VAALCO Announces New 3-D Seismic Survey Over Entire Etame Marin Block and Provides Estimated Third Quarter 2020 Production
01 October 2020 - 6:45AM
VAALCO Energy, Inc. (NYSE: EGY; LSE: EGY) (“VAALCO” or the
“Company”) today announced that in connection with planning for
future drilling programs at the Etame Marin block offshore Gabon,
it will begin acquiring and processing new three-dimensional
(“3-D”) seismic data in the fourth quarter of 2020. The Company
also announced estimated third quarter 2020 production.
Highlights
- Committed to acquiring new
proprietary 3-D dual-azimuth seismic data over the entire Etame
Marin block which will be used to optimize and de-risk future
drilling locations as well as identify new potential
locations;
- Expects completion of seismic
acquisition by year-end 2020 with processing to be fully completed
by Q4 2021;
- Estimates the costs of both
acquisition and processing of seismic data is approximately $4 to
$5 million, net to VAALCO, and will be fully funded with cash on
hand and cash from operations;
- Enhances and updates current
seismic, some of which dates back to the field’s discovery in the
1990s, while offering the first continuous 3-D seismic over the
entire block;
- Maintained strong production
performance in Q3 2020 with production estimated at 4,370 net
barrels of oil per day (“BOPD”) to VAALCO, at the midpoint of
guidance; and
- Continues to fully fund operations
year to date in 2020 with internally generated cash flow and
expects a cash balance of approximately $37 million at September
30, 2020, excluding any joint venture owner advances.
Cary Bounds, Chief Executive Officer, commented,
“We are proud of the highly successful and transformational
drilling program that we completed earlier this year and look to
build on that success by beginning to plan for future drilling
programs. Our long-term strategy is to optimize every location that
we plan to drill and identify new locations to add to our drillable
inventory. We believe that by acquiring and processing a
state-of-the-art proprietary 3-D, dual-azimuth seismic survey over
our entire Etame block we are accomplishing these goals. As a
result of our strong operational performance to date in 2020, we
continue to be cash flow positive and the Company is fully funded
for all current activities including the upcoming seismic program.
We have lowered our operating cost per barrel and remain committed
to optimizing production to ensure that we continue to generate
free cash flow to fund future field development. We are confident
in the long-term potential at Etame and believe acquiring and
processing seismic is the first step toward preparing for our
future drilling campaigns that we believe will deliver long-term
growth, in line with our strategic objectives.”
VAALCO expects the seismic survey to begin and
conclude in the fourth quarter of 2020, with processing to be fully
completed by the fourth quarter of 2021. The Company expects the
full field 3-D survey will optimize future drilling locations,
provide better imaging of existing satellite and infill locations,
as well as identify additional upside opportunities. VAALCO
projects the gross cost of both the acquisition and processing of
the seismic survey to be between $13 and $15 million, or $4 to $5
million net to VAALCO. The Company plans to fund the costs with
cash on hand and through cash from operations.
About VAALCO
VAALCO, founded in 1985, is a Houston, USA
based, independent energy company with production, development and
exploration assets in the West African region.
The Company is an established operator within
the region, holding a 31.1% working interest in the Etame Marin
block, located offshore Gabon, which to date has produced over 117
million barrels of crude oil and of which the Company is the
operator.
For Further Information
VAALCO Energy, Inc.
(General and Investor Enquiries) |
+00 1 713 623 0801 |
Website: |
www.vaalco.com |
Al Petrie Advisors (US
Investor Relations) |
+00 1 713 543 3422 |
Al Petrie / Chris Delange |
|
Buchanan (UK Financial
PR) |
+44 (0) 207 466 5000 |
Ben Romney / Kelsey
Traynor / James Husband |
VAALCO@buchanan.uk.com |
Forward Looking Statements
This document includes “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. All statements, other than statements of
historical facts, included in this document that address
activities, events, plans, expectations, objectives or developments
that VAALCO expects, believes or anticipates will or may occur in
the future are forward-looking statements. These statements may
include statements related to the impact of the COVID-19 pandemic,
including the recent sharp decline in the global demand for and
resulting global oversupply of crude oil and the resulting steep
decline in oil prices, production quotas imposed by Gabon,
disruptions in global supply chains, quarantines of our workforce
or workforce reductions and other matters related to the pandemic,
well results, wells anticipated to be drilled and placed on
production, future levels of drilling and operational activity and
associated expectations, the implementation of the Company’s
business plans and strategy, prospect evaluations, prospective
resources and reserve growth, its activities in Equatorial Guinea,
expected sources of and potential difficulties in obtaining future
capital funding and future liquidity, its ability to restore
production in non-producing wells, future operating losses, future
changes in crude oil and natural gas prices, future strategic
alternatives, future acquisitions, capital expenditures, future
drilling plans, acquisition and interpretation of seismic data and
costs thereof, negotiations with governments and third parties,
timing of the settlement of Gabon income taxes, and expectations
regarding processing facilities, production, sales and financial
projections. These statements are based on assumptions made by
VAALCO based on its experience and perception of historical trends,
current conditions, expected future developments and other factors
it believes are appropriate in the circumstances. Such statements
are subject to a number of assumptions, risks and uncertainties,
many of which are beyond VAALCO’s control. These risks include, but
are not limited to, crude oil and natural gas price volatility, the
impact of production quotas imposed by Gabon in response to
production cuts agreed to as a member of OPEC, inflation, general
economic conditions, the outbreak of COVID-19, the Company’s
success in discovering, developing and producing reserves,
production and sales differences due to timing of liftings,
decisions by future lenders, the risks associated with liquidity,
lack of availability of goods, services and capital, environmental
risks, drilling risks, foreign regulatory and operational risks,
and regulatory changes.
Investors are cautioned that forward-looking
statements are not guarantees of future performance and that actual
results or developments may differ materially from those projected
in the forward-looking statements. VAALCO disclaims any intention
or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events, or
otherwise.
Inside Information
This announcement contains inside information as
defined in Regulation (EU) No. 596/2014 on market abuse (“MAR”) and
is made in accordance with the Company’s obligations under article
17 of MAR.
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