VAALCO ENERGY INC /DE/

Previous wording

•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;

Current wording

•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 Russia/Ukraine war, 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;

Previous 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.

Current wording

Vaalco is a Houston, Texas-based, African-focused independent energy company with a strong production and reserve portfolio of assets in Gabon, Egypt, Côte d’Ivoire, Equatorial Guinea, Nigeria, and, 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.

Previous wording

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.

Current wording

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, conflicts in the Middle East, including the 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, and 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.

Previous 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.

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 is not material and the Company is still assessing the impact of provisions that are not yet effective.

Previous wording

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 wording

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 several 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.

Previous wording

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 wording

In addition, 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.

Previous wording

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 wording

Following the completion of its planned dry dock refurbishment in February 2026, the Baobab FPSO returned to Côte d’Ivoire and was successfully reconnected to field infrastructure in early April 2026. Production resumed from all producer wells in June 2026. While production has restarted, the first crude oil lifting is scheduled for August 2026. A drilling rig has been mobilized and the drilling program is expected to start in September 2026. This development campaign is expected to drive meaningful production growth and further unlock the value of the main Baobab field in Block CI-40.

Previous wording

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, which focuses on key areas of drilling evaluations, facilities design, market inquiries and metocean review. The Company has completed the initial Front End Engineering and Design study that confirmed the viability of the development concept and is currently evaluating alternative technical solutions which may deliver enhanced economic value.

Current wording

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, which focuses on key areas of drilling evaluations, facilities design, market inquiries and metocean review. The Company has completed the initial Front End Engineering and Design study that confirmed the viability of the development concept and is currently evaluating alternative technical solutions which may deliver enhanced economic value. Work is progressing towards Final Investment Decision in the fourth quarter of 2026.

Previous wording

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 wording

As discussed above, in February 2026, the Company completely exited its Canadian oil and gas operations. Please see Part I, Item 1, Note 3. Acquisition and Disposition to the unaudited condensed consolidated financial statements for further discussion on the sale of the Canada operating assets.

Previous 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.

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 June 30, 2026, we had unrestricted cash of $30.4 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 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.

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 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, or other strategic transactions depends on operating and economic conditions, some of which are beyond our control. In the event additional capital is needed, we may not be able to obtain debt or equity financing on terms favorable to us, on expected timelines, or at all. We continue to evaluate the use of available cash, including opportunistic acquisitions and other growth initiatives, and assess whether additional liquidity sources, including equity and/or debt financing, would be appropriate to fund such activities.

Previous wording

Our cash flows for the three months ended March 31, 2026 and 2025 are as follows:

Current wording

Our cash flows for the six months ended June 30, 2026 and 2025 are as follows:

Previous wording

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 wording

The $16.6 million decrease in net cash provided by operating activities during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily attributable to cash settlements paid on matured derivative contracts and higher exploration expenses, including the acquisition of seismic data and costs associated with an unsuccessful well. These decreases were partially offset by higher crude oil, natural gas and natural gas liquids sales and favorable changes in working capital and other assets and liabilities.

Previous 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.

Current wording

Net cash used in investing activities during the six months ended June 30, 2026 was primarily attributable to $181.6 million for expenditures associated with the Baobab FPSO refurbishment work and reconnection activities, as well as the development drilling programs in Gabon and Egypt, offset by cash proceeds of $25.5 million from the Canada Assets Divestment. For the six months ended June 30, 2025, cash used in investing activities 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.

Previous 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.

Current wording

Net cash provided by financing activities during the six months ended June 30, 2026 primarily consisted of $117.0 million of proceeds from borrowings under the 2025 RBL Facility, offset by cash outflows of $13.4 million for dividend distributions, $2.2 million for deferred financing costs, $2.0 million to satisfy employee withholding tax obligations related to vested equity awards, and $6.2 million of principal payments on finance lease obligations. For the six months ended June 30, 2025, cash used in financing activities primarily included $13.1 million for dividend distributions, $6.9 million of payments for deferred financing costs and $6.3 million of principal payments on our finance leases, offset by $60.0 million in proceeds from borrowing under the 2025 RBL Facility.

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. 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.

Current wording

We actively manage commodity price risk by entering into derivative transactions that help mitigate the impact of volatility in crude oil, NGL and natural gas prices on our cash flows and operating results; however, these transactions may also limit our cash flow in periods of rising crude oil, NGL and natural gas prices. We have entered into derivative contracts primarily with counterparties that are also lenders under the 2025 RBL Facility. 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 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.

Current wording

Our material cash requirements generally consist of capital projects, finance and operating leases, dividend payments, Merged Concession Agreement and abandonment funding, each of which is discussed in further detail below.

Previous 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.

Current wording

Capital Projects and Expenditures - For the six months ended June 30, 2026, we had accrual basis capital expenditures of $172.4 million compared to $92.2 million accrual basis capital expenditures for the same period in 2025. Capital spending during the six-month period ended June 30, 2026, primarily reflected development activities associated with the Phase Three drilling campaign in Gabon, refurbishment and reconnection activities relating to the FPSO in Côte d’Ivoire, expenditures associated with an unsuccessful exploration well in Gabon and costs incurred in connection with the 3D seismic campaign across the Niosi and Guduma blocks.

Previous 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.

Current wording

Merged Concession Agreement - Under the Merged Concession Agreement, we have minimum financial work commitments of $50.0 million per each five-year period of the primary development term, commencing on February 1, 2020. Through June 30, 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. See Part I, Item 1, Note 9. Commitments and Contingencies to the unaudited condensed consolidated financial statements for additional information.

Previous 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.

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 have 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

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 wording

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 years. During the first exploration period, the joint owners intend to reprocess existing seismic and carry out a 3D 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.

Previous 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.

Current wording

The Company paid a quarterly cash dividend of $0.0625 per share of common stock for the second quarter of 2026 ($0.25 annualized) on June 26, 2026 to stockholders of record at the close of business on May 22, 2026. The Company also announced its next quarterly cash dividend of $0.0625 per share of common stock for the third quarter of 2026 ($0.25 annualized) to be paid on September 22, 2026 to stockholders of record at the close of business on August 21, 2026.

Previous 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.

Current wording

Net income for the three months ended June 30, 2026 was $42.4 million compared to a net income of $8.4 million during the same period in 2025. See discussion below for changes in revenues and expenses.

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 $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.

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. Total revenue from our Gabon segment was $91.8 million during the three months ended June 30, 2026, an increase of $33.2 million from the $58.6 million of revenue reported during the three months ended June 30, 2025. The increase in revenues is primarily due to a higher average realized sales price received in Gabon of $92.31 per Bbl for the three months ended June 30, 2026 compared to the $65.02 per Bbl average realized sales price received during the same period in 2025. Sales volumes also slightly increased from the 900 MBbls reported during the second quarter of 2025 to 948 MBbls for the three months ended June 30, 2026. Gabon’s share of crude oil inventory, excluding royalty barrels, was approximately 125 MBbls and 55 MBbls at June 30, 2026 and 2025, respectively.

Previous 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.

Current wording

Prior to the Canada Assets Divestment, crude oil sales in Canada were normally sold through pipelines to a third party. During the three months ended June 30, 2025, the Company’s Canadian segment contributed $4.7 million of revenue based on sales volumes of 172 MBoe and an average realized sales price received of $27.35 per Boe.

Previous 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.

Current wording

Production expenses increased $5.1 million, or approximately 13%, for the three months ended June 30, 2026 to $45.5 million from $40.4 million for the same period in the prior year. The increase was primarily attributable to higher production expenses in our Gabon and Egypt segments, offset by lower production expenses resulting from the Canada Assets Divestment and the change in oil inventory adjustments in Cote d’Ivoire. Production expenses associated with unsold crude oil inventory are capitalized and included in inventory, which are then subsequently expensed when oil inventory is sold. On a per barrel basis, production expense, excluding workover expense and stock compensation expense, for the three months ended June 30, 2026 increased to $28.05 per barrel from $22.85 per barrel for the three months ended June 30, 2025.

Previous 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.

Current wording

Credit losses and other increased by approximately $0.5 million for the three months ended June 30, 2026 compared to the same period in 2025. The increase in credit losses and other is primarily attributable to allowance charges related to other receivables.

Previous 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.

Current wording

Interest expense, netwas $2.7 million for the three months ended June 30, 2026 compared to an expense of $2.6 million during the same period in 2025. The increase in net interest expense for the three months ended June 30, 2026 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.

Previous 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.

Current wording

Income tax expensefor the three months ended June 30, 2026 was $16.8 million, which includes a $1.0 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 $17.8 million for the period. Income tax expense for the three months ended June 30, 2025 was an expense of $7.0 million, which includes a $3.1 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 $10.1 million for the period.

Previous 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.

Current wording

Crude oil, natural gas and NGLs revenues decreased $9.4 million, or approximately 5%, to $197.8 million during the six months ended June 30, 2026 from $207.2 million during the same period in 2025. The revenue decrease is attributed to lower sales volumes primarily in Côte d’Ivoire and Canada, partially offset by higher average realized sales prices per barrel.

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 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.

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 six months ended June 30, 2026, the oil sold in Egypt was through direct sales to EGPC. The Company’s Egypt segment contributed $82.3 million of revenue to the Company’s total revenue for the six months ended June 30, 2026, which is $15.1 million higher than the $67.2 million of revenue reported during the six months ended June 30, 2025. The increase in revenues was primarily due to the increase in average realized sales price from $50.34 per Bbl during the six months ended June 30, 2025 to $60.49 per Bbl during the same period in 2026, as well as the slight increase in sales volumes from 1,334 MBbls to 1,360 MBbls.

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 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.

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 discussed, following the completion of its planned dry dock refurbishment in February 2026, the Baobab FPSO returned to Côte d’Ivoire and was successfully reconnected to field infrastructure in early April 2026. While production has restarted, the first crude oil lifting is scheduled for August 2026. As such, there were no revenues from the Côte d’Ivoire segment for the six months ended June 30, 2026. The Côte d’Ivoire segment reported revenues of $18.4 million during the six months ended June 30, 2025 with total sales volumes of 238 MBbls and an average realized sales price received of $77.36 per Bbl. Côte d’Ivoire’s share of crude oil inventory was approximately 106 MBbls at June 30, 2026.

Previous 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.

Current wording

Exploration expensefor the six months ended June 30, 2026 of $22.5 million included the cost of additional seismic data for the Niosi and Guduma blocks, and the costs of an unsuccessful well in Gabon. Exploration expense for the six months ended June 30, 2025 was $2.5 million which was attributable to the purchase of seismic data for Block 705 in Côte d’Ivoire.

Previous 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.

Current wording

Depreciation, depletion and amortization costs decreased $6.1 million, or approximately 10%, for the six months ended June 30, 2026 to $52.5 million from $58.6 million during the same period in 2025. The decrease in depreciation, depletion and amortization expense is due primarily to the Canada Assets Divestment completed in February 2026 as well as due to lower production volumes in Côte d’Ivoire, offset by higher depletable costs in Gabon.

Previous wording

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.

Current wording

Loss on asset divestmentof $1.2 million for the six months ended June 30, 2026 was attributable to the Canada Assets Divestment, which closed in February 2026.

Previous 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.

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 $51.9 million net loss on derivative instruments for the six months ended June 30, 2026, which included an unrealized loss of $12.2 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 $39.7 million on matured commodity derivative contracts. We recognized a net gain on derivative instruments of $0.3 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 six months ended June 30, 2026 compared to the same period in 2025. Our derivative instruments currently cover a portion of our crude oil production through September 2027.

Previous 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.

Current wording

Other income (expense), netwas an expense of $1.4 million and $0.7 million for the six months ended June 30, 2026 and 2025, respectively. Other income (expense), net, primarily consists of foreign currency gains and losses.