EXHIBIT 99.1
VAALCO ENERGY, INC.
4600 Post Oak Place, Suite 309
Houston, Texas 77027
Tel: (713) 623-0801 Fax: (713) 623-0982
PRESS RELEASE
For Further
Information Contact
Russell Scheirman
President/CEO
713-623-0801
VAALCO TO ACQUIRE INTERESTS IN INTERNATIONAL
PROPERTIES AND FORM DOMESTIC EXPLORATION VENTURE
VAALCO Energy, Inc. announced today that it has entered into an
agreement with the 1818 Fund II, L.P., a private investment fund managed by
Brown Brothers Harriman & Co., whereby 1818 Fund II will acquire preferred stock
of Vaalco currently convertible into approximately 60% of the common stock of
VAALCO in exchange for all of the capital stock of 1818 Oil Corp. The principal
asset of 1818 Oil, currently a wholly-owned subsidiary of 1818 Fund II, is a
7.5% limited partnership interest in Hunt Overseas Exploration Company, L.P.
Hunt Overseas Exploration Company, L.P. is managed by a subsidiary of
Hunt Oil Company and is engaged in international exploration for oil. Hunt
Overseas Exploration Company, L.P. has interests in petroleum exploration
concessions totaling approximately 34.0 million acres both onshore and offshore
in South America, Africa, and Canada. Exploration drilling on selected
concessions is expected to commence on certain prospects during 1998. The
agreement provides for VAALCO to receive from the 1818 Oil Corp. a sufficient
amount of cash to meet all of 1818 Oil Corp.'s capital contribution obligations
under the Hunt partnership agreement of Hunt Overseas Exploration Company, L.P.,
presently $13.6 million.
Robert L. Gerry, III Chairman and C.E.O. of VAALCO stated "these
agreements give us a portfolio of both domestic and international exploration
prospects. We now
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have in place the strategic alliances and expertise that should expose VAALCO to
future reserve growth through the use of modern exploration technology.
The preferred stock will entitle 1818 Fund II to elect, as a separate
class, three of VAALCO's eight directors and to vote on all matters, on an as
converted basis, with the holders of common stock as a single class. In
addition, the by-laws of VAALCO will be amended so as to require the approval of
at least one director appointed by 1818 Fund II for certain material
transactions.
Consummation of the transaction is subject to a number of material
conditions, including (i) the completion and execution of several related
agreements, including agreements with Hunt, (ii) the closing of the sale of at
least $5.0 million of VAALCO common shares in a private placement transaction
and (iii) the receipt of a fairness opinion with respect to the overall
transaction. Simultaneously with the closing of the purchase by VAALCO of 1818
Oil Corp., the 1818 Fund II have agreed to purchase an additional $5.0 million
of VAALCO common stock, at a price per share equal to the lesser of $2.50 and
the price per share (net of placement fees) of the common stock sold in the
aforesaid private placement.
VAALCO also announced that it agreed to form a domestic exploration
venture with Paramount Petroleum Company, an oil and gas exploration company
owned by Robert Schneeflock, to jointly explore for oil and gas in the Gulf
Coast area focusing primarily on Alabama, Mississippi and Louisiana. VAALCO
will commit $3.0 million to the venture with Paramount of which $0.7 million has
been funded and will have the right to acquire an interest in any exploration
prospect generated by Paramount and will be entitled to a portion of the
proceeds of any prospects sold to third parties.
Closing of these transactions is expected to occur during March 1998.
VAALCO is an independent oil and gas company based in Houston, Texas.
VAALCO's producing properties are located in Texas and internationally in the
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Philippines. VAALCO will operate and own an interest in an exploration well to
be drilled offshore Gabon in the first half of 1998.
This news release contains projections and other forward-looking
statements within the meaning of section 27A of the Securities Act of 1993 and
Section 21E of the Securities Exchange Act of 1934. These projections and
statements reflect the company's current views with respect to future events and
financial performance. No assurances can be given, however, that these events
will occur or that these projections will be achieved and actual results could
differ materially from those projected as a result of certain factors.
The securities will not be registered under the Securities Act of 1933
and may not be offered or sold in the United States absent registration or an
applicable exemption from registration requirements.
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