African Reserves

VAALCO Energy Announces Successful Completion of FSO Field Installation and Reconfiguration Project at Etame and Strong Production and Sales Volumes for Q3 2022

VAALCO Energy, Inc.

HOUSTON, Oct. 19, 2022 (GLOBE NEWSWIRE) — VAALCO Energy Inc. (NYSE: EGY; LSE: EGY) (“VAALCO“or the”Company“) today announced the successful completion of the Floating Storage and Offloading Vessel (“FSO”) installation and field reconfiguration at Etame. Additionally, the company reported strong production in the third quarter of 2022, above the high end of the quarterly guidance and sales volumes above the midpoint of the quarterly guidance.

Strong points

  • In connection with the FSO and the reconfiguration in the field, VAALCO successfully carried out:

    • All dives, underwater connections, underwater infrastructure and reconfigurations;

    • All pipeline connections and pressure testing;

    • All new riser connections to Teli FSO;

  • Disconnected all production lines from Petroleo Nautipa’s floating production, storage and offloading (“FPSO”) unit and performed a removal of export oil from the FPSO on September 26 of 300,510 barrels followed by a removal from the FPSO on October 5 of 275,817 barrels;

  • Delivered the first oil from the Etame field to the Teli FSO on October 18;

  • Completion of annual pitch-scale maintenance concurrent with FSO and pitch reconfiguration;

  • Disclosure of preliminary production of approximately 9,150 barrels of oil per day (“BOPD”) for the third quarter of 2022, or 10,525 BOPD with working interest (“WI”), which was above the high end of the forecast of the third trimester;

  • Announcement of sales volumes for the third quarter of 2022 of 731,000 net barrels of oil or 7,952 net BOPD, 8% above the midpoint of the forecast; and

  • Provided an update on the third quarter financial impacts due to the successful TransGlobe transaction.

George Maxwell, President and CEO of VAALCO, said, “We are very pleased to have successfully delivered this complete reconfiguration to the highly complex field, maintenance overhaul and upgraded FSO facility, as planned and within the deadlines. This project was completed despite a difficult global supply chain. environment and is a testament to the dedication of our workforce and partners who helped deliver the project, underscoring VAALCO’s status as a quality operator. effective storage which is 50% greater than our abandonment It also reduces our planned storage and offloading costs by 50%, which should lead to an extension of the economic life of the field, leading to a corresponding increase in recovery and reserves at Etame.

Additionally, we reported very strong VAALCO production and standalone sales volumes in Q3 2022, both above the midpoint of our guidance ranges. Production for the third quarter was approximately 9,150 net BOPD and sales volumes were approximately 7,952 net BOPD. Our team has worked tirelessly to ensure that we maximize our production and sales in the third quarter. We were able to complete three lifts during the quarter, plus another smaller one on October 5, shortly before the dismantling of the FPSO. The team successfully overlapped the maintenance lead time with field reconfiguration to minimize downtime and improve operational efficiency. We continue to execute on our strategy and remain focused on generating meaningful free cash flow to enhance shareholder value. »

As the strategic combination with TransGlobe Energy did not close until October 14, 2022, production volumes and associated revenues and expenses will not be included in VAALCO’s financial results until after closing in the fourth quarter of 2022. However, the company said the majority of the transaction costs associated with the strategic combination were incurred in the third quarter and will be recorded as special one-time charges in the third quarter financial results. The Company also expects to incur a realized loss on derivatives in the third quarter following the settlement of the remaining derivative swaps. Transaction costs and realized losses on derivatives are not deductible from Gabonese tax, so the effective tax rate will be higher than normal during the third quarter. In addition, the costs associated with the discontinuation of the FPSO and the transition to the FSO will be included in the third quarter.

About VAALCO

VAALCO, founded in 1985, is an independent energy company based in Houston, USA, with production, development and exploration assets in the West African region.

The Company is an established operator in the region, holding a 63.6% interest in the Etame Marin block, located offshore Gabon, which to date has produced more than 126 million barrels of crude oil and of which the Company is the operator.

For more information

VAALCO Energy, Inc. (General and Investor Inquiries)

+00 1 713 623 0801

Website:

www.vaalco.com

Al Petrie Advisors (US Investor Relations)

+00 1 713 543 3422

Al Petrie/Chris Delange

Buchanan (UK Financial PR)

+44 (0) 207 466 5000

Ben Romney/Jon Krink

[email protected]

Forward-looking statements

This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included herein that address activities, events, plans, expectations, objectives or developments that VAALCO expects, believes or anticipates will occur. will or may occur in the future are forward-looking statements. These statements may include statements related to the impact of the COVID-19 pandemic, including the recent sharp decline in global demand and resulting global oversupply of crude oil and the sharp drop in oil prices that as a result, production quotas imposed by Gabon, disruptions in global supply chains, quarantines of our workforce or workforce reductions and other issues related to the pandemic, well results, wells expected to be drilled and brought into production, future levels of drilling and operational activity and associated expectations, implementation of the Company’s business plans and strategy, prospect assessments, potential resources and reserve growth, its activities in Equatorial Guinea, expected sources and potential difficulties in obtaining future capital funding and future liquidity, its ability to restore production in non-producing wells, our ability to find a replacement for the FPSO or to renew the charter of the FPSO, future operating losses, c evolution of crude oil and natural gas prices, future strategic alternatives, future and pending acquisitions, capital expenditures, future drilling plans, acquisition and interpretation of seismic data and their costs, negotiations with governments and third parties, timing of Gabon income tax settlement, and expectations regarding processing facilities, production, sales and financial projections. These statements are based on assumptions made by VAALCO based on its experience and perception of historical trends, current conditions, expected future developments and other factors it deems appropriate in the circumstances. These statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond VAALCO’s control. These risks include, but are not limited to, volatility in crude oil and natural gas prices, the impact of production quotas imposed by Gabon in response to agreed production cuts as a member of OPEC, inflation, general economic conditions, the outbreak of COVID-19. 19, the Company’s success in finding, developing and producing reserves, differences in production and sales due to the timing of offtakes, decisions of future lenders, risks associated with liquidity, lack of availability of goods, services and capital, environmental risks, drilling risks, foreign regulatory and operational risks and regulatory developments.

Investors are cautioned that forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. VAALCO disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Inside information

This announcement contains inside information as defined in the Market Abuse Regulation (EU) No 596/2014, which forms part of UK national law under the Withdrawal from the European Union Act 2018 (“ MAR”) and is made pursuant to the Company’s obligations under Article 17 of MAR. The person responsible for arranging the publication of this announcement on behalf of VAALCO is Michael Silver, Corporate Secretary of VAALCO.