Q4 & FY 2025 RESULTS

Summary by AI BETAClose X

Vaalco Energy reported a full-year 2025 net loss of $41.4 million ($0.40 per diluted share) but generated $173.4 million in Adjusted EBITDAX and $212.7 million in net cash from operating activities. The company's year-end 2025 SEC proved reserves were 43.0 million barrels of oil equivalent, with 4 MMBOE of positive revisions, and they entered a new reserves-based lending facility of up to $300 million. For the fourth quarter of 2025, Vaalco reported a net loss of $58.6 million ($0.56 per diluted share) and an Adjusted EBITDAX of $42.9 million, while capital expenditures were $100.1 million. The company also announced a quarterly cash dividend of $0.0625 per share for Q1 2026.

Disclaimer*

Vaalco Energy Inc
13 March 2026
 

        

 

THIS RELEASE CONTAINS INSIDE INFORMATION

VAALCO ENERGY, INC. ANNOUNCES FOURTH QUARTER AND FULL YEAR 2025 RESULTS

 

HOUSTON - March 13, 2026  - VAALCO Energy, Inc. (NYSE: EGY, LSE: EGY) ("Vaalco" or the "Company") today reported operational and financial results for the fourth quarter and full year of 2025, including year-end 2025 reserves. Additionally, the Company provided operational and financial guidance for the first quarter and full year of 2026.  

2025 Full Year Highlights:

•      Sold 17,452 net revenue interest ("NRI")(1) barrels of oil equivalent per day ("BOEPD"), above the high end of the Company's increased guidance, while delivering production of 16,556 NRI(1) BOEPD or 21,160 working interest ("WI")(2) BOEPD, both above the midpoint of Vaalco's increased guidance;

•      Reported full year ("FY") 2025 net loss of $41.4 million ($0.40 per diluted share) and Adjusted Net Loss(3) of $4.0 million  ($0.04 per diluted share);

•      Generated Adjusted EBITDAX(3) of $173.4 million and net cash from operating activities of $212.7 million in FY 2025;

•     Reported year-end 2025 SEC proved reserves of 43.0 million barrels of oil equivalent ("MMBOE"), which included 4 MMBOE of positive revisions, organic additions and extensions, replacing two-thirds of 2025 production;

•      Entered into new reserves based lending facility with a current commitment level of $255 million and the ability to grow to $300 million;

•     Continued strong collection of receivables in Egypt and at year end 2025 this balance had fallen to $31 million;

•     Acquired 70% WI(3) in and will operate the CI-705 block in offshore Côte d'Ivoire, which covers approximately 2,300 square kilometers ("km2") located in the prolific Tano basin and is approximately 70 km to the west of Vaalco's CI-40 Block; and

•      Returned $26.5 million to shareholders in 2025 through dividends and has returned over $115 million to shareholders since Q4 2021 through dividends and share buybacks.

Fourth Quarter 2025 Highlights:

 

•      Sold 18,566 NRI BOEPD, 10% above the high end of guidance, while production was 16,128 NRI(2) BOEPD or 20,729 WI(2) BOEPD;

•      Reported net loss of $58.6 million ($0.56 per diluted share), Adjusted Net Loss(3) of $2.3 million ($0.02 per diluted share) and Adjusted EBITDAX(3) of $42.9 million; and

•     Invested $100.1 million in capital expenditures, which included the successful start to the Gabon Phase Three Drilling Program, continued Côte d'Ivoire Floating Production Storage and Offloading vessel ("FPSO") Dry

Dock refurbishment and key long leads for the upcoming 2026 drilling campaign in Côte d'Ivoire and drilling in

Egypt.

2026 Recent Key Items and Outlook:

•     Confirmed as operator with a 60% WI in the Kossipo field on the CI-40 Block, located southwest of the Baobab field, with a field development plan ("FDP") expected to be completed in second half of 2026;

◦ Further information on the Kossipo field can be found in the Q4 2025 supplemental deck posted on Vaalco's website;

•     Divested all Canadian properties for $25.5 million with a closing date of February 19, 2026;

•     Successfully drilled, completed and placed on production the Etame 15H-ST development well, confirming expectations from the ET-15P pilot well results;

•      Planning a 2026 capital budget of $290 to $360 million, including a drilling campaign at Etame, expected completion of the FPSO Refurbishment/Reconnection Project, initial Phase 5 Drilling Program at Baobab and continued field activity in Egypt; and

•     Declared quarterly cash dividend of $0.0625 per share of common stock to be paid on March 27, 2026.

(1)   All NRI sales and production rates are Vaalco's working interest volumes less royalty volumes, where applicable.

(2)   All WI production rates and volumes are Vaalco's working interest volumes, where applicable.

(3)   Adjusted EBITDAX, Adjusted Net Income (Loss), Adjusted Working Capital, Free Cash Flow and Net Debt are Non-GAAP financial measures and are described and reconciled to the closest GAAP measure in the attached table under "Non-GAAP Financial Measures."

 

 

George Maxwell, Vaalco's Chief Executive Officer, commented, "In 2025, we successfully completed another year where we delivered consistent quarterly results that either met or exceeded our guidance. We repeatedly raised production and sales guidance in 2025 and continued to deliver on those increased guidance ranges. Operationally, we kicked off the Gabon Phase Three Drilling Campaign in Q4 2025, we continued to progress the FPSO project for Baobab and we successfully continued to drill in Egypt. Financially, we entered into a new reserves based lending facility with the ability to grow to $300 million and we ended 2025 with an additional $35 million in cash on hand compared to the prior quarter end and closed the year with a net debt position of around $1 million. We also generated $173 million in Adjusted EBITDAX, driven by strong sales and continued to have increased collections from our receivables, where all of our aged receivables are now largely current. We are particularly pleased with the progress our team have made in our Egyptian receivables in 2025. At the start of 2025 our outstanding accounts receivable for Egypt amounted to $113 million, and at year end 2025 this balance had fallen to $31 million even after invoicing over $129 million in revenue for the year. We are pleased to be working with strong partners and host nations that continue to be very positive toward capital investment in oil and gas projects."

 

"In 2026, we began the year by divesting all of our Canadian assets, and increased our future growth potential in Côte d'Ivoire by being confirmed as operator with a 60% WI in the Kossipo field. The Kossipo field is a discovery with material oil in place, located in close proximity to our highly productive Baobab field on the CI-40 Block. We also have had a positive start to our Gabon drilling campaign with the ET-15H-ST well. Despite non-commercial Gamba sands in the West Etame exploration prospect, we are now using the well bore to side-track and drill another Gamba development well before moving to the SEENT and Ebouri platforms where we have several wells and workovers planned to enhance production, lower costs and potentially add reserves. The FPSO for Baobab is currently off the coast of South Africa and is expected to return to offshore Côte d'Ivoire by late March, with the field expected to restart in Q2 2026. Soon thereafter, we plan to start the Phase 5 Drilling Program at Baobab. We are well on our way to another successful year, as indicated by our 2026 guidance and believe that we are well positioned to deliver on our forecasted 225% organic production growth by 2030."

 

Mr. Maxwell concluded, "I am proud of all that we have accomplished in these past five years and would like to thank our hard-working employees for helping us to achieve so many milestones. We have successfully grown Vaalco from a single asset delivering around 5,000 BOPD to a diversified, multi country operator well on our way to achieving our goal of 50,000 BOEPD. I believe that we are well positioned to continue to execute operationally and financially to achieve all of our growth targets and continue to generate and return value to our shareholders for the rest of the decade. Our track record of success in delivering results should provide our investors with assurance that we can execute on our expanded portfolio of opportunities."

Operational Update

 

Gabon

 

The Company's Phase Three Drilling Program in Gabon commenced in the fourth quarter of 2025 with the drilling of two pilot wells in the Etame field. Based on the results of the pilot wells, the Company proceeded with the drilling of the Etame 15H-ST1 development well in the 1V block of Etame in December 2025. The well was completed and placed on production in January 2026 confirming expectations from the ET-15P pilot well results. The Company recently announced that although the West Etame exploration well (ET-14P) encountered 10 meters of high quality sands, the target zone was water-bearing. The lower portion of the well will be plugged and abandoned but the well bore will be utilized and sidetracked in the upper portion of the well to drill the ET-14H development well in the Main Fault Block of Etame. Operations are expected to be completed in April.

 

After completing the program at the Etame platform, the Company expects to move the drill rig to the SEENT and Ebouri platforms where the Company has several wells and workovers planned to enhance production, lower costs and potentially add reserves.

 

In the Niosi and Guduma blocks, the partners initiated its 3D seismic campaign in November 2025 and was completed in January 2026. The seismic acquisition was executed to satisfy the minimum commitments under the terms of the Niosi PSC as well as to inform the decision on whether to proceed into the second exploration period for the Guduma Block.

 

Egypt

 

Vaalco conducted a drilling campaign in Egypt that began in December 2024 and concluded in the fourth quarter of 2025. During the fourth 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 January 2026. The successful 2025 Egyptian drilling program included an exploration well in the H-Field, Eastern Desert, that opens a new development area with an initial flow rate of approximately 450 BOEPD. Additionally, continuous well interventions, workovers and optimization activities were carried out throughout the fourth quarter of 2025 to enhance production levels.

 

Côte d'Ivoire

 

In connection with the planned dry dock refurbishment, the Baobab FPSO ceased hydrocarbon production on January 31, 2025, with the final crude oil lifting in February 2025. The vessel departed the field in late March 2025 for Dubai for the refurbishment work, which was completed in February 2026. The Baobab FPSO has commenced mobilization back to Côte d'Ivoire and is expected to return to offshore Côte d'Ivoire by late March 2026. A rig has been secured for the planned development drilling program at Baobab which is expected to begin during the fourth quarter of 2026 after the FPSO returns to service. The drilling campaign is expected to bring meaningful additions to production from the main Baobab field in CI-40.

 

In February 2026, the Company was confirmed as the operator with a 60% WI in the Kossipo field on the CI-40 Block with a field development plan ("FDP") to be completed in the second half of 2026. The field was discovered in 2002 with the Kossipo-1X well and later appraised in 2019 with the Kossipo-2A well, which tested at over 7,000 BOPD. Vaalco is continuing to analyze ocean bottom node ("OBN") seismic data that was recently acquired which is helping to drive and derisk the Company's updated evaluation and assisting with the FDP.

 

Equatorial Guinea

 

The Company owns a 60% WI in an undeveloped portion of Block P offshore Equatorial Guinea where it is the designated operator. The Company has 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. Vaalco 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.

 

Canada

 

On February 5, 2026, Vaalco announced an agreement for the sale of all of its producing properties in Canada to a third party for approximately $25.5 million with a closing date of February 19, 2026. The Canadian properties were producing approximately 1,850 BOEPD at the time of the sale. Vaalco's first quarter 2026 results will include January and prorated February Canadian production and financial results.

 

Year-End 2025 Reserves

 

Vaalco's SEC proved reserves at December 31, 2025 decreased by 5% to 43.0 MMBOE. Year-end 2025 reserves included 17.5 MMBOE in proved developed reserves and 25.5 MMBOE in proved undeveloped reserves. The Company's SEC reserves were prepared by its third-party independent reserve engineers, Netherland, Sewell & Associates, Inc., ("NSAI") that has provided annual independent estimates of Vaalco's year-end SEC reserves for over 16 years. In 2025, the Company added 2.8 MMBOE of SEC proved reserves due to positive revisions and 1.2 MMBOE of SEC proved reserves through extensions and additions. These additions were offset by 6.0 MMBOE of full year 2025 production. Vaalco had a reserve replacement ratio of 66% compared to the 6.0 MMBOE of production in 2025.

 

The standardized measure of Vaalco's SEC proved reserves, utilizing SEC pricing increased to $410.0 million at December 31, 2025 from $379.4 million at December 31, 2024. This was primarily driven by the positive revisions, offset by widening differentials in Gabon and a decrease in year over year SEC prices which were utilized for the calculation and can be found in the Company's Annual Report on Form 10-K disclosure, which is expected to be filed with the SEC no later than March 16, 2026.

 

 

 

 

 

 

 

 

MMBoe

Proved SEC Reserves at December 31, 2024

 

                45.0

2025 Production

 

                (6.0)

Revisions of Previous Estimates

 

                  2.8

Extensions and Additions

 

                  1.2

Proved SEC Reserves at December 31, 2025

 

                43.0

 

At year-end 2025, NSAI provided the 2P WI CPR estimates of proven and probable reserves which were prepared in accordance with the definitions and guidelines set forth in the 2018 Petroleum Resources Management Systems approved by the Society of Petroleum Engineers as of December 31, 2025 using Vaalco's management assumptions for future commodity pricing and costs shown below under "WI CPR Reserves". The 2P WI CPR reserves attributable to Vaalco's ownership are reported on a WI basis prior to deductions for government royalties. Management's year-end 2025 2P WI CPR estimate of reserves is 90.7 MMBOE to Vaalco's WI, a decrease of 6% from 96.1 MMBOE at December 31, 2024. The present value discounted at 10% ("PV-10") of Vaalco's 2P WI CPR reserves at year-end 2025, utilizing management timing assumptions and escalated pricing and cost assumptions, is $858.8 million, up 26% from $684.1 million at December 31, 2024.

 

See "PV-10 Value and Probable Reserves" and "WI CPR Reserves" for additional information related to 2P WI CPR reserves and 2P PV-10.

 

Financial Update - Fourth Quarter of 2025

Vaalco reported a net loss of $58.6 million ($0.56 per diluted share) for Q4 2025 which was down compared with net income of $1.1 million ($0.01 per diluted share) in Q3 2025 and net income of $11.7 million ($0.11 per diluted share) in Q4 2024. The decrease in earnings compared with Q3 2025 and Q4 2024 was driven primarily by a non-cash impairment charge of $67.2 million to the carrying value of proved and unproved oil and gas properties for Vaalco's Canadian assets reported as held for sale.

Adjusted EBITDAX totaled $42.9 million in Q4 2025, compared with $23.7 million in Q3 2025. The increase was primarily due to higher sales volumes and slightly higher realized pricing. Adjusted EBITDAX was down from $76.2 million generated in Q4 2024 primarily due to lower realized pricing and lower sales volumes.

 

 

Quarterly Summary - Sales and Net Revenue

 

  

 

  

 

  

 

  

 


 

  

$ in thousands

Three Months Ended December 31, 2025

 

Three Months Ended September 30, 2025


Gabon

 

Egypt

 

Canada

 

Côte d'Ivoire

 

Total

 

Gabon

 

Egypt

 

Canada

 

Côte d'Ivoire

 

Total

Oil Sales

 $ 56,238

 

$ 54,842

 

$   2,966

 

$   -

 

$ 114,046   

 

$24,287

 

$ 58,271

 

$   3,278

 

$    -

 

$   85,836

NGL Sales

           -

 

           -

 

      1,444

 

           -

 

        1,444    

 

          -

 

          -

 

     1,418

 

          -

 

          1,418

Gas Sales

           -

 

           -

 

         648

 

           -

 

           648    

 

          -

 

          -

 

        196

 

          -

 

             196

Gross Sales

    56,238

 

    54,842

 

      5,058

 

           -

 

    116,138    

 

   24,287

 

   58,271

 

     4,892

 

          -

 

        87,450


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling Costs & Carried Interest

      1,305

 

       (232)

 

       (177)

 

           -

 

           896    

 

        495

 

      (183)

 

      (187)

 

          -

 

             125

Royalties & Taxes

    (7,830)

 

  (17,520)

 

       (642)

 

           -

 

    (25,992)   

 

   (3,511)

 

(22,392)

 

      (665)

 

          -

 

      (26,568)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Revenue

$ 49,713

 

$ 37,090

 

$   4,239

 

$        -

 

$   91,042  

 

$21,271

 

$ 35,696

 

$   4,040

 

$     -

 

$   61,007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil Sales MMB (working interest)

         970

 

      1,009

 

           56

 

           -

 

        2,035    

 

        383

 

        995

 

          52

 

          -

 

          1,430

Average Oil Price Received

$   57.97

 

$   54.14

 

$   53.23

 

$    -

 

$     56.05   

 

$  63.46

 

$   58.40

 

$   62.75

 

$    -

 

$   60.04

Change

 

 

 

 

 

 

 

 

     (7)      %

 

 

 

 

 

 

 

 

 

 

Average Brent Price

 

 

 

 

 

 

 

 

$     63.65    

 

 

 

 

 

 

 

 

 

$   69.04

Change

 

 

 

 

 

 

 

 

     (8)      %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gas Sales MMCF (working interest)

           -

 

           -

 

         402

 

           -

 

           402    

 

          -

 

          -

 

        429

 

          -

 

             429

Average Gas Price Received

           -

 

           -

 

$     1.62

 

           -

 

$       1.61   

 

          -

 

          -

 

$     0.46

 

          -

 

$    0.46

Change

 

 

 

 

 

 

 

 

       250  %

 

 

 

 

 

 

 

 

 

 

Average Aeco Price ($USD)

           -

 

           -

 

$     2.12

 

           -

 

$       2.12   

 

          -

 

          -

 

$     0.69

 

          -

 

$    0.69

Change

 

 

 

 

 

 

 

 

       208   %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NGL Sales MMB (working interest)

           -

 

           -

 

           63

 

           -

 

             63    

 

          -

 

          -

 

          56

 

          -

 

               56

Average Liquids Price Received

           -

 

           -

 

$   22.78

 

           -

 

$     22.78   

 

          -

 

          -

 

$   25.17

 

          -

 

$    25.17

Change

 

 

 

 

 

 

 

 

     (9)      %

 

 

 

 

 

 

 

 

 

 

 

Revenue and Sales

Q4 2025

 

Q4 2024

 

% Change Q4 2025 vs. Q4 2024

 

Q3 2025

 

% Change Q4 2025 vs. Q3 2025

Production (NRI BOEPD)

  16,128  

 

               20,775              

 

      (22)   %

 

               

15,405 

 

   5           %

Sales (NRI BOE)

            1,708,000

 

           1,872,000          

 

    (9)     %

 

           1,180,000 

 

   45       %

Realized commodity price ($/BOE)

$                52.54                  

 

$              64.77                

 

      (19)   %

 

$              51.26                

 

   2           %

Commodity (Per BOE including realized

     commodity derivatives)

$                52.59                  

 

$              64.48                

 

      (18)   %

 

$              50.96                

 

   3           %

Total commodity sales ($MM)

$                 91.0                   

 

$             121.7                

 

      (25)   %

 

$                61.0                  

 

     49       %

In Q4 2025, Vaalco had a net revenue increase of $30.0 million or 49% compared to Q3 2025 primarily due to an increase in the total NRI sales volumes of 1,708 MBOE which was 45% higher than the Q3 2025 volumes of 1,180 MBOE and was lower compared to 1,872 MBOE for Q4 2024 and a higher average realized price received of $52.54 per BOE in Q4 2025 compared to $51.26 per BOE in Q3 2025.  Q4 2025 NRI sales were 10% above the high end of Vaalco's guidance. The higher sales and production volumes in Q4 2025 compared to Q3 2025 was primarily a result of a planned and successful full field maintenance shutdown in Gabon which occurred in July 2025.

Costs and Expenses

Q4 2025

 

Q4 2024

 

% Change Q4 2025 vs. Q4 2024

 

Q3 2025

 

% Change Q4 2025 vs. Q3 2025

Production expense, excluding offshore workovers and stock comp ($MM)

$           43.0

 

$           36.5

 

     18  %

 

$           29.8

 

     44  %

Production expense, excluding offshore workovers ($/BOE)

$         25.21

 

$         19.52

 

     29  %

 

$         25.24

 

     -  %

Offshore workover expense ($MM)

$             0.1

 

$             0.1

 

     -       %

 

$             0.1

 

         -  %

Depreciation, depletion and amortization ($MM)

$           30.8

 

$           37.0

 

       (17)   %

 

$           20.6

 

     50   %

Depreciation, depletion and amortization ($/BOE)

$         18.06

 

$         19.79

 

     (9)  %

 

$         17.41

 

   4    %

General and administrative expense, excluding stock-based compensation ($MM)

$             5.2

 

$             7.1

 

       (27)   %

 

$             7.2

 

       (28)   %

General and administrative expense, excluding stock-based compensation ($/BOE)

$           3.04

 

$           3.80

 

       (20)   %

 

$           6.07

 

       (50)   %

Stock-based compensation expense ($MM)

$             1.5

 

$             1.4

 

   8    %

 

$             1.7

 

                (11%)

Current income tax expense (benefit) ($MM)

$             5.2

 

$           26.2

 

       (80)   %

 

$             8.6

 

       (39)   %

Deferred income tax expense (benefit) ($MM)

$           (9.8)

 

$           (9.0)

 

   9   %

 

$         (12.2)

 

                (19%)

 

Total production expense (excluding offshore workovers and stock compensation) of $43.0 million in Q4 2025 increased by 44% compared to Q3 2025 and 18% compared to Q4 2024. The increase in Q4 2025 compared to Q3 2025 was driven by a 45% increase in sales volumes and compared to Q4 2024 was driven by an increase in production expenses in Gabon partially offset by a reduction in production expenses in Côte d'Ivoire. Q4 2025 production expense per BOE was at the low end of Vaalco's guidance.

 

DD&A expense for Q4 2025 was $30.8 million, which was 50% higher than $20.6 million in Q3 2025 and 17% lower than $37.0 million in Q4 2024. The increase in Q4 2025 DD&A expense compared to Q3 2025 was due primarily to a 45% increase in sales volumes. The decrease in Q4 2025 DD&A expense compared to Q4 2024 was due primarily to a reduction in DD&A expenses in the Côte d'Ivoire segment.

 

General and administrative ("G&A") expense, excluding stock-based compensation, decreased to $5.2 million in Q4 2025, compared to $7.2 million in Q3 2025 and $7.1 million in Q4 2024 primarily due to lower professional service fees and salaries and wages. Q4 2025 cash G&A was below the low end of the Company's guidance range of $7 million to $9 million.

 

Non-cash stock-based compensation expense was $1.5 million for Q4 2025 compared to $1.7 million for Q3 2025 and $1.4 million for Q4 2024.

 

Exploration expense was $6.0 million for Q4 2025 compared to $0.4 million for Q3 2025. This Q4 amount was primarily  attributable to seismic acquisition costs with Niosi and Guduma blocks in Gabon as well as costs related to the Egyptian exploration well in South Ghazalat determined to be non-commercial. The Q3 2025 amount was due to seismic acquisition costs with Niosi and Guduma blocks in Gabon. There were minimal exploration costs incurred in Q4 2024.

 

Total other income (expense), net, was an income of $1.6 million for Q4 2025 compared to an expense of $3.4 million for Q3 2025 and an expense of $9.7 million during Q4 2024. Other income (expense), net, includes gains or losses on derivatives, interest expense and foreign currency losses. As previously disclosed, during Q4 2024, the bargain purchase gain for the Baobab acquisition was reduced by $6.4 million.  

 

Vaalco reported an income tax benefit for Q4 2025 of $4.6 million which was comprised of a $5.2 million current tax expense, offset by a deferred tax benefit of $9.8 million. Income tax benefit includes a $7.3 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 $2.7 million for the period. Income tax expense for Q4 2024 was $17.2 million which is comprised of current tax expense of $26.2 million and deferred tax benefit of $9.0 million. Current quarter tax was impacted by non-deductible items (such as the Côte d'Ivoire transaction costs) and the change in market value of tax barrels due to Gabon State mark-to-market at quarter end.

 

 

Taxes paid by jurisdiction are as follows:  

(in thousands)

 

Gabon

 

Egypt

 

Canada

 

Equatorial Guinea

 

Cote d'Ivoire

 

Corporate and Other

 

Total

Cash/In Kind Taxes Paid:

 


 


 


 


 

 

 


 


Three Months Ended December 31, 2025

 

$        1,451

 

$        8,430

 

$             -

 

$              -

 

$             -

 

$              -

 

$        9,881

 

 

Financial Update - Full Year 2025

 

Net sales for the year ended December 31, 2025 decreased to 6,370 MBOE compared to 7,262 MBOE in the year ended December 31, 2024.  The decrease was driven primarily by a reduction in sales volume from Côte d'Ivoire due to the FPSO refurbishment.

 

The average realized price for the year ended December 31, 2025  was $56.11 per BOE, representing a decrease of 15% from $65.64 realized in the year ended December 31, 2024. This decrease in crude oil price reflects the softening of commodity prices over the past year.

 

The Company reported a net loss for the year ended December 31, 2025 of $41.4 million, which compares to a net income of $58.5 million for the year ended December 31, 2024. The decrease in net income for the year ended December 31, 2025 compared to the same period in 2024 was primarily driven by a non-cash impairment charge of $67.2 million to the carrying value of proved and unproved oil and gas properties for Vaalco's Canadian assets reported as held for sale.  Also, the net loss was due to lower realized pricing in 2025 and a reduction in sales volume primarily in the Company's Côte d'Ivoire segment in 2025. In addition, as previously disclosed, the year ended December 31, 2024 included a bargain purchase gain of $13.5 million related to the Baobab acquisition completed in April 2024.

 

Year to Date Summary - Sales and Net Revenue

 

  

 

  

 

  

 

  

 


 

  

$ in thousands

Year Ended December 31, 2025

 

Year Ended December 31, 2024


Gabon

 

Egypt

 

Canada

 

Côte d'Ivoire

 

Total

 

Gabon

 

Egypt

 

Canada

 

Côte d'Ivoire

 

Total

Oil Sales

$208,353  

 

$225,957  

 

$  15,319    

 

$  18,396    

 

$ 468,025  

 

$236,221  

 

$250,946  

 

$ 28,418    

 

$  95,082    

 

$ 610,667      

NGL Sales

           -

 

           -

 

       5,968      

 

           -

 

         5,968   

 

           -

 

           -

 

7,859

 

           -

 

7,859

Gas Sales

           -

 

           -

 

       2,052      

 

           -

 

         2,052   

 

           -

 

           -

 

1,849

 

           -

 

1,849

Gross Sales

   208,353  

 

   225,957  

 

     23,339    

 

     18,396    

 

      476,045  

 

236,221

 

250,946

 

38,126

 

     95,082    

 

620,375


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling Costs & Carried Interest

       1,865      

 

        (743)

 

        (835)

 

           -

 

            287   

 

2,276

 

       (531)

 

     (1,131)

 

           -

 

614

Royalties & Taxes

    (28,480)

 

    (85,250)

 

     (3,330)

 

           -

 

    (117,060) 

 

   (32,543)

 

(104,449)

 

     (5,009)

 

           -

 

      (142,001)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Revenue

$181,738

 

$139,964

 

$  19,174

 

$  18,396

 

$ 359,272

 

$205,954

 

$145,966

 

$31,986 

 

$  95,082

 

$478,988 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil Sales MMB (working interest)

       3,144      

 

       3,918      

 

          250         

 

          238         

 

         7,550   

 

      2,971

 

      3,791

 

         402

 

      1,223

 

           8,387  

Average Oil Price Received

$    66.27

 

$    57.48

 

$    61.16

 

$    77.36

 

$     61.99

 

$    79.52

 

$    66.20

 

$   70.66

 

      77.74

 

$   72.81 

Change

 

 

 

 

 

 

 

 

      (15)   %

 

 

 

 

 

 

 

 

 

 

Average Brent Price

 

 

 

 

 

 

 

 

$     69.14   

 

 

 

 

 

 

 

 

 

$    80.52          

Change

 

 

 

 

 

 

 

 

      (14) %

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gas Sales MMCF (working interest)

           -

 

           -

 

       1,692      

 

           -

 

         1,692   

 

           -

 

           -

 

1,772

 

           -

 

           1,772

Average Gas Price Received

           -

 

           -

 

$      1.21

 

           -

 

$       1.21

 

           -

 

           -

 

$     1.04

 

           -

 

$     1.04 

Change

 

 

 

 

 

 

 

 

     16    %

 

 

 

 

 

 

 

 

 

 

Average Aeco Price ($USD)

           -

 

           -

 

$      1.40

 

           -

 

$       1.40

 

           -

 

           -

 

$     1.05

 

           -

 

$     1.05 

Change

 

 

 

 

 

 

 

 

     33  %

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NGL Sales MMB (working interest)

           -

 

           -

 

          248         

 

           -

 

            248   

 

           -

 

           -

 

         309

 

           -

 

              309    

Average Liquids Price Received

           -

 

           -

 

$    24.04

 

           -

 

$     24.04

 

           -

 

           -

 

$  25.46

 

           -

 

$   25.46 

Change

 

 

 

 

 

 

 

 

    (6)    %

 

 

 

 

 

 

 

 

 

 

 

 


Capital Investments/Balance Sheet

 

For the fourth quarter of 2025, net capital expenditures totaled $100.1 million on a cash basis and $88.8 million on an accrual basis, within its fourth quarter guidance of $70 million to $90 million. These expenditures were primarily related to project costs and long-lead items for Egypt and Gabon drilling program, continued FPSO refurbishment and key long leads for the upcoming 2026 drilling campaign in Côte d'Ivoire.

 

As of December 31, 2025, Vaalco had an unrestricted cash balance of $58.9 million. The Company had a working capital deficit of $59.0 million at December 31, 2025 compared to a working capital of $56.2 million at December 31, 2024. In addition, Vaalco had an Adjusted Working Capital deficit of $41.2 million at December 31, 2025 compared to an Adjusted Working Capital of $73.1 million at December 31, 2024.

In March 2025, Vaalco entered into a new reserves based lending facility (the "2025 RBL Facility") that had initial aggregate commitments of $190.0 million and the ability to grow to $300.0 million, led by The Standard Bank of South Africa Limited, Isle of Man Branch with other participating banks and financial partners. The new facility, which is subject to customary administrative conditional precedents, replaces the Company's previously undrawn reserves based lending facility. The Company arranged the new facility primarily to provide short-term funding that may be needed from time-to-time to supplement its internally generated cash flow and cash balance as it executes its planned investment programs across its diversified asset base over the next few years. As of December 31, 2025, the Company had $60.0 million outstanding borrowings. 

On February 4, 2026, the Company borrowed an additional $65.0 million under the 2025 RBL Facility. The borrowing accrues interest at a rate of 10.2% per annum which is based on the Term SOFR plus the Applicable Margin of 6.5% per annum. In addition, the borrowing is due to be repaid within one month from the drawdown date with, subject to certain conditions, the option to rollover the debt upon maturity. 

 

Effective October 17, 2025, the Lenders unanimously approved an increase in the Company's borrowing base under the new facility from $186.6 million to $190.0 million after the Company completed its semi-annual borrowing base redetermination process. In addition, the Lenders also approved to (i) extend the first date on which the Initial Total Commitments will be reduced from September 30, 2026 to March 31, 2027, and (ii) update the semi-annual commitment reduction amounts from $19.0 million to $10.0 million on March 31, 2027, and $22.5 million starting on September 30, 2027.


In addition, on November 7, 2025, subject to certain conditions precedent, certain existing lenders under the new facility agreed to increase their initial commitment effective January 23, 2026 (the "Effective Increase Date") so that the aggregate borrowing base under the 2025 RBL Facility as of the Effective Increase Date would increase from $190.0 million to $255.0 million. The increase in commitments was undertaken with the existing accordion feature included in the new facility.

 


Quarterly Cash Dividend

Vaalco paid a quarterly cash dividend of $0.0625 per share of common stock for the fourth quarter of 2025 on December 24, 2025.  The Company also recently announced its next quarterly cash dividend of $0.0625 per share of common stock for the first quarter of 2026 ($0.25 annualized), to be paid on March 27, 2026 to stockholders of record at the close of business on February 27, 2026. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Vaalco Board of Directors.

Hedging

The Company continued to hedge a portion of its expected future production to lock in cash flow generation to assist in funding its capital and shareholder return programs.

The following includes hedges remaining in place as of the end of the fourth quarter of 2025:

 

 

 

 

Settlement Period

Instrument

 

Index

 

January 2026 - March 2026

 

April 2026 - June 2026

 

July 2026 - September 2026

 

October 2026 - December 2026

Crude oil:

 

 

 

 

 

 

 

 

 

 

Collars

 

Dated Brent

 

 

 

 

 

 

 

 

Total volumes (Bbls)

 

 

 

400,000

 

360,000

 

                 75,000

 

                        -

Weighted average floor price ($/Bbl)

 

 

 

$              62.29

 

$            61.88

 

$               65.00

 

$                      -

Weighted average ceiling price ($/Bbl)

 

 

 

$              68.63

 

$            67.95

 

$               71.00

 

$                      -

 

 

 

 

 

 

 

 

 

 

 

Natural Gas(a):

 

 

 

 

 

 

 

 

 

 

Swaps

 

AECO 7A

 

 

 

 

 

 

 

 

Total volumes (GJs)(b)

 

 

 

               225,000

 

150,000

 

150,000

 

50,000

Weighted average fixed price (CAD/GJ)

 

 

 

$              2.99

 

$              2.80

 

$                 2.80

 

$                 2.80

 

(a) Natural gas hedge contracts were assumed by the third-party purchaser upon closing of the sale pursuant to the Canada APA.

(b) One gigajoule (GJ) equals one billion joules (J). A gigajoule of natural gas is approximately 25.5 cubic meters standard conditions.

 

Subsequent to December 31, 2025, the Company entered into the following additional derivative contracts to cover its future anticipated production:

 

 

 

 

Settlement Period

Instrument

 

Index

 

January 2026 - March 2026

 

April 2026 - June 2026

 

July 2026 - September 2026

 

October 2026 - December 2026

 

January 2027 - March 2027

Crude oil:

 

 

 

 

 

 

 

 

 

 

 

 

Collars

 

Dated Brent

 

 

 

 

 

 

 

 

 

 

Total volumes (Bbls)

 

 

 

260,000

 

338,000

 

702,000

 

692,000

 

673,000

Weighted average floor price ($/Bbl)

 

 

 

$          62.00

 

$          64.22

 

$           63.72

 

$           64.96

 

$          64.68

Weighted average ceiling price ($/Bbl)

 

 

 

$          67.80

 

$          70.14

 

$           68.49

 

$           68.33

 

$          72.63

 

 

 

 

 

 

 

 

 

 

 

 

 

Swaps

 

Dated Brent

 

 

 

 

 

 

 

 

 

 

Total volumes (Bbls)

 

 

 

100,000

 

 

 

 

 

 

 

 

Weighted average fixed price ($/Bbl)

 

 

 

$          65.10

 

 

 

 

 

 

 

 

 

The Company has continued to add more hedges as part of a rolling hedging program to provide downside protection against a volatile commodity price backdrop. Taking advantage of higher oil prices in early 2026, the Company further secured the above additional hedge positions. As a result, approximately 2,900 MBbls of 2026 oil production is hedged at an average floor price of approximately $64.00 per barrel. In addition, approximately 700 MBbls of expected 2027 oil production is hedged with an average floor price of approximately $65.00 per barrel.

 


 

2026 Guidance:

The Company has provided first quarter 2026 guidance and its full year 2026 guidance. All of the quarterly and annual guidance is detailed in the tables below.


 

FY 2026

 

Gabon

 

Egypt

 

Canada

 

Côte d'Ivoire

Production (BOEPD)

WI

 

 20100 - 22400

 

 8300 - 9200

 

 9500 - 10500

 

 200 - 300

 

 2100 - 2400

Production (BOEPD)

NRI

 

 16100 - 17950

 

 7300 - 8000

 

 6500 - 7300

 

 200 - 250

 

 2100 - 2400

Sales Volume (BOEPD)

WI

 

 18800 - 22600

 

 7200 - 9800

 

 9500 - 10500

 

 200 - 300

 

 1900 - 2000

Sales Volume (BOEPD)

NRI

 

 14900 - 18050

 

 6300 - 8500

 

 6500 - 7300

 

 200 - 250

 

 1900 - 2000

Production Expense (millions)

WI & NRI

 

 $150.50 - $178.00

 


 


 


 


Production Expense per BOE

WI

 

 $19.00 - $24.00

 


 


 


 


Production Expense per BOE

NRI

 

$23.50 - $31.00

 


 


 


 


Exploration Expense (millions)

WI & NRI

 

 $30 - $35 MM

 

 

 

 

 

 

 

 

Offshore Workovers (millions)

WI & NRI

 

 $0 - $10 MM

 


 


 


 


Cash G&A (millions)

WI & NRI

 

 $31.0 - $37.0 MM

 


 


 


 


CAPEX Excluding Acquisitions (millions)

WI & NRI

 

 $290 - $360 MM

 


 


 


 


DD&A ($/BOE)

NRI

 

 $15.00 - $19.00

 


 


 


 


 


 

Q1 2026

 

Gabon

 

Egypt

 

Canada

 

Côte d'Ivoire

Production (BOEPD)

WI

 

18700 - 20600

 

7300 - 8000

 

10300 - 11400

 

1100 - 1200

 

 

Production (BOEPD)

NRI

 

14200 - 16000

 

6300 - 7000

 

7000 - 8000

 

900 - 1000

 

 

Sales Volume (BOEPD)

WI

 

15200 - 17000

 

3800 - 4400

 

10300 - 11400

 

1100 - 1200

 

 

Sales Volume (BOEPD)

NRI

 

11200 - 12900

 

3300 - 3900

 

7000 - 8000

 

900 - 1000

 

 

Production Expense (millions)

WI & NRI

 

$26.0 - $32.5 MM

 

 

 

 

 

 

 

Production Expense per BOE

WI

 

$18.00 - $22.00

 

 

 

 

 

 

 

 

Production Expense per BOE

NRI

 

$24.00 - $29.00

 

 

 

 

 

 

 

Exploration Expense (millions)

WI & NRI

 

 $27 - $32 MM

 

 

 

 

 

 

 

 

Offshore Workovers (millions)

WI & NRI

 

$0 - $0 MM

 

 

 

 

 

 

 

Cash G&A (millions)

WI & NRI

 

$7.0 - $9.0 MM

 

 

 

 

 

 

 

 

CAPEX Excluding Acquisitions (millions)

WI & NRI

 

$90- $110 MM

 

 

 

 

 

 

 

DD&A ($/BOE)

NRI

 

$16.00 - $19.00

 

 

 

 

 

 

 

 

 

 


 

Conference Call

As previously announced, the Company will hold a conference call to discuss its fourth quarter 2025 financial and operating results, Friday, March 13, 2026, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time and 2:00 p.m. London Time). Interested parties may participate by dialing (833) 685-0907. Parties in the United Kingdom may participate toll-free by dialing 08002799489 and other international parties may dial (412) 317-5741. Participants should request to be joined to the "Vaalco Energy Fourth Quarter 2025 Conference Call." This call will also be webcast on Vaalco's website at www.vaalco.com. An archived audio replay will be available on Vaalco's website.

A "Q4 2025 Supplemental Information" investor deck will be posted to Vaalco's website prior to its conference call on March 13, 2026 that includes additional financial and operational information.

About Vaalco

Vaalco, founded in 1985 and incorporated under the laws of Delaware, is a Houston, Texas, USA based, independent energy company with a diverse portfolio of production, development and exploration assets across Gabon, Egypt, Côte d'Ivoire, Equatorial Guinea and Nigeria.

 

Vaalco's Legal Entity Identifier (LEI) is 549300CFHFVIWB8M6T24

For Further Information

Vaalco Energy, Inc. (General and Investor Enquiries)

+00 1 713 543 3422

Website:

www.vaalco.com

 

 

Al Petrie Advisors (US Investor Relations)

+00 1 713 543 3422

Al Petrie / Chris Delange


 

 

Burson Buchanan (UK Financial PR)

+44 (0) 207 466 5000

Barry Archer

VAALCO@buchanan.uk.com

 


Forward Looking Statements

 

This press release 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, which are intended to be covered by the safe harbors created by those laws and other applicable laws and "forward-looking information" within the meaning of applicable Canadian securities laws(collectively, "forward-looking statements"). Where a forward-looking statement expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. All statements other than statements of historical fact may be forward-looking statements. The words "anticipate," "believe," "estimate," "expect," "intend," "forecast," "outlook," "aim," "target," "will," "could," "should," "may," "likely," "plan" and "probably" or similar words may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this press release include, but are not limited to, statements relating to (i) estimates of future drilling, production, sales and costs of acquiring crude oil, natural gas and natural gas liquids; (ii) expectations regarding future exploration and the development, growth and potential of Vaalco's operations, project pipeline and investments, and schedule and anticipated benefits to be derived therefrom; (iii) expectations regarding future acquisitions, investments or divestitures; (iv) expectations of future dividends; (v) expectations of future balance sheet strength; and (vi) expectations of future equity and enterprise value.

Such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to: risks relating to any unforeseen liabilities of Vaalco; the ability to generate cash flows that, along with cash on hand, will be sufficient to support operations and cash requirements; risks relating to the timing and costs of completion for scheduled maintenance of the FPSO servicing the Baobab field; and the risks described under the caption "Risk Factors" in Vaalco's most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q filed with the SEC.

Dividends beyond the first quarter of 2026 have not yet been approved or declared by the Board of Directors for Vaalco. The declaration and payment of future dividends remains at the discretion of the Board and will be determined based on Vaalco's financial results, balance sheet strength, cash and liquidity requirements, future prospects, crude oil and natural gas prices, and other factors deemed relevant by the Board. The Board reserves all powers related to the declaration and payment of dividends. Consequently, in determining the dividend to be declared and paid on Vaalco common stock, the Board may revise or terminate the payment level at any time without prior notice.

Any forward-looking statement made by Vaalco in this press release is based only on information currently available to Vaalco and speaks only as of the date on which it is made. Except as may be required by applicable securities laws, Vaalco undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

 

Other Oil and Gas Advisories

Investors are cautioned when viewing BOEs in isolation. BOE conversion ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalencies described above, utilizing such equivalencies may be incomplete as an indication of value.

 

Inside Information

This announcement contains inside information as defined in Regulation (EU) No. 596/2014 on market abuse which is part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR") and is made in accordance with the Company's obligations under article 17 of MAR. The person responsible for arranging the release of this announcement on behalf of Vaalco is Matthew Powers, Corporate Secretary of Vaalco.


PV-10 Value and Probable Reserves

PV-10 is a non-GAAP financial measure and represents the period-end present value of estimated future cash inflows from VAALCO's reserves, less future development and production costs, discounted at 10% per annum to reflect timing of future cash flows. PV-10 values for 2P WI CPR reserves have been calculated using VAALCO's management assumptions for timing, escalated crude oil price and cost in the case of 2P WI CPR reserves. PV-10 generally differs from standardized measure, the most directly comparable GAAP financial measure, because it generally does not include the effects of income taxes; however, VAALCO's PV-10 does include the effect of income taxes. PV-10 is a widely used measure within the industry and is commonly used by securities analysts, banks and credit rating agencies to evaluate the estimated future net cash flows from proved reserves on a comparative basis across companies or specific properties. VAALCO's PV-10 includes the effect of income taxes. Neither PV-10 nor the standardized measure purports to represent the fair value of the Company's crude oil and natural gas reserves.

VAALCO has provided summations of its PV-10 for its proved and probable reserves on a 2P WI CPR basis in this press release. The SEC strictly prohibits companies from aggregating proved, probable and possible reserves in filings with the SEC due to the different levels of certainty associated with each reserve category. GAAP does not provide a measure of estimated future net cash flows for reserves other than proved reserves and accordingly it is not practicable to reconcile the PV-10 value of 2P WI CPR reserves to a GAAP measure, such as the standardized measure. Investors should be cautioned that estimates of PV-10 of probable reserves, as well as the underlying volumetric estimates, are inherently more uncertain of being recovered and realized than comparable measures for proved reserves. Further, because estimates of probable reserve volumes have not been adjusted for risk due to this uncertainty of recovery, their summation may be of limited use. Nonetheless, VAALCO believes that PV-10 estimates for probable reserves present useful information for investors about the future net cash flows of its reserves in the absence of a comparable GAAP measure such as standardized measure.

WI CPR Reserves

WI CPR reserves represent proved ("1P") and proved plus probable ("2P") estimates as reported by NSAI and prepared in accordance with the definitions and guidelines set forth in the 2018 Petroleum Resources Management Systems approved by the Society of Petroleum Engineers. The SEC definitions of proved and probable reserves are different from the definitions contained in the 2018 Petroleum Resources Management Systems approved by the Society of Petroleum Engineers. As a result, 1P and 2P WI CPR reserves may not be comparable to United States standards. The SEC requires United States oil and gas reporting companies, in their filings with the SEC, to disclose only proved reserves after the deduction of royalties and production due to others but permits the optional disclosure of probable and possible reserves in accordance with SEC definitions.

1P and 2P WI CPR reserves, as disclosed herein, may differ from the SEC definitions of proved and probable reserves because:

•      Pricing for SEC is the average closing price on the first trading day of each month for the prior year which is then held flat in the future, while the 1P and 2P WI CPR pricing assumption was $65.00 per barrel of oil beginning in 2026, $70.00 in 2027, and inflating 2% thereafter; and

•      Lease operating expenses are typically not escalated under the SEC's rules, while for the WI CPR reserves estimates, they are escalated at 2% annually beginning in 2027.

Management uses 1P and 2P WI CPR reserves as a measurement of operating performance because it assists management in strategic planning, budgeting and economic evaluations and in comparing the operating performance of the Company to other companies. Management believes that the presentation of 1P and 2P WI CPR reserves is useful to its international investors, particularly those that invest in companies trading on the London Stock Exchange, in order to better compare reserve information to other London Stock Exchange-traded companies that report similar measures. However, 1P and 2P WI CPR reserves should not be used as a substitute for proved reserves calculated in accordance with the definitions prescribed by the SEC. In evaluating Vaalco's business, investors should rely on Vaalco's SEC proved reserves and consider 1P and 2P WI CPR reserves only supplementally.

 


VAALCO ENERGY, INC AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

 

As of December 31, 2025

 

As of December 31, 2024

 

(in thousands)

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$            58,900

 

$            82,650

Receivables:

 

 

 

Trade, net of allowances for credit loss and other of $0.0 million and $0.2 million, respectively

               39,924

 

               94,778

Accounts with joint venture owners, net of allowance for credit losses of $2.7 million and $1.5 million, respectively

                 5,420

 

                    179

Egypt receivables and other

                 2,277

 

               35,763

Other current assets

               26,280

 

               24,557

Current assets held for sale

                    179

 

                      -

Total current assets

             132,980

 

             237,927

Crude oil, natural gas and NGLs properties and equipment, net

             586,095

 

             538,103

Other noncurrent assets:

 

 

 

Restricted cash

                 1,659

 

                 8,665

Value added tax and other receivables, net of allowances for credit loss and other of $0.0 million and $0.8 million, respectively

                 7,149

 

               10,094

Right of use operating lease assets

               16,596

 

               17,254

Right of use finance lease assets

               68,615

 

               79,849

Deferred tax assets

               54,825

 

               55,581

Other long-term assets

               13,630

 

                 7,477

Noncurrent assets held for sale

               31,826

 

                      -

Total assets

$          913,375

 

$          954,950

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

Current liabilities

             191,817

 

$          181,728

Current liabilities held for sale

                    183

 

                      -

Asset retirement obligations

               78,406

 

               78,592

Operating lease liabilities - net of current portion

               11,183

 

               13,903

Finance lease liabilities - net of current portion

               57,256

 

               67,377

Deferred tax liabilities

               63,630

 

               93,904

Long-term debt

               60,000

 

                      -

Other long-term liabilities

                      - 

 

               17,863

Noncurrent liabilities held for sale

                 7,403

 

                      -

Total liabilities

             469,878

 

             453,367

Total shareholders' equity

             443,497

 

             501,583

Total liabilities and shareholders' equity

$          913,375

 

$          954,950

 


VAALCO ENERGY, INC AND SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited)

 

 

Three Months Ended

 

Year Ended

 

December 31, 2025

 

December 31, 2024

 

September 30, 2025

 

December 31, 2025

 

December 31, 2024

 

(in thousands except per share amounts)

Revenues:

 

 

 

 

 

 

 

 

 

Crude oil, natural gas and natural gas liquids sales

$          91,042

 

$        121,721

 

$         61,007

 

$        359,272

 

$        478,988

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

Production expense

              43,107

 

              36,641

 

             29,872

 

           158,177

 

            163,500

Exploration expense

                6,040

 

                     -

 

                  353

 

               8,914

 

                     48

Depreciation, depletion and amortization

              30,845

 

              37,047

 

             20,555

 

           109,978

 

            143,034

Impairment loss on assets held for sale

              67,224

 

                     -

 

                    -

 

             67,224

 

                     -

General and administrative expense

                6,696

 

                8,454

 

               8,845

 

             33,089

 

              29,684

Credit losses and other

                 (379)

 

                1,082

 

                  484

 

                  106

 

                6,304

Total operating costs and expenses

            153,533

 

              83,224

 

             60,109

 

           377,488

 

            342,570

Other operating income (expense), net

              (2,391)

 

                     10

 

                    -

 

             (2,391)

 

                     78

Operating income (loss)

            (64,882)

 

              38,507

 

                  898

 

           (20,607)

 

            136,496

Other income (expense):

 

 

 

 

 

 

 

 

 

Derivative instruments gain (loss), net

                3,643

 

                 (365)

 

             (1,093)

 

               2,876

 

                 (745)

Interest expense, net

              (2,044)

 

              (1,092)

 

             (2,333)

 

             (8,243)

 

              (3,732)

Bargain purchase gain

                     -

 

              (6,366)

 

                    -

 

                    -

 

              13,532

Other income (expense), net

                     32

 

              (1,828)

 

                    33

 

                (595)

 

              (5,754)

Total other income (expense), net

                1,631

 

              (9,651)

 

             (3,393)

 

             (5,962)

 

                3,301

Income (loss) before income taxes

            (63,251)

 

              28,856

 

             (2,495)

 

           (26,569)

 

            139,797

Income tax expense (benefit)

              (4,648)

 

              17,192

 

             (3,596)

 

             14,822

 

              81,307

Net income (loss)

$        (58,603)

 

$           11,664

 

$           1,101

 

$       (41,391)

 

$          58,490

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

Currency translation adjustments

                1,387

 

              (5,975)

 

             (1,799)

 

               4,464

 

              (7,842)

Comprehensive income (loss)

$        (57,216)

 

$            5,689

 

$            (698)

 

$       (36,927)

 

$          50,648


 

 

 

 

 

 


 


Basic net income (loss) per share:

 

 

 

 

 

 

 

 


Net income (loss) per share

$            (0.56)

 

$              0.11

 

$             0.01

 

$           (0.40)

 

$              0.56

Basic weighted average shares outstanding

            104,258

 

103,743

 

           104,258

 

           104,055

 

103,669

Diluted net income (loss)  per share:

 

 

 

 

 

 

 

 

 

Net income (loss) per share

$            (0.56)

 

$              0.11

 

$             0.01

 

$           (0.40)

 

$              0.56

Diluted weighted average shares outstanding

            104,258

 

103,812

 

           104,283

 

           104,055

 

103,747

 


VAALCO ENERGY, INC AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

Year Ended December 31,

 

2025

 

2024

 

(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net income (loss)

$      (41,391)

 

$         58,490

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

Depreciation, depletion and amortization

          109,978

 

          143,034

Bargain purchase gain and measurement period adjustment

                   -

 

          (13,532)

Impairment loss on assets held for sale

            67,224

 

                   -

Deferred taxes

          (29,427)

 

          (16,785)

Non-cash exploration expense

              2,409

 

                   48

Stock-based compensation expense

              6,211

 

              4,281

Derivative instruments loss, net

            (2,876)

 

                 745

Cash settlements paid on matured derivative contracts, net

                 (48)

 

               (453)

Credit losses and other

               (389)

 

              5,979

Equipment and other expensed in operations

              5,572

 

              2,505

Change in operating assets and liabilities

            95,404

 

          (70,594)

Net cash provided by operating activities

          212,667

 

          113,718

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

Property and equipment expenditures, including exploration expense

        (252,856)

 

        (102,996)

Acquisition of crude oil and natural gas properties

            (3,034)

 

                 877

Net cash used in investing activities

        (255,890)

 

        (102,119)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

Proceeds from the issuances of common stock

                   -

 

                 447

Proceeds from borrowings

            60,000

 

                   -

Dividend distribution

          (26,480)

 

          (26,216)

Treasury shares

               (709)

 

            (6,802)

Deferred financing costs

            (7,145)

 

                   -

Payments of finance lease

          (13,289)

 

          (10,477)

Net cash provided by (used in) in financing activities

            12,377

 

          (43,048)

Effects of exchange rate changes on cash

                   83

 

                   (3)

NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

          (30,763)

 

          (31,452)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD

            97,726

 

          129,178

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD

$         66,963

 

$         97,726

 


VAALCO ENERGY, INC AND SUBSIDIARIES

Selected Financial and Operating Statistics

(Unaudited)

Three Months Ended

 

Year Ended


December 31, 2025

 

December 31, 2024

 

September 30, 2025

 

December 31, 2025

 

December 31, 2024

NRI SALES DATA

 

 


 


 

 

 


Crude oil, natural gas and natural gas liquids sales (MBOE)

              1,708

 

              1,872

 

              1,180

 

              6,370

 

              7,262

Average daily sales volumes (BOE)

            18,566

 

            20,352

 

            12,831

 

17,452

 

            19,843

 

 

 

 

 

 

 

 

 

 

WI PRODUCTION DATA

 

 

 

 

 

 

 

 

 

Etame Crude oil (MBbl)

                 712

 

                 791

 

                 655

 

              2,913

 

              3,199

Gabon Average daily production volumes (BOEPD)

              7,743

 

              8,598

 

              7,118

 

              7,982

 

              8,741

 

 

 

 

 

 

 

 

 

 

Egypt Crude oil (MBbl)

              1,009

 

                 923

 

                 995

 

              3,918

 

              3,791

Egypt Average daily production volumes (BOEPD)

            10,963

 

            10,035

 

            10,812

 

            10,735

 

            10,357

 

 

 

 

 

 

 

 

 

 

Canada Crude Oil (MBbl)

                   56

 

                   99

 

                   52

 

                 250

 

                 402

Canada Natural Gas (MMcf)

                 402

 

                 431

 

                 429

 

              1,692

 

              1,772

Canada Natural Gas Liquid (MBOE)

                   63

 

                   75

 

                   56

 

                 248

 

                 309

Canada Crude oil, natural gas and natural gas liquids (MBOE)

                 186

 

                 246

 

                 180

 

                 781

 

              1,006

Canada Average daily production volumes (BOEPD)

              2,023

 

              2,669

 

              1,957

 

              2,139

 

              2,749

 

 

 

 

 

 

 

 

 

 

Côte d'Ivoire Crude oil (MBbl)

                   -

 

                 368

 

                   -

 

                 111 

 

              1,058

Côte d'Ivoire Average daily production volumes (BOEPD)

                   -

 

              3,997

 

                   -

 

                 305

 

              2,891

 

 

 

 

 

 

 

 

 

 

Total Crude oil, natural gas and natural gas liquids production (MBOE)

              1,907

 

              2,328

 

              1,830

 

              7,723

 

              9,054

Average daily production volumes (BOEPD)

            20,729

 

            25,300

 

            19,887

 

            21,160

 

            24,738


 

 

 

 

 

 

 

 

 

NRI PRODUCTION DATA

 

 

 

 

 

 

 

 

 

Etame Crude oil (MBbl)

                 620

 

                 688

 

                 570

 

              2,535

 

              2,783

Gabon Average daily production volumes (BOEPD)

              6,737

 

              7,481

 

              6,192

 

              6,944

 

              7,605

 

 

 

 

 

 

 

 

 

 

Egypt Crude oil (MBbl)

                 702

 

                 644

 

                 693

 

              2,730

 

              2,585

Egypt Average daily production volumes (BOEPD)

              7,635

 

              7,001

 

              7,532

 

              7,479

 

              7,063

 

 

 

 

 

 

 

 

 

 

Canada Crude Oil (MBbl)

                   48

 

                   85

 

                   45

 

                 214

 

                 350

Canada Natural Gas (MMcf)

                 349

 

                 371

 

                 368

 

              1,449

 

              1,542

Canada Natural Gas Liquid (MBOE)

                   55

 

                   64

 

                   48

 

                 212

 

                 269

Canada Crude oil, natural gas and natural gas liquids (MBOE)

                 162

 

                 211

 

                 154

 

                 667

 

                 870

Canada Average daily production volumes (BOEPD)

              1,757

 

              2,296

 

              1,681

 

              1,828

 

              2,377

 

 

 

 

 

 

 

 

 

 

Côte d'Ivoire Crude oil (MBbl)

                   -

 

                 368

 

                   -

 

                 111 

 

              1,058

Côte d'Ivoire Average daily production volumes (BOEPD)

                   -

 

              3,997

 

                   -

 

                 305

 

              2,891

 

 

 

 

 

 

 

 

 

 

Total Crude oil, natural gas and natural gas liquids production (MBOE)

              1,484

 

              1,911

 

              1,417

 

              6,043

 

              7,296

Average daily production volumes (BOEPD)

            16,128

 

            20,775

 

            15,405

 

            16,556

 

            19,935

 

AVERAGE SALES PRICES:

 

 


 


 

 

 


Crude oil, natural gas and natural gas liquids sales (per BOE) - WI basis

$           53.46

 

$           65.69

 

$           55.91

 

$           58.72

 

$           68.63

Crude oil, natural gas and natural gas liquids sales (per BOE) - NRI basis

$           52.54

 

$           64.77

 

$           51.26

 

$           56.11

 

$           65.64

Crude oil, natural gas and natural gas liquids sales (Per BOE including realized commodity derivatives) - NRI basis

$           52.59

 

$           64.48

 

$           50.96

 

$           56.10

 

$           65.58


 

 


 


 

 

 

 

COSTS AND EXPENSES (Per BOE of sales):

 

 


 


 

 

 

 

Production expense

$           25.24

 

$           19.57

 

$           25.30

 

$           24.83

 

$           22.51

Production expense, excluding offshore workovers and stock compensation*

$           25.20

 

$           19.49

 

$           25.23

 

$           24.78

 

$           22.48

Depreciation, depletion and amortization

$           18.06

 

$           19.79

 

$           17.41

 

$           17.27

 

$           19.69

General and administrative expense**

$             3.92

 

$             4.52

 

$             7.49

 

$             5.19

 

$             4.09

Property and equipment expenditures, cash basis (in thousands)

$       100,128

 

$         41,466

 

$         48,302

 

$       252,856

 

$       102,996

*              Offshore workover costs excluded for Q4 2025, Q4 2024, and Q3 2025 are  $0.1 million, $0.1 million and $0.1 million, respectively.

*              Stock compensation associated with production expense excluded for Q4 2025, Q4 2024, and Q3 2025 are immaterial.

**            General and administrative expenses include $0.88, $0.72 and $1.42 per barrel of oil related to stock-based compensation expense for Q4 2025, Q4 2024, and Q3 2025, respectively.

**           


NON-GAAP FINANCIAL MEASURES

Management uses Adjusted Net Income to evaluate operating and financial performance and believes the measure is useful to investors because it eliminates the impact of certain non-cash and/or other items that management does not consider to be indicative of the Company's performance from period to period. Management also believes this non-GAAP measure is useful to investors to evaluate and compare the Company's operating and financial performance across periods, as well as to facilitate comparisons to others in the Company's industry. Adjusted Net Income is a non-GAAP financial measure and as used herein represents net income, plus deferred income tax expense (benefit), unrealized derivative instrument loss (gain), bargain purchase gain on the Baobab Acquisition, FPSO demobilization, transaction costs related to the Baobab acquisition and non-cash and other items.

Adjusted EBITDAX is a supplemental non-GAAP financial measure used by Vaalco's management and by external users of the Company's financial statements, such as industry analysts, lenders, rating agencies, investors and others who follow the industry. Management believes the measure is useful to investors because it is as an indicator of the Company's ability to internally fund exploration and development activities and to service or incur additional debt. Adjusted EBITDAX is a non-GAAP financial measure and as used herein represents net income, plus interest expense (income) net, income tax expense (benefit), depreciation, depletion and amortization, exploration expense, FPSO demobilization, non-cash and other items including stock compensation expense, bargain purchase gain on the Baobab Acquisition, other operating (income) expense, net, non-cash purchase price adjustment, transaction costs related to acquisition, credit losses and other and unrealized derivative instrument loss (gain).

Management uses Adjusted Working Capital as a transition tool to assess the working capital position of the Company's continuing operations excluding leasing obligations because it eliminates the impact of discontinued operations as well as the impact of lease liabilities. Under the applicable lease accounting standards, lease liabilities related to assets used in joint operations include both the Company's share of expenditures as well as the share of lease expenditures which its non-operator joint venture owners' will be obligated to pay under joint operating agreements. Adjusted Working Capital is a non-GAAP financial measure and as used herein represents working capital excluding working capital attributable to discontinued operations and current liabilities associated with lease obligations.

Management uses Free Cash Flow to evaluate financial performance and to determine the total amount of cash over a specified period available to be used in connection with returning cash to shareholders, and believes the measure is useful to investors because it provides the total amount of net cash available for returning cash to shareholders by adding cash generated from operating activities, subtracting amounts used in financing and investing activities, effects of exchange rate changes on cash and adding back amounts used for dividend payments and stock repurchases. Free Cash Flow is a non-GAAP financial measure and as used herein represents net change in cash, cash equivalents and restricted cash and adds the amounts paid under dividend distributions and share repurchases over a specified period.

Free Cash Flow has significant limitations, including that it does not represent residual cash flows available for discretionary purposes and should not be used as a substitute for cash flow measures prepared in accordance with GAAP. Free Cash Flow should not be considered as a substitute for cashflows from operating activities before discontinued operations or any other liquidity measure presented in accordance with GAAP. Free Cash Flow may vary among other companies. Therefore, the Company's Free Cash Flow may not be comparable to similarly titled measures used by other companies.

Adjusted EBITDAX and Adjusted Net Income have significant limitations, including that they do not reflect the Company's cash requirements for capital expenditures, contractual commitments, working capital or debt service. Adjusted EBITDAX, Adjusted Net Income, Adjusted Working Capital and Free Cash Flow should not be considered as substitutes for net income (loss), operating income (loss), cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDAX and Adjusted Net Income exclude some, but not all, items that affect net income (loss) and operating income (loss), and the calculation of these measures may vary among other companies. Therefore, the Company's Adjusted EBITDAX, Adjusted Net Income, Adjusted Working Capital and Free Cash Flow may not be comparable to similarly titled measures used by other companies.

The tables below reconcile the most directly comparable GAAP financial measures to Adjusted Net Income, Adjusted EBITDAX, Adjusted Working Capital and Free Cash Flow.


VAALCO ENERGY, INC AND SUBSIDIARIES

Reconciliations of Non-GAAP Financial Measures

(Unaudited)

(in thousands)

Three Months Ended

 

Year Ended

Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss)

December 31, 2025

 

December 31, 2024

 

September 30, 2025

 

December 31, 2025

 

December 31, 2024

Net income (loss)

$         (58,603)

 

$            11,664

 

$               1,101

 

$         (41,391)

 

$           58,490

Adjustment for discrete items:

 

 

 

 

 

 

 

 

 

Unrealized derivative instruments (gain) loss

               (3,549)

 

                      96

 

                      737

 

               (2,923)

 

                    292

Impairment loss on assets held for sale

               67,224

 

                      -

 

                        -

 

               67,224

 

                      -

Bargain purchase gain and measurement period adjustment

                      -

 

                 6,366

 

                        -

 

                      -

 

             (13,532)

Deferred income tax benefit

               (9,858)

 

             (11,781)

 

               (12,171)

 

             (29,427)

 

             (20,332)

Non-cash purchase price adjustment

                      -

 

                      -

 

                        -

 

                      -

 

               14,981

Transaction costs related to acquisition

                      53

 

                    508

 

                        17

 

                    126

 

                 3,910

Other operating (income) expense, net

                 2,391

 

                    (10)

 

                        -

 

                 2,391

 

                    (78)

Adjusted Net Income (Loss)

$           (2,342)

 

$             6,843

 

$          (10,316)

 

$           (4,000)

 

$           43,731


 

 


 


 

 

 


Diluted Adjusted Net Income (Loss) per Share

$             (0.02)

 

$               0.07

 

$              (0.10)

 

$             (0.04)

 

$               0.42

Diluted weighted average shares outstanding (1)

             104,258

 

             103,812

 

               104,283

 

             104,055

 

103,747

(1)    No adjustments to weighted average shares outstanding

 

Three Months Ended

 

Year Ended

Reconciliation of Net Income to Adjusted EBITDAX

December 31, 2025

 

December 31, 2024

 

September 30, 2025

 

December 31, 2025

 

December 31, 2024

Net income (loss)

$         (58,603)

 

$            11,664

 

$               1,101

 

$         (41,391)

 

$           58,490

Add back:

 

 

 

 

 

 

 

 

 

Interest expense, net

                 2,044

 

                 1,092

 

                   2,333

 

                 8,243

 

                 3,732

Income tax expense

               (4,648)

 

               17,192

 

                 (3,596)

 

               14,822

 

               81,307

Depreciation, depletion and amortization

               30,845

 

               37,047

 

                 20,555

 

             109,978

 

             143,034

Impairment loss on assets held for sale

               67,224

 

                      -

 

                        -

 

               67,224

 

                      -

Exploration expense

                 6,040

 

                      -

 

                      353

 

                 8,914

 

                      48

Non-cash or unusual items:

 

 

 

 

 

 

 

 

 

Stock-based compensation

                 1,508

 

                 1,196

 

                   1,685

 

                 5,956

 

                 4,558

Unrealized derivative instruments (gain) loss

               (3,549)

 

                      96

 

                      737

 

               (2,923)

 

                    292

Bargain purchase gain and measurement period adjustment

                      -

 

                 6,366

 

                        -

 

                      -

 

             (13,532)

Other operating (income) expense, net

                 2,391

 

                    (10)

 

                        -

 

                 2,391

 

                    (78)

Non-cash purchase price adjustment

                      -

 

                      -

 

                        -

 

                      -

 

               14,981

Transaction costs related to acquisition

                      53

 

                    508

 

                        17

 

                    126

 

                 3,910

Credit losses (recovery) and other

                  (379)

 

                 1,082

 

                      484

 

                    106

 

                 6,304

Adjusted EBITDAX

$           42,926

 

$           76,233

 

$             23,669

 

$         173,446

 

$         303,046

 


VAALCO ENERGY, INC AND SUBSIDIARIES

Reconciliations of Non-GAAP Financial Measures

(Unaudited)

(in thousands)

Reconciliation of Working Capital to Adjusted Working Capital

December 31, 2025

 

December 31, 2024

 

Change

Current assets

$         132,980

 

$         237,927

 

$   (104,947)

Current liabilities

            (192,000)

 

            (181,728)

 

          (10,272)

Working capital

              (59,020)

 

                56,199

 

       (115,219)

Add: lease liabilities - current portion

                17,863

 

                16,895

 

                 968

Adjusted Working Capital

$        (41,157)

 

$           73,094

 

$   (114,251)

 

 

Year Ended December 31, 2025

Reconciliation of Free Cash Flow

(in thousands)

Net cash provided by Operating activities

$                  212,667

Net cash used in Investing activities

                       (255,890)

Net cash provided by Financing activities

                           12,377

Effects of exchange rate changes on cash

                                   83

Total net cash change

                         (30,763)


 

Add back shareholder cash out:

 

Dividends paid

                           26,480

Total cash returned to shareholders

                           26,480


 

Free Cash Flow

$                    (4,283)

 

Reconciliation of Debt to Net Debt

Net debt, or outstanding debt obligations less cash and cash equivalents, is a non-GAAP financial measure. Management uses net debt as a measure of the Company's outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand.

Reconciliation of Debt to Net Debt

December 31, 2025

 

September 30, 2025

Long-term debt

$               60,000

 

$              60,000

Less: Cash and cash equivalents

                    (58,900)

 

                  (32,114)

Net debt

$                 1,100

 

$              27,886

 

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