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Jun 30, 2023
VAALCO Q2 2023 Earnings Report
Reported strong production in all operating areas, leading to increased full-year production guidance and reduced capital expenditure guidance.
Key Takeaways
VAALCO Energy reported a net income of $6.8 million for Q2 2023, driven by higher sales volumes. Production grew by 7% to nearly 20,000 net BOEPD. The company raised its full-year production guidance by 7% and lowered its full-year capex guidance.
Returned $14.9 million to shareholders by purchasing 3.8 million shares since inception of share buy back in November 2022 through August 4, 2023.
Record production levels achieved in Egypt and Canada drove production above the high-end of guidance.
Sold 1,803,000 BOE in Q2, an increase of 47% and above the high end of guidance due to increased production and sales in Gabon, Egypt and Canada.
Grew Adjusted EBITDAX by 37% to $65.3 million compared to Q1 2023 and funded $27.1 million in capital expenditures from cash on hand and cash from operations during the second quarter of 2023.
VAALCO
VAALCO
VAALCO Revenue by Geographic Location
Revenue by Geographic Location
Gabon Revenue
CapyFin.comEgypt Revenue
CapyFin.comCanada Revenue
CapyFin.com Forward Guidance
The Company has provided third quarter 2023 guidance and updated its full year 2023 guidance. Driven by continued strong performance from the 2023 drilling program, production guidance for both Egypt and Canada have been raised. Additionally, due to operational excellence and continued focus on maintaining strong uptime in the field, VAALCO has raised its Gabon full year production guidance. The drilling, completions and facility improvements seen in Egypt and Canada has also driven capital costs lower and VAALCO has updated and lowered its full year capital expenditure budget.
Positive Outlook
- Production guidance for both Egypt and Canada have been raised.
- VAALCO has raised its Gabon full year production guidance
- VAALCO has updated and lowered its full year capital expenditure budget.
- Company expects third quarter NRI sales to be between 18,400 and 20,600 BOEPD
- Company expects to sell an Egyptian export cargo offshore which should improve the pricing.
Challenges Ahead
- Company has seen inflationary and industry supply chain pressure on personnel and contractor costs.
- Decrease in earnings compared to the second quarter of 2022 is due to higher production expense and higher DD&A expense partially offset by lower income taxes and lower realized losses on derivatives.
- VAALCO has seen inflationary and industry supply chain pressure on personnel and contractor costs.
- expects to see a reduction in its outstanding Accounts Payable and Accruals.
- expects the cost savings from the new FSO have crystalized as planned but are being offset by increased diesel costs and inflationary (marine vessel supply rates, transportation, and contractors) and industry supply chain pressures
Revenue & Expenses
Visualization of income flow from segment revenue to net income