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Jun 30, 2020
VAALCO Q2 2020 Earnings Report
Reported increased production and sales volumes but decreased realized crude oil prices, resulting in a net income of $0.6 million.
Key Takeaways
VAALCO Energy, Inc. reported a net income of $0.6 million, driven by increased production and sales volumes, which offset the impact of lower realized crude oil prices. The company maintained a strong balance sheet with a cash balance of $44.8 million and no debt.
Exceeded production guidance for the quarter, producing 5,410 net revenue interest barrels of crude oil per day.
Sold 631,000 barrels of oil in Q2 2020, compared to 294,000 barrels in Q1 2020.
Reported net income of $0.6 million ($0.01 per diluted share).
Maintained a strong balance sheet with $44.8 million in cash and no debt.
VAALCO
VAALCO
Forward Guidance
VAALCO anticipates full-year 2020 NRI production to be between 4,700 and 5,000 BOPD, with Q3 2020 production between 4,200 and 4,600 BOPD. Full year 2020 production expense is expected to be $37 to $39 million, and capital expenditures between $10 million and $12 million.
Positive Outlook
- Full year 2020 NRI production range increased to between 4,700 and 5,000 BOPD
- Sales NRI volumes for 2020 increased in line with production to at an estimated average of 4,700 to 5,000 BOPD.
- Company expects to continue to take proactive steps to manage any disruption in its business caused by COVID-19 and to protect the health and safety of its employees.
- There are no remaining material non-discretionary capital expenditures for the balance of 2020.
- Company intends to manage future capital expenditure levels in view of the existing and expected pricing environment.
Challenges Ahead
- Third quarter 2020 production is expected to be between 4,200 and 4,600 BOPD.
- Third quarter production reflects reductions imposed by the State of Gabon in response to production cuts agreed to as a member of OPEC.
- Third quarter production reflects a planned six-day full field shut-in for scheduled maintenance.
- Company has incurred higher costs related to proactive measures taken in response to the pandemic.
- Situation surrounding COVID-19 remains fluid and unpredictable, and VAALCO is actively managing its response and assessing potential impacts to its financial position and operating results, as well as any adverse developments that could impact the Company’s business.