rig operation and improved supply chain [9][10] - **Cost Management**: Enhanced drilling techniques and reduced downtime have allowed for more wells to be drilled with the same or lower capital [10] Gabon Drilling Program - **Upcoming Drilling**: Rig arrived on-site, with plans to spud the first well within 72-96 hours [14] - **Drilling Schedule**: Five firm wells and five optional wells planned, with a focus on minimizing rig moves [15][16] Côte d'Ivoire Developments - **FPSO Return**: Expected to return in late Q1 2026, with a 70-day plan for hookups and production restoration [27][28] - **Phase Five Development**: Targeting gross reserves of about 33 million BOE, with peak production of 27,000 BOE per day, likely impacting 2027 rather than 2026 [34] Equatorial Guinea Developments - **Venus Discovery**: Evaluating alternatives for development, including a subsea tieback to a shallower facility, which could expedite production [36][37] - **FID Timeline**: Potential for a Final Investment Decision (FID) in 2026, contingent on balancing capital expenditures [42] Strategic Focus - **Investment Strategy**: Emphasis on near-term production to enhance cash flow while balancing long-term greenfield developments [44][45] - **Longevity of Assets**: Commitment to investing in existing fields to maximize recovery and extend operational life [45][46] Operational Efficiency - **Cost Management**: Ongoing evaluation of operational costs and efficiencies, particularly in relation to FPSO upgrades and maintenance [30][31] Additional Insights - **Seismic Programs**: Planned seismic activities in Gabon to identify hydrocarbon systems and connectivity, expected to commence in late 2025 or early 2026 [25][26] - **Long-term Vision**: VAALCO aims to balance immediate cash returns with long-term growth opportunities, ensuring sustainability in operations [47][48] This summary encapsulates the key discussions and insights from the VAALCO Energy fireside chat, highlighting the company's strategic direction, operational performance, and future growth potential.

Company Overview - Vaalco Energy has been growing production since its merger with TransGlobe in 2022, transitioning from reliance on Gabonese assets to a diversified global player [1] - The company is based in Houston, Texas, and has expanded its operations beyond Gabon to include Côte d'Ivoire and Egypt [6][7] - Vaalco's stock price has fluctuated, recently rallying to nearly $8.00 per share after a strong Q-4 2023 earnings report, but has since declined to $3.33 [6] Financial Performance - The company reported a mixed Q-2 performance, which negatively impacted its stock, while Q-3 showed some optimism despite missing EPS and revenue expectations [5][6] - Vaalco trades at a low EV/EBITDA multiple of 2.8X and a low flowing barrel valuation of $19,000 per barrel [9] - The company has a 6.5% dividend yield and a small amount of long-term debt, with ongoing capital reduction and cost-cutting programs to improve cash flow [10] Production and Operations - Vaalco's production focus includes ramping up output in its Egyptian concession and Gabon, although results have been uneven due to various operational challenges [7] - The company has hedged a quarter of its Q-4 production at $60 and plans to increase this to about half, with a target of hedging 40% of daily output by 2026 [9] Market Conditions - The upstream oil and gas sector is currently facing an oversupply narrative, with crude oil prices having fallen about 30% this year [4] - Geopolitical volatility continues to influence trading, with traders maintaining long futures contracts during periods of conflict [2][3] Investment Outlook - Analysts rank Vaalco as a strong buy, with price targets set at $10.00 per share, although EPS estimates suggest potential small losses in the near term [9][21] - The company’s management is experienced in West African operations, which bodes well for future performance [20] - The upcoming drilling campaigns in Gabon, Egypt, and Côte d'Ivoire are seen as potential catalysts for growth [14][15]

Core Viewpoint - Vaalco Energy, Inc. is set to participate in an investor event hosted by Water Tower Research on December 2, 2025, focusing on potential volume growth opportunities in 2026 and beyond [1][2]. Group 1: Event Details - The investor event will feature a discussion led by Jeff Robertson, Managing Director at WTR, with George Maxwell, Vaalco's CEO, covering the company's asset portfolio and growth strategies [2]. - Key topics include the sequencing of the Gabon drilling campaign and the planning for a 2026 drilling campaign at the Baobab field offshore Côte d'Ivoire, along with production restoration following the FPSO's anticipated return in Q2 2026 [2]. Group 2: Company Overview - Vaalco Energy, founded in 1985 and incorporated in Delaware, is an independent energy company based in Houston, Texas, with a diverse portfolio of production, development, and exploration assets across multiple countries including Gabon, Egypt, Côte d'Ivoire, Equatorial Guinea, Nigeria, and Canada [3].

Core Insights - Vaalco Energy (EGY) reported its lowest production quarter due to the accumulation of costs from various projects in this quarter [2] - The company is part of a cyclical industry characterized by boom and bust cycles, requiring patience and experience for successful investment [2] Company Analysis - The recent offshore shutdown was the first project completed, contributing to the current production challenges [2] - The focus is on identifying undervalued oil and gas companies and out-of-favor midstream companies that present compelling investment opportunities [2] Industry Context - The oil and gas sector is described as cyclical, indicating that market conditions can fluctuate significantly over time [2]

Financial Data and Key Metrics Changes - In Q3 2025, the company reported net income of $1.1 million or $0.01 per share and adjusted EBITDA of $23.7 million, with NRI sales at the high end of guidance at 12,831 BOE per day [17][18] - For the first nine months of 2025, net income reached $17.2 million or $0.16 per share, and adjusted EBITDA totaled $130.5 million [5][25] - The company raised the midpoint of its full-year production and sales guidance by about 5% while reducing capital guidance by almost 20% [4][24] Business Line Data and Key Metrics Changes - NRI production was 15,405 BOE per day, and working interest production was 19,887 BOE, both at the high end of guidance [4] - Production expenses on a per BOE basis decreased by about $1, with absolute production expenses at $29.87 million, a 26% reduction quarter over quarter [20] Market Data and Key Metrics Changes - Sales decreased by 33% due to fewer liftings in Gabon, and pricing was lower by about 7% quarter on quarter [18] - The company has hedged approximately 500,000 barrels of remaining 2025 oil production with an average floor of about $61 per barrel [19] Company Strategy and Development Direction - The company aims to maintain operational excellence and consistent production across its portfolio to support organic growth initiatives [5] - Plans include significant development drilling in Côte d'Ivoire starting in 2026 and a drilling campaign in Gabon [7][10] - The company is focused on maximizing asset value and exploring accretive opportunities while managing costs effectively [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in executing projects and achieving strong results despite challenges in the commodity price environment [24][72] - The company anticipates a meaningful production uplift from major projects beginning in 2026 and into 2027 [6][7] Other Important Information - The FPSO refurbishment in Côte d'Ivoire is on track, with a 10-year license extension for CI-40 [7][8] - The company has successfully completed a semi-annual redetermination with lenders, reaffirming initial commitments of a reserves-based credit facility [22] Q&A Session Summary Question: CapEx prediction for 2025 and its implications for 2026 - Management indicated a $60 million reduction in CapEx guidance, with $20 million being a permanent reduction due to efficiency gains [30][37] Question: Potential size of South Gazala reserves - Management noted ongoing evaluations to determine the extent of oil zones and potential development opportunities in South Gazala [31][32] Question: Gabon production performance despite no recent drilling - Management attributed strong production performance to reduced back pressure and improved well performance [43][46] Question: Timetable for Côte d'Ivoire drilling program - Management confirmed the FPSO is expected to be back in production by late April to early May 2026, ahead of the drilling program [51][62] Question: Maintenance work impact on upcoming drilling campaign in Gabon - Management stated that upgrades during maintenance have prepared facilities for the upcoming drilling campaign [63]

Financial Data and Key Metrics Changes - In Q3 2025, the company reported net income of $1.1 million or $0.01 per share, with adjusted EBITDAX of $23.7 million [17][18] - For the first nine months of 2025, net income reached $17.2 million or $0.16 per share, and adjusted EBITDA totaled $130.5 million [5][25] - Production costs for Q3 2025 were $29.87 million, a 26% reduction quarter-over-quarter, with a per barrel cost of $25.24 [20] Business Line Data and Key Metrics Changes - NRI production was 15,405 BOE per day, and NRI sales were 12,831 BOE per day, both at the high end of guidance [4][18] - NRI production increased by 900 BOE per day, while sales rose by 750 BOE per day compared to previous periods [16] - The company has raised the midpoint of its full-year production and sales guidance by about 5% while reducing capital guidance by almost 20% [4][24] Market Data and Key Metrics Changes - The company experienced a 33% decrease in sales due to fewer liftings in Gabon, driven by planned maintenance [18] - Pricing was lower by about 7% quarter-on-quarter, reflecting higher volatility in the commodity price environment [18] Company Strategy and Development Direction - The company aims to maintain operational excellence and consistent production across its portfolio to support organic growth initiatives [5][24] - A focus on cost control and maximizing margins is emphasized to enhance cash flow [20][25] - The company is committed to executing a strategy that includes investing prudently and seeking accretive opportunities [24] Management's Comments on Operating Environment and Future Outlook - Management views 2025 as a transitional year, with significant production uplifts expected from major projects starting in 2026 and 2027 [6][25] - The company is optimistic about its ability to execute on upcoming projects, citing a proven track record of success [26] - Management expressed confidence in the operational performance and efficiency of the drilling program in Egypt, which has contributed positively to production [12][25] Other Important Information - The company has a 10-year extension of the license on CI-40, extending it to 2038 [7] - The FPSO refurbishment is underway, with significant development drilling expected to begin in 2026 after the FPSO returns to service [7][8] - The company has hedged approximately 500,000 barrels of 2025 oil production with an average floor price of $61 per barrel [19] Q&A Session Summary Question: CapEx prediction for 2025 and its implications for 2026 - Management indicated that about $20 million of the reduced CapEx guidance is a permanent reduction, with efficiency gains expected to continue into 2026 [30][37] Question: Potential size of South Gazala reserves - Management is evaluating the extent of oil zones and gas depletion in South Gazala, with ongoing technical and commercial assessments [31][32] Question: Gabon production performance despite no recent drilling - Management attributed strong production performance to reduced back pressure and improved well performance following reconfiguration [43][46] Question: Timetable for Côte d'Ivoire drilling program - The drilling program is contingent on the timely arrival of the drilling unit, with all long lead items ready [55] Question: H2S wells and future expectations - Management discussed past shut-in wells and expressed optimism about future production from new wells, particularly the 5H redrill [65][66]

Financial Data and Key Metrics Changes - In Q3 2025, the company reported net income of $1.1 million or $0.01 per share and adjusted EBITDA of $23.7 million, with NRI sales at 12,831 BOE per day, which was at the high end of guidance [17][18][24] - For the first nine months of 2025, the company achieved net income of $17.2 million or $0.16 per share and adjusted EBITDA of $130.5 million, despite Côte d'Ivoire being offline [5][25] - The company raised the midpoint of its full-year production and sales guidance by about 5% while reducing capital guidance by almost 20% [4][24] Business Line Data and Key Metrics Changes - NRI production was reported at 15,405 BOE per day, with working interest production at 19,887 BOE, both meeting or exceeding guidance [4][16] - Production expenses on a per BOE basis decreased by about $1, while absolute production expenses were $29.87 million, a 26% reduction quarter over quarter [19][20] - The company successfully completed a planned full-field maintenance shutdown in Gabon, contributing to strong production uptime [8][10] Market Data and Key Metrics Changes - The company experienced a 33% decrease in sales due to fewer liftings in Gabon, while pricing was lower by about 7% quarter on quarter [18] - The company has hedged approximately 500,000 barrels of remaining 2025 oil production with an average floor of about $61 per barrel [19] Company Strategy and Development Direction - The company aims to maintain operational excellence and consistent production across its portfolio to support organic growth initiatives [5][24] - The company is focused on executing projects in its enhanced portfolio, with multiple major projects anticipated to grow production and reserves significantly [15][24] - The company is exploring more efficient development opportunities through subsea development in Equatorial Guinea [12][56] Management's Comments on Operating Environment and Future Outlook - Management indicated that 2025 is a transitional year, with significant production uplift expected from major projects starting in 2026 and 2027 [5][6] - The company remains confident in its ability to execute on upcoming projects, supported by a proven track record of success [25][26] - Management expressed optimism about the operational performance in Egypt, which has contributed positively to production and cost efficiency [11][25] Other Important Information - The company reported unrestricted cash of $24 million at the end of Q3 2025, with collections from the Egyptian General Petroleum Corporation totaling over $103.6 million since January 2025 [20][21] - The company returned $6.7 million through dividends to shareholders, maintaining a dividend yield of around 7% [23][25] Q&A Session Summary Question: CapEx prediction for 2025 and its implications for 2026 - Management indicated that about $60 million was removed from CapEx guidance, with $20 million being discretionary CapEx and a $10 million increase in CDI CapEx [29][30] Question: Efficiency gains in Egypt and their sustainability - Management confirmed that efficiency gains in Egypt are expected to be retained, leading to lower costs for drilling in 2026 [34] Question: Gabon production performance despite no drilling for two years - Management attributed the strong production performance to significant reductions in back pressure and improved well performance [41][42] Question: Timetable for Côte d'Ivoire drilling program - Management confirmed that the FPSO is expected to be back on production by late April or early May 2026, ahead of the drilling program [50][61] Question: H2S wells and their production volumes - Management noted that three wells were shut in back in 2014, with production levels around 6,000 to 8,000 BOE per day, and expressed optimism about future redrills [65][66]

Q3 2025 Supplemental Information Profitably and Sustainably Growing Value November 2025 Q3 2025 Supplemental Information: Profitably and Sustainably Growing Value November 2025 Forward Looking Statements Safe Harbor This presentation of VAALCO Energy, Inc. ("Vaalco" or the "Company") includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to ...

Financial Performance - Vaalco Energy reported a quarterly loss of $0.1 per share, missing the Zacks Consensus Estimate of a loss of $0.04, and compared to earnings of $0.08 per share a year ago, representing an earnings surprise of -150.00% [1] - The company posted revenues of $61.01 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 2.39%, and a significant decline from year-ago revenues of $140.33 million [2] - Over the last four quarters, Vaalco Energy has surpassed consensus EPS estimates just once and topped consensus revenue estimates two times [2] Market Performance - Vaalco Energy shares have lost approximately 10.3% since the beginning of the year, while the S&P 500 has gained 14.4% [3] - The company's earnings outlook and estimate revisions will be crucial for its stock price movement in the near term [4][6] Earnings Outlook - The current consensus EPS estimate for the coming quarter is -$0.01 on revenues of $76.3 million, and for the current fiscal year, it is $0.03 on revenues of $354.15 million [7] - The estimate revisions trend for Vaalco Energy was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Oil and Gas - Exploration and Production - International industry is currently in the top 38% of Zacks industries, suggesting that stocks in the top 50% outperform those in the bottom 50% by a factor of more than 2 to 1 [8]

Financial Performance - Net income for the three months ended September 30, 2025 was $1.1 million, a decrease of approximately 90% from $11.0 million during the same period in 2024[141]. - Net income for the nine months ended September 30, 2025 was $17.2 million, a decrease of approximately 63% from $46.8 million during the same period in 2024[161]. - Crude oil, natural gas, and NGLs revenues decreased by $79.3 million, or approximately 57%, to $61.0 million for the three months ended September 30, 2025, down from $140.3 million in 2024[142]. - Crude oil, natural gas, and NGLs revenues decreased by $89.0 million, or approximately 25%, to $268.2 million during the nine months ended September 30, 2025, from $357.3 million in 2024[162]. - Total operating costs and expenses decreased by $35.4 million (14%) to $224.0 million for the nine months ended September 30, 2025, from $259.3 million in 2024[163]. Revenue and Sales - Crude oil sales in Gabon decreased by $26.3 million to $21.3 million for the three months ended September 30, 2025, down from $47.6 million in 2024[146]. - Crude oil sales in Gabon contributed $132.0 million in revenue, a decrease of $26.8 million (17%) from $158.8 million in 2024, primarily due to lower average realized sales prices[166]. - Crude oil sales in Egypt generated $102.9 million, down $4.1 million (4%) from $107.0 million in 2024, attributed to a decrease in average realized sales price from $55.12 to $50.74 per Bbl[167]. Expenses and Costs - Production expenses decreased by $12.5 million, or approximately 29%, to $29.9 million for the three months ended September 30, 2025, compared to $42.3 million in 2024[151]. - Production expenses decreased by $11.8 million (9%) to $115.1 million in 2025, with a per barrel increase to $24.63 from $23.51 in 2024[171]. - General and administrative expenses increased by $1.9 million, or 28%, to $8.8 million for the three months ended September 30, 2025, compared to $6.9 million in 2024[154]. - General and administrative expenses increased by $5.2 million (24%) to $26.4 million in 2025, driven by higher professional service fees and salaries[174]. - Depreciation, depletion, and amortization costs decreased by $26.5 million, or approximately 56%, to $20.6 million for the three months ended September 30, 2025, from $47.0 million in 2024[153]. - Depreciation, depletion, and amortization costs decreased by $26.9 million (25%) to $79.1 million in 2025, primarily due to lower depletable costs in Gabon and Egypt[173]. Cash Flow and Financing - Net cash provided by operating activities for the nine months ended September 30, 2025, was $67.5 million, a decrease of $1.7 million compared to $69.2 million in 2024[101]. - Net cash used in investing activities increased by $94.6 million in the nine months ended September 30, 2025, primarily due to development drilling programs in Egypt and maintenance costs in Gabon and Côte d'Ivoire[102]. - Net cash provided by financing activities included $60.0 million from borrowings under the 2025 RBL Facility[103]. - As of September 30, 2025, the company had unrestricted cash of $24.0 million, which will be utilized for operations and capital expenditures[108]. Operational Activities - The company secured a drilling rig for its 2025/2026 drilling program in Gabon, expected to begin in Q4 2025[95]. - Four development wells were drilled in Egypt during Q3 2025, with three completed in the same period[97]. - The company plans to defer additional drilling in Canada to focus on lower-cost optimization projects[98]. - The Baobab FPSO in Côte d'Ivoire ceased production for refurbishment, with significant development drilling expected to begin in 2026[99]. - The company secured a rig for the 2025/26 drilling campaign at Etame, with drilling expected to begin in the fourth quarter of 2025[116]. Risk Management - The company has significant exposure to commodity price risk, particularly for crude oil, natural gas, and NGLs, with potential adverse effects on financial condition if prices remain low or decline further[187]. - A $5 decline in oil prices could lead to a non-cash impairment exceeding $100 million for certain asset groups, indicating vulnerability to commodity price fluctuations[192]. - For the nine months ended September 30, 2025, a $5 per Bbl decrease in crude oil price would decrease consolidated revenues by $33.3 million and increase operating losses by $16.0 million[193]. - The company’s primary exposure to interest rate risk is from $60.0 million of borrowings under the 2025 RBL Facility, accruing interest at 10.8% per annum[195]. Regulatory and Compliance - The company is evaluating the potential effects of the One Big Beautiful Bill Act of 2025 on its financial position, but does not anticipate any material financial impact[128]. - The company continues to monitor the evolving regulatory and trade landscape, including the impacts of U.S. tariffs on energy-related goods[125]. - The company has refined its reporting in line with the Task Force on Climate-Related Disclosures (TCFD) and is committed to transparency in sustainability efforts[135]. Commitments and Future Plans - The Merged Concession Agreement requires the company to make annual modernization payments of $10.0 million to EGPC through February 2026[118]. - The company has financial work commitments of $50.0 million for each five-year period, totaling $150 million over the 15-year license contract term in Egypt[119]. - The FPSO refurbishment is currently underway and is expected to return to service in 2026[120].