VAALCO ENERGY INC /DE/
For the period ended Mar 31, 2026. Filed May 11, 2026.
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, 2026 · Filed May 11, 2026
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 2025-09-30; filed 2025-11-10.
0000894627-25-000057
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-11.
0000894627-26-000027
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 159 previous paragraphs and 131 current paragraphs.
68 unchanged; 38 reworded; 24 added; 46 removed; 7 previous and 1 current paragraphs rearranged.
Tables are not compared: 7 previous and 2 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 (24)
Current report
•the macroeconomic, regulatory or other potential effects of a prolonged U.S. government shutdown;
Current report
•the ability of the FPSO in Cote d’Ivoire to return to service within the expected timeframe;
Current report
Business Environment and Outlook
Current report
The oil and gas industry is cyclical and commodity prices are inherently volatile. Oil prices reflect global supply and demand dynamics as well as the geopolitical and macroeconomic environment and uncertainties. These factors, and any changes to these factors, among others, could have a material adverse impact on our future revenues and overall profitability. See Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Form 10-K for further discussion of Trends and Uncertainties.
Current report
Commodity Prices – Uncertainties in the global supply chain and financial markets impact oil supply and demand and contribute to commodity price volatility. These uncertainties include the impacts of ongoing international conflicts, inflation, current and potential tariffs or other trade barriers, global trade policies, and actions taken by foreign oil and gas producing nations, including OPEC+. Changes in oil prices could result in adjustments to capital investment levels and allocation, which impact our production volumes.
Current report
As a company, we remain focused on our overall business strategy to maximize the value of our current resources and expand into new development opportunities across our strategically complementary asset base. We intend to accelerate shareholder returns and increase shareholder value by controlling operating costs and capital expenditures, maximizing reserve recoveries and making disciplined strategic accretive acquisitions that meet our strategic and financial objectives. We believe that our quality portfolio, strong management and technical expertise specific to the markets in which we operate, and our ongoing focus on maintaining a competitive cost structure and disciplined capital allocation framework, position us to achieve our business strategy and navigate a variety of commodity price environments. Over the past years, we have delivered on our focused strategy and believe we will continue to do so with the organic growth programs across our diversified portfolio over the coming years.
Current report
Canada Assets Divestment
Current report
On February 4, 2026, the Company entered into an asset purchase agreement to sell all of our operating assets in Canada (the “Canada Assets Divestment”) to a third party purchaser for a purchase price of $24.4 million (C$33.4 million) to be settled in cash, subject to customary post-closing adjustments. The Canada Assets Divestment closed on February 19, 2026 with an effective date of February 1, 2026 for an adjusted purchase price of $25.5 million (C$34.9 million), subject to customary post-closing adjustments. The net cash proceeds from the divestment were primarily used to fund our capital expenditures and for working capital purposes. The Canada Assets Divestment represents the Company’s complete exit of its Canadian oil and gas operations.
Current report
Assumption of Operatorship
Current report
The Company’s Phase Three Drilling Program in Gabon commenced in the fourth quarter of 2025 with the drilling of the ET-15H development well in the 1V block of Etame in December 2025. The well was completed and placed on production in February 2026 confirming expectations from the pilot well results. Although the West Etame exploration well (ET-14) encountered 10 meters of high quality sands, the target zone was water-bearing. The lower portion of the well was plugged and abandoned but the well bore was utilized and sidetracked in the upper portion of the well to drill the ET-14H development well in the Main Fault Block of Etame. The well was completed and placed on production in April 2026.
Current report
After completing our program at the Etame platform, we expect to move the drill rig to the Ebouri and SEENT platforms where we have several wells and workovers planned to enhance production and potentially add reserves.
Current report
The BWE Consortium completed its 3D seismic campaign across the Niosi and Guduma blocks in January 2026. The seismic data processing and interpretation are currently ongoing.
Current report
The drilling campaign in Egypt began in December 2024 and continued throughout 2025 with the final well placed on production in January 2026. All wells drilled in the Eastern Desert successfully achieved their target.
Current report
During the first quarter of 2026, operations focused on interventions, workovers, and production optimization activities. A workover campaign to reactivate shut-in wells contributed to incremental production, while improved uptime supported increased average daily production rates.
Current report
Côte d'Ivoire
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The Baobab FPSO completed its planned dry dock refurbishment in February 2026 and arrived back in Côte d'Ivoire in early April 2026. Reconnection activities are now underway and field production is expected to restart during the second quarter of 2026. A rig has been secured for the planned development drilling program which is expected to begin at the end of the third quarter of 2026. The drilling campaign is expected to bring meaningful additions to production from the main Baobab field in block CI-40.
Current report
As discussed above, in February 2026, the Company completely exited its Canadian oil and gas operations. Please see above under “Canada Assets Divestment,” for further discussion on the sale of the Canada operating assets.
Current report
The $71.9 million decrease in net cash provided by operating activities during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily due to lower crude oil, natural gas and natural gas liquids sales ($47.7 million) and an increase in net cash used in working capital and other assets and liabilities ($33.6 million).
Current report
Capital Projects - In December 2025, the Company commenced its Phase Three drilling campaign in Gabon. The BWE Consortium completed its 3D seismic campaign across the Niosi and Guduma blocks in January 2026. A rig has also been secured for the planned development drilling program in Côte d’Ivoire which is expected to begin during the third quarter of 2026.
Current report
FPSO Refurbishment and Reconnection – The Baobab FPSO completed its planned dry dock refurbishment in February 2026 and arrived back in Côte d’Ivoire in early April 2026. Reconnection activities are now underway and field production is expected to restart during the second quarter of 2026.
Current report
BWE Consortium - We are a member of the BWE Consortium that was awarded the licenses for the Niosi Marin and the Guduma Marin exploration blocks in Gabon. These licenses are covered by PSCs entered into with the Gabonese Government. These PSCs will have two exploration periods totaling eight years which may be extended by an additional two more years. During the first exploration period, the joint owners intend to reprocess existing seismic and carry out a 3-
Current report
D seismic campaign on these two blocks and have also committed to drilling exploration wells on both blocks. Under the terms of the BWE Consortium PSC, the Company holds a 37.5% non-operating working interest in these licenses.
Current report
Côte d'Ivoire
Current report
Loss on asset divestmentfor the three months ended March 31, 2026 of $1.2 million was due to the Canada Assets Divestment which was completed in February 2026.
Removed paragraphs (46)
Previous report
•our ability to remediate our material weaknesses;
Previous report
•the impact and duration of scheduled maintenance of the floating, production, storage and offloading (“FPSO”) vessel in Côte d'Ivoire;
Previous report
The Company secured a drilling rig in December 2024 in conjunction with its 2025/2026 drilling program, which is expected to begin during the fourth quarter of 2025, once the drilling rig completes its current commitments. The program includes drilling multiple development wells, and appraisal or exploration wells, and perform workovers, with options to drill additional wells. We plan to drill wells at both the Etame platform and at its Seent platform, as well as a re-drill and a number of workovers in the Ebouri field to access production and reserves that were previously removed from proved reserves due to the presence of hydrogen sulfide.
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In July 2025, the Company performed planned, staged shutdowns of the Gabon platforms to perform safety inspections and necessary maintenance to increase the integrity and reliability of the assets. This is the first full field maintenance shutdown that the Company has performed since the new Floating Storage and Offloading vessel (“FSO”) was brought online in 2022. All fields were successfully brought back online and the planned turnaround was completed on budget and with no safety or environmental incidents.
Previous report
The current drilling campaign in Egypt began in December 2024 and has continued through the third quarter of 2025. During the third quarter of 2025, four development wells were drilled in the Eastern Desert, of which three were completed during the same period and the fourth well was completed in October 2025. Also, during the third quarter of 2025, we drilled one exploration well in the Western Desert which was completed in October 2025. Additionally, continuous well interventions, workovers and optimization activities were carried out throughout the third quarter of 2025 to enhance production levels.
Previous report
In 2025, the Company decided to defer the drilling of additional wells in Canada based on a reassessment of capital allocation priorities across the portfolio and to ensure that investment is directed toward projects with the highest expected returns. Therefore, the Canadian division is looking towards lower-cost optimization projects to enhance productivity by year-end.
Previous 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 arrived at the shipyard in Dubai ahead of schedule in mid-May 2025. The FPSO refurbishment is progressing well and has now been underway for the last five months in the shipyard. A rig has been secured for significant development drilling which is expected to begin in 2026 after the FPSO returns to service, bringing meaningful additions to production from the main Baobab field in CI-40. The Company is also evaluating the anticipated impact of the potential future development of the Kossipo field, which is also on the CI-40 license.
Previous report
The $1.7 million decrease in net cash provided by operating activities during the nine months ended September 30, 2025 compared to the nine months ended September 30, 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 $45.9 million for the nine months ended September 30, 2025 compared to the same period of 2024 was primarily related to the overall decrease in accrued liabilities and accounts payable, decrease in trade receivables due to the settlement of the Egypt backdated receivables and improvement of trade receivables, value added tax and other receivables. The favorable changes in the cash flows from operating activities are offset primarily by a decrease in foreign taxes payable.
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Cash on Hand
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At September 30, 2025, we had unrestricted cash of $24.0 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 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 begin during the fourth quarter of 2025. In Egypt, additional drilling and completion activities are expected to continue during the last quarter of 2025.
Previous report
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 report
FPSO Maintenance – The Baobab FPSO arrived at the shipyard in Dubai ahead of schedule in mid-May for planned maintenance and upgrades. The FPSO refurbishment is now underway in the shipyard. The FPSO is expected to return to service in 2026.
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Trends and Uncertainties
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Additionally, global market forces including inflation, supply chain constraints due to lingering impacts from conflicts such as the Russia-Ukraine war, and shifts in U.S. trade policy including tariffs on energy-related goods, continue to increase costs and extend lead times for equipment and materials essential to drilling and production activities. These factors could affect project timing, cost structures, and overall operational efficiency. The Company also notes ongoing volatility in commodity prices driven by dynamic supply and demand fundamentals, energy transition policies, and broader macroeconomic uncertainties. Vaalco actively manages exposure to these risks through operational flexibility, diversified sourcing, and prudent financial planning to safeguard long-term growth and value creation.
Previous report
Additionally, the evolving global trade environment may increase compliance complexity and affect the cost efficiency of international operations. Enhanced documentation requirements and new rules of origin associated with U.S. trade actions could impact our ability to efficiently move materials through international logistics hubs, such as those in Houston, Texas and could necessitate additional internal resources to maintain compliance. These complexities necessitate additional internal resources to ensure sustained compliance and efficient material flow.
Previous report
The broader geopolitical trade environment, including retaliatory tariffs and ongoing trade tensions with key partners, continues to inject volatility into the global supply network, necessitating vigilant risk management and strategic sourcing to mitigate operational disruptions and cost impacts.
Previous report
Moreover, to the extent U.S. policy shifts create uncertainty in bilateral relations or disrupt traditional trade partnerships, there could be indirect effects on our ability to manage risk and maintain favorable operating conditions in host countries. While we continue to monitor the evolving regulatory and trade landscape, we cannot predict the full impact of current or future tariffs, trade restrictions or retaliatory actions on our operations, financial condition or future capital deployment decisions.
Previous report
Commodity Prices– Historically, the markets for oil, natural gas and NGLs have been volatile. Oil, natural gas and NGLs prices are subject to wide fluctuations in supply and demand. Our cash flows from operations may be adversely impacted by volatility in crude oil and natural gas prices, a decrease in demand for crude oil, natural gas or NGLs and future production cuts by OPEC. In addition, recent U.S. energy policy changes that prioritize domestic production and energy security, including through tax credits and development incentives, may influence global supply dynamics and capital flows, potentially altering the competitive landscape for international assets.
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ESG and Climate Change Effects – Sustainability matters continue to attract public, political, regulatory and scientific attention.
Previous report
While 2025 has seen a deceleration in the adoption of sustainability-oriented regulation, particularly in the U.S., and a noticeable shift by some financial institutions away from explicitly “ESG” or “Net Zero” branded initiatives due to perceived political or reputational sensitivities, we believe the underlying trend of focusing on sustainability remains consistent. Long-term structural pressures, including stakeholder expectations, evolving global market standards, and transition-related investment priorities, continue to support the integration of sustainability considerations into corporate strategy and capital markets.
Previous report
The attention to climate change and environmental stewardship coupled with increasing government incentives around renewable energy sources may result in demand shifts away from crude oil and natural gas products, higher regulatory and compliance costs, additional governmental investigations and private litigation against the oil and gas industry, including Vaalco. For example, numerous proposals have been made and are likely to continue to be made at the international, national, regional and state levels of government to monitor and limit emissions of GHGs. These efforts have included consideration of cap-and-trade programs, carbon taxes, voluntary efforts to reduce routine flaring, GHG reporting and tracking programs and regulations that directly limit GHG emissions from certain sources. In addition, institutional investors, proxy advisory firms and other industry participants continue to focus on environmental, social and governance (“ESG”) matters, including climate change. We expect that this heightened focus will continue to drive ESG efforts across our industry and influence investment and voting decisions, which for some investors may lead to less favorable sentiment towards carbon assets and diversion of investment to other industries.
Previous 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, which, as of September 2025, have been held in abeyance by the Eighth Circuit Court of Appeals until such time as the SEC reconsiders the challenged rules by notice-and-comment rulemaking or renews its defense of the rules, the SEC's withdrawal of support signals a potential shift in direction for climate disclosure regulations. Despite this regulatory shift in the U.S., we remain committed to maintaining transparency and aligning with industry standards for similarly situated companies.
Previous report
U.S. 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 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 report
The Company considers itself aligned with both the TCFD's Governance and Strategy pillars and the recommendations therein. During 2025, the Company has made meaningful progress against certain of the underlying recommendations of the TCFD’s Governance and Strategy pillars and provides statements of intent to address these recommendations, including communicating its short-, mid- and long-range goals for emission reductions, beginning with its operated assets.
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In June 2025, the UK government advanced its endorsement process for sustainability reporting standards by publishing exposure drafts for UK Sustainability Reporting Standards (“UK SRS”) S1 and S2, derived from the International Financial Reporting Standards (“IFRS”) S1 and S2 frameworks, and initiated a public consultation scheduled to conclude in autumn 2025. Pending final government approval and subsequent Financial Conduct Authority (FCA) rulemaking, UK listed businesses will be subject to phased implementation starting with climate-related disclosures, excluding Scope 3 greenhouse gas emissions in the first period, transitioning to full coverage in subsequent years. The UK approach eliminates fixed commencement dates and offers regulatory flexibility, with transitional reliefs supporting issuer compliance and a “climate-first” methodology for initial reports, ensuring a measured shift from existing TCFD requirements to the new UK SRS/IFRS-aligned disclosure regime. UK listed entities are advised to prepare for mandatory reporting in line with IFRS S1 and S2, anticipated from accounting periods beginning in 2026, subject to the outcomes of the consultation and final government direction.
Previous report
Crude oil, natural gas and NGLs revenues decreased $79.3 million, or approximately 57%, to $61.0 million during the three months ended September 30, 2025 from $140.3 million during the same period in 2024. The revenue decrease is primarily attributable to lower revenues in our Côte d'Ivoire and Canada segments.
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The revenue changes in the three months ended September 30, 2025 compared to the same period in 2024 identified as related to changes in price or volume, are shown in the table below:
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(1)Other in the table above includes 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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Depreciation, depletion and amortization costs decreased by $26.5 million, or approximately 56%, for the three months ended September 30, 2025 to $20.6 million from $47.0 million during the same period in 2024. Since there was no production during the three months ended September 30, 2025 in Côte d’Ivoire, there was also no depletion expense recorded and therefore resulted in the decrease in the overall depletion expense for the period.
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Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024
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The revenue changes in the nine months ended September 30, 2025 compared to the same period in 2024 identified as related to changes in price or volume, are shown in the table below:
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(1)Other in the table above includes 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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Gabon
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Egypt
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Canada
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Crude oil sales in Canada are normally sold through pipelines to a third party. The Company’s Canadian segment contributed $14.9 million of revenue to the Company’s total revenue for the nine months ended September 30, 2025, or a decrease of $9.6 million, compared to $24.5 million of revenue reported during the nine months ended September 30, 2024. The decrease in revenues was primarily due to lower average realized sales price received of $29.54 per Boe during the nine months ended September 30, 2025 compared to $37.29 per Boe received during the same period in 2024. Sales volumes in Canada decreased during the nine months ended September 30, 2025 to 506 MBoe in comparison to 656 MBoe in the same period in 2024.
Previous report
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. As previously noted, the FPSO ceased production in January 2025 and its refurbishment is currently underway in the shipyard. The FPSO is expected to return to service in 2026. The Company's Côte d’Ivoire segment contributed $18.4 million of revenue to the Company’s total revenue for the nine months ended September 30, 2025, or a decrease of $48.6 million, compared to $67.0 million of revenue reported during the nine months ended September 30, 2024. The decrease in revenues was primarily due to a decrease in sales volumes from 844 MBbls during nine months ended September 30, 2024 to 238 MBbls during the same period in 2025. In addition, the average realized sales price received of $77.36 per Bbl during the nine months ended September 30, 2025 was lower compared to $79.43 per Bbl received during the same period in 2024.
Showing the first 40 of 46 passages. Open the source sections for the rest.
Reworded paragraphs (38)
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 (collectively, “OPEC+”) with respect to crude oil production levels;
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•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;
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•our ability to generate cash flows that, along with our cash on hand, will be sufficient to support our operations and cash requirements;
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•our ability to generate cash flows that, along with our cash on hand and our 2025 RBL facility, will be sufficient to support our operations and cash requirements;
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•the uncertainty of estimates of crude oil, natural gas and NGLs reserves;
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•the uncertainty of estimates of crude oil and natural gas;
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•the ultimate resolution of our abandonment funding obligations with the government of Gabon and the audit of our operations in Gabon that was conducted by the government of Gabon;
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•the ultimate resolution of our abandonment funding obligations with the government of Gabon and the audit of our operations in Gabon currently being conducted by the government of Gabon;
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•general economic conditions, including any future economic downturn, the impact of inflation, and disruption in financial credit and other disruptions resulting from geo-political events such as the Russian invasion of Ukraine, conflicts in the Middle East, and trade tensions between the U.S. and China;
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•general economic conditions, including any future economic downturn, the impact of inflation or tariffs, disruptions in financial credit and other disruptions resulting from geo-political events such as the Russian invasion of Ukraine, conflicts in the Middle East, including the United States-Israel-Iran war, trade tensions between the U.S. and China and U.S. military operations in Venezuela;
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•actions by the governments and other significant actors with respect to events occurring in the countries in which we operate;
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•actions by governments and other significant actors with respect to events occurring in the countries in which we operate;
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•actions by our joint venture owners;
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•actions by our joint venture partners;
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Vaalco is a Houston, Texas-based, African-focused independent energy company with strong production and reserve portfolio of assets in Gabon, Egypt, Equatorial Guinea, Nigeria, Côte d'Ivoire, as well as Canada. We are 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, Côte d'Ivoire, Equatorial Guinea, Nigeria, as well as, prior to the Canada Assets Divestment, producing properties in Canada. We are currently engaged in the acquisition, exploration, development and production of crude oil, natural gas and NGLs.
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Geopolitical Conflict and Other Market Forces – The Company continues to monitor geopolitical developments globally, and specifically in Europe, the Middle East, Africa, and North America, where they have the potential to impact operational continuity and market dynamics. On October 9, 2025, Israel, Hamas, the United States and other countries in the region agreed to a framework for a ceasefire in Gaza between Israel and Hamas, which if sustained, could reduce regional instability in the Eastern Mediterranean, and improve security conditions affecting Egypt operations and related energy supply chains. However, whether the ceasefire will be sustained or will result in a lasting de-escalation of tensions in the region is unknown. Additionally, geopolitical tensions and localized disruptions persist in parts of West Africa, where we hold significant producing and development interests, require ongoing vigilance regarding political, economic, and security risks.
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Geopolitical Conflict and Other Market Forces – The Company continues to monitor geopolitical developments globally, and specifically in Europe, the Middle East, Africa, and North America, where they have the potential to impact operational continuity and market dynamics. Global markets are also experiencing volatility and uncertainty connected to the Russia-Ukraine war United States-Israel-Hamas conflict, United States-Israel-Iran war and the U.S intervention in Venezuela. Additionally, geopolitical tensions and localized disruptions persist in parts of West Africa, where we hold significant producing and development interests, require ongoing vigilance regarding political, economic, and security risks. The duration and impact of these ongoing armed conflicts, and the potential of these conflicts spreading to more regions are uncertain and could adversely affect the global economy, financial markets, our customers and in turn us.
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U.S. Tariffs and Global Trade Policies – In 2025, the U.S. administration enacted sweeping trade legislation, including significant tariff increases on industrial goods, energy-related equipment, and certain critical minerals, with a stated intent to prioritize domestic manufacturing and energy security. While there is significant uncertainty as to the duration of these and any further tariffs, and the impacts these tariffs and any corresponding retaliatory tariffs will have on the oil and gas industry and on commodity prices, these tariffs, along with anticipated retaliatory measures from affected trading partners, have introduced new volatility into the global supply chain for energy infrastructure. While we do not maintain U.S. based production assets, our operations in Canada and on the continent of Africa rely on equipment, services, and materials that are often sourced, engineered, or consolidated through the United States or through U.S. aligned trading routes. As a result, we may experience increased costs and longer lead times for the procurement and delivery of drilling and production equipment, particularly if suppliers adjust pricing in response to increased duties or if we are required to diversify sourcing channels. These impacts could affect the timing, cost structure and execution risk of certain development activities, especially in frontier offshore environments.
Current wording
U.S. Tariffs and Global Trade Policies – In 2025, the U.S. administration enacted sweeping trade legislation, including significant tariff increases on industrial goods, energy-related equipment, and certain critical minerals, with a stated intent to prioritize domestic manufacturing and energy security. Global trade policy continues to evolve and the ultimate impact of recent developments with respect to U.S. tariffs is unclear. While we do not maintain U.S. based production assets, our operations on the continent of Africa rely on equipment, services, and materials that are often sourced, engineered, or consolidated through the United States or through U.S. aligned trading routes. As a result, we may experience increased costs and longer lead times for the procurement and delivery of drilling and production equipment, particularly if suppliers adjust pricing in response to increased duties or if we are required to diversify sourcing channels. These impacts could affect the timing, cost structure and execution risk of certain development activities, especially in frontier offshore environments.
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Enactment of the One Big Beautiful Bill Act of 2025 – On July 4, 2025, the budget reconciliation bill known as the One Big Beautiful Bill Act of 2025 (“OBBBA”) was signed into law, which includes significant changes to federal tax law and other regulatory provisions that may impact the Company. Among other provisions, the OBBBA makes permanent key elements of the Tax Cuts and Jobs Act of 2017. We are currently evaluating the provisions of the OBBBA law and the potential effects on our financial position, results of operations, and cash flows, however we do not anticipate any material financial impact from the passage of the OBBBA.
Current wording
Enactment of the One Big Beautiful Bill Act of 2025 – On July 4, 2025, the budget reconciliation bill known as the One Big Beautiful Bill Act of 2025 (“OBBBA”) was signed into law, which includes significant changes to federal tax law and other regulatory provisions that may impact the Company. Among other provisions, the OBBBA makes permanent key elements of the Tax Cuts and Jobs Act of 2017. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The impact of provisions effective in 2025 and through the date of this filing, are not material and the Company is still assessing the impact of provisions that are not yet effective.
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The Company paid a quarterly cash dividend of $0.0625 per share of common stock for the third quarter of 2025 ($0.25 annualized) on September 19, 2025 to stockholders of record at the close of business on August 22, 2025. The Company also announced its next quarterly cash dividend of $0.0625 per share of common stock for the fourth quarter of 2025 ($0.25 annualized) to be paid on December 24, 2025 to stockholders of record at close of business on November 21, 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.
Current wording
The Company paid a quarterly cash dividend of $0.0625 per share of common stock for the first quarter of 2026 ($0.25 annualized) on March 27, 2026 to stockholders of record at the close of business on February 27, 2026. The Company also announced its next quarterly cash dividend of $0.0625 per share of common stock for the second quarter of 2026 ($0.25 annualized) to be paid on June 26, 2026 to stockholders of record at close of business on May 22, 2026. 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.
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Our cash flows for the nine months ended September 30, 2025 and 2024 are as follows:
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Our cash flows for the three months ended March 31, 2026 and 2025 are as follows:
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The $94.6 million change in net cash used in investing activities during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, was due to costs associated with the development drilling programs in Egypt, as well as maintenance, project costs and long lead items for Gabon and Côte d'Ivoire. For the nine months ended September 30, 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. In addition, Vaalco used $40.2 million in cash for the acquisition of Svenska which is offset by the cash received from Svenska in the amount of $40.6 million.
Current wording
Net cash used in investing activities during the three months ended March 31, 2026 was primarily attributable to $78.1 million for costs associated with the Baobab FPSO refurbishment work and the development drilling programs in Gabon, as well as maintenance, project costs and long lead items for Gabon and Côte d’Ivoire, offset by cash proceeds of $25.5 million from the Canada Assets Divestment. For the three months ended March 31, 2025, cash used in investing activities was due to capital spending costs associated with the development drilling programs in Egypt, as well as maintenance, project costs and long lead items for Gabon and Côte d'Ivoire.
Previous wording
Net cash provided by financing activities during the nine months ended September 30, 2025 primarily consists of $60.0 million in proceeds from borrowings under the 2025 RBL Facility, offset by cash used of $19.8 million for dividend distributions, $7.1 million of payments for deferred financing costs and $9.8 million of principal payments on our finance leases. For the nine months ended September 30, 2024, cash used in financing activities included $19.6 million for dividend distributions, $6.8 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 $6.3 million of principal payments on our finance leases partially offset by $0.4 in proceeds from options exercised.
Current wording
Net cash provided by financing activities during the three months ended March 31, 2026 primarily consists of $92.0 million in proceeds from borrowings under the 2025 RBL Facility, offset by cash used of $6.7 million for dividend distributions, $1.2 million of payments for deferred financing costs and $3.2 million of principal payments on our finance leases. For the three months ended March 31, 2025, cash used in financing activities primarily 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.
Previous wording
For the nine months ended September 30, 2025, we had accrual basis capital expenditures of $147.6 million compared to $73.1 million accrual basis capital expenditures for the same period in 2024. For the nine months ended September 30, 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 refurbishment of the FPSO in Côte d'Ivoire. During the same period in 2024, our cash spending primarily related to the Svenska acquisition as well as payments for the 2024 drilling campaigns in both Egypt and Canada.
Current wording
For the three months ended March 31, 2026, we had accrual basis capital expenditures of $73.5 million compared to $51.3 million accrual basis capital expenditures for the same period in 2025. For the three months ended March 31, 2026, our cash spending primarily related to the new wells drilled as part of the Phase Three drilling campaign in Gabon as well as expenditures associated with the refurbishment and reconnection activities of the FPSO in Côte d’Ivoire. During the same period in 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 refurbishment in Côte d’Ivoire.
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. 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 to the unaudited condensed consolidated financial statements for further discussion.
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. We have entered into derivative contracts primarily with counterparties that are also lenders under the 2025 RBL Facility. 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 7. Derivatives to the unaudited condensed consolidated financial statements for further discussion.
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. 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 sources of liquidity have been cash flows from operations, cash on hand and available borrowing capacity under the 2025 RBL Facility, and our primary use of cash has been to fund capital expenditures for development activities. At March 31, 2026, we had unrestricted cash of $48.0 million. 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 and our 2025 RBL Facility to support our current cash requirements during the next 12 months and beyond, including the FPSO refurbishment, drilling programs, dividend payments, Merged Concession Agreement, abandonment funding, 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.
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 refurbishment and reconnection, drilling programs, dividend payments, Merged Concession Agreement, abandonment funding, 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
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.
Current wording
Our material cash requirements generally consist of the FPSO refurbishment and reconnection, 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
Leases - We are a party to several operating and financing lease arrangements, including operating leases for the corporate office, a drilling rig, rental of marine vessels and a helicopter, warehouse and storage facilities, equipment and financing lease agreements for the FSO, generators and turbines used in the operations of the Etame Marin block and for equipment, offices and vehicles used in the operations of Canada and Egypt. The annual costs of these leases are significant to us.
Current wording
Leases - We are a party to several operating and financing lease arrangements, including operating leases for the corporate office, a drilling rig, rental of marine vessels and a helicopter, warehouse and storage facilities, equipment and financing lease agreements for the FSO, generators and turbines used in the operations of the Etame Marin block and for equipment, offices and vehicles used in the operations in Canada and Egypt. The annual costs of these leases are significant to us.
Previous 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 September 30, 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.
Current wording
Merged Concession Agreement - Under the Merged Concession Agreement, a total of $65.0 million of modernization payments were to be made to EGPC over a period of six years from February 1, 2020 (the “Merged Concession Effective Date”) for a total of $150 million over the 15-year license contract term. As of December 31, 2025, all modernization payments had been fully settled either through actual cash payments or through the issuance of credit against receivables owed from EGPC. We also have minimum financial work commitments of $50.0 million per each five-year period of the primary development term, commencing on the Merged Concession Effective Date. As of December 31, 2025, all modernization payments had been fully settled either through actual cash payments or through the issuance of credit against receivables owed from EGPC. Through March 31, 2026, 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
Drilling Rig Commitment -The Company entered into a bareboat charter agreement (the “Bareboat Charter”) during the fourth quarter of 2024 to charter a drilling rig for its drilling program in Gabon that is expected to commence during the fourth quarter of 2025. Pursuant to the Bareboat Charter, the Company also entered into a service agreement with a third party for purposes of maintaining and operating the drilling rig on its behalf. The Bareboat Charter is expected to commence once the mobilization of the drilling rig towards the Company’s first well has commenced and has a noncancellable period of 300 days plus five single well options. The Bareboat Charter stipulates fixed day rates and other variable payments.
Current wording
Drilling Rig Commitment -The Company entered into the Bareboat Charter for its Phase Three drilling campaign in Gabon. Pursuant to the Bareboat Charter, the Company also entered into a service agreement with a third party for purposes of maintaining and operating the drilling rig on its behalf. The Bareboat Charter and the service agreement commenced in November 2025 and has a noncancelable period of 300 days plus five single well options. The Bareboat Charter and the service agreement stipulate fixed day rates and other variable payments.
Previous wording
Net income for the three months ended September 30, 2025 was $1.1 million compared to a net income of $11.0 million during the same period of 2024. See discussion below for changes in revenues and expenses.
Current wording
Net loss for the three months ended March 31, 2026 was $93.8 million compared to a net income of $7.7 million during the same period of 2025. See discussion below for changes in revenues and expenses.
Previous wording
Crude oil, natural gas and NGLs revenues decreased $89.0 million, or approximately 25%, to $268.2 million during the nine months ended September 30, 2025 from $357.3 million during the same period in 2024. The revenue decrease is primarily due to lower revenues in Gabon and Côte d’Ivoire.
Current wording
Crude oil, natural gas and NGLs revenues decreased $47.7 million, or approximately 43%, to $62.6 million during the three months ended March 31, 2026 from $110.3 million during the same period in 2025. The revenue decrease is primarily due to lower revenues in Gabon, Côte d’Ivoire and Canada.
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 $132.0 million of revenue to the Company’s total revenue during the nine months ended September 30, 2025, a decrease of $26.8 million from the $158.8 million of revenue reported during the nine months ended September 30, 2024. The decrease in revenues is primarily due to the lower average realized sales price received in Gabon of $69.52 per Bbl for nine months ended September 30, 2025 compared to $81.55 per Bbl average realized sales price received during the same period in 2024. Additionally, there was a decrease in sales volume in Gabon to 1,891 MBbls for the nine months ended September 30, 2025 from the 1,947 MBbls sales volume during the same period of 2024. Gabon's share of crude oil inventory, excluding royalty barrels, was approximately 292 MBbls and 217 MBbls at September 30, 2025 and 2024, 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 $21.4 million of revenue to the Company’s total revenue during the three months ended March 31, 2026, a decrease of $30.8 million from the $52.2 million of revenue reported during the three months ended March 31, 2025. The decrease in revenues is primarily due to the lower average realized sales price received in Gabon of $66.32 per Bbl for the three months ended March 31, 2026 compared to $79.25 per Bbl average realized sales price received during the same period in 2025. Additionally, sales volumes in Gabon decreased to 323 MBbls for the three months ended March 31, 2026 from the 658 MBbls reported during the same period of 2025. Gabon's share of crude oil inventory, excluding royalty barrels, was approximately 333 MBbls and 276 MBbls at March 31, 2026 and 2025, 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, through EGPC. During the three months ended September 30, 2025, the oil sold in Egypt was through direct sales to EGPC. The Company’s Egypt segment contributed $35.7 million of revenue to the Company’s total revenue for the three months ended September 30, 2025, which is higher than the $34.5 million of revenue reported during the three months ended September 30, 2024. The increase in revenues was primarily due to an increase in sales volumes to 693 MBbls during the three months ended September 30, 2025 compared to 657 MBbls, during the three months ended September 30, 2024 partially offset by a decrease in average realized sales price from $52.58 per Bbl during the three months ended September 30, 2024 to $51.51 per Bbl during the same period in 2025.
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, 2026, the oil sold in Egypt was through direct sales to EGPC. The Company’s Egypt segment contributed $38.9 million of revenue to the Company’s total revenue for the three months ended March 31, 2026, which is $5.0 million higher than the $33.9 million of revenue reported during the three months ended March 31, 2025. The increase in revenues was primarily due to the increase in average realized sales price from $52.85 per Bbl during the three months ended March 31, 2025 to $56.57 per Bbl during the same period in 2026. Sales volumes in Egypt slightly increased to 688 MBbls during the three months ended March 31, 2026 from 642 MBbls sold during the same period in 2025.
Previous 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. As previously noted, the FPSO ceased production in January 2025 and its refurbishment is currently underway in the shipyard. The FPSO is expected to return to service in 2026. As such, there were no revenues from the Company's Côte d’Ivoire segment during the three months ended September 30, 2025. Revenues during the three months ended September 30, 2024 were $49.8 million with total sales volumes of 632 MBbls and an average sales price received of $78.75 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. As previously noted, the FPSO ceased production in January 2025 to undergo a planned refurbishment which was completed in February 2026. The FPSO arrived back in Côte d’Ivoire in early April 2026. Reconnection activities are now underway and field production is expected to restart during the second quarter of 2026. A rig has been secured for the planned development drilling program which is expected to begin at the end of the third quarter of 2026. The drilling campaign is expected to bring meaningful additions to production from the main Baobab field in CI-40. As such, there were no revenues from the Côte d’Ivoire segment for the three months ended March 31, 2026. The Côte d’Ivoire segment reported revenues of $18.0 million during the three months ended March 31, 2025 with total sales volumes of 238 MBbls and an average realized sales price received of $75.87 per Bbl.
Previous wording
Crude oil sales in Canada are normally sold through pipelines to a third party. The Company’s Canadian segment contributed $4.0 million of revenue to the Company’s total revenue for the three months ended September 30, 2025, or a decrease of $4.4 million compared to $8.4 million of revenue reported during the three months ended September 30, 2024. The decrease in revenues was primarily due to lower average realized sales price received of $26.13 per Boe during the three months ended September 30, 2025 compared to the $36.95 per Boe received during the same period in 2024. Sales volumes in Canada decreased during the three months ended September 30, 2025 to 155 MBoe in comparison to 227 MBoe in the same period in 2024.
Current wording
Prior to the Canada Assets Divestment, crude oil sales in Canada were normally sold through pipelines to a third party. The Company’s Canadian segment contributed $2.3 million of revenue to the Company’s total revenue for the three months ended March 31, 2026, or a decrease of $3.9 million, compared to $6.2 million of revenue reported during the three months ended March 31, 2025. The decrease in revenues was primarily due to the Canada Assets Divestment. We received a lower average realized sales price of $27.34 per Boe during the three months ended March 31, 2026 compared to $34.61 per Boe received during the same period in 2025. Sales volumes in Canada also decreased during the three months ended March 31, 2026 to 83 MBoe in comparison to 179 MBoe in the same period in 2025.
Previous wording
Production expenses decreased $12.5 million, or approximately 29%, for the three months ended September 30, 2025 to $29.9 million from $42.3 million for the same period in the prior year. The decrease was primarily driven by a reduction in production expenses in our Côte d’Ivoire segment. On a per barrel basis, production expense, excluding workover expense and stock compensation expense, for the three months ended September 30, 2025 increased to $25.23 per barrel from $19.80 per barrel for the three months ended September 30, 2024.
Current wording
Production expenses decreased $16.4 million for the three months ended March 31, 2026 to $28.4 million from $44.8 million for the same period in the prior year. The decrease in production expenses was primarily driven by lower expenses in Gabon mainly due to the change in oil inventory adjustments. Production expenses associated with unsold crude oil inventory are capitalized and included in inventory, which are then subsequently expensed when oil inventory is sold. In addition, we had higher costs during the three months ended March 31, 2025 related to government audit settlements. We also had significantly lower production expense in Cote d’Ivoire as there were no production operations during the current period. On a per barrel basis, production expense, excluding workover expense and stock compensation expense, for the three months ended March 31, 2026 slightly decreased to $25.89 per barrel from $26.05 per barrel for the three months ended March 31, 2025.
Previous wording
Exploration expensefor the three months ended September 30, 2025 of $0.4 million was attributable to the purchase of additional seismic data to be used in Block 705 in Cote d’Ivoire and to expenses related to Blocks G and H in Gabon. There were no exploration costs incurred during the same period in 2024.
Current wording
Exploration expensefor the three months ended March 31, 2026 of $22.4 million was comprised of the cost of additional seismic data to be used in Niosi and Guduma blocks, and the costs of a well in Gabon that was determined to be unsuccessful. There were no exploration costs incurred during the same period in 2025.
Previous wording
Depreciation, depletion and amortization costs decreased $26.9 million, or approximately 25%, for the nine months ended September 30, 2025 to $79.1 million from $106.0 million during the same period in 2024. The decrease in depreciation, depletion and amortization expense is primarily related to the lower depletable costs in Gabon and Egypt. Also, since there was no production since January 2025 in Côte d’Ivoire, there was also no depletion expense recorded and therefore resulted in the decrease in the overall depletion expense for the period.
Current wording
Depreciation, depletion and amortization costs decreased $12.1 million, or approximately 40%, for the three months ended March 31, 2026 to $18.2 million from $30.3 million during the same period in 2025. The decrease in depreciation, depletion and amortization expense is due primarily to lower depletable costs in Gabon and to no production in Cote d’Ivoire during the current quarter.
Previous wording
General and administrative expenses increased by $1.9 million, or 28%, for the three months ended September 30, 2025 to $8.8 million from $6.9 million during the same period in 2024. The increase in general and administrative expenses is primarily due to an increase in professional service fees and salaries and wages.
Current wording
General and administrative expenses slightly decreased by $0.8 million, or 9%, for the three months ended March 31, 2026 to $8.3 million from $9.1 million during the same period in 2025. The decrease in general and administrative expenses is primarily due to a decrease in compensation expenses.
Previous wording
Credit losses and other increased by approximately $0.4 million for the three months ended September 30, 2025 compared to the same period in 2024. The increase in credit losses and other is primarily attributable to allowance charges related to the joint venture partners and value added tax receivables. Credit losses and other for the same period in 2024 was an insignificant amount due to a smaller joint venture partner receivable.
Current wording
Credit losses and other increased by approximately $0.3 million during the three months ended March 31, 2026 compared to the same period in 2025. The increase in credit losses and other for the three months ended March 31, 2026, is primarily attributable to allowance charges related to receivables from joint venture partners.
Previous wording
Derivative instruments gain (loss), netis attributable to our swaps and collars as discussed in Part I, Item 1, Note 8. Derivatives to the unaudited condensed consolidated financial statements. Derivative loss increased by $1.3 million to a loss of $1.1 million for the three months ended September 30, 2025 from a gain of $0.2 million during the same period in 2024. Derivative loss for the three months ended September 30, 2025 are a result of the decrease 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, 2025. Our derivative instruments currently cover a portion of our production through September 2026 for oil and through December 2026 for natural gas.
Current wording
Derivative instruments loss, netis attributable to our swaps and collars as discussed in Part I, Item 1, Note 7. Derivatives to the unaudited condensed consolidated financial statements. We recorded a $70.6 million net loss on derivative instruments for the three months ended March 31, 2026, which included an unrealized loss of $55.9 million related to the change in fair value of our commodity derivative contracts primarily driven by an increase in the futures curve for forecasted commodity prices and a realized loss of $14.6 million on matured commodity derivative contracts. We recognized a net loss on derivative instruments of $0.1 million during the same period in 2025. The increase in derivative losses was primarily due to a higher volume of outstanding derivative contracts entered into for the three months ended March 31, 2026 compared to the same period in 2025. Our derivative instruments currently cover a portion of our crude oil production through June 2027.
Previous wording
Interest expense, netwas $2.3 million for the three months ended September 30, 2025 compared to an expense of $0.6 million during the same period in 2024. The increase in net interest expense for the three months ended September 30, 2025 primarily resulted from an increase in our amortization of debt issue costs, commitment fees incurred and interest incurred on our borrowing under the 2025 RBL Facility, partially offset by interest income.
Current wording
Interest expense, netwas $1.7 million for the three months ended March 31, 2026 compared to an expense of $1.3 million during the same period in 2025. The increase in net interest expense for the three months ended March 31, 2026 primarily resulted from an increase in our amortization of debt issue costs, commitment fees incurred and interest incurred on our borrowings under the 2025 RBL Facility, partially offset by interest income.
Previous wording
Other income (expense), netincreased by $0.2 million to an income of less than $0.1 million for the three months ended September 30, 2025 from a $0.1 million expense during the same period in 2024. Other income (expense), net, normally consists primarily of foreign currency gains and losses.
Current wording
Other income (expense), net was an expense of $1.0 million for the three months ended March 31, 2026 and 2025. 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, 2025 was a benefit of $3.6 million which includes a $3.9 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, income taxes were $0.3 million for the period. Income tax expense for the three months ended September 30, 2024 was an expense of $32.6 million. This expense 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.
Current wording
Income tax expense for the three months ended March 31, 2026 was an expense of $4.3 million which includes a $2.9 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 $1.4 million for the period. Income tax expense for the three months ended March 31, 2025 was $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, current income taxes were $15.4 million for the period.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Dividend Policy - Our Board of Directors adopted a quarterly cash dividend policy of an expected $0.0625 per common share per quarter, which commenced in the first quarter of 2023. 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.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
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 $21.3 million of revenue to the Company’s total revenue during the three months ended September 30, 2025, a decrease of $26.3 million from the $47.6 million of revenue reported during the three months ended September 30, 2024. The decrease in revenues is primarily due to a sales volume decrease in Gabon from the 617 MBbls reported during the third quarter of 2024 to 333 MBbls for the three months ended September 30, 2025 combined with a lower average realized sales price received in Gabon of $62.40 per Bbl for three months ended September 30, 2025 compared to the $77.16 per Bbl average realized sales price received during the same period in 2024. The lower sales and production volumes is primarily a result of a planned and successful full field maintenance shutdown which occurred in July 2025. Gabon's share of crude oil inventory, excluding royalty barrels, was approximately 292 MBbls to 217 MBbls at September 30, 2025 and 2024, respectively.
Previous report — wording carried elsewhere
Net income for the nine months ended September 30, 2025 was $17.2 million compared to a net income of $46.8 million during the same period of 2024. See discussion below for changes in revenues and expenses.
Previous report — wording carried elsewhere
*Average of daily Dated Brent spot prices posted on the U.S. Energy Information Administration website.
Previous report — wording carried elsewhere
Crude oil, natural gas and NGL revenues:
Previous report — wording carried elsewhere
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 nine months ended September 30, 2025, the oil sold in Egypt was through direct sales to EGPC. The Company’s Egypt segment contributed $102.9 million of revenue to the Company’s total revenue for the nine months ended September 30, 2025, which is $4.1 million lower than the $107.0 million of revenue reported during the nine months ended September 30, 2024. The decrease in revenues was primarily due to a decrease in average realized sales price from $55.12 per Bbl during the nine months ended September 30, 2024 to $50.74 per Bbl during the same period in 2025. Sales volumes in Egypt remained relatively consistent at 2,027 MBbls and 1,941 MBbls during the nine months ended September 30, 2025 and 2024, respectively.
Previous report — wording carried elsewhere
Interest expense, netwas $6.2 million for the nine months ended September 30, 2025 compared to an expense of $2.6 million during the same period in 2024. The increase in net interest expense for the nine months ended September 30, 2025 primarily resulted from an increase in our amortization of debt issue costs, commitment fees incurred and interest incurred on our borrowings under the 2025 RBL Facility, partially offset by interest income.
Previous report — wording carried elsewhere
Income tax expense (benefit) for the nine months ended September 30, 2025 was an expense of $19.5 million which includes a $6.4 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, income taxes were $25.9 million for the period. Income tax expense for the nine months ended September 30, 2024 was $64.1 million. This expense 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 such period.