VAALCO Q1 2023 Earnings Report
Key Takeaways
VAALCO Energy, Inc. reported a net income of $3.5 million ($0.03 per diluted share) for Q1 2023. The company achieved a 27% increase in daily production compared to Q4 2022. VAALCO is progressing with the Venus development in Equatorial Guinea and finalized multiple substantive documents with partners and the Ministry of Mines & Hydrocarbons.
Reported Q1 2023 net income of $3.5 million ($0.03 per diluted share) and Adjusted Net Income of $7.3 million ($0.07 per diluted share).
Generated Adjusted EBITDAX of $47.8 million and funded $27.7 million in cash capital expenditures.
Increased quarterly dividend by 92% to $0.0625 per share and returned $10.5 million in share buy backs through May 9th.
Finalized multiple substantive documents with partners and the Ministry of Mines & Hydrocarbons in Equatorial Guinea for Block P which includes the Venus development.
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VAALCO Revenue by Segment
VAALCO Revenue by Geographic Location
Forward Guidance
VAALCO provided guidance for 2023, including production, sales volume, production expense, offshore workovers, cash G&A, and CAPEX.
Positive Outlook
- Expects second quarter NRI sales to be between 15,600 and 17,300 BOEPD which includes the impacts of the delayed liftings.
- The Company is currently evaluating future drilling campaigns, with the intent of moving exclusively to 3-mile laterals in order to improve economics.
- Planned activity includes a detailed seabed survey to identify the prime location for the development facilities.
- VAALCO anticipates a strong, efficient and economic development of this exciting discovery with first oil projected for 2026.
- In the second quarter of 2023, the Company plans to drill another six vertical wells.
Challenges Ahead
- VAALCO has seen inflationary and industry supply chain pressure on personnel and contractor costs.
- A lifting in Gabon originally planned for March 2023 was delayed until April which resulted in lower NRI sales volumes of 13,600 BOEPD during the first quarter of 2023.
- Commodity pricing was lower.
- Higher production expense, DD&A expense and higher taxes.
- There were no offshore workover expenses in the first quarter of 2022, the fourth quarter of 2022 incurred $4.7 million in offshore workover expenses.