Petroleum Africa
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Tuesday, February 14, 2023
VAALCO Energy reports that over 2022 its operations in Canada, Egypt and Gabon achieved successful results.
George Maxwell, CEO, commented, “We have continued to execute on our strategic vision focused on sustainable free cash flow generation, solid operational and financial results, and maintaining a strong balance sheet…”
Maxwell continued, “We reported solid production results in the fourth quarter of 2022 from a diversified portfolio of assets across three producing countries. We had strong operating results from Egypt that were offset by some tie in delays in Canada and the timing of production following the FSO conversion as well as the lower results from the North Tchibala 2H-ST well in Gabon. The 2H-ST well production is lower than expected as the reservoir’s permeability in this deeper Dentale formation was less than expected. However, the well is flowing naturally, there is no produced water and the pressure data indicates no evidence of depletion. We expect production to remain stable with minimal declines moving forward. While the last two wells in our 2021/2022 drilling program have not performed to our expectations, the overall drilling campaign at Gabon was a success as the initial two wells were highly successful and exceeded our predrill estimates. The program has materially increased production and extended the economic life of the Etame field, thereby fulfilling the primary objectives of this campaign. We forecast the total drilling program at Etame will achieve pay back later in 2023 and have strong overall economics, demonstrating the strong cash flow profile generated from this quality asset.
“We are continuing to integrate the TransGlobe (TGA) team and assets into VAALCO. The combination has given us the ability to diversify our production portfolio and increase our cash flow which will continue to be key to our success moving forward. We have also achieved the first tranche of synergies related to the acquisition. We now have a streamlined management team and Board and have captured the savings from delisting TGA and eliminating other related duplicative public company costs. We continue to rationalize our operational and G&A costs in 2023 as we look to attain additional synergies. We plan to review our 2022 financial and operational results in greater detail, as well as provide our outlook for an exciting 2023 with full year and first quarter guidance during our year-end 2022 conference call in March. We have premier assets in Gabon, Egypt and Canada generating strong operational results, which, coupled with continued strong commodity pricing, allow us to generate significant cash flow. We remain focused on adding value through drilling campaigns, complementary acquisitions and returning meaningful cash to our shareholders,” he concluded.
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