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Jun 30, 2024
VAALCO Q2 2024 Earnings Report
Reported strong operational and financial results driven by the Côte d’Ivoire acquisition and solid performance in Canada.
Key Takeaways
VAALCO Energy reported a strong second quarter in 2024, marked by increased net income and adjusted EBITDAX, driven by the Côte d'Ivoire acquisition and solid results from the Canadian drilling program. The company closed the Côte d'Ivoire transaction, recognized a non-cash bargain purchase gain, and focused on preparing for major projects to deliver organic growth in 2025.
Net income increased significantly to $28.2 million, driven by the non-cash bargain purchase gain on the acquisition and increased sales associated with Côte d’Ivoire.
Adjusted EBITDAX rose to $72.5 million due to additional sales volumes from Côte d'Ivoire.
Closed the Côte d'Ivoire acquisition on April 30, with a lifting in May and payment collected in June.
Canadian drilling program showed solid results, improving the liquid mix with higher-than-expected IP30 rates.
VAALCO
VAALCO
Forward Guidance
The focus for the second half of 2024 will be the preparation for major projects expected to deliver a step-change in organic growth across the portfolio in 2025. An increase in capex investment is expected through the second half of the year associated with these numerous projects including the drilling campaign in Gabon and the FPSO upgrade in Cote d’Ivoire.
Positive Outlook
- Preparing for major projects expected to deliver a step-change in organic growth across the portfolio in 2025.
- Increase in capex investment through the second half of the year associated with these numerous projects including the drilling campaign in Gabon and the FPSO upgrade in Cote d’Ivoire.
- Expect third quarter 2024 NRI sales to be between 21,700 and 24,000 BOEPD, reflecting the addition of the Côte d'Ivoire volume for an entire quarter.
- The Company expects third quarter 2024 NRI sales to be between 21,700 and 24,000 BOEPD, reflecting the addition of the Côte d'Ivoire volume for an entire quarter.
- Continued focus on generating strong operational cash flow to fund organic opportunities and return capital to shareholders through the quarterly dividend.
Challenges Ahead
- VAALCO has seen withholding tax, inflationary and industry supply chain pressure on personnel and contractor costs.
- FPSO is planned to come off station at the start of 2025 for planned maintenance and upgrade work to allow the FPSO to continue to produce through the end of the expected extended field license in 2038.
- The scope of work for the FPSO upgrade is currently being finalized.
- Production on Baobab is expected to re-start in 2026 following the FPSO work program.
- Foreign income taxes for Gabon are settled by the government taking oil in-kind.