VAALCO ENERGY INC /DE/

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 . ORGANIZATION AND ACCOUNTING POLICIES

Vaalco Energy, Inc. (together with its consolidated subsidiaries, “we”, “us”, “our”, “Vaalco” or the “Company”) is a Houston, Texas-based independent energy company engaged in the acquisition, exploration, development and production of crude oil, natural gas and natural gas liquids (“NGLs”) properties. We have a diversified African-focused asset portfolio in Gabon, Egypt, Côte d’Ivoire, and Equatorial Guinea, and, prior to the Canada Assets Divestment (defined below), producing properties in Canada.

These unaudited condensed consolidated financial statements (“Financial Statements”) reflect the opinion of management and include all adjustments necessary for a fair presentation of results for the interim periods presented. All adjustments are of a normal recurring nature unless disclosed otherwise. Interim period results are not necessarily indicative of results expected for the full year.

These Financial Statements have been prepared in accordance with the rules of the Securities and Exchange Commission (“SEC”) and do not include all the information and disclosures required by accounting principles generally accepted in the United States (“GAAP”) for complete financial statements. They should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, which includes a summary of the significant accounting policies.

Allowance for credit losses and other– The Company estimates the current expected credit losses based primarily on either an aging analysis or a discounted cash flow methodology that incorporates consideration of current and future conditions that could impact its counterparties’ credit quality and liquidity. Uncollectible receivables are written off when a settlement is reached for an amount that is less than the outstanding historical balance or when the Company has determined that the balance will not be collected.

The following table provides an analysis of the change in the aggregate credit loss allowance and other allowances.

Derivative instruments and hedging activities–

Commodity Derivative Instruments

The Company enters into crude oil and natural gas derivative contracts from time to time in an effort to mitigate the effects of commodity price volatility and enhance the predictability of cash flows relating to a portion of our crude oil and natural gas production. While these instruments mitigate the cash flow risk of future decreases in commodity prices, they may also curtail benefits from future increases in commodity prices.

The Company records derivative assets and liabilities at fair value in the consolidated balance sheets. The Company has previously elected not to offset fair value amounts of qualifying derivatives under a master netting arrangement and associated fair value amounts for cash collateral receivables and payables. Beginning during the three months ended March 31, 2026 and effective during such period and for subsequent periods thereafter, the Company changed the presentation of derivative assets and liabilities on the Consolidated Balance Sheets from a gross basis to a net basis by counterparty when a legally enforceable master netting arrangement exists. The Company believes that net presentation better reflects the rights and obligations associated with these derivative instruments. This change affects presentation only and does not affect the recognition, measurement, or classification of the derivative assets and liabilities. It also had no impact on the Company’s consolidated statements of operations, cash flows, or shareholders’ equity. Prior period amounts have been conformed to the current presentation. Gains and losses from the change in fair value of derivative instruments and cash settlements on commodity derivatives are presented in the “Commodity derivative instruments gain (loss), net” in the consolidated statements of operations and comprehensive income (loss).

Interest Rate Derivative Instruments

The Company uses an interest rate collar to manage its exposure to changes in interest rates on a portion of borrowings outstanding under its 2025 RBL Facility (defined below). The interest rate collar establishes a ceiling and a floor on the applicable reference rate, thereby reducing the Company's exposure to significant increases in interest rates while allowing the Company to participate in a portion of potential decreases in market rates. Settlements under the interest rate collar are recognized as a component of interest expense in the statements of operations. As the Company’s interest rate collar is not designated as a hedging instrument for accounting purposes, changes in the fair value of the derivative instruments are recognized in “Interest expense, net” in the consolidated statements of operations and comprehensive income (loss).

Fair Value of Derivative Instruments–The following tables present the carrying amounts and fair value hierarchy classifications of the Company’s derivative assets and liabilities measured at fair value on a recurring basis as of September 30, 2026 and December 31, 2025.

Commodity Derivatives. The Company’s commodity derivatives primarily consist of crude oil collars, fixed-price swaps, and differential swaps. The fair values of these contracts are determined using Level 2 inputs, including the contractual terms of the underlying positions, current market prices, crude oil forward curves, discount rates, and volatility factors.

Interest Rate Derivative. The Company’s interest rate collar is valued using Level 2 inputs. The fair value of the collar is determined based on the contracted notional amount, contractual terms, remaining term, and observable market inputs, including forward SOFR yield curves, volatility factors, and applicable discount rates.

See Note 7. Derivatives for additional information regarding the Company’s derivative contracts.

2 . NEW ACCOUNTING STANDARDS

Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Accounting Standards Update 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements for interim and annual reporting periods. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on the notes to its consolidated financial statements and its processes.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The ASU introduces a practical expedient and, for non-public business entities, an accounting policy election to simplify the application of credit loss guidance to short-term receivables and contract assets by allowing consideration of post-balance-sheet collections. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company has elected to not adopt the practical expedient and therefore, the Company, when estimating its credit losses, will continue to consider available information that is relevant to its assessment of the collectability of cash flows, including historical losses, current economic conditions, and reasonable and supportable forecasts. Management will continue to monitor changes in the Company’s portfolio, economic conditions, and future guidance issued by the Financial Accounting Standards Board to determine whether the election of the practical expedient would be appropriate in future reporting periods.

3 . ACQUISITION AND DIVESTMENT

Assumption of Operatorship

In February 2026, the Company became the operator with a 60% working interest in the Kossipo field on the CI-40 Block with a field development plan expected to be completed in the first half of 2027.

Canada Assets Divestment

As of December 31, 2025, the assets and liabilities associated with the Canada Assets Divestment (defined below) were classified as held for sale. The Company recorded an impairment loss of $67.2 million at the time it classified the assets as held for sale to adjust the carrying value of the assets held for sale to their estimated fair value less cost to sell.

On February 4, 2026, the Company entered into an asset purchase agreement to sell all of its operating assets in Canada (the “Canada Assets Divestment”) to a third party purchaser for a purchase price of $24.3 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, for an adjusted purchase price of $25.5 million (C$34.9 million), resulting in a $1.2 million loss on sale of assets recognized in the nine months ended September 30, 2026. The sale had an effective date of February 1, 2026.

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.

4 . EARNINGS PER SHARE

Basic earnings per share (“EPS”) is calculated using the weighted average number of shares of common stock outstanding during each period. For the calculation of diluted shares, the Company assumes that restricted stock is outstanding on the date of vesting, and the Company assumes the issuance of shares from the exercise of stock options using the treasury stock method.

A reconciliation of reported net income (loss) to net income (loss) used in calculating EPS as well as a reconciliation from basic to diluted shares follows:

5 . REVENUE

Production Sharing Contracts (“PSCs”)

Exploration and production activities of our assets in Gabon, Egypt, Côte d’Ivoire, and Equatorial Guinea are generally governed by PSCs.

Our oil entitlement under the PSCs is generally the sum of cost oil, profit oil and excess cost oil, if applicable. Under the terms of the PSCs, the Company is typically the contractor partner (“Contractor”) and bears the risk and cost of exploration, development, and production activities. In return, if exploration is successful, the Contractor receives entitlement to variable physical volumes of hydrocarbons, representing recovery of the costs incurred (“Cost Oil”) and a stipulated share of production after cost recovery (“Profit Oil”).

The Contractor may be obligated to make royalty payments to the host government of each country using a variable percentage based on gross daily production levels. The remaining oil production, after deducting the gross royalty, if any, is split between Cost Oil and Profit Oil. Cost Oil is up to a maximum percentage and is allocated to recover approved operating and capital costs spent on specific projects. Excess Cost Oil, which is Cost Oil less the actual cost recovery, is further shared between the host government and the Contractor. Except as otherwise disclosed, all crude oil sales are priced at current market rates at the time of sale.

Our share of royalties is paid out of the government's share of production. Additionally, the income tax to which the Contractor is subject (“Profit Oil Tax”) is deemed to have been paid to the host government as part of the payment of Profit Oil or is captured in the entitled share of Profit Oil production paid in-kind to the host government, and therefore no additional tax burden is due. Under this arrangement, taxation is based on a set percentage of average daily production volume.

Gabon

The following table presents revenues from contracts with customers as well as revenues associated with the obligations under the Etame PSC.

(1) Crude oil sales and purchase agreements (“COSPAs”) or crude oil sales and marketing agreements (“COSMA” or “COSMAs”).

With respect to the government’s share of Profit Oil, the Etame PSC provides that corporate income tax is satisfied through the payment of Profit Oil. In the unaudited condensed consolidated statements of operations and comprehensive income, the government’s share of revenues from Profit Oil is reported in revenues with a corresponding amount reflected in the current provision for income tax expense. Payments of the income tax expense are reported in the period that the government takes its Profit Oil in-kind, which is the period in which it lifts the crude oil. As of September 30, 2026 and December 31, 2025, the Company’s Gabon segment had $16.3 million and $18.8 million of foreign taxes payable, respectively.

Egypt

The following table presents revenues in Egypt from contracts with customers:

As of September 30, 2026 and December 31, 2025, the Company’s Egypt segment had $2.0 million and $0.3 million of foreign taxes payable, respectively.

Revenues from contracts with customers are generated from sales in Côte d’Ivoire pursuant to crude oil sales and purchase agreements and revenues are recognized when a lifting is completed.

The following table presents revenues in Côte d’Ivoire from contracts with customers:

Similar to Gabon, the government’s share of Profit Oil attributable to the Company’s equity interest is reported in revenues with a corresponding amount reflected in the current provision for income tax expense. In addition, under the terms of the Côte d’Ivoire PSC, the tax payments to the Ivorian Government are deemed satisfied by its share of the Profit Oil. Payments of the income tax expense are reported in the period that the government takes its Profit Oil in-kind, which is the period in which it lifts the crude oil. As of September 30, 2026 and December 31, 2025, the Company’s Cote d’Ivoire segment had $5.3 million and $0.3 million of foreign taxes payable, respectively.

Canada

The following table presents revenues in Canada from contracts with customers:

During the nine months ended September 30, 2026, the Canada segment revenues include amounts recognized from January 1, 2026 through the closing date of the Canada Assets Divestment.

Information about the Company’s most significant customers

Our revenue concentration by major customers is shown in the table below for the three and nine months ended September 30, 2026 and 2025.

6 . CRUDE OIL, NATURAL GAS AND NGLS PROPERTIES AND EQUIPMENT, NET

The Company’s crude oil, natural gas and NGLs properties and equipment is comprised of the following:

At December 31, 2025, the Company classified $31.8 million of net crude oil, natural gas and NGLs properties and equipment, including unproved property costs of $13.1 million, as “Noncurrent asset held for sale” on the Consolidated Balance Sheet.

Exploration expense

During the three and nine months ended September 30, 2026, we incurred exploration expenses of $4.8 million and $27.3 million, respectively, which included the cost of additional seismic data for the Niosi and Guduma blocks and the CI-705 block, and exploration costs related to drilling activities in Gabon. During the three and nine months ended September 30, 2025, we incurred exploration expenses of $0.4 million and $2.9 million, respectively, attributable to the purchase of seismic data for Block 705 in Côte d’Ivoire, and costs associated with the Niosi and Guduma blocks in Gabon.

7 . DERIVATIVES

Commodity Derivative Instruments

The Company enters into commodity derivative contracts primarily with counterparties that are also lenders under the 2025 RBL Facility to mitigate price risk associated with a portion of its crude oil and natural gas production. Pricing for these derivative contracts is based on certain market indexes and prices at our primary sales points. The following table presents the Company’s outstanding commodity derivative contracts as of September 30, 2026:

Interest Rate Derivative Instruments

On August 17, 2026, the Company entered into an interest rate collar with a notional amount of $50.0 million to manage its exposure to variability in interest payments on borrowings under its 2025 RBL Facility. The following table summarizes the key terms of the Company’s interest rate collar:

The collar is based on the applicable SOFR reference rate, which resets quarterly beginning January 26, 2027, and each quarter thereafter through maturity. The counterparty to the collar is a lender participating in the 2025 RBL Facility. The collar is not designated as a hedging instrument for accounting purposes and is recognized at fair value in the consolidated balance sheets, with changes in fair value recognized in current earnings.

Financial Statement Presentation

In accordance with the FASB’s authoritative guidance on disclosures about offsetting assets and liabilities, the Company is required to disclose both gross and net information about instruments and transactions eligible for offset in the statement of financial position as well as instruments and transactions subject to an agreement similar to a master netting agreement. The Company’s derivative instruments are presented as assets and liabilities on a net basis by counterparty, as all counterparty contracts provide for net settlement. No margin or collateral balances are deposited with counterparties, and as such, gross amounts are offset to determine the net amounts presented in the Company’s consolidated balance sheets.

The following tables summarize the gross and net amounts of the Company’s outstanding derivative instruments presented in the Company’s consolidated balance sheets:

The Company’s derivative agreements contain credit-risk-related contingent features that provide for termination and settlement upon certain events related to the Company’s reserve-based lending facility, including insolvency, acceleration and other specified events of default. Upon the occurrence of such events, the Company could be required to settle the derivative instruments at fair value. As of September 30, 2026, the aggregate fair value of derivative instruments in a net liability position containing such features was $43.9 million.

In addition, under one of the derivative agreements, the Company is required to post collateral equal to the amount by which its net derivative liability exceeds an applicable threshold, less collateral previously posted. As of September 30, 2026, the threshold was $60.0 million and the related net derivative liability was $4.5 million; accordingly, no collateral was required or posted. Failure to post required collateral within two days of notice constitutes an event of default that permits the counterparty to terminate and settle the derivative instruments at fair value. The threshold is reduced to zero upon the occurrence of the events described above.

See Note 1. Organization and Accounting Policies for information regarding the measurement of the Company’s derivative assets and liabilities at fair value.

The following table presents the gains and losses on derivative instruments recognized in the Company’s unaudited condensed consolidated statements of operations and comprehensive income:

8 . CURRENT ACCRUED LIABILITIES AND OTHER

Accrued liabilities and other balances were comprised of the following:

(a)The table excludes $0.2 million of the current portion of asset retirement obligations associated with assets held for sale as of December 31, 2025.

9 . COMMITMENTS AND CONTINGENCIES

Abandonment funding

Under the terms of the Etame PSC, the Company has a cash funding arrangement for the eventual abandonment of all offshore wells, platforms and facilities on the Etame Marin block. At September 30, 2026, $10.7 million ($6.3 million, net to Vaalco) of the abandonment fund has been funded on an undiscounted basis. The annual payments will be adjusted based on revisions in the abandonment estimate. This cash funding is reflected under “Other noncurrent assets” in the “Abandonment funding” line item of the unaudited condensed consolidated balance sheets. Future changes to the anticipated abandonment cost estimate could change the asset retirement obligation and the amount of future abandonment funding payments.

Merged Concession Agreement

The Company is a party to the Merged Concession Agreement with the Egyptian General Petroleum Corporation (“EGPC”) (the “Merged Concession Agreement”). In accordance with the Merged Concession Agreement, the Company was required to make a $10.0 million annual modernization payment to EGPC each year through February 1, 2026. 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 by EGPC.

The Company also has minimum financial work commitments of $50 million for 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, 2026, the Company's financial work commitments have exceeded thefive-year minimum $50 million threshold and any excess carries forward to offset against subsequent five-year commitments.

Drilling Rig Commitment

The Company entered into a bareboat charter agreement (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 commenced in November 2025 and has a noncancelable period of 300 days plus five single well options. The Bareboat Charter stipulates fixed day rates and other variable payments. The drilling rig was demobilized in October 2026 following the completion of the Phase Three drilling campaign.

10 . DEBT

2025 RBL Facility

The Company’s reserves-based facility agreement (the “2025 Facility Agreement”) provides a senior secured reserve-based revolving credit facility (the “2025 RBL Facility”) with maximum aggregate commitments of $300.0 million, subject to certain conditions specified in the 2025 Facility Agreement. The borrowing base amount is calculated pursuant to the 2025 Facility Agreement and redetermined on March 31 and September 30 of each year beginning June 30, 2025, and, in certain circumstances, other interim triggers set out in the 2025 Facility Agreement. In addition, the aggregate commitments are scheduled to reduce semi-annually starting with a $15.8 million reduction on March 31, 2027, and a $35.5 million reduction for each of the subsequent semi-annual periods starting on September 30, 2027.

Effective January 23, 2026, certain existing Lenders (defined below) under the 2025 RBL Facility agreed to increase their initial commitment from $190.0 million to $255.0 million. In addition, on April 28, 2026, certain existing Lenders further increased their commitments to $300.0 million, which is equal to the maximum aggregate commitments permitted under the facility. The increases in commitments were undertaken with the existing accordion feature included in the 2025 RBL Facility.

As of September 30, 2026, the 2025 RBL Facility had $300.0 million of aggregate commitments and $239.0 million of outstanding borrowings, resulting in available borrowing capacity of $61.0 million. As of December 31, 2025, our outstanding borrowing under the 2025 RBL Facility was $60.0 million. Proceeds from our borrowings were primarily used to fund the FPSO Baobab Ivoirien refurbishment and reconnection. The weighted-average interest rate on outstanding borrowings under the 2025 RBL Facility was 10.2% for the nine months ended September 30, 2026 and 10.7% from the inception of the 2025 Facility Agreement through December 31, 2025.

Each loan under the 2025 RBL Facility will bear interest at a rate equal to Term Secured Overnight Financing Rate (“SOFR”) plus the applicable margin (the “Applicable Margin”) of (i)6.50%, from the date of the 2025 Facility Agreement until the date on which the renovation and repair of the floating production storage and offloading (“FPSO Baobab Ivoirien”) tanker facility named FPSO Baobab Ivoirien for use in connection with the development of the Baobab field (the “FPSO Baobab Ivoirien Renovation”) meets certain completion tests defined in the 2025 Facility Agreement and (ii) thereafter,6.00% until the Final Maturity Date (defined below). Effective September 18, 2026, the Company satisfied the completion tests relating to the FPSO Baobab Ivoirien Renovation and, accordingly, the Applicable Margin was reduced from 6.50% to 6.00%. We will pay the accrued interest on the last day of each applicable interest period, which interest period may be, at our option, one, three or six months or such other period as agreed between us and the lenders party to the 2025 Facility Agreement (the “Lenders”).

The loans under the 2025 RBL Facility may be borrowed, repaid, and reborrowed during the term of the 2025 RBL Facility, which will mature on the earlier of (i) March 4, 2031, which is the sixth anniversary of the date of the 2025 Facility Agreement and (ii) the Reserve Tail Date (the “Final Maturity Date”). The Reserve Tail Date is the last day of the calculation period immediately preceding the first calculation period in which the aggregate remaining reserves for all of the borrowing base assets are projected in the then current banking case to be less than 25% of the initial approved reserves.

The 2025 RBL Facility is secured against certain assets of the Company and the other obligors under the 2025 Facility Agreement. The security package includes security interests in the shares of the obligors (other than the Company), hedging agreements, intercompany loans, insurances, offtake agreements relating to the borrowing base assets and project accounts.

The 2025 Facility Agreement contains certain financial covenants, including that, beginning on June 30, 2025 and then as of each March 31 and September 30 until the Final Maturity Date, the ratio of Total Net Indebtedness to EBITDAX (each defined in the 2025 Facility Agreement) for the trailing 12 months shall not exceed 3.0 x. Additionally, following the FPSO Baobab Ivoirien Renovation completion date, the debt service coverage ratio for the 12 months commencing on the day immediately following each March 31 and September 30 (and any interim redetermination date) until the Final Maturity Date shall be at least 1.2:1. The Company also provides a liquidity forecast for the Company and certain of its subsidiaries which shall demonstrate that the total corporate sources equal or exceed the total corporate uses. Following the FPSO Baobab Ivoirien Renovation completion date, the liquidity forecast is delivered on each redetermination of the banking case and any proposed distribution.

The Company is required to pay a quarterly commitment fee equal to (i)35% per annum of the Applicable Margin on the daily amount of the difference (if any) by which the borrowing base amount exceeds the then-outstanding amount of loans, plus (ii)20% per annum of the Applicable Margin on the daily amount by which the then-total commitments exceed the higher of the total outstanding amount of loans and the borrowing base amount. The Company is also required to pay customary technical and modeling bank fees, agency fees and security agent fees. The 2025 Facility Agreement also contains customary information covenants as well as affirmative and negative covenants subject to customary thresholds and materiality which include, among others, compliance with laws (including environmental laws, sanctions and anti-corruption laws), delivery of quarterly and annual financial statements and compliance certificates, no change of business, no merger and maintenance of corporate existence, field preservations and related contracts relating to the borrowing base assets, maintenance of insurance, entry into certain derivatives contracts which are regulated by the 2025 Facility Agreement and the hedging policy, restrictions on the incurrence of liens, indebtedness, asset dispositions, acquisitions, restricted payments, entry into offtake agreements and other customary covenants. If the aggregate borrowings exceed 35% of the lower of (a) the available Total Commitments and (b) the applicable borrowing base amount, we are also required to enter into commodity price hedge positions covering certain volumes of anticipated future production set out in the banking case. There are other covenants that make the Company’s ability to pay dividends and to enter into certain acquisition and disposition transactions subject to certain conditions. These covenants are subject to a number of limitations and exceptions.

Additionally, the 2025 Facility Agreement contains customary events of default, including non-payment and borrowing base deficiency, funding shortfall subject to certain liquidity cure rights, breach of financial covenants, misrepresentation, insolvency, changes in ownership or business, litigation, cross default, expropriation of any borrowing base assets, political events, cessation of production and the occurrence of a material adverse effect. The 2025 Facility Agreement also contains events of default related to the failure to renew any field license on substantially the same terms three months before the expiration of such field license and if a change of operator occurs. The events of default contain thresholds and remedy periods customary for credit facilities of this nature. If the obligors do not comply with the financial and other covenants relating to non-payment, sanctions, anti-corruption, loans and guarantees or tax in the 2025 Facility Agreement, the Lenders may require immediate payment of all amounts outstanding under the 2025 Facility Agreement and any outstanding unfunded commitments may be terminated. In addition, if any principal amount payable is not paid upon the due date, interest shall accrue on the overdue amount from the due date up to the date of the actual payment at an additional interest rate of 2% per annum, and such interest shall be immediately payable on demand.

As of September 30, 2026 and December 31, 2025, we were in compliance with all of our debt covenants.

Fair Value Measurement

The fair value of the 2025 RBL Facility approximates its respective its carrying amount as its interest rate is variable and reflective of market rates. The fair value measurement for the 2025 RBL Facility represents Level 2 inputs.

11 . INCOME TAXES

Vaalco and its domestic subsidiaries file a consolidated U.S. federal income tax return. Certain foreign subsidiaries also file tax returns in their respective local jurisdictions including Canada, Egypt, Equatorial Guinea, Gabon, Côte d’Ivoire and Nigeria.

The foreign income taxes payable are attributable to Gabon and Côte d’Ivoire as of September 30, 2026 and December 31, 2025.

The Company’s effective tax rate for the three months ended September 30, 2026 and 2025, excluding the impact of discrete items, was 41.29% and (81.21)%, respectively. The Company’s effective tax rate for the nine months ended September 30, 2026 and 2025, excluding the impact of discrete items, was 40.16% and 59.48%, respectively. For the three and nine months ended September 30, 2026 and 2025, the Company’s overall effective tax rate was primarily impacted by tax rates in foreign jurisdictions higher than the U.S. statutory rate and by non-deductible items associated with operations.

For the three months ended September 30, 2026, the income tax expense of $20.3 million includes a $4.1 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. For the nine months ended September 30, 2026, the income tax expense of $41.4 million includes a $6.0 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.

As of September 30, 2026, the Company hadno material uncertain tax positions. The Company’s policy is to recognize potential interest and penalties related to unrecognized tax benefits as a component of income tax expense.

In January 2026, the Company received an assessment from the Canada Revenue Agency in connection with an examination. Following the sale of its Canadian assets, the Company elected not to file an objection or pursue other remedies. As a result, the Company reduced its Canadian net operating loss carryforwards and the related valuation allowance carried forward from December 31, 2025. This adjustment did not have a material impact on the Company’s consolidated financial position, results of operations, cash flows, or income tax expense.

12 . RELATED PARTY TRANSACTION

The Company entered into an agreement with a related party for contract engineering services. Payments for these services were approximately $0.04 million and $0.2 million during the three and nine months ended September 30, 2026, respectively, compared to $0.1 million and $0.2 million during the three and nine months ended September 30, 2025, respectively.

13 . OTHER COMPREHENSIVE INCOME (LOSS)

The functional currency of our Canadian segment is the Canadian Dollar. All of the Company’s other comprehensive income arises from the currency translation of its Canadian segment to USD.

The components of accumulated other comprehensive income are as follows:

As previously discussed, the Canada Assets Divestment, which represents the divestment of substantially all of the net assets of our Canadian subsidiary, was completed in February 2026. Accordingly, cumulative translation adjustment gains of $0.4 million were reclassified from accumulated other comprehensive loss into earnings and included in the loss on sale of assets in the consolidated statements of operations and comprehensive income (loss).

14 . SEGMENT INFORMATION

The Company’s operations are based in Gabon, Egypt, Côte d’Ivoire, Equatorial Guinea, and, prior to the Canada Assets Divestment, producing properties in Canada. Each of thereportable operating segments are organized and managed based upon geographic location. The Company’s Chief Executive Officer, who is the chief operating decision maker (“CODM”), evaluates segment performance based on the operation of each geographic segment separately primarily based on operating income (loss) and allocates financial and capital resources for each segment predominantly in the annual budget and forecasting process. The CODM also considers budget-to-actual variances on a quarterly basis for the performance measure when making decisions about allocating capital and personnel to the segments.

The operations of all segments include exploration for and production of hydrocarbons where commercial reserves have been found and developed. Revenues are based on the location of hydrocarbon production. Corporate and other is primarily corporate and operations support costs that are not allocated to the reportable operating segments and are shown in the tables to reconcile the business segments to consolidated totals. No transactions occurred between operating segments. “Other operating income (expense)” below includes those items that are included in Net income (loss) but are not regularly provided to the CODM, or are reported to the CODM but are not considered to be significant segment expenses.

Segment activity of continuing operations for the three and nine months ended September 30, 2026 and 2025, as well as long-lived assets and segment assets at September 30, 2026 and December 31, 2025 is as follows:

(a)During the nine months ended September 30, 2026, the Canada segment revenues include amounts recognized from January 1, 2026 through the closing date of the Canada Assets Divestment.

(a) At December 31, 2025, the Company classified $31.8 million of net Crude oil, natural gas and NGLs properties as “Noncurrent Assets held for sale” on the Consolidated Balance Sheet.