VAALCO ENERGY INC /DE/
For the period ended Mar 31, 2025. Filed May 12, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 12, 2025
EGY$5.380.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001628280-24-047305
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-12.
0000894627-25-000024
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 177 previous paragraphs and 136 current paragraphs.
73 unchanged; 37 reworded; 26 added; 53 removed; 14 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (26)
Current report
•the impact of the wide-ranging policy changes and numerous executive actions issued by the current U.S. presidential administration on topics including international trade, imposition of trade tariffs, energy resources, corporate taxes, global climate change initiatives, employment practices, corporate compliance programs, environmental regulations, as well as other matters;
Current report
•our ability to remediate our material weaknesses;
Current report
Quarterly Cash Dividends
Current report
2025 RBL Facility
Current report
On March 4, 2025, the Company and certain of its subsidiaries, entered into the 2025 Facility Agreement with The Standard Bank of South Africa Limited, Isle of Man Branch, The Standard Bank of South Africa Limited, and the other financial institutions named in the 2025 Facility Agreement, providing for the 2025 RBL Facility.
Current report
The 2025 RBL Facility has aggregate commitments of $190.0 million (the “Initial Total Commitments”) as of March 4, 2025, with an initial borrowing base of $182.0 million. The Initial Total Commitments reduce semi-annually starting from September 30, 2026. The Borrowing base amount is calculated pursuant to the 2025 Facility Agreement and redetermined on March 31 and September 30 of each year beginning June 30, 2025 and other interim triggers set out in the 2025 Facility Agreement. See Part I, Item 1, Note 11. Debt to the unaudited condensed consolidated financial statements for more information on the 2025 RBL Facility. As of March 31, 2025, the Company had no outstanding borrowings, $190.0 million of aggregate commitments, and we had $182.0 million of available borrowing capacity under the 2025 RBL Facility. In April 2025, the Company drew down $60.0 million under the 2025 RBL Facility.
Current report
Glencore RBL Facility
Current report
On March 17, 2025, in connection with the execution of the 2025 Facility Agreement, Vaalco Gabon (Etame), Inc. voluntarily delivered a notice of cancellation to Glencore Energy UK Ltd. (“Glencore”), and its security agent, related to the senior secured reserve-based revolving credit facility agreement dated May 16, 2022, as amended and restated on October 3, 2023 (as amended, the “Glencore RBL Facility”).
Current report
On March 17, 2025, no amounts were drawn under the Glencore RBL Facility, which was terminated and liens associated therewith were released effective March 18, 2025.
Current report
FPSO Acquisition
Current report
In February 2025, the Company, through the joint operating agreement operator, completed the acquisition of the FPSO in Côte d'Ivoire for a total purchase price of $20.0 million, or approximately $5.5 million net cost to the Company.
Current report
Acquisition of Interest in CI-705 Block
Current report
In March 2025, the Company farmed into the CI-705 block offshore Côte d’Ivoire. The Company is operator of the CI-705 block with a 70% working interest and a 100% paying interest through a commercial carry arrangement and is partnering with two other parties. The CI-705 block is located in the Tano basin, west of the Company's CI-40 Block, where the Baobab and Kossipo oil fields are located. The total purchase price for this transaction is approximately $3.0 million.
Current report
The Company secured a drilling rig in December 2024 in conjunction with its 2025/2026 drilling program, which is planned to begin in late 2025 to drill multiple development wells, and appraisal or exploration wells, as well as to perform workovers, with options to drill additional wells. We plan to drill the wells at both the Etame platform and at our Seent platform, and a re-drill and several workovers in the Ebouri field to access production and reserves that were previously shut in and removed from proved reserves due to the presence of hydrogen sulfide.
Current report
The start of the 2024 drilling campaign was deferred until late 2024. In Q4 2024, we completed one well. In Q1 2025, we completed an additional five wells. Four of the five wells that were completed in Q1 2025 were brought online and had an average initial production rate for the first 30 days of approximately 135 barrels of oil per day (“BOPD”). The fifth well was brought online in early Q2 2025. In addition to all new wells successfully increasing production levels, new reserves and a new production zone were discovered in the Bakr formation. The Company is reviewing several options to improve flow as the reservoir contains heavier oil.
Current report
The Company continues to perform detailed technical reviews of its newly drilled and existing wells while also continuing to work on enhancing production through a series of planned workovers and recompletions.
Current report
In 2024, Vaalco drilled and completed four 2.75 mile lateral wells in Canada. These wells continue to meet production expectations and the Company is monitoring their longer-term performance for future drilling opportunities. In 2025, Vaalco has decided to defer the drilling of additional wells in Canada to reduce the Company's overall capital expenditures.
Current report
As part of the planned dry dock refurbishment, the Baobab FPSO ceased hydrocarbon production on January 31, 2025 and the final lifting of crude oil from the FPSO took place in February 2025. The vessel departed from the field in late March 2025 and is now currently under tow to the shipyard in Dubai for the refurbishment. Significant development drilling is expected to begin in 2026 after the FPSO is expected to return to service with meaningful additions to production from the main Baobab field in CI-40, as well as a potential future development of the Kossipo field, which is also on the license.
Current report
We own a 60% working interest in an undeveloped portion of Block P offshore Equatorial Guinea where we are the designated operator. We have an existing plan of development of the Venus field discovery on Block P (the “Venus Plan of Development”), which is currently on schedule and focuses on key areas of drilling evaluations, facilities design, market inquiries and metocean review. The Company is currently targeting to make a Final Investment Decision by the end of the second quarter of 2025.
Current report
Capital Projects - In December 2024, Vaalco secured a rig for the 2025/26 drilling campaign at Etame and is currently finalizing locations and planning for the next drilling campaign, which is expected to commence in the third quarter of 2025. We currently have a 10 to 15 well drilling campaign in Egypt, where we have completed the drilling of six wells.
Current report
FPSO Maintenance – The Baobab FPSO is in transit to dry dock for planned maintenance and upgrades. It ceased hydrocarbon production as scheduled on January 31, 2025 and the final lifting of crude oil from the FPSO concluded in February 2025.
Current report
In early 2025, the new U.S. presidential administration announced wide-ranging policy changes and issued numerous executive actions on topics including international trade, energy resources, corporate taxes, global climate change initiatives, employment practices, corporate compliance programs, environmental regulations, as well as other matters. Further, the new U.S. presidential administration has indicated its intent to make structural changes to the executive branch of the federal government, including significant reductions in the federal workforce. Continuing legal challenges to many of the policy changes and executive actions are expected. Such actions may directly or indirectly impact our industry and could lead to increased regulatory uncertainty and volatility. We cannot predict how these policy changes and executive actions will be implemented and interpreted, or the ultimate effect they will have on our business, financial condition and results of operations.
Current report
Climate-Related Disclosures – On March 27, 2025, the SEC ended its defense of the final rules on climate-related disclosures, effectively withdrawing its support for the regulation. The rules, which were adopted in March 2024, require publicly traded companies to disclose climate-related risks and greenhouse gas emissions. The SEC's decision to end its defense was made after a change in administration and a shift in policy, with Acting Chairman Mark Uyeda expressing concerns about the rule's costs and intrusiveness. While the rules remain on hold pending legal challenges, the SEC's withdrawal of support signals a potential shift in direction for climate disclosure regulations.
Current report
See Part I, Item 1, Note 2. New Accounting Standards to the unaudited condensed consolidated financial statements.
Current report
Note 3. Acquisitions to the unaudited condensed consolidated financial statements for further details on the Svenska Acquisition
Current report
Credit losses and other decreased by approximately $1.8 million during the three months ended March 31, 2025 compared to the same period in 2024. The decrease in credit losses and other for the three months ended March 31, 2025, is primarily attributable to the higher allowance calculated during the first quarter of 2024 related to the Backdated Receivables, defined in Part I, Item 1, Note 10. Commitments and Contingencies to the unaudited condensed consolidated financial statements. The Backdated Receivables were settled as of March 31, 2025.
Removed paragraphs (53)
Previous report
•our ability to extend the Block CI-40 Petroleum Production Sharing Contract in Cote d'Ivoire;
Previous report
•the timing of the payment(s) from the Egyptian General Petroleum Corporation ("EGPC") to us for the difference in the historic commercial terms and the revised commercial terms applied against the production since February 1, 2020 (the “Merged Concession Effective Date”);
Previous report
Dividend Policy
Previous report
VAALCO completed its last drilling campaign in the fourth quarter of 2022. We are currently evaluating locations and planning for the next drilling campaign at Etame that is expected to occur early in 2025. In October 2022, VAALCO successfully completed its transition to a Floating Storage and Offloading vessel (“FSO”) and related field reconfiguration processes. This project provides a lower cost FSO solution that increases the storage capacity for the Etame block and improves operational performance. The Company continues to focus on operational excellence, production uptime and enhancement in 2024 to minimize decline until the next drilling campaign.
Previous report
Preventative maintenance activities on facilities and facility equipment remained at scheduled levels. Planned maintenance shutdown activities and piping external corrosion repairs were carried out on Avouma platform. Equipment reliability and availability remain at high levels.
Previous report
We have deferred 2024 drilling to work up a robust drilling program which is expected to commenced in late November 2024. We currently have a workover rig in place which has allowed us to slow decline during 2024.
Previous report
We completed the K-81 recompletion at the start of the first quarter which was a carry-over from our 2023 drilling activity. The EA-55 well, drilled in October 2023, was completed and put online in January 2024. The planned workover program for 2024 was completed for 12 wells as shown in the table below. Both wells H-22 and K-65 ST1 had sanding issues and may need sand screens fitted to achieve peak production; whereas K-85 and K-80 have come on with very strong production. Well K-84 was initially tested on Asl-G, however no notable enhancement was observed. Hence the layer was temporarily isolated for further study and the well was recompleted to Asl-D to achieve peak production from the well. The well was recently recompleted and showed significant improvement in the rate.
Previous report
Water shutoff was successful in well K-74, which improved production results. In July 2024, well K-72A was successfully recompleted, transitioning production from Asl-B formation to Asl-A2 formation. Following the recompletion, the well demonstrated an average IP-30 oil production rate of 150 (bopd) contributing to improved field performance.
Previous report
The testing of the Asl-D zone in well K-65ST was postponed, and the well was recompleted on the Asl-B zone to enhance production efficiency. Following the recompletion, well K-65ST demonstrated an average IP-30 oil production rate of 100 (bopd) highlighting its production potential.
Previous report
A summary of the Egyptian workover campaign's impact in the quarter ended September 30, 2024 is presented below:
Previous report
a) Initial Production; 30 day duration
Previous report
*Production – impacted by sand production. Possible workover with sand screen required.
Previous report
The 2024 drilling campaign commenced in January 2024 and our four planned wells in the north of the license have since been drilled. Completion of the wells was initiated in late March 2024, and were completed in April 2024. The wells were equipped and tied-in in April 2024 and early May 2024 followed by well start-up. As of September 30, 2024, all four wells were producing. A summary of the 2024 drilling campaign in Canada is presented below:
Previous report
During the three months ended September 30, 2024, three shared liftings took place in Cote d'Ivoire. In July 2024, 612,773 gross barrels were lifted or 197,474 net barrels to VAALCO. In August 2024, 681,584 gross barrels were lifted in Cote d'Ivoire or 219,630 net barrels to VAALCO. And in September, 667,880 gross barrels were lifted or 215,211 net barrels to VAALCO.
Previous report
As VAALCO has a non-operated position, the operator continues to work with Modec International, Inc. (“Modec”), the operator of the floating production storage and offloading vessel (the “FPSO”), on the FPSO dry dock project (off station 2025) throughout the third quarter of 2024. Negotiations with key vendors have matured for the critical path activities for the dry dock project which remains on target for 2025. This includes selection of the disconnect and reconnect contractor, and support for the revised yard bid from Dubai dry docks among other activities.
Previous report
ACTIVITIES BY ASSET
Previous report
We operate the Etame Marin Block on behalf of a consortium of companies. As of September 30, 2024, production operations in the Etame Marin block included fifteen platform wells, plus two subsea wells tied back by pipelines to deliver crude oil and associated natural gas through a riser system to allow for delivery and processing at the Etame platform. From the Etame platform, the crude oil is pumped through a riser system to the FSO where it is stored and ultimately offloaded. The leased FSO is anchored to the seabed on the block. During the three months ended September 30, 2024 and 2023, production from the block was 1,377 million barrels ("MBbls") (696 MBbls, net) and 1,506 MBbls (761 MBbls, net), respectively, as discussed below in "Results of Operations". During the nine months ended September 30, 2024 and 2023, production from our Etame assets was 4,138 MBbls (2,108 MBbls, net) and 4,740 MBbls (2,425 MBbls, net), respectively.
Previous report
In Egypt, our interests are spread across two regions: the Eastern Desert, which contains the West Gharib, West Bakr and North West Gharib merged concessions, and the Western Desert, which contains the South Ghazalat concession. Both of our Egyptian blocks are production sharing contracts (“PSC”) among the Egyptian General Petroleum Corporation (“EGPC”), the Egyptian government and us. We have an equal ownership interest, with EGPC owning the other portion, in the joint venture that has a 100% working interest in both PSCs. During the three months ended September 30, 2024 and 2023, production from the Eastern Desert was 965 MBbls (657 MBbls, net) and 1,076 MBbls (732 MBbls, net), respectively, as discussed below in “Results of Operations”. The third quarter 2024 saw a slight increase in the production from the Eastern Desert compared to the second quarter 2024 which had production of 953 MBbls (643 MBbls, net). During the nine months ended September 30, 2024 and 2023, production from our Eastern Desert assets was 2,867 MBbls (1,941 MBbls, net) and 3,032 MBbls (2,074 MBbls, net), respectively.
Previous report
In Harmattan, Canada, we own production and working interests in the Cardium light oil and Mannville liquids-rich gas assets. This property produces oil and associated natural gas from the Cardium zone and liquids-rich natural gas from zones in the Lower Mannville and Rock Creek formations at vertical depths of 2,000 to 2,600 meters. All gas is delivered to a third party non-operated gas plant for processing. During the three months ended September 30, 2024 and 2023, production from our Canadian assets was 269 MBoe (229 MBoe, net) and 261 MBoe (210 MBoe, net), respectively, as discussed below in “Results of Operations”. During the nine months ended September 30, 2024 and 2023, production from our Canadian assets was 761 MBoe (658 MBoe, net) and 775 MBoe (672 MBoe, net), respectively.
Previous report
As of September 30, 2024, we have $10.0 million of undeveloped leasehold costs associated with the Block P license. In February of 2023, we acquired an additional 14.1% participating interest, increasing VAALCO’s participating interest in the Block to 60.0%. This increase of 14.1% participating interest increases our future payment to GEPetrol to $6.8 million at first commercial production of the Block. In March 2023, Atlas voted to participate in the Venus Development. Amendment 5 of the PSC was approved by all parties in March 2023 with this updated participating interest, and execution of the Venus development plan (the “Venus POD”), the Venus Development was initiated.
Previous report
In March 2024, all partners signed the final documents, and the Government of Equatorial Guinea has approved the Joint Operating Agreement (“JOA”) related to the previously approved Venus-Block P plan of development.
Previous report
The 2024 amended budget was approved by all partners on May 10, 2024, and then approval was requested from the Ministry of Mines and Hydrocarbons. At the end of the 30-day waiting period, the budget was deemed to be approved, and the corresponding Authorization for Expenditures was sent to all partners. It was unanimously approved on June 18, 2024, and the implementation of the FEED phase was initiated. The project is on schedule and focuses on key areas of drilling evaluations, facilities design, market inquiries and metocean review. The ultimate objective is to obtain an FID determination by the end of the first quarter of 2025.
Previous report
The Block P PSC provides for a development and production period of 25 years from the date of approval of a development and production plan for the area associated with the Venus development. The PSC also includes the portions of Block P not associated with the Block P - Venus development.
Previous report
CI-40 Baobab field was discovered in 2001 and is located in the western half of the CI-40 license, 30km offshore Côte d’Ivoire. VAALCO holds a 27.4% non-operated working interest (30.4% paying interest) in CI-40. The license is operated by Canadian Natural Resources.
Previous report
The field has been developed with 24 subsea production wells and 5 water injector wells tied back to a leased FPSO operated by Modec. Third quarter production was stable with three water injectors and nine production wells online. Gross production for the third quarter 2024 was 1,489 MBoe (415 MBoe, net).
Previous report
The FPSO is planned to go to dry dock in 2025 to undergo maintenance and is expected to return to service in 2026.
Previous report
The PSC license has an initial term until April 11, 2028 with a ten-year extension option until April 2038.
Previous report
Regulatory and Joint Interest Audits
Previous report
We are subject to periodic routine audits by various government agencies, including audits of our petroleum cost account (the “Cost Account”), customs, taxes and other operational matters, as well as audits by other members of the contractor group under our joint operating agreements.
Previous report
We currently sell our crude oil production from Gabon under a crude oil sales and marketing agreement ("COSMA") with Glencore. Under the COSMA, all oil produced from the Etame G4-160 Block offshore Gabon from August 2022 through the final maturity date of the RBL Facility, expected to be May 15, 2027, will be bought and marketed by Glencore, with pricing based upon an average of Dated Brent in the month of lifting, adjusted for location and market factors. Sales with Glencore are normally settled 30 days from the delivery date.
Previous report
Revenues associated with the sales of our crude oil in Egypt are recognized by reference to actual volumes sold and quoted market prices in active markets for Dated Brent, adjusted according to specific terms and conditions as applicable per the sales contracts. For reporting purposes, we record the EGPC’s share of production as royalties which are netted against revenue. With respect to taxes in Egypt, our income taxes under the terms of the Merged Concession Agreement are the liability of TransGlobe Petroleum International ("TGPI"), a wholly-owned indirect subsidiary of VAALCO. TGPI's income taxes are paid by EGPC on behalf of TGPI out of EGPC’s production entitlement. The income taxes paid to the Arab Republic of Egypt on behalf of TGPI are recognized as oil and gas sales revenue and income tax expense for reporting purposes. Terms of settlement for sales to EGPC are within 30 days from the delivery date.
Previous report
Revenues from the sale of crude oil, natural gas, condensate and NGLs in Canada are recognized by reference to actual volumes delivered at contracted delivery points and prices. Prices are determined by reference to quoted market prices in active markets for crude oil, natural gas, condensate, and NGLs based on product, each adjusted according to specific terms and conditions applicable per the sales contracts. Revenues are recognized net of royalties and transportation costs. Settlement of accounts receivable in Canada occur on the 25th of the following month after production.
Previous report
Revenues associated with the sales of our crude oil in Cote d’Ivoire are recognized by reference to actual volumes sold and prices in active markets that are quoted against world crude benchmarks, e.g. Brent and adjusted according to specific terms and conditions as applicable per the sales contracts. The payment terms include settlement of accounts receivable in Cote d’Ivoire is typically 30 days after bill of lading, commercial invoice and original certificates of quantity, quality and origin are received and accepted by the customer.
Previous report
BWE Consortium– On October 11, 2021, we announced our entry into a consortium with BW Energy and Panoro Energy (the “BWE Consortium”) and that the BWE Consortium has been provisionally awarded two blocks in the 12th Offshore Licensing Round in Gabon. Negotiations to finalize the commercial terms were held in 2023. In early February 2024, the BWE Consortium and the government came to an agreement on the fiscal terms on February 9, 2024. The other parties to the BWE Consortium signed the PSC on October 30, 2024, while VAALCO is expected to sign the PSC pending the determination of an agreed upon signing date with the Gabonese Government. Pursuant to the terms of the PSC, BW Energy will be the operator with a 37.5% working interest, and VAALCO will have a 37.5% working interest and Panoro Energy will have a 25% working interest as non-operating joint owners. The two blocks, Niosi Marin Block (previously G12-13) and the Guduma Marin Block (previously H12-13), are adjacent to our Etame PSC, as well as BW Energy and Panoro Energy’s Dussafu PSC offshore Southern Gabon, and cover an area of 2,989 square kilometers and 1,929 square kilometers, respectively.
Previous report
Climate-Related Disclosures – On March 6, 2024, the SEC adopted a new set of rules that require a wide range of climate-related disclosures, including material climate-related risks, information on any climate-related targets or goals that are material to the registrant’s business, results of operations, or financial condition, Scope 1 and Scope 2 greenhouse gas emissions on a phased-in basis by certain larger registrants when those emissions are material and the filing of an attestation report covering the same, and disclosure of the financial statement effects of severe weather events and other natural conditions including costs and losses. Compliance dates under the final rule are phased in by registrant category. Multiple lawsuits have been filed challenging the SEC’s new climate rules, which have been consolidated and will be heard in the U.S. Court of Appeals for the Eighth Circuit. On April 4, 2024, the SEC issued an order staying the final rules until judicial review is complete.
Previous report
VAALCO also is participating in the Carbon Disclosure Project (“CDP”) voluntary reporting for its 2023 performance. This is the first year VAALCO has submitted to CDP and the Company intends to continue to do so in the future.
Previous report
See Note 2 to the unaudited condensed consolidated financial statements.
Previous report
Crude oil, natural gas and NGLs revenues increased $24.1 million, or approximately 21%, to $140.3 million during the three months ended September 30, 2024 from $116.3 million during the same period in 2023. The revenue increase is attributable to higher volumes sold in Gabon, Egypt and Canada segments partially offset by lower realized sales prices compared to the prior period. In addition, revenue was recognized within the Cote d'Ivoire segment during the three months ended September 30, 2024, that were not present in the prior period.
Previous report
Gabon
Previous report
Crude oil sales in Gabon are a function of the number and size of crude oil liftings in each year and thus crude oil sales do not always coincide with volumes produced in any given year. The Company’s Gabon segment contributed $47.6 million of revenue to the Company’s total revenue during the three months ended September 30, 2024. This compares to the $57.3 million of revenue contributed by the Gabon segment during the three months ended September 30, 2023. The total sales volume in Gabon for the three months ended September 30, 2024 was 617 MBbls or 48 MBbls lower than the sales volumes of 665 MBbls in the same period in 2023. Further, we had a decrease in the Gabon average realized price per barrel received during the three months ended September 30, 2024 of $77.16 per barrel (Bbl) compared to the price received in 2023 of $86.19 per Bbl. Our share of crude oil inventory, excluding royalty barrels, was approximately 217,124 barrels and 333,396 barrels at September 30, 2024 and 2023, respectively.
Showing the first 40 of 53 passages. Open the source sections for the rest.
Reworded paragraphs (37)
Previous wording
•the impact of any future production quotas imposed by Gabon, as a member of the Organization of the Petroleum Exporting Countries (“OPEC”), as a result of agreements among OPEC, Russia and other allied producing countries with respect to crude oil production levels;
Current wording
•the impact of any future production quotas imposed by Gabon, as a member of the Organization of the Petroleum Exporting Countries (“OPEC”), as a result of agreements among OPEC, Russia and other allied producing countries (collectively, “OPEC+”) with respect to crude oil production levels;
Previous wording
•the impact and duration of scheduled maintenance of the floating, production, storage and offloading vessel in Cote d'Ivoire;
Current wording
•the impact and duration of scheduled maintenance of the floating, production, storage and offloading (“FPSO”) vessel in Côte d'Ivoire;
Previous wording
The information contained in this Quarterly Report and the information set forth under the heading “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K”) and our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024 (the “Q1 2024 Form 10-Q”) and our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024 (the “Q2 2024 Form 10-Q”), identifies additional factors that could cause our results or performance to differ materially from those we express in forward-looking statements. Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions and therefore also the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. In light of the significant uncertainties inherent in the forward-looking statements that are included in this Quarterly Report, the Q1 2024 Form 10-Q, the Q2 2024 Form 10-Q and the 2023 Form 10-K, our inclusion of this information is not a representation by us or any other person that our objectives and plans will be achieved. When you consider our forward-looking statements, you should keep in mind these risk factors and the other cautionary statements in this Quarterly Report.
Current wording
The information contained in this Quarterly Report and the information set forth under the heading “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 (“2024 Form 10-K”), identifies additional factors that could cause our results or performance to differ materially from those we express in forward-looking statements. Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions and therefore also the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. In light of the significant uncertainties inherent in the forward-looking statements that are included in this Quarterly Report, and the 2024 Form 10-K, our inclusion of this information is not a representation by us or any other person that our objectives and plans will be achieved. When you consider our forward-looking statements, you should keep in mind these risk factors and the other cautionary statements in this Quarterly Report.
Previous wording
VAALCO is a Houston, Texas-based, African-focused independent energy company with strong production and reserve portfolio of assets in Gabon, Egypt, Equatorial Guinea, Canada, Nigeria and Cote d'Ivoire, currently engaged in the acquisition, exploration, development and production of crude oil, natural gas and NGLs.
Current wording
Vaalco is a Houston, Texas-based, African-focused independent energy company with strong production and reserve portfolio of assets in Gabon, Egypt, Equatorial Guinea, Canada, Nigeria and Côte d'Ivoire, currently engaged in the acquisition, exploration, development and production of crude oil, natural gas and NGLs.
Previous wording
On August 6, 2024, VAALCO issued a press release announcing its quarterly cash dividend of $0.0625 per share of common stock for the third quarter of 2024 ($0.25 annualized), which was paid on September 20, 2024 to stockholders of record at the close of business on August 23, 2024. On November 11, 2024, the Company's board of directors declared a quarterly cash dividend of $0.0625 per common share to be paid on December 20, 2024 to stockholders of record at the close of business on November 22, 2024.
Current wording
The Company paid a quarterly cash dividend of $0.0625 per share of common stock for the first quarter of 2025 ($0.25 annualized) on March 28, 2025 to stockholders of record at the close of business on February 28, 2025. The Company also announced its next quarterly cash dividend of $0.0625 per share of common stock for the second quarter of 2025 ($0.25 annualized) to be paid on June 27, 2025 to stockholders of record at close of business on May 23, 2025. Payment of future dividends, if any, will be at the discretion of the board of directors after taking into account various factors, including current financial condition, the tax impact of repatriating cash, operating results and current and anticipated cash needs.
Previous wording
Our cash flows for the nine months ended September 30, 2024 and 2023 are as follows:
Current wording
Our cash flows for the three months ended March 31, 2025 and 2024 are as follows:
Previous wording
The $102.6 million decrease in net cash provided by operating activities during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, was driven primarily by changes in operating assets and liabilities during the period. The net decrease in changes provided by operating assets and liabilities of $119.8 million for the nine months ended September 30, 2024 compared to the same period of 2023 was related to a decrease in cash provided by trade receivable and receivables accounts with joint venture owners (collectively $88.6 million). In addition, cash used by operating assets and liabilities increased due to decreases in the foreign income taxes payable balance that was reduced with proceeds generated from the lifting of crude oil for the Gabon Oil Company as well as a decrease in the accrued liabilities other balances (collectively $43.1 million). Partially offsetting these changes were increases in cash provided by changes in crude oil inventory of $18.1 million.
Current wording
The $10.9 million increase in net cash provided by operating activities during the three months ended March 31, 2025 compared to the three months ended March 31, 2024, was driven primarily by changes in operating assets and liabilities during the period. The net increase in changes provided by operating assets and liabilities of $3.7 million for the three months ended March 31, 2025 compared to the same period of 2024 was primarily related to the overall decrease in accrued liabilities and the foreign income taxes payable balance that was reduced with proceeds generated from the lifting of crude oil for the Gabon Oil Company as well as a decrease in the accrued liabilities other balances.
Previous wording
The $16.2 million decrease in net cash used in investing activities during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, was due to capital spending costs associated with the development drilling programs in Egypt and Canada not exceeding prior year expenditures along with reduced current year expenditures for Gabon. In addition, VAALCO used $40.2 million in cash for the Svenska Acquisition which is offset by the cash received from Svenska in the amount of $40.6 million. See Note 3 to the unaudited condensed consolidated financial statements for further discussion of the acquisition. For the nine months ended September 30, 2023, cash used in investing activities was due to the Etame field reconfiguration and other items to support the 2021/2022 drilling campaign.
Current wording
The $42.2 million change in net cash used in investing activities during the three months ended March 31, 2025 compared to the three months ended March 31, 2024, was due to costs associated with the development drilling programs in Egypt and Canada, as well as maintenance, project costs and long lead items for Gabon and Côte d'Ivoire. For the three months ended March 31, 2024, cash used in investing activities was due to capital spending costs associated with the development drilling programs in Egypt and Canada not exceeding prior year expenditures along with reduced current year expenditures for Gabon.
Previous wording
Net cash used in financing activities during the nine months ended September 30, 2024 included $19.6 million for dividend distributions, $6.8 million for treasury stock repurchases made under our stock repurchase plan and as a result of tax withholding on options exercised and on vested restricted stock, and $6.3 million of principal payments on our finance leases partially offset by $0.4 million in proceeds from options exercised. For the nine months ended September 30, 2023, cash used in financing activities included $20.2 million for dividend distributions, $17.5 million for treasury stock repurchased under our stock repurchase plan, and $5.2 million of principal payments on our finance leases partially offset by $0.6 million in proceeds from options exercised.
Current wording
Net cash used in financing activities during the three months ended March 31, 2025 included $6.6 million for dividend distributions, $5.1 million of payments for deferred financing costs and $2.9 million of principal payments on our finance leases. For the three months ended March 31, 2024, cash used in financing activities included $6.5 million for dividend distributions, $6.4 million for treasury stock repurchases made under our stock repurchase plan or as a result of tax withholding on options exercised and on vested restricted stock, and $2.1 million of principal payments on our finance leases partially offset by $0.5 million in proceeds from options exercised.
Previous wording
For the nine months ended September 30, 2024, we had accrual basis capital expenditures of $73.1 million compared to $63.3 million accrual basis capital expenditures for the same period in 2023. For the nine months ended September 30, 2024, our cash spending primarily related to the new wells drilled as part of the drilling campaign in Canada as well as expenditures associated with the preparation of the FPSO dry dock project in Cote d'Ivoire. During the same period in 2023, our cash spending primarily related to the payments for the 2023 drilling campaigns in both Egypt and Canada.
Current wording
For the three months ended March 31, 2025, we had accrual basis capital expenditures of $51.3 million compared to $24.0 million accrual basis capital expenditures for the same period in 2024. For the three months ended March 31, 2025, our cash spending primarily related to the new wells drilled as part of the drilling campaign in Egypt as well as expenditures associated with the preparation of the FPSO dry dock project in Côte d'Ivoire. During the same period in 2024, our cash spending primarily related to the payments for the 2024 drilling campaigns in both Egypt and Canada.
Previous wording
Due to the inherent volatility in crude oil prices, we use commodity derivative instruments such as swaps, costless collars and put options to hedge price risk associated with a portion of our anticipated crude oil and gas production. These instruments allow us to reduce, but not eliminate, the potential effects of variability in cash flow from operations due to fluctuations in commodity prices. The instruments provide only partial protection against declines in crude oil and gas prices and may limit our potential gains from future increases in prices. None of these instruments are used for trading purposes. We do not speculate on commodity prices but rather attempt to hedge physical production by individual hydrocarbon product in order to protect returns. The counterparty to our derivative swap transactions was a major oil company’s trading subsidiary, and our costless collars are with Glencore. We have not designated any of our derivative contracts as fair value or cash flow hedges. The changes in fair value of the contracts are included in the unaudited condensed consolidated statements of operations and other comprehensive income. We record such derivative instruments as assets or liabilities in the unaudited condensed consolidated balance sheets.
Current wording
Due to the inherent volatility in crude oil prices, we use commodity derivative instruments such as swaps, costless collars and put options to hedge price risk associated with a portion of our anticipated crude oil and gas production. These instruments allow us to reduce, but not eliminate, the potential effects of variability in cash flow from operations due to fluctuations in commodity prices. The instruments provide only partial protection against declines in crude oil and gas prices and may limit our potential gains from future increases in prices. None of these instruments are used for trading purposes. We do not speculate on commodity prices, but rather attempt to hedge physical production by individual hydrocarbon product in order to protect returns. The counterparty to our derivative swap transactions was a major oil company’s trading subsidiary, and our costless collars are with Glencore. We have not designated any of our derivative contracts as fair value or cash flow hedges. The changes in fair value of the contracts are included in the unaudited condensed consolidated statements of operations and other comprehensive income. We record such derivative instruments as assets or liabilities in the unaudited condensed consolidated balance sheets. Our 2025 RBL Facility requires us to enter into commodity price hedge positions establishing certain minimum fixed prices for anticipated future production. See Part I, Item 1, Note 8. Derivatives and Fair Value to the unaudited condensed consolidated financial statements for further discussion.
Previous wording
At September 30, 2024, we had unrestricted cash of $89.1 million. We invest cash not required for immediate operational and capital expenditure needs in short-term money market instruments primarily with financial institutions where we determine our credit exposure is negligible. As operator of the Etame Marin block in Gabon, we enter into project-related activities on behalf of our working interest joint venture owners. We generally obtain advances from joint venture owners prior to significant funding commitments. Our cash on hand will be utilized, along with cash generated from operations, to fund our operations.
Current wording
At March 31, 2025, we had unrestricted cash of $40.9 million. We invest cash not required for immediate operational and capital expenditure needs in short-term money market instruments primarily with financial institutions where we determine our credit exposure is negligible. As operator of the Etame Marin block in Gabon, we enter into project-related activities on behalf of our working interest joint venture owners. We generally obtain advances from joint venture owners prior to significant funding commitments. Our cash on hand will be utilized, along with cash generated from operations, to fund our operations and capital expenditures.
Previous wording
Our primary source of liquidity has been cash flows from operations and our primary use of cash has been to fund capital expenditures for development activities in each of our operating segments and earlier in the year 2024, the Svenska Acquisition. We continually monitor the availability of capital resources, including equity and debt financings that could be utilized to meet our future financial obligations, planned capital expenditure activities and liquidity requirements including those to fund opportunistic acquisitions. Our future success in growing proved reserves, production and balancing the long-term development of our assets with a focus on generating attractive corporate-level returns will be highly dependent on the capital resources available to us.
Current wording
Our primary source of liquidity has been cash flows from operations and our primary use of cash has been to fund capital expenditures for development activities. We continually monitor the availability of capital resources, including equity and debt financings that could be utilized to meet our future financial obligations, planned capital expenditure activities and liquidity requirements including those to fund opportunistic acquisitions. Our future success in growing proved reserves, production and balancing the long-term development of our assets with a focus on generating attractive corporate-level returns will be highly dependent on the capital resources available to us.
Previous wording
Based on current expectations, we believe we have sufficient liquidity through our existing cash balances, cash flow from operations as well as the ability to extend our RBL Facility to support our current cash requirements during the next 12 months and beyond, including the FSO charter in Gabon and drilling programs, as well as transaction expenses and capital and operational costs associated with our business segments' operations. However, our ability to generate sufficient cash flow from operations or fund any potential future acquisitions, consortiums, joint ventures or pay dividends or other similar transactions depends on operating and economic conditions, some of which are beyond our control. If additional capital is needed, we may not be able to obtain debt or equity financing on terms favorable or acceptable to us, or at all. We are continuing to evaluate all uses of cash, including opportunistic acquisitions, and whether to pursue growth opportunities and whether such growth opportunities, additional sources of liquidity, including equity and/or debt financings, are appropriate to fund any such growth opportunities.
Current wording
Based on current expectations, we believe we have sufficient liquidity through our existing cash balances, cash flow from operations and our 2025 RBL Facility to support our current cash requirements during the next 12 months and beyond, including the FPSO charter, drilling programs, as well as transaction expenses and capital and operational costs associated with our business segments' operations. However, our ability to generate sufficient cash flow from operations or fund any potential future acquisitions, consortiums, joint ventures or pay dividends for other similar transactions depends on operating and economic conditions, some of which are beyond our control. If additional capital is needed, we may not be able to obtain debt or equity financing on terms favorable to us, or at all. We are continuing to evaluate all uses of cash, including opportunistic acquisitions, and whether to pursue growth opportunities and whether such growth opportunities, additional sources of liquidity, including equity and/or debt financings, are appropriate to fund any such growth opportunities.
Previous wording
For information on the Merged Concession Agreement, see Note 10 to the unaudited condensed consolidated financial statements.
Current wording
For information on the Merged Concession Agreement, see Part I, Item 1, Note 10. Commitments and Contingencies to the unaudited condensed consolidated financial statements.
Previous wording
RBL Facility Agreement and Available Credit
Current wording
2025 Facility Agreement and Available Credit
Previous wording
For information on our RBL Facility agreement and available credit, see Note 11 to the unaudited condensed consolidated financial statements.
Current wording
For information on our 2025 Facility Agreement and available credit, see Part I, Item 1., Note 11. Debt, to the unaudited condensed consolidated financial statements.
Previous wording
Our material cash requirements generally consist of finance leases, operating leases, purchase obligations, capital projects, dividend payments, the Merged Concession Agreement, future lease payments and abandonment funding, each of which is discussed in further detail below.
Current wording
Our material cash requirements generally consist of the FPSO refurbishment, finance and operating leases, capital projects, dividend payments, Merged Concession Agreement and abandonment funding, each of which is discussed in further detail below.
Previous wording
Etame PSC, annual funding payments are spread over the periods from 2018 through 2028, under the applicable abandonment study. The amounts paid will be reimbursed through the Cost Account and are non-refundable. At September 30, 2024, the balance of the abandonment fund was $10.7 million ($6.3 million, net to VAALCO) on an undiscounted basis. The annual payments will be adjusted based on revisions in the abandonment estimate. This cash funding is reflected under “Other noncurrent assets” in the “Abandonment funding” line item of the unaudited condensed consolidated balance sheets. Future changes to the anticipated abandonment cost estimate could change the asset retirement obligation and the amount of future abandonment funding payments.
Current wording
Abandonment Funding - Under the terms of the Etame PSC, we have a cash funding arrangement for the eventual abandonment of all offshore wells, platforms and facilities on the Etame Marin block. As a result of the extension of the Etame PSC, annual funding payments are spread over the periods from 2018 through 2028, under the applicable abandonment study. The amounts paid will be reimbursed through the Cost Account and are non-refundable. At March 31, 2025, the balance of the abandonment fund was $10.7 million ($6.3 million, net to Vaalco) on an undiscounted basis. The annual payments will be adjusted based on revisions in the abandonment estimate. This cash funding is reflected under “Other noncurrent assets” in the “Abandonment funding” line item of the unaudited condensed consolidated balance sheets. Future changes to the anticipated abandonment cost estimate could change the asset retirement obligation and the amount of future abandonment funding payments.
Previous wording
Merged Concession Agreement - On January 20, 2022, the Merged Concession Agreement was executed with EGPC that merged the three existing Eastern Desert concessions with a 15-year primary term and improved economics. As part of the agreement, the Company is required to make an annual modernization payment of $10.0 million per year to EGPC through February 2026. In accordance with the Merged Concession Agreement, we agreed to substitute the 2023 and 2024 payments and issue two $10.0 million credits against receivables owed from EGPC. We will make two further annual modernization payments of $10.0 million on February 1, 2025 and February 1, 2026. For information on the Merged Concession Agreement, see Note 10 to the unaudited condensed consolidated financial statements.
Current wording
Merged Concession Agreement - On January 20, 2022, the Merged Concession Agreement was executed with EGPC that merged the three existing Eastern Desert concessions with a 15-year primary term and improved economics. As part of the agreement, the Company is required to make an annual modernization payment of $10.0 million per year to EGPC through February 2026. In accordance with the Merged Concession Agreement, we agreed to substitute the 2023, 2024 and 2025 payments and issue three $10.0 million credits against receivables owed from EGPC. We will make one further annual modernization payment of $10.0 million on February 1, 2026. For information on the Merged Concession Agreement, see Part I, Item 1, Note 10. Commitments and Contingencies to the unaudited condensed consolidated financial statements.
Previous wording
Financial Work Commitments - We also have financial work commitments of $50.0 million per each five-year period of the primary development term, commencing on February 1, 2020 for a total of $150 million over the 15 year license contract term. Through September 30, 2024, our financial work commitments have exceeded the five-year minimum $50 million threshold and any excess carries forward to offset against subsequent five-year commitments.
Current wording
Financial Work Commitments - In Egypt, we also have financial work commitments of $50.0 million per each five-year period of the primary development term, commencing on February 1, 2020 for a total of $150 million over the 15 year license contract term. Through March 31, 2025, our financial work commitments have exceeded the five-year minimum $50 million threshold and any excess carries forward to offset against subsequent five-year commitments.
Previous wording
For example, shortly after the outbreak of the conflict through the year ended December 31, 2023 and on-going into 2024, we noticed that the lead times associated with obtaining materials to support our operations and drilling activities has lengthened, leading to delays and, in most cases, prices for materials have increased. Management believes the ongoing war between Russia and Ukraine, the Houthis attacks on maritime vessels in the Red Sea region, conflicts in the Middle East and the related impact on the global economy are causing supply chain issues and energy concerns in parts of the global economy, as well as destabilizing impacts on the global oil and natural gas market. In addition, increased inflation, higher interest rates and current turmoil in certain governments are impacting the global supply chain market.
Current wording
For example, shortly after the outbreak of the conflict through the year ended December 31, 2024 and ongoing into 2025, we noticed that the lead times associated with obtaining materials to support our operations and drilling activities have lengthened, leading to delays and, in most cases, prices for materials have increased. Management believes the ongoing war between Russia and Ukraine, the Houthis attacks on maritime vessels in the Red Sea region, conflicts in the Middle East and the related impact on the global economy are causing supply chain issues and energy concerns in parts of the global economy, as well as destabilizing impacts on the global oil and natural gas market. In addition, increased inflation, higher interest rates and current turmoil in certain governments are impacting the global supply chain market.
Previous wording
For the past three years, the Company has refined its reporting in line with the recommendations of the Task force on Climate-related Financial Disclosures (“TCFD”), which is recognized as the global standard in climate-related reporting. The full TCFD report was included within the Company's 2023 Sustainability Report (rather than in the Annual Report on Form 10-K or in the annual report which was published in connection with the annual meeting), as the Sustainability Report details environmental, social and governance matters which the TCFD report forms an important part of The 2023 Sustainability Report is available on the Company's website.
Current wording
US activity notwithstanding, for the past three years, the Company has refined its reporting in line with the recommendations of the Task Force on Climate-related Financial Disclosures (“TCFD”), which is recognized as the global standard in climate-related reporting and required by Vaalco to report against through its listing on the London Stock Exchange. The full TCFD report was included within the Company's 2024 Sustainability Report (rather than in the Annual Report on Form 10-K or in the annual report which was published in connection with the annual meeting), as the Sustainability Report details environmental, social and governance matters of which the TCFD report forms an important part. The 2024 Sustainability Report is available on the Company's website.
Previous wording
Net income for the three months ended September 30, 2024 was $11.0 million compared to net income of $6.1 million during the same period of 2023. See the discussion below for changes in revenue and expense.
Current wording
Net income for the three months ended March 31, 2025 was $7.7 million compared to net income of $7.7 million during the same period of 2024. See discussion below for changes in revenue and expense.
Previous wording
Crude oil, natural gas and NGLs revenues increased$51.4 million, or approximately 17%, to $357.3 million during the nine months ended September 30, 2024 from $305.9 million during the same period in 2023. The revenue increase is attributable to revenues recognized within the Cote d'Ivoire segment during the nine months ended September 30, 2024 that were not present in the prior period.
Current wording
Crude oil, natural gas and NGLs revenues increased $10.2 million, or approximately 10%, to $110.3 million during the three months ended March 31, 2025 from $100.2 million during the same period in 2024. The revenue increase is attributable to revenues recognized within the Côte d'Ivoire segment during the three months ended March 31, 2025 that were not present in the prior period.
Previous wording
(1)The price in the table above excludes revenues attributed to carried interests.
Current wording
(1)Other in the table above includes revenues attributed to carried interests.
Previous wording
Crude oil sales in Gabon are a function of the number and size of crude oil liftings in each year and thus crude oil sales do not always coincide with volumes produced in any given year. The Company’s Gabon segment contributed $158.8 million of revenue to the Company’s total revenue during the nine months ended September 30, 2024. This compares to the $171.9 million of revenue contributed by the Gabon segment during the nine months ended September 30, 2023. The decrease in revenues is primarily due to lower sales volume in Gabon, which decreased to 1,947 MBbls for the nine months ended September 30, 2024 from the 2,092 MBbls sales volumes reported in the same period in 2023. The average realized sales price received in Gabon was $81.55 per Bbl for nine months ended September 30, 2024, which was also lower compared to the $82.18 per Bbl average realized sales price received during the first nine months of 2023. Gabon's share of crude oil inventory, excluding royalty barrels, was approximately 217,124 barrels and 333,396 barrels at September 30, 2024 and 2023, respectively.
Current wording
Crude oil sales in Gabon are a function of the number and size of crude oil liftings in each year and thus crude oil sales do not always coincide with volumes produced in any given year. The Company’s Gabon segment contributed $52.2 million of revenue to the Company’s total revenue during the three months ended March 31, 2025, a decrease of $5.3 million from the $57.5 million of revenue reported during the three months ended March 31, 2024. The decrease in revenues is primarily due to the lower average realized sales price received in Gabon of $79.25 per Bbl for three months ended March 31, 2025 compared to the $84.14 per Bbl average realized sales price received during the same period in 2024. In addition, sales volume in Gabon slightly decreased to 658 MBbls for the three months ended March 31, 2025 from the 669 MBbls sales volumes reported during the first quarter of 2024. Gabon's share of crude oil inventory, excluding royalty barrels, was approximately 276,299 barrels and 111,871 barrels at three months ended March 31, 2025 and 2024, respectively.
Previous wording
Crude oil sales in Egypt are either sold to a third party via a cargo lifting or sold directly to the government, EGPC. During the three months ended September 30, 2024, the oil sold in Egypt was through direct sales to EGPC. The Company’s Egypt segment contributed$34.5 million of revenue to the Company’s total revenue for the three months ended September 30, 2024. This compares to the $50.3 million of revenue contributed by the Egypt segment during the three months ended September 30, 2023. At September 30, 2024, the Company’s Egypt segment had no barrels in oil inventory. The decrease in sales was primarily due to the decrease in sales volumes during three months ended September 30, 2024 to 657 MBbls compared 938 MBbls during the same period in the prior year. The average realized price received in Egypt was $52.58 per Bbl during the three months ended September 30, 2024, which was also lower compared to the $53.61 per Bbl received in the third quarter of 2023.
Current wording
Crude oil sales in Egypt are either sold to a third party via a cargo lifting or sold directly to the government, through EGPC. During the three months ended March 31, 2025, the oil sold in Egypt was through direct sales to EGPC. The Company’s Egypt segment contributed$33.9 millionof revenue to the Company’s total revenue for the three months ended March 31, 2025, which is $3.1 million lower than the $37.0 million of revenue reported during the three months ended March 31, 2024. The decrease in revenues was primarily due to a decrease in average realized sales price from $57.68 per Bbl during the three months ended March 31, 2024 to $52.85 per Bbl during the same period in 2025. Sales volumes in Egypt remained relatively consistent at 642 MBbls and 641 MBbls, during the three months ended March 31, 2025 and 2024, respectively.
Previous wording
Crude oil sales in Canada are normally sold through pipelines to a third party. The Company’s Canadian segment contributed $24.5 million of revenue to the Company’s total revenue for the nine months ended September 30, 2024. This compares to the $27.6 million of revenue contributed by the Canadian segment during the nine months ended September 30, 2023. The decrease in revenues was due to the 17 MBls decrease in sales volumes from 673 MBoe during the nine months ended September 30, 2023 to 656 MBoe in the same period in 2024. In addition, the average realized sales price also decreased from $40.98 per Boe during the nine months ended September 30, 2024 to $37.29 per Boe during the nine months ended September 30, 2023.
Current wording
Crude oil sales in Canada are normally sold through pipelines to a third party. The Company’s Canadian segment contributed $6.2 million of revenue to the Company’s total revenue for the three months ended March 31, 2025, or an increase of $0.5 million compared to $5.7 million of revenue reported during the three months ended March 31, 2024. The increase in revenues was primarily due to higher average realized sales price received of $34.61 per Boe during the three months ended March 31, 2025 compared to the $31.63 per Boe received during the first three months of 2024. Sales volumes in Canada were relatively flat during the three months ended March 31, 2025 at 179 MBoe in comparison to 180 MBoe in the same period in 2024.
Previous wording
Crude oil sales in Cote d’Ivoire are sold through a marketing contract with an international oil trading company which offers the cargo shipments to buyers, mainly refineries, around the world. The Company's Cote d’Ivoire segment contributed $67.0 million of revenue to the Company’s total revenue during the nine months ended September 30, 2024. Total sales volumes in Cote d'Ivoire for the nine months ended September 30, 2024 was 844 MBbls and the average realized sales price received was $79.43 per Bbl.
Current wording
Crude oil sales in Côte d’Ivoire are sold through a marketing contract with an international oil trading company which offers the cargo shipments to buyers, mainly refineries, around the world. The Company's Côte d’Ivoire segment contributed $18.0 million of revenue to the Company’s total revenue during the three months ended March 31, 2025. Total sales volumes in Côte d'Ivoire for the three months ended March 31, 2025 was 238 MBbls and the average realized sales price received was $75.87 per barrel. The assets in Cote d’Ivoire were acquired through the Svenska Acquisition which was completed in April 2024 and as such, there is not a comparable amount in the same period of 2024. See Part I, Item 1,
Previous wording
Production expenses increased $20.1 million, or approximately 19%, for the nine months ended September 30, 2024 to $126.9 million from $106.8 million for the same period in the prior year. In February 2024, the Government in Gabon enacted new regulation which has resulted in an increase to withholding taxes on foreign supplied goods and services. In addition, VAALCO has seen inflationary pressure on personnel and contractor costs. Also, production expenses have increased due to the addition of Cote d'Ivoire expenses not included in the prior year period. On a per barrel basis, production expense, excluding workover expense and stock compensation expense, for the nine months ended September 30, 2024 increased to $23.51 per barrel from $22.32 per barrel for the nine months ended September 30, 2023 primarily as a result of production volumes for the current period.
Current wording
Production expenses increased $12.7 million, or approximately 40%, for the three months ended March 31, 2025 to $44.8 million from $32.1 million for the same period in the prior year. The increase was primarily driven by higher expenses in Gabon related to government audit settlements of approximately $4.7 million (net to Vaalco), additional chemical costs associated with the H 2 S treatment and to the increased sales associated with the purchase of the Côte d'Ivoire asset. On a per barrel basis, production expense, excluding workover expense and stock compensation expense, for the three months ended March 31, 2025 increased to $26.05 per barrel from $21.56 per barrel for the three months ended March 31, 2024.
Previous wording
Depreciation, depletion and amortization costs increased $14.5 million, or approximately 45%, for the three months ended September 30, 2024 to $47.0 million from $32.5 million during the same period in 2023. The increase in depreciation, depletion and amortization expense is due primarily to the addition of Cote d'Ivoire related to the Svenska Acquisition partially offset by lower depletable costs in Gabon, Egypt, and Canada.
Current wording
Depreciation, depletion and amortization costs increased $4.5 million, or approximately 17%, for the three months ended March 31, 2025 to $30.3 million from $25.8 million during the same period in 2024. The increase in depreciation, depletion and amortization expense is primarily related to the Svenska Acquisition partially offset by lower depletable costs in Gabon and Egypt.
Previous wording
General and administrative expenses increased $4.4 million, or 26%, for the nine months ended September 30, 2024 to $21.2 million from $16.8 million during the same period in 2023. The increase in general and administrative expenses is primarily professional service fees, salaries and wages, and accounting and legal fees.
Current wording
General and administrative expenses slightly increased $1.0 million, or 13%, for the three months ended March 31, 2025 to $9.1 million from $8.0 million during the same period in 2024. The increase in general and administrative expenses is primarily due to an increase inprofessional service fees, salaries and wages, and accounting and legal fees.
Previous wording
Derivative instruments gain (loss), netis attributable to our swaps and collars as discussed in Note 8 to the unaudited condensed consolidated financial statements. Derivative gain increased by $2.5 million to a gain of $0.2 million for the three months ended September 30, 2024 from a loss of $2.3 million during the same period in 2023. Derivative gain for the three months ended September 30, 2024 are a result of the increase in the price of Dated Brent crude oil over the initial strike price per barrel of the option over the three months ended September 30, 2024. Our derivative instruments gain (loss), net currently cover a portion of our production through March 2025.
Current wording
Derivative instruments gain (loss), netis attributable to our swaps and collars as discussed in Part I, Item 1, Note 8. Derivatives and Fair Value to the unaudited condensed consolidated financial statements. Derivative loss decreasedby $0.7 million to a loss of $0.1 million for the three months ended March 31, 2025 from a loss of $0.8 million during the same period in 2024. Derivative losses for the three months ended March 31, 2025 are a result of the increase in the price of Dated Brent crude oil over the initial strike price per barrel of the option over the three months ended March 31, 2025. Our derivative instruments currently cover a portion of our production through September 2025 for oil and through October 2025 for gas.
Previous wording
Interest expense, netwas $0.6 million for the three months ended September 30, 2024 compared to an expense of $1.4 million during the same period in 2023. The decrease of net interest expense for the three months ended September 30, 2024, primarily results from a decrease in our amortization of debt issue costs and commitment fees incurred on the RBL Facility partially offset by interest income.
Current wording
Interest expense, netwas $1.3 million for the three months ended March 31, 2025 compared to an expense of $0.9 million during the same period in 2024. The increase of net interest expense for the three months ended March 31, 2025 primarily results from an increase in our amortization of debt issue costs and commitment fees incurred on the 2025 RBL Facility partially offset by interest income.
Previous wording
Other (expense) income, netincreased by $4.0 million to an expense of $3.9 million for the nine months ended September 30, 2024 from a $0.1 million expense during the same period in 2023. Other (expense) income, net, normally consists of foreign currency gains and losses. However, during the nine months ended September 30, 2024, there was a $3.4 million expense related to transactions costs associated with the Svenska Acquisition.
Current wording
Other income (expense), netincreased by $0.5 million to an expense of $1.0 million for the three months ended March 31, 2025 from a $0.5 million expense during the same period in 2024. Other income (expense), net, normally consists of foreign currency gains and losses.
Previous wording
Income tax expense (benefit) for the three months ended September 30, 2024 was an expense of $32.6 million. This is comprised of current tax expense of $33.7 million including a $1.8 million favorable oil price adjustment as a result of the change in value of the government of Gabon's allocation of Profit Oil between the time it was produced and the time it was taken in-kind. After excluding this impact, current income taxes were $35.5 million for the period. Income tax expense (benefit) for the three months ended September 30, 2023 was an expense of $25.8 million, which was comprised of current tax expense of $26.8 million and $1.0 million of deferred tax benefit.
Current wording
Income tax expense (benefit) for the three months ended March 31, 2025 was an expense of $16.1 million which includes a $0.7 million unfavorable oil price adjustment as a result of the change in value of the government of Gabon's allocation of Profit Oil between the time it was produced and the time it was taken in-kind. After excluding this impact, income taxes were $15.4 million for the period. Income tax expense for the three months ended March 31, 2024 was an expense of $22.2 million, this is comprised of current tax expense of $25.7 million including a $1.6 million adverse oil price adjustment as a result of the change in value of the government of Gabon's allocation of Profit Oil between the time it was produced and the time it was taken in-kind. After excluding this impact, current income taxes were $24.1 million for the period.
Rearranged previous paragraphs (14)
Previous report — wording carried elsewhere
Payment of future dividends, if any, will be at the discretion of the board of directors after taking into account various factors, including current financial condition, the tax impact of repatriating cash, operating results and current and anticipated cash needs.
Previous report — wording carried elsewhere
Abandonment Funding - Under the terms of the Etame PSC, we have a cash funding arrangement for the eventual abandonment of all offshore wells, platforms and facilities on the Etame Marin block. As a result of the extension of the
Previous report — wording carried elsewhere
Crude oil sales in Cote d’Ivoire are sold through a marketing contract with an international oil trading company which offers the cargo shipments to buyers, mainly refineries, around the world. The Company's Cote d’Ivoire segment contributed $49.8 million of revenue to the Company’s total revenue for the three months ended September 30, 2024. Total sales volumes in Cote d'Ivoire for the third quarter of 2024 was 632 MBbls and the average realized sales price received was $78.75 per Bbl.
Previous report — wording carried elsewhere
General and administrative expenses increased $0.7 million, or 11% for the three months ended September 30, 2024 to $6.9 million from $6.2 million for the same period in 2023. The increase in general and administrative expensesis primarily attributable to increases inprofessional service fees, salaries and wages, and accounting and legal fees.
Previous report — wording carried elsewhere
Net income for the nine months ended September 30, 2024 was $46.8 million compared to net income of $16.4 million during the same period of 2023. See discussion below for changes in revenue and expense.
Previous report — wording carried elsewhere
The revenue changes in the nine months ended September 30, 2024 compared to the same period in 2023 identified as related to changes in price or volume, are shown in the table below:
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(1)The price in the table above excludes revenues attributed to carried interests.
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The table below shows net production, sales volumes and realized prices for both periods.
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*Average of daily Dated Brent spot prices posted on the U.S. Energy Information Administration website.
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Crude oil, natural gas and NGL revenues:
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Depreciation, depletion and amortization costs increased $11.0 million, or approximately 12%, for the nine months ended September 30, 2024 to $106.0 million from $95.0 million during the same period in 2023. The increase in depreciation, depletion and amortization expense is primarily due to the addition of Cote d'Ivoire expense related to the Svenska Acquisition partially offset by lower depletable costs in Gabon, Egypt.
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Derivative instruments gain (loss), netis attributable to our swaps and collars as discussed in Note 8 to the Financial Statements. Derivative loss decreasedby $1.9 million to a loss of $0.4 million for the nine months ended September 30, 2024 from a loss of $2.3 million during the same period in 2023. Derivative losses for the nine months ended September 30, 2024 are a result of the increase in the price of Dated Brent crude oil over the initial strike price per barrel of the option over the nine months ended September 30, 2024. Our derivative instruments currently cover a portion of our production through March 2025.
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Interest expense, netwas $2.6 million for the nine months ended September 30, 2024 compared to an expense of $5.4 million during the same period in 2023. The decrease of net interest expense for the nine months ended September 30, 2024 primarily results from a decrease in our amortization of debt issue costs and commitment fees incurred on the RBL Facility partially offset by interest income.
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Income tax expense (benefit) for the nine months ended September 30, 2024 was an expense of $64.1 million. This is comprised of current tax expense of $72.7 million including a $1.2 million favorable oil price adjustment as a result of the change in value of the government of Gabon's allocation of Profit Oil between the time it was produced and the time it was taken in-kind. After excluding this impact, current income taxes were $73.9 million for the period. Income tax expense for the nine months ended September 30, 2023 was an expense of $52.2 million. This is comprised of current tax expense of $51.5 million and $0.7 million of deferred tax expense.