Earnings call transcript Q2 2023

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Operator

Good morning, everyone and welcome to the VAALCO Second Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please also note today's event is being recorded.

And at this time, I'd like to turn the floor over to Al Petrie, Investor Relations Coordinator. begin. may you Sir,

Al Petrie

highlights Good XXXX And cover Q&A. then Conference Maxwell, review statements, summary operator. Bain, with results. Chief Energy's CFO our for our George the to be Second George key will CEO Quarter Call. our Operating is with also morning, you, operational financial will today welcome Ron will everyone. VAALCO forward-looking along Thank After some and for available Pruckl, return provide questions. before comments Thor a us will closing we review. then take your Officer I

we During our question-and-answer your you session, a ask and to follow up. questions one limit to

Investor queue has should point can we quarter be comparisons posted financial re-enter the I'd Information website questions. second analysis, that out on morning this with Deck You additional and our that that helpful. to like guidance a always Supplemental additional XXXX

With that comments. statement let forward-looking me with our proceed

call are are making of materially be the from may this will the differ of guarantees those results not that During cautioned those or future performance. developments in forward-looking conference course statements. accurate company the And Investors forward-looking projected statements. forward-looking statements

website yesterday's information, Accordingly, Form release, whether reliance intention VAALCO any the SEC events statements, update in of press posts statements. the obligation These reports as and forward-looking our on including you the are XX-K. otherwise. future new in a the risks or or forward-looking or described should not result undue we revise filed to disclaims any place on other with and presentation

is being that recorded. call Please note this conference

George. over now Let call me turn to the

George Maxwell

call. second morning, to Good welcome Al. our you, quarter XXXX Thank and earnings conference everyone

asset TransGlobe by in combination. XXXX, continued have exceptional to following the We expanded base bolstered deliver results

growth operations managing been our plans. and on and future development optimizing our Our focus capital to has drilling allocating optimizing costs, production,

second to of out that returns. XXXX. us shares, quarter has execution our dividend the total the We the thus increasing shareholder and nearly increase and to generate to quarter we the we announced continue pay buyback strategy, third double allowed on growth in paid the dividend we track dividend paid the and Through EBITDA and are dividend

returned Additionally, a buyback XXXX. continues at million $XX through current we to program date, levels. pricing XXXX since program this have share And November through

also capital debt and projects future our cash expect program our XXXX portfolio. fully exciting have We fund funded diverse bank in build free meaningful half second remain to the to of across

barrels NRI basis. second on quarterly levels to I by like would point our equivalent quarter. were now or day and in X% out the production end in programs key oil production above driven increase the and both barrels of accomplishments areas. some per drilling XX,XXX from a saw of XX,XXX a This Canada to interest Egypt successful record working was and highlights high of for We guidance

to operational Additionally, new we saw the anticipated than less due at uptime declining FSO. are operational better determined and Gabon to enhancements

of QX volumes see in You XX% quarter 'XX and timing lifting Sales second Gabon and clearly pushed when in how this and year, Canada. we XXX%. we last you into compared can we up production were have due higher to the was second quarter compare up QX, QX that also Gabon, are year, to the sales experienced production from Egypt the grown

adjusted than QX, grow Our increased million, lower higher sales which despite $XX.X allowed XX% was million to pricing. $XX.X EBITDAX by to realized

fund debt. in maintain end with allowed of and in us cash to million a million or operations, bank $XX.X $XX.X generated from no $XX.X strong quarter balance cash CapEx also million We which

our positive assets a our sustainably and Equatorial countries, portfolio will I Guinea detailing area. grow as spend VVAALCO. diverse we second activities positive Egypt, half scale of have across and operationally both of momentum operational building enter in size and now the XXXX, financially. including we're Canada, With four We And Gabon, each little time to

with capital of in begin XXXX. where have Let's amount we largest the invested Egypt

of horizontal one drilling the in drilling pleased far included has We're vertical, XX with well thus including a well. as Egypt injector performance campaign very exploration XXXX. well in the Our drilling well, and as one

drilling vertical moving seeing we're significantly On days faster in consistently eight wells, XXXX, to per XX faster, from the days times. roughly in under XX average a allows future to By XX% XXXX meaningfully, performance, reduction drilling cycle XX costs well in vertical the per drill Egypt. well, of wells is change of wells drilling us the economics cutting which days. our we're step We the to and believe improving in wells in

In in efficiencies, facilities that and This and also changes in effort meaningful were two enacted overall operations. production the we addition resulted have the spent effort time recently. to drilling Egypt reviewing has

we The a resulted barrel that oil is back steps relieve which to first and pressure, XXX pressure took improvement bottlenecks day production. per in in

increased our to and to improving containment The old and improve spills prevent and well of installation use new ability replacement for screwable composite lines lines. second of secondary was pipe measures capture of sites with on on potential by

actions commitment spills. We environmental well believe being that not eliminating to move significant this will performance, good make stewards, part as but ESG improve These our only also towards ongoing of a uncontained initiatives. enhance our

key areas to We ability production. company maintain total our is and records continue of in production driving XXXX, set grow one which to the

program, Egypt of in one a drilling develop XXXX our significant assets. continue core of capital our Our to we completion as is and part program

We XXXX that spend the third of but will to capital majority flagged still our the been completed. for quarter, need Egypt vast wells have in has several in be

online these In recall, but in wells built delayed late XXXX you QX, December in Canada, as January several we wells XXXX. completions and came were and

lateral the without X-mile drilled cost drilled also were Both quarter, for and in which were completed required wells X.X-mile two land retention wells safely purposes. additional a incident. and lateral, and fourth We also effectively

in roads production on in less wells. July, continued began rates is cycle The and overall run times. significantly historical early well Both and wells pre-deal were pump were in May wells to produce very very which expectations April and and flowing are cycle exceed May, The equipped both early and times a tied than positive the with well sign. in were

move our laterals believe prospects almost program. our further forward going of to development optimize believe will we will three-mile economics we Canadian also that improve which exclusively, the and to We X.X better

also performing we drilling a program completions Canada so well another a reason our XXXX, and XXXX production are finished and as Canada. targets in set our record exceeding company in production with completely

wells position. taking are pleased thus combination we completed with our of could of see After development steadily We with further the evaluate closely far. at the look our the we're refine TransGlobe techniques. we how part last improve future valuation the increase to we rest and facility and XXXX optimization, And completion and Canada very results acreage short to the term efficiencies and in optionality year,

Gabon. to Turning

campaign CapEx, fourth lead As minimum quarter in you of and to new have dollars drilling Gabon in related only our we and drilling XXXX long know, primarily completed maintenance in CapEx the XXXX-XXXX XXXX, we the XXXX no end seen our production Despite numbers in end high production second the program, drilling at both the equipment. guidance. have or overall high with XXXX, and of exceeding strong quarters first

quarter in the operational next us is the fourth until of allowing year, which excellence, economically more and XXXX focusing configuration and campaign. operate drilling POB uptime including project, on FSO the In enhancement to production we minimize while efficiently to completed decline last

higher FSO We're and supply the some already. to the of are benefits rate our from the from pressures. interest offset costs FSO seeing The of helping impact cost multiple inflation, new savings from

In capacity, sales reasons addition, one greater why is the which of our storage quarter has strong. so FSO and handling second the were

to diesel now line to As scheduled completed. had same less today, the be completed help minor should once due which costs class the things QX, we lower stand pipeline is on in September, work OpEx

team drilling evaluation at subsurface of been Our our [Indiscernible]. for working campaign prospects on have the joint next

currently program, to four XXXX-XXXX be well planning well a three of with options. We we're progress are projecting ready which to program the additional our drilling to

of this All of on rig to search we interest a dependent week issued last availability mid-XXXX. to meet market for in and that requirements rig and begin the expression the is program our an

along planned detail earnings better and rig We in next at be a understanding further discuss timing have it more we and the believe planning call. with our to and of that availability program will

in engaged they Gabon. potential of we our We expand as the the about And when blocks the excited and update negotiations Gabon, under remain partners final the regarding in in will Additionally, these we details. have blocks PSC market upside government we acreage are G with H. more

on where additional resources a as meeting Another the Let Guinea, XXXX, for to area a discussion a owns their previously In Equatorial March with but exploration partners. offshore productive interest significant held future Equatorial MMH discovered potential me VAALCO. and in Block as working now undeveloped they were well turn we whole VAALCO also potential. P Guinea

relating includes to multiple substantive documents finalized Block we Venus meetings, schedule these the production contract. development the P During which for

will we following and [Indiscernible] by project has approval outstanding to stakeholders. all place in signatures accelerate But able the forward still be

towards and POD will We approved all have it stakeholders continue with to forward we FID. working an move

proven a a look track operating have for we progress this kind. into forward demonstrating Venus we capabilities these We discovery as to And development record production. of

and our projects production reserves that a will Group in into development XXXX help are moving of There for to lot VAALCO value exciting XXXX continue in shareholders. and

plans. I would like to continue to team and execute operate who thank your our hardworking

the have reductions continuing capturing towards to cost and progress and size and acquisition efficiencies, captured of to synergies more scale. TransGlobe make meaningful build already while We continue

ESG. shareholder and future free growth operating the of remain opportunities debt and regards a firmly towards focused with a bank are on highest We strategic maximizing vision for return

would With the that, to to our share like turn Ron I results. to over call financial

Ron Bain

George. you, everyone. Thank morning, Good

performance by Let continued our about strategic George's operational echoing as our comments strong plan. execute me begin we

of and much base before asset us, growing integration the with than in the diversified positioned business are we behind history. today VAALCO's With a substantially better ever

in numbers, lot us rattling and you than dive into give our that earnings some review financial for this verbiage and results morning. release you numbers high I'll a drive or the explanations level Rather XX-Q, of off that can

to up drives assets quarter Let's end along was strong sales. for the second our guidance up XXXX. production Production begin considerably, above all increased QX high to our with the quarter which performance, production sales, very Sales realized revenue. pricing X% with of compared were resulting for and with the and in

weather the last cargo QX quarter, a of tidal shifting only but QX. also it and greater when larger to timing And we allows capacity as handling that the had storage reduce events. not flexibility was FSO costs, We greater have lifting us much Gabon, to us This highlighted from with will in FSO. provides liftings due and possible within said help to the have previously

revenues up nearly sales million the led in a to increase strong are Our from first XX% quarterly quarter. $XX

partially was Egypt. QX in the Egyptian QX. dropped with quarterly, held result sales were pricing with largest declines. line sales Our volumes up strong cargo all reduction export by sequentially XXX% in Brent the being and our compared with commodity This sold all the are offset pricing about softening, of benchmark X% domestically, in

gas and natural gas was -- in and declines were significant this natural trend down the we slightly pricing by XX% liquid impacted able also natural to NGL prices Benchmark Canada. were down realize XX% we and pricing was gas gas XX% were down sequentially. pricing We in buck will but

sales earnings country by will pricing commodity You our we in in an increase detailed release provided volumes transparency. note along with a to breakdown yesterday, of effort

the hedging, to via risk to indexed and protect earnings for with $XX. Investor floor hedged in brent of upside shown $XX year, hedging and and implement through about of price to release all costless, help We've Regarding the a in our $XX end we our commitment returns. our as protected a colors mitigate of to production between XX% program our to shareholder Deck, continue us

the for Production This is contracts removing the normally million costs. cost storage disposal costs from happens under onetime unit typical FPSO. radioactive to lease a occurring decommissioned of lessee. gets whenever the and included deemed decommissioned, Turning X.X and norms a of material responsibility of

production were per Excluding this or within the guidance. midpoint cost in came costs our onetime bottle of charge production at guidance,

While, sequentially, due up per sales, lower barrel absolute cost our are year-on-year. higher to costs production actually were quarter-over-quarter and

line in with also were guidance. costs G&A

and duplicate G&A year-to-date onetime higher reorganizing of offset combined But For activities by of this million costs by integration about reorganization from charges skill. advantage taking functional are functions, is $X removing TransGlobe. the our and than for XXXX, more

we've is ahead by target XXXX business both well as The of the costs seen When and speak. full and costs integration million per in annum. our TransGlobe, the of combined compared we VAALCO $X G&A in meaningful completed being to synergies reorganization reductions seen of

to on ability flow. continue our on can improve generate We cash to control will we the to margins focus the operational costs help

EBITDAX adjusted of XX% increase of million, sequentially. generated an million $XX.X We or $XX.X

led costs commodity sales declines and growth, and strong discussed EBITDAX pricing, Our continuing controlling as despite work earlier. to solid in

higher the highly Non-cash record due compared DD&A of to were to the the with drilling to costs quarter first the basis which absolute an achieved sales campaign, completed part successful spending in increased and XXXX second the has in incremental on been Costs and near accelerated quarter. also time. Egypt, due large completion a capital in

the valuation. For XXXX seen up in DD&A step an the increase the we of due to have TransGlobe asset

a per barrel, forward balance the of XXXX, As QX go a $XX that $XX result, with QX for DD&A of and this the basis, range and will year. costs we in on believe additions between year, will CPR the lead change of for be the barrel. per rate and Targeted will DD&A as a reserve reflected completed of our most in end our in to wells line the likely

resulted have in the rate quarter expenditures tax no offset foreign U.S. sufficient of U.S.A. in do Corporate in and costs in tax million an about Tax income domestic these effective about costs. resulted of $XX.X we to not benefit, the XX%.

to that our business costs ability is is obtain to not in This which of $XXX,XXX count a project. as towards foreign no continue progress operational, does with recoverable we us we about our costs incurred tax achieve when we expected for but oil, credit first Additionally, provides currently EG XXXX.

in tax entitlement barrels. sufficient paid losses to any net cover Gabon the with calculated. still the taking states in we operating and And Canada, have Taxes respective both to Egypt

of reported pricing, around Overall, million DD&A $X.XX lower barrel rate tax adjusted barrel net $XX.X or saw sales, remains after per items. onetime higher effective that strong per share expenses, production diluted per income We an and lower removing XX%. we

receipts we July. the to Cash receive million million was $XX statement in and now on XX, June for in about cash sheet but Turning QX. $XX.X flow cash balance did

Egypt are receivables. accounts balance nearly liabilities was thirds offset XX be EGPC used EGPC. is and within million, likely June accrued million of will as standard excess in some two and of Our of receivable with an for that Concurrently $XX.X liability our for cost $X

export on late August. successfully can of and barrels to we've about offsets. arranged cargo confirm in likely that We work We QX with both continue EGPC that collections will XXX,XXX also the occur

is includes than inventory oil sequentially, used cargo. lift inventory will be XXX,XXX is the in and FSO within Egypt, Crude upcoming the flat under export which Gabon. remaining barrels against The

additional continue million in it will sequentially With has As the third acquisition we of and since build is outstanding the reduction payable near completion accounts drilling facilities opportunities accretive value. the credit been quarter utilize closed bank accounting start see no we to completion debt and XXXX, of case or a Egypt, flat to of Canada to to for available in $XXX the

VAALCO paid quarterly dividend XXXX, QX share, million $X.XXXX $X and of was common per million. cash $X.X In or our share buyback

buybacks of As on and stated acquisition. share a asset generation direct of expanded previously, growing flow dividend result as a result the our the ability TransGlobe our base are cash

programs related funding capital on Aside drilling a million funded in we basis. returns, cash from our to fully fully expenditures net $XX.X shareholder of also were primarily or These in Canada. Egypt expenditures

both earnings and guidance in updates. and the release where Let a taken our me on Also, interest all is interest, now royalties website. revenue key the difference highlights in that to remind you we slide with a guidance full to deck give with our turn some I I our breakout paid net production barrels. working you report or will want supplemental representing our in

discussed production. we in mitigate successful Egypt focus is Canada, in coupled our to As meaningful highly a programs have to with on in increase leading uptime our declining capital Gabon operational

increase for guidance all our are leading year company production the about to raising we For of full areas, a total XXXX production X%. operational

the third our compared and For second who Gabon, Canada to quarter. expecting slightly off XXXX, flat quarter but to and slightly the production in decline we're Egypt to

our our in volumes quarter, sales and sales sales export cargo we're unrealized which we're where the in increase strong volumes, third expecting Additionally, at would pricing. particularly looking forecasting see to Egypt,

gone full sequentially our due of to in increased costs for to But unchanged both the slightly the SEENT virtually completed primarily guidance, be and up Our have work expected seals. year to per and the pipeline costs the are equivalent expected barrel due production quarter. third

the have the half past we towards CapEx, is of XXXX at spend in year. front capital the looking Finally, said weighted or

and that full from due capital our QX a You and quite times, in for cycle Furthermore, to below ranges the teams are completion expected drilling bit to are year. Canadian reduction coming not in spend. improvements that expected and can see QX Egyptian the capital spending

As sales Coupled $XX by at midpoint. reducing spending and capital grow production result, in year VAALCO XXXX. about we flow cash million believe a very we're and of is with fourth expected full the our quarters higher third that to positioned well the

that and updated earnings out of a our an point to like deck good I'd key have analysis, supplemental assets that highlights we detailed performance. and is overviews

transparent, better an pricing to generate detailing are at that more and strong our and the effort country stakeholders assets our we flow. help seals Additionally, be production our cash understand level

like resolution market obligations to the that sign in principle, in note as to our that is also agreed the as various Gabon I'd of now the historic we've recently in by well domestic ministries. a debt, process off

Despite price paying of very commodity the dividend in increase continue a low strong at driven bank stock pricing, trade despite being recent to debt a we and yield EBITDAX, by multiple free. our higher

believe common to reason our is which share few to an we've shares program are that now their decided a buy continue excellent past months. opportunity why the our to We over value, buyback trading accelerate discount a right to intrinsic at is

will turn over call I the back to now that, With George.

George Maxwell

Ron. Thanks,

tremendous have very of be continue half heard you this and the As believe in the have our continue to will success year morning, we strong. to that second XXXX

of cash grow on dividends, EBITDAX expect in $XX around of position and for quarterly the half funding meaningfully We buybacks and generated our share level all from second to have of with cash cash flow the in our hand $XXX million CapEx adjusted current million. XXXX and

shows impact and decreasing to date to with capturing efforts this accomplished commodity shareholders debt began positively realized with delivering to balance. synergies financial commitment position market our are results a already. XXXX towards the pricing margin no all our time we our in in continued of which and We're cash growing to more on XXXX, We solid to and and

Our for strategy asset look remains operate prudently, accretive unchanged, efficiently, opportunities. base and maximize our invest

remained focused we QX amount shareholders. the dividend Additionally, our increased QX XXXX, have same that paid same In and our QX. earnings XXXX nearly and returning to in value on we for dividend doubled quarterly

for per are last on to dividend that $X.XX track promised year. annual share we We deliver XXXX

the and first continued also shares have program through approved $XX Through common common repurchased million X.X million We the shareholders returned XXXX. through of shares buyback. to to buyback we repurchase the months have XX in program,

in successful class substantially the lower development. highly XXXX Our XXXX above of drilling allow the are capital capital programs second half Canada should The and significant to Egypt generations for flow cash to campaigns and existing plans build future for meaningful the a for profile our completed spend build XXXX cash. in reserve us obligations

will our or to potential In campaign look as planning addition, plan accretive the the accelerate in for return and with we for the Venus P, partners EG at We're opportunities. as shareholders as next locations enhance evaluating evaluating as working on well discovery exciting development drilling on Etame. to well Block

and successes We're and Egypt plan facility and optimization drilling next it efficiency gains Canada, to taking we're campaign. in the drilling our applying and

very future value cash to to significant our see entire should XXXX shareholders. continue the across to in I'm of reserves production We're will for excited and deliver our long-term portfolio, continue in which we activity flow will superior grow that economy, increase confident generation. You our

ready that, with you. operator, questions. take to And are Thank we

Operator

our [Operator gentlemen, we'll ROTH first And go question from Please comes with today ahead White begin Instructions] at from question-and-answer question. and John session. Ladies your the Capital. this time,

John White

very congratulations quarter. on and a morning, Good strong

George Maxwell

Thanks, John.

John White

drilling early wondering, Gabon CapEx to potential of I'm range it CapEx talk with sure. too Sure, about or is program? associated XXXX-XXXX the potential

George Maxwell

That's in full rigs rig. call what the market. higher earlier the we've much the mentioned solidify is that CapEx day over of seen the obviously the 'XX-'XX to also we've of order in went utilization position. why have Well, out expression general increase We for I the rates seen and jackup an in campaign mean, interest I in in

an both So estimate, we that do the numbers work have, drilling side. obviously with preliminary on we

we think for thing have of some the long do items positions One lead already, worth in is inventory. I pointing some out

information, the with the the But associated campaign for the next things outs we're be get will cash together pull we're locations, because about able of QX the course that that a versus cost, everything both a then going previously. that. step not et be to to in purchased accelerant drilling cetera that drill the talk call. more market types to And So basically lot wells taking of yeah, quarter we well and John, we'll

John White

thank Okay, in that's doing you a in in resulting are what such decrease drilling dramatic you. times? Egypt And

George Maxwell

the And of asked had and I -- improve think year, question. can I'll to go the we plans? when what the and think at Good how were plans we we I call were the integration, back last started are question to the We've efficiency. we QX always look our

that's through how measures. of and a a changed procedures of we've step Now operate. we policies to number resulted is there One number as

had we've in rig blockage. greater we've delivery. for a equipment the for that past, Secondly, proceed. the some to in degree on a seen cases, of long solved waiting And time equipment We've quite order on coordination in standby

We personnel focusing running significant change efficiency a are both have and of completion efficiency. drill on programs, and these had

personnel, supply sure is cup chain same then one finger good of So have It's of all between the effort time. we it's unit and issues. doing a making a change with in And a of at one, drill coordinated obviously, the the on any my the performing heart not mixture but major three.

efficiency. levels, seen in I important, we've step our But a mean, change what's more yes,

maintain that confident can is of commitment level we Because we're can. efficiency. we Our that that

John White

pass appreciate to Thanks I'll detail. I back for the all operator. it that it. And

George Maxwell

Thank you, John.

Operator

Canaccord. your question next ahead Please Sharp from Charlie Our question. go with from comes

Charlie Sharp

or comments Thank you quarter, very for previous echo such congratulations. taking And question. about I much. if good thanks And a question the my can

questions, in working impact Can that what impact you think SEENT. is you I be again? will fix once on may. Just the short I One, gasline -- the fairly think quantify the will if of two, terms on positive costs,

wells? the campaign between to it split Will is secondly, of next Gabon [Indiscernible]. And some have soon idea about too

George Maxwell

the we infield a Ron. utilize question for field Okay. obviously, gas I'll certain lane At on pressure with lot bubbling. the first power Etame. of is the But levels, the efficiency at share

to So now. align trying right we're maintain pressure and equilibrium

also So does go repair than it spread get Gabon to line will an and wait in the opportunity come us commissioning rather cost. a leak mobilization And trying equilibrium has that -- it to and by those We're to for not and be doesn't it immediately Gabon. that reduces maintaining doesn't flooded. through to spread when the allowed

I'll let Ron dam what efficiency it talk the for about us. does of

Ron Bain

Charlie, yeah, done, George. a SEENT are burning FSO is we we being gasline with the diesel. Thanks, that the moment, Gabon. haven't for on feedstock based so cost that got the And the for from the fuel coming diesel bunkered in at

between quite enough not is we're that having A, gas. means month we should more $XXX,XXX due that feed and crude burning to Essentially, high than So probably be a $XXX,XXX pricing.

So see the out happening in we We repair dropping QX. itself, that pipeline QX. see basically in effectively

into We It month is got require are a for relation say we've that look QX. were project, perform What of this diesel getting and in of suitable we the yeah, a the lot cost vessel And about repair. They simulation essentially, each the at and between dice of the and QX quarter. if burning point will in on to vessel that QX it. receiving I'd price it's discussions the a time at to and team. built in

and of cost million this time, $X we in we if this costs that between, estimate between off repair big in QX, at done should is see $X point somewhere million. in drop And essentially, we a the in So get QX. diesel

Charlie Sharp

Okay, that's you. great. Thank

George Maxwell

on And drilling to the your get question program. to second XXXX

team the -- in our are been the opportunities the [Indiscernible] Dentale have We working opportunities. obviously and looking the hard Gamba both stepping at on subsurface and in in

the four of as quite hopefully to said a again, portfolio, least QX. wells and programs well currently to the So more lot a options. in number the whilst number the a in of of I sequencing able wells clarity my selection with there in we'll But are statement, the wells of be talk three

Charlie Sharp

much. Thank you so

George Maxwell

Thanks, Charlie.

Operator

with from comes Please ahead go question. Our next Wheaton Chris question Stifel. from your

Chris Wheaton

screen me And something discipline guys. to let say morning, that Good see on you. numbers to really this say good Thank great turning good morning. the it's into operational

So well done. very

could seen to production Canada, that First drilling growth than tempted cash maintain that the we and question growth CapEx you Egypt chose why budgeted. spend good do see Definitely you'd for George. in up but interested drilling next you're accelerate spent you rather originally and performance and in that money you, And into a extra more to not in flow year. bit I'm you therefore where stop money

And then secondly, a question for Ron.

look XQ absolute XQ breaking activity, $XX effect to example you sort up much. Thank very the the of If in Gabon. down in you about like one-off leads costs, versus gets any lack burn were identified cost I'm than it of relation for terms in interested deflationary And into million. to diesel at fuel you've

George Maxwell

complete. when Chris. CapEx our spend what almost thanks, I a there's Okay, we And of, couple guess, an earlier statement, is nuances. And we said said in

the a opportunities. we the about And now, Yes, it three position Are think we're firm instance. Has just taking Right CapEx is successful, talk it. our we program. Egypt wear by to excited today contingent at within guidance been range. we're now has. at, been completing are, looking in rig it me Clearly successful? will first clearly let our So that up down? Right I least that we very

So doesn't it our change guidance provided. we It's the range. that within

contingently wells. for We allowed those

we very the there the two arrest course, for be completed three we've working wells yes, up is a Egypt. to And probability will program, at decline. XXXX for firm then the drilling high in the campaign. that we of wells least another order will we to campaign in is There say So continue

When it comes to Canada, it's slightly different.

have can to that. we can allows at we get One and how develop look Canada, make we things do how that said lateral us of in to the footprint land wells the a need we sure longer we

up the this So half of this once we can had a already first year, we with year, up X.XX those in for how the half to planned that So any come said we is again, in of Canada? number that? to order the land of at three-mile second make lateral looking in wells. drilled as And do acquisition do preparation campaign a and to we is additional XXXX opportunities need

Ron Bain

costs, and [Indiscernible] ahead. sorry. Yeah, Chris Go

Chris Wheaton

have just include see Can on just that Does clear of just that you've guidance? George, top those today? Ron. up I Sorry, you two one what revised on be production guidance and on your follow those interrupt said additional three opportunities or to to

George Maxwell

It our the we does know we're included mean, been CapEx conservative. Because existing not we're for we CapEx and will these range. I within We've we've top what be the guidance include planning And success. position on But wells, targeting. guidance. know

not included have We the production.

Chris Wheaton

clear. Very Thank you, George.

Ron. Sorry to interrupt you,

Ron Bain

Not from [Indiscernible]. the

question, equivalent, to a like we're out on a actually I point dealing party quarter. quarter really first to The barrel

a So is that understand. as in relation are can see and this in of the was out you there FPSO. about the as to We volumetric the in you there lot old cost from $X.X production one-off a million a there. waste those pulled costs, obviously driven, can yes, couple costs, one-off But disposal enormous of

obviously like and QX, what inventory of you adjustments, really inflationary is the highest say QX that, in a costs which And we've the We've consequence SEENT -- look obviously period. is crude for the yields a one-off got inventory out in gas things sold and pipeline. that other eight I'd of as range when at impact

million be looking $X Chris would to I think there. million at you within $X.X

pipeline I inflationary But $X removed. $X.X the pressure. is largely and do million to SEENT thought million, have once So that fixed, is negated we

have marine helicopters. come seen expense on times We some reasonable on it boat contracts our our to increases These on we they as renewal. as have said, seen our many

Chris Wheaton

Thank great. much. very you That's

Ron Bain

problem. No

Operator

question. Dezellem Please from from go question ahead next Tieton Our comes Capital. your with Bill

Bill Dezellem

you. Thank

that offshore We new are all had acquisitions. have number majors assets. historically know you that indicating the a in interest seen that divest have an continuing looking stories African to of I

even therefore in higher divestitures referenced opportunity you what you call interest that been seen? a to seeing degree in you there dynamics similar have today. level I To here characterize think than ordered the the is of please? past are you what and it the more Would have or

Ron Bain

bulk of What focus years in we and the areas focus investment We Bill. divestiture from the oil there's we seen core few divestiture four have XXXX, we, have the course, BP well, positions. strategic about the majors, that more of significant policies, Shell and is a reverse of and growing a seeing been for Okay, said and recently, on to for opportunity thanks, opportunities a that IOC I've divestitures. from both for two where last we've gas And talked reduction we've growth. where see been

early So XX lot in divestiture rare, a of participated whilst more and there are I were XXXX, we there quite in opportunities months than a ago. opportunities, programs number have can honestly that 'XX say less for

And the UK, lot the is competition oil we're to high a addition the particularly gas in the moment oil areas site seen focus, also particularly companies, In tax at from increasing the UK Africa. our regime companies the in where wings, we've European in into of forcing spread that, seeing and and of to UK interest.

change much there's now competition. we're finding it complex where less more of opportunities So meaningful kind more step and

I probably evaluating, that will or we that Now, down four now we say before mean have to be would But projects that's in potential quarter five. that doesn't would completely any an focus. to XX, we say any eight to our changed

Bill Dezellem

Does at you being take acquirer, premium currently that trading And discount. about you sale. all a question given are flip to upside at an particularly if only the that let of And or purchase. thinking one is me take the a understanding lead But a two difference. make out for competition let there someone you assets you're increasing instead down need fewer that to to

Ron Bain

it also I operating as much as thing producing best to is mean, make company, efficiently oil do can as a produce. possible our public as we company that sure the can and is as

this you many As NAV. number Because the we yes. today areas are operate ago. for that that others. callers becoming Potentially, Are a here attractive acquisition And of market was trading years an a the we know, our in potentially are say, of on company to current as target? discount the at we

change No, it Does don't think that I does. our strategy?

absolutely onshore the we as only two production so for think as contacts offshore opportunities or have inside that the in and and those through. you're opportunity, of correct, come growth. Africa, have to continued one set the a we need or amount you one that core stepped for capabilities I skill the an ourselves any shallow in set in give have in we do experience region time. the into But individuals to water opportunity company, reduced we're And may both some our point of evaluating

Bill Dezellem

relative with property on additional that one And update to Gabon contiguous the helpful. question, the please, BW. That's then in What's opportunity?

Ron Bain

there of a partners. progress well, activity Yeah, the and quite lot meeting was that. Ministry And with actually, we actually, on QX in had scheduled under some

can there over now. election? to there's before And of And know, coming time the a the everyone was to get you a election Gabon this it. frenzy, the kind in we right line tried As

about the it we that under we towards than probably both that so we year TGH And it last keen after with And the a of in the appears will talk next been the firstly, get TNH of the be But we end earliest We're before the very the we're at idling we I'm year pleased encouraged engagement this Now as commenced. that of partners do acreage lot PWE that don't from to haven't the [ph] calls. opportunity. election. couple line or quite over won't beginning elections.

Bill Dezellem

for on taking it And be Congratulations an you luck, the questions. good the acquirer. or the becoming acquisition growth. production whether Thank with

Ron Bain

Bill. Thanks,

Operator

from your question from question. Please Partners. next Our comes with ahead Richard Longport go Dearnley

Richard Dearnley

where explain the in Good morning. Could you are geology the of figuring out you Dentale?

George Maxwell

question. a That's good

experienced another far of permeability last a successes. what listeners anticipated, had than technical lower was had will we most some cases, the wells as So aware, were, given Dentale we of that we'd in the previously. couple In cases, be year

between the the see be much the come coming permeability lower. of you'll But drilling we will we much, the yet. the and Dentale landing the to on And is wells Dentale where we called to and in haven't Dentale upper some spent wells sub-crop program. hear the sequencing Dentale, what up started why for perhaps the difficult future it's which up So where a time this terminology the break the to deeper XX and is this

deeper how producing extract still study wells. study And albeit a some a those to from is the to still are two efficiently Dentale? also us and we level. quite at on. understand we've and come got about that's can It's low time effectively The that's They take resolution going Dentale to

So from future. the focusing data right study now, that. some we we're But do are for on that we getting particular

that's focusing And higher the program, on for permeability, we're drilling the looking of do Dentale so or at is a year's are a well, drilling campaign detail? Not Shell we Dentale at and the there up yet. which that up, lot moment, discuss experience. study with Richard. much which in a we we have if next where we're possibility is sub-crop yes, worked ready of coming And Have is. -- that's got there to But the Dentale

Richard Dearnley

you. Okay, thank

Thor Pruckl

from two right We've questions in having came now. telephone Jamie. got some issues [Indiscernible] line that Okay, his with who's

and ask So for I'm him. going to ahead those go

Gabon we with chance midyear, whenever is one or in year, see the first for XXXX that versus for next now The maybe be. sometime starting XXXX any production drilling might Gabon? Do growth

George Maxwell

wells, as have obviously, mentioned the lead the we the for out to it equipment. comes so the unit. interest put Okay, infill expression I I long items that mentioned we earlier, of when drilling also for

and drilling the the timing on is So of availability program the the the dependent unit. of drilling cost

also availabilities? sequencing when in, the Of those all it's subjected comes sorry, we back, cost get if it course, the well. and So and when of these to

well drilling first comes the I in start of absolutely a the And key. to in more 'XX, about as answer rig the for again, call. QX be as we we'll and But infill and will XXXX. say, and designed one sequencing And correct. So to be we conference was that it have in the able the production is QX it's wells, drill well impact talk we'll timing,

Thor Pruckl

the one Okay, Or the those get that costs Etame great. blocks of costs we with exploration costs? incur any Thanks, Box is may And with are can those next on Are G&H? ring George. fence? the the included drilling are those

George Maxwell

[Indiscernible] G&H not is and will will as the absolutely about be case, split that in Etame. terms blocks finally conditions costs and subject straddle but this simple and early are be unitization, where answer of line. costs terms accumulations those are There with like leased the negotiate the the that there a that opportunities to same costs are we absolutely potential be commercial and to may Those anything issues on is the in that accordance that. too ring G&H around blocks. will the terms The fencing In talk

Thor Pruckl

George, sounds Jeremy. to it good. to turn Okay, I'm going you, back that

Operator

And your from with Dunlop audio our next Please side from question. on the Carter Dunlap comes Equity. question go ahead

Carter Dunlap

QX then with into spoke I didn't get of -- you went didn't be? year I QX what total when fiscal should and then to takes. away understanding you the number Hi, production puts you for -- come the X%, went But

George Maxwell

question, Carter, repeat it? follow Actually that you can

Carter Dunlap

forecast started for about downs, of for you with QX know you spoke of puts total a to Gabon to and forecast. for QX growth fiscal spoke year what the I to then you did Sorry, don't production is and takes, talk production And a you but X%.

George Maxwell

again, on working QX XX,XXX. low-side is the in the it's got the XX,XXX out guidance and not and interest Yeah, a there But basis high-side that guidance process. we've

So midpoint effectively, are a about barrels. XX,XXX there

in We've year. campaign. drilling point Gabon the will you extremely in with some half the maintenance at obviously decline got Gabon time optimizations continuing on well, first haven't see this So active to an the because the projects got we worked of

end campaign. really the drilling as Certainly and mentioned Egypt, the of George to there, on budgeted coming we're firm

QX other some decline number workovers in are a and we've And also there arrest above. continue Although got both opportunities planned there. to Egypt, through that and over of QX

that's we see So relation where QX to production. in

Carter Dunlap

you. Okay, thank

George Maxwell

Thank you.

Operator

Robertson please And ladies Tower question comes our next and Jeff from Sir, your with go Water ahead gentlemen, question. Research. from

Jeff Robertson

'XX, with ultimately as that sure look original you into million share you. share When will you have -- of million but George, Thank about the dividend. repurchase a spending and combination you that $XX cash? XXXX capital prospects the money Gabon you think about into in about making between And on the the program, talked do build remaining the you've $XX capital for authorization. lot for VAALCO program drilling $X.XX campaign ahead at the you repurchase and think I can the Venus. return dividend, EG also going and for the fund How the

George Maxwell

do to that we So wanted was because our key show the things been it. on could that's first initiated we through XXXX, one of the good the numbers was a And When able question. dividend sustain dividend, projections to run affordable. the we we

are included of to to impact But where the right dividend, I testing our based a in predominantly we that. moment, had capital we we've jackups see for estimates the dividend. We we're at, around it forecast $XX did that program that the think a at significant for programs where, When be program $XX for or And that's going the see tested got on around capital mainly. we've we the don't on in-house. Gabon. oil market rig costs now that about certain the the capital parameters, was and look the to certain And why

first When level. a that think a it as that's program initiated higher when We based buyback, $XX million. north seen, $XX buyback And we you at to through campaign again somewhere through oil that continue sustainable we the we we said find to the that XX. on position different. slightly of comes I million reconfirm as price, that go And

a of extend to we When it There to comes number are factors that will to that whether continue we program. consider. have

earlier, First the obviously raises And it's and as flow available the Bill foremost, is depressed. do whether price stock price and where free remains stock determined, that. to mentioned secondly, that cash you when

Jeff Robertson

domestically get you And cargo, into a whether believed quarter. dictates international just a sold are Egypt price. Can Ron, up. dictates market going what said not good cargoes you to whether cargo Egypt sold in in versus who is I'm to oil have me, all out you in what a domestic just to third be the or the follow sold Egypt -- Thanks. a dictates exposure of remind sorry, higher or international into were the

Ron Bain

got Yes, have barrels or That the XX%. minus cargoes plus at good Jeff. of end for August. confirmed again, we question cargo Yes, XXX,XXX a

those to us allows get expert working to that. cargoes get PSC cargoes. to our Obviously, we're So always preference export in those our it's

have doing to. obligation have we to And Now with EGPC a domestic that. in do we partner work our

barrel. So obligation an a cargo yes, QX both in you in achieve as the we getting and point $X time be fulfill see cargo QX. cargo that for QX, per as too. working saw for domestic we export differential one this domestic for us can But And we got would in at much that through cases, the we're can versus

to certainly it's go down that route. preference our So

Jeff Robertson

Thank you.

Operator

with gentlemen, remarks. and And I'd ladies turn back to over closing Maxwell like concluding question be the floor that, to answer our any and session. for we'll George

George Maxwell

activities strong I Operator, very had weren't think, from driven for in the QX much. very upon some we've you QX. driven performance in indicators indicators we the performance QX, last when just by Those commenced Thank were they year, contribute we started to efficiencies earlier, it contribute Ron that altos and to the to our restructure see earnings and business. profile We're synergy and reorganize flow and mentioned the which are we seeing cash operations substantive. through generation,

programs to we're already a know talk end able We areas year. Gabon lot in confidently in We to to program that and we Canada, three to producing to we know program. next with execute future on taking are of for position year. our Egypt. the look And steps market towards when program at outline more the the in planning We we'll a next outlined the we've this year. all program going And starting current of the have with, know we're have find get to a that we'll

make progress very some Equatorial forward. meetings about and move to And to Guinea. opportunity again, recently to project to on the hope QX. drill go continued more have ministerial We in in had We I that speak that

investment for as Ron we the confirm to month cargos try with can XXXX We cargo confirm later our QX mentioned, the have this meetings plans. Egyptian Government and so the and progress

look was said, efforts in by we QX was like want QX Because from and I came QX. the don't to the that that together. contributed that So performance achieved when all backwards at we be at, just looking

forward We with these and about for for base. stable production platform shareholders also to the to talk have of having the deal basically generating formally returns types opportunities to point the the grow to now company that continue

we some with second quarter one we I about on of this the the to it. shareholders through to What had I'm we've first them we more when in plans were one the very half. I'm say pleased through And very realized assets think successful And QX. it's do we told them planning how discussions. very We acquisition pleased exactly do what is acquiring. and successful went been we call, with coming were we to told on those a to TransGlobe plan a

like everyone in that, Thank everyone I'd for the attending. for to call. with look forward I So to QX. to you talking thank

Operator

that presentation. and thank conclude you today's We and Ladies gentlemen, will joining. for do conference call

You may lines. now your disconnect

VAALCO Energy (EGY) 10 Aug 232023 Q2 Earnings call transcript