Current EGY Stock Info

VAALCO finances purchase of 3.23% participating interest with $5 million loan and cash on hand

Houston—based VAALCO Energy (ticker: EGY) announced today that the company purchased an additional 3.23% interest in its flagship Etame asset located offshore of the Republic of Gabon. The interest was purchased from Sojitz Etame Limited, and represented the company’s total interest in the offshore project.

VAALCO is operator of and, prior to the acquisition, owned a 30.35% participating interest (28.1% working interest) in the fields in the Etame Marin block, which encompasses approximately 28,700 gross acres in shallow water, according to a company press release. There are currently four production platforms and nine wells currently producing in the concession, including three subsea well tiebacks.  Production from the fields averaged about 19,000 barrels of oil per day in the second quarter of 2016 and over 93 million barrels of oil have been produced since production commenced in 2002.  This acquisition is expected to boost VAALCO’s net production by nearly 11%, effective as of August 1, 2016.

VAALCO Energy

The company announced that it financed the acquisition with the additional $5 million loan capacity available under the new term loan agreement announced in early July with the International Finance Corporation, and cash on hand.

Steve Guidry, VAALCO’s CEO commented, “We are very pleased to increase our participating interest in our flagship producing asset in offshore Gabon to 33.58%.  VAALCO, operator of the Etame Marin block, drilled the first discovery in the field in 1997, so our technical team knows the area extremely well.  We believe it has significant upside potential remaining.  We have identified at least 17 future drilling opportunities we can pursue when prices recover that we estimate could include about 65 million barrels of gross unrisked recoverable contingent resources.”

Guidry continued, “This is an ideal acquisition for us as it is anticipated to increase our production by nearly 11% and not require any additional staffing or cash overhead costs to assimilate into the company.  One of the goals of our strategic review process we announced earlier this year was to seek opportunities to grow the company in a cost effective manner to enhance shareholder value and we believe this acquisition fits perfectly within that strategy.”

VAALCO Energy

VAALCO will be presenting at EnerCom’s The Oil & Gas Conference in Denver, Colorado, on Wednesday, August 17, at 4:45 p.m. EST. To learn more about the conference and who is presenting, click here.


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