EGY - Earnings call transcript Q4 2023

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Operator

Good morning, and welcome to the VAALCO Energy Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Al Petrie, Investor Relations Coordinator. Please go ahead.

Al Petrie

Thank you, operator. Fourth Full Energy's Call. XXXX VAALCO to Quarter Year and Conference Welcome full I George of key and statements, the the XXXX. our quarter After forward-looking review Maxwell, cover CEO, will fourth year highlights will Ron then Bain, our provide more review. in-depth a financial CFO, some return your comments before George questions. for we will closing then take

[Operator Instructions]

our we me point be statement comparisons investor and forward-looking that a should deck proceed additional on like to posted has analysis, I'd our With financial let that, helpful. with out that supplemental website that comments. guidance

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

on obligation any Accordingly, otherwise. forward-looking reliance intention or the result are statements. described update SEC, Form a risks as These any other that file XX-K. undue forward-looking whether should new with is disclaims information, recorded. events revise Please reports of and this on not including posted in place VAALCO and or future statements, the our you being or to note earnings release, in the call we conference presentation our our website

the turn Let me George. over now call to

George Maxwell

exceeding to morning, ability you, guidance deliver earnings and and full exceptional late conference that XXXX. to and Thank year our Good occurred everyone, our TransGlobe our combination operational Al. results XXXX pleased expectations very call. welcome and fourth XXXX, in with in quarter following I the financial am

and our funding buybacks, position all campaigns all significantly and costs bank cost free. optimizing strategy, execution been capturing has our dividends program, while to growth. our operational cash capital grown of the synergies, on shareholder have this focus executing remaining fully Our Through while we drilling while debt capital and enhance profitability managing and production,

X,XXX a XXXX announced shareholders portion million $XX acquisition that over returned to have utilize already day buybacks, will the million working per $XXX and cash balance interest million an XP XXXX, CPR in in and to we barrels through on interest XX in working reserves. of add of dividends that We and barrels sheet

into by of decrease key grew and XXXX. me some Before led operational XX% let $XXX detail EBITDAX which results many This We first past XXXX over new. high-level upcoming go more to accomplishments a on increase deliver a adjusted year production pricing. commodity items, XX% XX% record-breaking realized million us financial the summarize in year-over-year, despite over I was and XXXX helped our that record-breaking a in

record the increased year levels and and day XX,XXX campaign uptime as our first were experienced by in operational guidance at production in XXXX the production performance had finished of half well drilling given we that barrels the At XX,XXX the strong end working driven Our with we a our production of our we basis. successful equivalent NRI per programs or Canada midyear, Egypt Gabon. interest increased on high barrels in guidance as of top oil

significant at our flow capital fully XXXX. cash and to After through operational generate asset the cash $XX to we dividends buybacks. flow almost activities. XXXX, of back generated allowed over unrestricted and cash In and free shareholders over grew end and that free flow we in of The us million million and dividends to funding diversity fund our buyback, program of million to has paying cash grow returned base our $XXX $XXX

building and We and we to both operationally sustainably momentum VAALCO. size, are and as financially, enter have grow we XXXX, scale profitability positive

offshore of of Cote assets We to recently expands announced our acquisition d'Ivoire. portfolio an accretive that Svenska include all-cash diversified

of an new the VAALCO believe we acquiring announced debt no Petroleum in ago, million October that The we Exploration adjustments. We the or X, of an of assets in issuance we and equity. XXXX begin customary purchase will second an with between Svenska has price A of net quarter to to million were $XX.X deal weeks closing $XX overview acquisition. occur the Let's few of gross with date be subject closing is XXXX, effective will and million. cash $XX we to at need which that all-cash expect pay

X,XXX to are of shareholder oil. has a with about us accretive area. growth. African additional highly to support and current price. base production It West strong an and adding The at production interest metrics Block and diversification We acquisition focus attractive asset d'Ivoire provides reserves expand strong equivalent strategically barrel oil with provides our in our key is CI-XX and Cote strong working on of very field another XX% This Baobab is asset future

working this million producing reserves interest XP XX.X XX proven XXXX, XP interest CPR asset million The October at X, and from CPR are barrels. barrels are working reserves the

parallels Kossipo XXXX future very the are opportunity. at historic well. field that meaning development in drilling with that campaigns, significant potential We realized this Baobab we the in excited and many upside terms about the defined drilling profile upside an how Baobab is and of the is through has the understand organic the is The time development type campaign well production opportunity asset

XX-year drilling of FPSO near field of many and docking XXXX dry wells years through X history. for production drilling position The a come. potential for the to expected campaigns from the planned program significantly wells, will XX been and drilling for XXXX has production the future production derisked growth field upgrading The the in and the injection

the of insight success future provide with are and changeover will to Africa FPSO managing experience great XXXX development in experience help We Baobab. significant enhance and a partnering believe at operator our and our West offshore successful

years should to to and our to sustainable cash flow cash producing base ability provides ability many return This for contributes generate to acquisition continue shareholders. our to that another asset enhance

budget. outstanding, As some XXXX XXXX not capital we from our remain in production our any guidance included have in Svenska condition precedents or expenditures capital

Egypt. Turning to

in than which budgeted wells, allowed as the some saw results. in last well. increase and faster at to horizontal positive as We very we we completed the October. lower campaign planned, XX position. campaign including XXXX drilling well a original wells in XXXX, well program drilled drilling And X program XXXX exploration XXXX X originally our injector We us vertical from the finalized well Our cost the and

Overall, a very strong drilling we we our and are economic had program performance with with XXXX. pleased very production in performance, drilling

meaningfully months By the we're about wells wells Egypt. wells drilling wells, vertical of faster a from our the per now faster, every moving of times. in X costs improving month, we economics the are to a XX% in average which On drilling seeing wells drilling performance significantly X X cycle drilled is XXXX and reduction cutting

resulted increased In addition efficiencies, safety Egypt production, better facilities spent also costs environmental and in to operations. in we lower in reviewing the the production drilling performance Egypt. have effort time overall and These efforts and and

X a quarter X.X In addition, XXXX NRI hours the XP The resulted in additions in barrels an with on time major million we program man flow without first of million improvement drilling of SEC achieved incident. in process lost a basis. milestone and the

As we drilling to look program. planning we to a XXXX, as we are evaluate spend reduce currently potential capital

the of offset workovers decline first the on We are that this half for half focusing of are rates the to year capital forecasted on year. first

completion evaluating period. the a we drilling drilling confirmation are We of half This program that for currently this of have second of XX- and a program the for rig to contingent year. program the XX-mile evaluation on remains

included within guidance not firm CapEx We program have this confirmed. our until

if successful, million, additional will generate we additional which of anticipate $XX However, CapEx also approximately production.

macroeconomic position in Egypt headwinds seen some The has recently.

XXXX, tied are early production weeks, positive quarter the and However, that and over which the were wells of in few with May with and the April Both were less equipped And wells rates. flowing government run X-mile drilled wells X early wells. in significantly drilled first historical pump times past roads and overall effectively some completed cycle we in in on safely cost lateral from May began good times. encouraging. in X.X-mile have The incident. a announcements and Canada, were a we were than July, both and lateral. The seen In cycle without wells the

to in we by day equivalent production Both X,XXX now a in are produce type for set continuing at and XXXX Canada barrels wells slightly per QX. exceeded and curves. working production record the interest above working us initial rates expected eclipsing expectations,

performed Canada we targets. our exceeded well reason production and Another so in

from to we of better using that XXXX We drilling results forward, optimize program. prospects completions our the development further our and X-mile the and learnings which we economics and program improve believe our to going XXXX almost drilling. X.X While Canadian believe will exclusively, move our to enhance will laterals

In addition, refining and have we pads our also completion while techniques. optimized facilities

locations undeveloped acreage Canada these of proved acquisitions. small X.X the to existing having continued add extend first wells flowing our completed tied increase second In wells. our that quarter. have help lease lateral of them year-end We drilling to the land in in footprint anticipate and reserves our additional and We to had are holding and proved a length of half in are part around the the X in X-mile all we XXXX, laterals from northern

our an also XXXX. see wells. expect strong production should increase the exploration completing in Canada we well provide boost appraisal from in targeting This as addition, after can we're And guidance, in our you development production in In south a these Canada. to

Canadian strong ability contribute our operational to generate production and overall continued flow. assets Our to cash produce strong to

Turning to Gabon.

XXXX, in only XXXX the minimal dollars we long-lead know, of drilling Gabon you in maintenance equipment. As CapEx invested primarily related to previous campaign in completed and CapEx drilling our fourth and quarter

XXXX We the maintenance the through uptime projects and field and the in and wells. in curves next production minimizing improved The to us enhancing to efficiency field drilling and XXXX have requirements prior OpEx while have capture decline production campaign. decline reduced strong savings year overall allowed FSO in seen the full XXXX results reconfiguration on

of XXXX, X- into wells Gabon at for We with our X-well Looking well at planned initially infield a XXXX to power drilling preparing campaign appraisal Etame. a have development, a and are mix gas requirements. for campaign and we next in

target XC to XC in initiated our some wells platform Ebouri numbers. will view a oil. will to million of XX to to and field million our is additional X crude reserve barrels enhancement the of also handle review with equipment. require a currently workovers, which development of We Ebouri This opportunities This between and drill sweetening

engineering towards year, have planned approved which Our this allow move FID to subsurface Gabon. enhance a will are drilling in program later and plants completion the meeting

program. to million scope in addition provide to will Gabon technical in this completing of drilling $XX we and timing confirm still campaign. further obtained We're the of and Some be for between expecting regulatory approvals million $XX a we and spend items when exciting anticipation drilling to in in valuation project the update and on lead preparing long and our are XXXX, the

details the in G progress to this made negotiations have and efforts that move On have pleased Blocks and we the H. and further second the am say partners move provide further partners. very year, only finalize confirmatory of study encouraging and outstanding to into with Equatorial a have to future. we with some quarter FEED plan firm near some upon will discussions the have where we to quarter JOA receipt, and discussions Turning project update. CapEx this some intensified towards remaining We held expect continued our in I to this and Guinea,

Turning to reserves.

proved of are base SEC We our in very pricing. decline a growth despite significant pleased with the reserve

impacted added equivalent. reserve positive in at despite downward revisions The to in the oil helped Canada reserves Canada slight results reserves proved barrels. Egypt in PV-XX Gabon year-end X% some values and due more in land our with than by production offset and increased for positive pricing purchases to XXXX increase coupled Our the of XP drilling performance field SEC to million XX.X lower with SEC pricing. barrels and

million XX% decreased from $XXX PV-XX our to $XXX Overall, million.

strong pricing we pricing Once proven X% a as million $XXX basis again, XX.X outweighed saw probable includes saw XXXX. million additions operational and of CPR assumptions management The increase VAALCO's using barrels PV-XX by oil working of inflation year-end Our year-over-year to and which XP prior and equivalent. and was reported decrease XP at XX% the to impacted cost and for mainly lower production. and CPR a government pricing performance reserves of impact value costs interest for deductions reserves our future estimate in royalties to

In I'm excited closing, results XXXX, and we about beyond. delivered XXXX outstanding in and

shareholders. our We are value focused growing on for production, reserves and

We who plans. to hardworking thank XXXX during have have our a delivered execute team to and strong shareholder I sheet. like and retained significant would continue our returns operate balance

results. return free opportunities debt on our growth with would focused bank the ESG. remain financial call With turn shareholder while accretive share are firmly that, like of vision operating I We to towards regard over maximizing strategic to and to our and Ron the highest

Ronald Bain

into insight our on repeating than drivers results. focus George, will provide everyone. you the or can you, in rather points. good earnings and the I release read XX-K, I Thank key And the some for morning, will our financial what

strong compared begin success adjusted income $XX that yielded Let income increases $XX push $X.XX of we fourth million performance echoing quarter, the EBITDAX. share net results. by Both George's XXXX, ahead to net to $XXX about significant consensus in to EBITDAX and generated $XX.X continued helped our by estimates. exceptional me to and in year or financial on operational XXXX driven fourth or per numbers million full quarter comments prior were In record quarters in $X.XX The per adjusted million. share our million

VAALCO's diversified are in base bank a proud a sheet much and We have history. in with say growing asset debt. today and balance position, a no strong ever positioned clean than that cash better before I'm we to a

production with our full quarter With in at impacts Canada at the of areas. our our guidance. Gabon producing and each realized our portfolio operating growth have impressive solid the earnings. through from end of end the was pricing a our assets in to in change mix will high our diversified higher mix of at bigger and But successful and along also in for Egypt producing and realized mitigating over across the in revenue. XXXX production Production guidance, expanding sales the buoyed drilling of quarter-to-quarter portfolio with performance which, our remained for of by of drives turn Let's from decline see look quarter assets. assets, you you'll and we and sales, ultimately, efficiencies. picture changes fourth sales pricing revenue if our of This year, a the The

sales fourth million. Egypt. in $XXX our total increase versus Gabon to mix quarter quarter We drove quarter-over-quarter higher pricing sales and due saw third overall from growth to volumes realized in This revenues the

This saw XX% year the revenue driven pricing, somewhat was full sales lower For by XXXX, million. by by XX%. little a declined increasing increase but realized we offset which over $XXX year-over-year,

note a provided You by release with of pricing detailed will commodity yesterday, we in breakout our volumes along earnings country. sales

protect a shown we to risk Regarding in continue release, earnings our and our helps program mitigate return. to as that hedging hedging, commitment implement shareholder

our with It's $XX between in to collars of collar collars QX through production of costless on we XX% QX for our QX through production the XXXX protecting our dividend. have XXXX. noting We place through $XX price XX% our a QX XXXX, have floor All for upside around $XXX. unhedged worth to have whilst of commitment and our

Turning to costs.

year and end XXXX per cost to of on margins end our cash capturing absolute production full to on barrel low basis. the bottom focused low at guidance keeping Our We guidance and us the remain and were flow. maximize below of on for synergies increase enable an our the costs a basis

on production XX% are volumes, synergies delivering capturing While per absolute our the we year-on-year. year-over-year, This cost cost-saving sales initiatives year. demonstrates like to FSO costs are last up were higher barrel project XX% lower due that primarily and

competent line were in VAALCO considerably well we've XXXX single whole combined XXXX we year-end project and the in reserves with that the in of of seen reorganization the in the process integration evaluation quarter-over-quarter, Egypt adjustments quarter The we've company. also Noncash final our our is our costs report. a a DD&A depletion decreased TransGlobe, made by guidance. completed the with improvement back-office cloud-based When persons to us. compared due costs commenced synergies. fourth ERP under across in implementation both G&A were target G&A primarily once ahead mostly to and meaningful seen costs of costs And business behind reductions

long-standing together increase have due prior that's a TVA step-up an the a barrels transfer quantity holding a remaining that the seen way Canada. barrels of by the reduced barrels XXXX. in and profit the Refinery. of of payable DD&A, fourth This and in valuation TransGlobe debt lifting additional to XXXX, we be state government-owned both are the with of Gabonese on of to from likely settled of we oil online debt will state to of the year In an foreign agreed for for contractors taxes debt. the by on we brought the quarter, its as because wells asset was protocol and and Etame the investment new Sogara Compared Egypt This in in outstanding settlement with state

the $XX.X We million in approximately quarter of had XXXX, but and oil for than of Gabon. revaluation barrels. lower the tax lifting the state in in by barrels lifting quarter. Tax had was about the quarters state resulted XX% no tax about an primarily costs of to a in XXXX Gabonese prior due of This protocol agreement in driven fourth effective XXX,XXX held rate

our government At have oil the payments. in taxes As each we stated through settled quarter, the by I foreign mark-to-market before, end Gabon, of the in-kind income oil. are to in-kind

prices when So movement reducing taxes. liability. this we price And the tax a which our is to if We a in-kind thus fall, the oil of marked accrued see cannot our commodity negative general, benefit, it in impact prices underlying too. rise, has to the control

items. We effective to guide the long continue rate excluding a is discrete term, over correct to that tax effective XX% rate tax XX%

Svenska of occurred the now to cash this to to XXXX flow accounts $XXX capital reduction the quarter sheet December and working movements, associated XXXX million the which call, fourth acquisition. as Last with cash the likely XXXX. to we Unrestricted some Turning in the program. in capital XX, of fund of discussed cash use of statement. related We payable rose to plan a balance portion

partially first the quarter, modernization of with the by and and sales accounts build that Egyptian projecting we're XXXX, a annual At be will our in domestic offset beginning payment. associated receivable

including new in paid cash annual domestic market to tend obligation be and insurances. Gabon that Additionally, early in payments year, with the certain the

Finally, as being we will projects our first Gabon, of executing the impact engagement working and that on quarter previously were These accrued. sanctioned are in in operator community a part items community by the position partner responsible of PSC XXXX. capital

has cash since available credit facilities we build share $X.XXXX continue paid $X.X to buyback accretive a of value. In million. no quarterly VAALCO quarter QX to are XXXX $X to opportunities the or our per and As share of case common third for the carrying bank debt XXXX, and about been additional million, utilize dividend was acquisition

million In or we year first dividends cash share the of rate the $XX.X the shareholders we announced February, full XXXX. returned buybacks. dividend free our payment For year XX% of flow and through quarterly XXXX, same at to the as

Aside from shareholder XXXX. CapEx funding over Canada also to These Egypt $XX our for expenditures and returns, we our funded of related with fully lead maintenance were capital expenditures fully long in primarily drilling Gabon. program million in some items and

release Let recently key I'll highlights guidance, now acquisition to guidance you not on production I turn and interest. working the finalized. give our website announced breakout me in our revenue is updates. of with guidance and our is interest supplemental in acquisition that full you breakout once slide some Also, will updated be to both and want remind net the the Svenska deck does and include earnings where

in For the do per solid With XXXX. be in that Canada barrels equivalent and production between to due drilling day quarter QX from XX,XXX due production XXXX decline. we and we of interest XX,XXX of is natural revenue XXXX down XX,XXX This equivalent net oil forecasting growth expect to interest program oil the working day. a of said, XX,XXX barrel per to are total slightly fourth company, between and

be of per and and total are of production XX,XXX oil For the XX,XXX revenue year equivalent day. oil forecasting equivalent and barrel XX,XXX XX,XXX interest per XXXX, interest we to working our net barrel day between full between company

we by are Looking natural expecting and Egypt. Gabon decline at in asset, production

program we in decline. In in of from the as XXXX, have I've Although capital do growth a should campaign. drilling Egypt mentioned, first expect half that year-over-year workover mitigate our Canada, help we

XXXX, in case. first the assuming But sales the line our with For not production. full be for are be year our quarter, will may this we

potentially scheduled that notice range. in lifting sales This end a into in April. a wide will You Gabon of shift have is March for Gabon because and the could QX is

that our but will quarter full it Of impact not course, sales second year happens, if our first and Gabon. sales impact in

but slightly small of projecting equivalent line per costs in Our increases costs expected also revenue remain absolute or resourcing increase projected to requirements. potentially barrel in are are to due XXXX, absolute to equivalent per primarily and range with oil we less G&A barrels. barrel expecting oil due G&A operating to We're

Finally, looking at CapEx.

million includes lateral spend our in campaign Gabon capital the XXXX in of long acreage drilling Canada, capital items long development drilling wells preparing XXXX $XX and for Our northern $XX in in million Egypt. X lead workovers to

the for a range For first and our we XX million quarter, million are XX between expecting CapEx. of

a EBITDAX XXXX, of $XXX Xx being a below free. in In production strong to and balance flow sales million bank very continue trading in EBITDAX. million adjusted and trade we despite debt in yield while should over well cash generated at to EBITDAX closing, significant EBITDAX on operational in we With we cash in increase and acquisition, low adjusted At had the an XXXX. generate multiple see sheet, dividend Svenska having we $XXX this continue year-end

to multiple I'll call George. We fund over are execute the With the assets to next back positioned CapEx across program now several years. producing very turn the that, over well and

George Maxwell

Ron. Thanks,

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

strong have vision. financial successfully heard our this in results executing operational delivered strategic morning, you As and XXXX by on have we

continued Our operational on campaigns decline. helped in Egypt and our effective minimize and in production grow focus drilling Gabon both XXXX helped areas uptime Canada

$XXX acquisition. the year All very exceeded We X a million we're of to over hand, accretive guidance. cash while of free EBITDAX that CapEx, million ended flow cash cash some cash all $XXX and our hand. share of with using of funding buybacks quarterly and with and in performance on and on flow $XXX We production adjusted million, dividends areas have strong record that cash generated make

no we portfolio future upside. and with We a financial bank have our of delivered and on producing debt an greater assets our to are commitment potential enviable shareholders with and in position the to market

focused our returning and remained funding growing we addition on shareholders. our cash capital position, to to have our value In program

flow we our rate of we and dividends XXXX. into buybacks. In the dividend free XXXX, $XX.X That's to million cash have continued that nearly We quarterly shareholders through doubled our higher returned that generated. a XX% and

pace XXXX, our $X.XX paid out per we We current at dividend in price on dividend nearly XXXX, which are share is another share for what to annual deliver yield of X%. matching a

have returned repurchase excess the through approved November inception million common program XXXX. back over continued have of X million to XXXX, We to buyback $XX we shares in program in Since the shareholders in shares. of and common repurchased

We are shareholders. targeting value to million to our over returning flow of And to in $XX cash we returning are committed XXXX, free shareholders.

to it terms. flow and acquisition sometime we cash once XXXX. both and in an see to share immediate are adjusted quarter in the second We EBITDAX close boost And will of absolute expecting production, the closes, per Svenska

XXXX current guidance incorporated, guidance. Svenska acquisition we does have but Our not the closes, provide once updated it will

very enviable excited in a truly is VAALCO future the position. and are now We about

our of prospects and diversified multiple have We completely sources producing future and risk have areas income. that our profile

will disciplined flow. for value remain growth production, by to delivering cash and maximize We reserves our in shareholders in our approach

program. purchasing right X to campaign items We wells well drill in lead have are preparing drilling XX longer Gabon, are evaluating additional and for Egypt, an multiple drilling in and the in XX and workovers lateral now planned Canada, we long

over success change X well significant and past meaningful Our generated at into created future. has VAALCO development years the the opportunities

you. future ready Thank we VAALCO with to questions. the shareholders. continue And long-term and of take to that, for value superior operator, will deliver remain our We that we to are are confident excited very

Operator

from the now with will session. [Operator Stephane Advisors. question-and-answer Instructions] Our We first question Foucaud go today Auctus begin ahead. is Please

Stephane Guy Foucaud

guidance, to to guidance. CapEx production the possibly if back go like and I'd the

the of to is, $XX items, year, confirm rather million. EG? study the you in anything think there $XX million same that, And particularly, the you FEED Gabon the George, -- is is don't CapEx talked now related understand not been the about uptick there around to if I because 'XX? in production be but the And on I there the -- in think Could so other end to there Gabon drilling 'XX any for is more back should that I likely come should CapEx please? with if start than program associated

George Maxwell

looking is One maintenance we're items million which within the yes, million I to CapEx the related and $XX thing So mentioned long-lead primarily that introduction of at evaluating Gabon, for in would do we're drilling was to not CapEx that CapEx $XX during get which drilling those that to additional but should guidance, is for a in add Egypt, we have wells. XX currently program confirmed, $XX an or that XX program. -- of million

makes And more what for reserves proven from of correct we targeting field, the on the number the we're Gabon program that mobilization, wider scope demobilization were were spread much Gabonese focus to them wells, and Ebouri originally which at is particularly allow efficient. more and have will also, the the converting over, You're is effectively when field program that of the wells have contingent. delaying lower that much we'll in and looking slightly Ebouri program a revision the and the that it overall cost because from the to therefore, and -- reason that to drilling a we're greater

quite there's program. opportunities So within the lot of CapEx a

Stephane Guy Foucaud

the for and so between Canada same the split And Egypt CapEx?

Ronald Bain

Stephane, it's Ron.

on breakdown of that for the Let me the take element CapEx. you

we as to studies. $XX XX% Egypt be FEED So that. at in to got being between you're would XX% Canada and between guidance we said of the million. looking possibly the will guidance, say, other XX% and for and XX% and XX% corporate million then $XX XX%. Gabon purposes, I

Stephane Guy Foucaud

FEED for EG, referring the study? And maybe that for you're

George Maxwell

now right not will the future, towards move study on position do in P that, at anticipate on the a -- Block so to we mentioned mean with position recap the a earlier we in confirm mean, -- we're time development. FEED whilst as very made with Yes. significant near and we I just I progress this I in the partners, have the I call, venous be. to

Operator

The next Sharp question Canaccord. from with is Charlie

Charlie Sharp

great a set little may. I could a Gabon, on and Congratulations clarify more I bit of if If results. just try

resources program, XC X-well that the that I include piece the it at, said at highlighted, additional of That's presumably on planned potential to of trying resources? barrels initially your XX wells. beginning than Gabon you million X that more or to or get think, X- versus X you in might not might million George, did a that exactly I'm targets, terms what be encompass and X you what reserves

George Maxwell

Yes.

So not would initial Ebouri probably of X workover. opportunity include program the additional the you're The of redevelopment and on field, that. did an we X correct wells the total, the say

obviously, target would So and basis XX well. that remains program as and X million reserves between barrels. million the development almost between X for an Ebouri The take to wells, contingent we conversion on to resource to that X will the firm options onto for carry

I of gas supply. well, in diesel. -- will field -- we commentary, further fuel but our the it for mentioned field gas the won't reduce and wells anything, so OpEx As reduce a add the in it replace is one with as It's natural

an obviously, other other million wells. a difficult be on And X we're well step-out you barrels give the X to targets, to the between at million range appraisal it's we'll looking X when but looking

Charlie Sharp

maintenance and the that license. following be more. What's how can presumably -- with will or you've for much I the just cost And presumably, think I going in That's on CI-XX a cost? to for And that? FPSO for great. that upgrades the recoverable is for year will one And up question all follow be And in year? the going XXXX indicated in that reason

George Maxwell

and Baobab operator. not yet really operator be because of the those question finalized plans we're have to by Hard the obviously,

both in nature and in the obviously, is, have There cost time upgrades. will the anticipation schedule time to period on with time. a the vessel would outage the we recoverable. a dry and off is be Once comment to these fully where more discussions a of station for that would position direct a are of be operator, accurately the the docking take position place delays we'll Our

In more our believe here of that. evaluation, statement our to side make upon allow we're we'll we And would we time it completion, and estimates both CapEx transaction picture, that be clearly, included for on but really give to conservative us how accurate able this very the to the confident a be estimates is, within really. accretive

Operator

Jeff with from Research. Water Robertson is question The Tower next

Jeffrey Robertson

George, your what work to of is But and the to similar premature FPSO is this is to terms the done did understanding, may previous times? on trying Ivory to it based at question. from field In the great, at that be run answer be in better upgrade lower the VAALCO costs expected your all to Etame? Coast,

George Maxwell

that answer beside me. Thor let I'll one. He's sitting

Thor Pruckl

So upgrade based the the is itself. really class the on vessel around

recollect actually dock reach what's get to limits, that an we happening Gabon, case, changed out this into in resumed. needs is dry you from an is FSO. the class to to if the go class vessel In vessel FPSO and So

So that's it. part first the of

part for phase replacement. While other the they'll it bearing the up They'll its on to would obviously is current. then replacements and reinvigorating it's next needs pick cleaning it I probably expect some do metal there, the the some be additional there to that up, on needs be life, equipment, process work of some done

subsea side, not the On there. work happening that's there's really of lot a

than scope topside more somewhat but different, the it's So of scope. same, the subsea the

Jeffrey Robertson

if rig in you JOA on going program effect, From just and the impact on the evaluate for talk the that FEED work? the an you of the you cost the if get work FID George, any, Gabon into ultimately, can fluctuations a finalized are and about having EG, perspective how

George Maxwell

asset allocation challenging from multi-asset a more for ago, single investment. can, and Jeff. where -- I to I mean, simple problematic, as the were company a return where allocation capital X we relatively I company, Yes, say becomes get best VAALCO obviously, years was wouldn't it as becomes the capital

we venous look and drilling both for the units where Obviously, at Now Guinea. when of pricing months units preparing considerably. in production on were on has development moved ago XX plan Equatorial we

was We're go it seen now. the where often in it's from challenge we've to maybe plateau really its study. that's reconfirm or And purpose cycle development. of technical top believe plan highs of we starting see not and that maybe it of the the in the position And the Now really XXXX. FEED to historic inside

in FEED how at doing seeing of of we robust study. project itself a had and more However, it, been see recoverable, it, that that CapEx if cash million despite But way and that million challenge mind barrels its the we at that do intensity. flow. a it position do lease into flow. relatively bear that which from and been XX that looking small We've very albeit can gives economic between CapEx attractive doing perspective. way we We've a it looking CapEx But will has tax about short to also XX at a an a come see fairly economics life, better project

it position. we'll corporate our that fits up and ensuring be the development, us the FID XXXX, the working FEED of can throughout So both firm FEED overall into deliver CapEx how towards that timing to an program study on

Operator

is from The Stifel. Wheaton with question next Chris

Christopher Wheaton

I questions, if may. Two

stages next to -- Firstly, Guinea to go FID I you're agreement to FID to the point. need back at to the you understand that, through going you get the operating be now XXXX, might Equatorial the like FEED because I'm the just stage be here? at in the out able get wonder need it you're get of year moment, to get to obviously, sorted stage some timing presuming if that be Because to you need in to as what you'd is through FEED well. sounds sometime and i.e.

would you're and that. strength, risk to flows do not simultaneously. your do a quite of your see I thought you Guinea to second cash risk interested I'm you'd redevelopment to able of the in Equatorial I'm -- the Baobab you any d'Ivoire balance related question both Guinea, projects your presuming whether you given being do folded like there's those of acquisition see of is the you simultaneously. to stake. of able kind quite -- sheet Equatorial and Svenska have Cote Financially, My after in both

you That's If second stack when you good is, question guess they my other? against want them question. to, returns up I how are each the

George Maxwell

to position see through do government on to The say, Equatorial efforts in first I we've the with sure the where indicated, XX% expect for at I today, but I be would now question, the that us. JOA we Guinea are -- future behind alignment Equatorial very extensively from in as got are Guinea, issues can't near we within a say And efforts particular want JOA. where I've the everyone MMH, from for sure the in

negotiating go we're allow opposed is opening we complexity for on assessments in said Like we've a to X impact given will have get at months deliver, I and blue where we us I time we to given delivering when the said that anticipate a previously. X we it frame documentation, and feed. FID. like does from are do I into feed. from survey, starting feed location, could which I'm looking big step anticipate a as move environmental guessing my is and a documentation confirmatory development That of go blue estimating that water quicker, seabed months to kind could move feed forward remarks, the been It water slower. But into do reasonable feed to

be period, this During the we surety of and we'll to that to clarity with Svenska throughout and do become obviously, what's give around close happening year. CNRL more the expect partner same full a in able operator acquisition, rest which QX much the in

pointed are CapEx more of at to that for Chris, and MVXX. that and all that time There clarity position, timings The a a about as recommence. shut get with is for around rehabilitation together as the same out, number the give be be things field the at we merits. frame you of certain we opportunities the challenges, there's can down what coming CNRL into time, happen. the costing we engaged As we'll what to are will happening clearly, looked that And must of

we Gabon a to there's soon on committed the the them. CapEx talked EG drilling look we've at our looked XXXX we as the to based said, can commitment absolutely with we are I that the well, around at early own When as with enhancement the operations there about for as that intensive. discuss we and timing and operator's development. Again, in So and EG time that said, program and schedule the development it's regard the opportunities

However, X-well in Guinea, Equatorial opportunities also, we I tax we drilling Gabon to potential a have I much X Guinea. given think wells opportunity we that may Gabon, XX-well CapEx we're we between in environment a back replace Charlie nice have given looking dovetail at -- and to program a can, so mentioned the opportunity up for was if programs And with in -- lease where rig earlier, that there's planned can operator opportunity tag in that exciting program to Equatorial dovetail we and it a the opportunities that more EG. as we

any that have execute you. to to really be But of these financial result we not do delay exceptionally of we'd financially, challenged the well we're technical. agree We're as So I -- all placed extent see with it's a to to going we're constraints, on projects.

Operator

with Capital. question next from is Bill The Dezellem Tieton

William Dezellem

to in deal? Congratulations you talk on the a or please Would great enough 'XX talk do the transaction about you if an quarter. is about additional Svenska of sourcing for this now? willing would And be if

George Maxwell

the immediately company we difficult production. you'd I look and have where on, opportunities as appreciate. adding think experience experience inside additional are see for But comment our that where deal immediately we do we Bill, transactions as structure accretive get we and to natural a obviously, can

looking to be see production. acreage? we but we fit are will look That's a where blue water around -- for exploration So we company at really doesn't going opportunities our that's build, not

Now to I'm do of and source, got Yes, exist of the we with you're sure in look the Africa lots got information the when lot now? in what West to longevity parts world. at that not created a opportunities has. the And comes you we've for quite as source. have profile we've When it enough of other We've around referring they we've to considerable opportunities acquired opportunities. date, production VAALCO to

some managed base we closing lot opportunity percolate. And a knowledge be we asset, do of aided particular a came at called take particular at from we of years that ago the will some When we VAALCO's our can the you knowledge as at to came our and inside that deal what running another to conclude precedences, have -- ago, and which of company. and the long when abetted that we've to this you opportunity in speed time deals, were and company which aware, this to we a was diligence. looked And we from actually due subject looked of could financial these -- Africa technical really number close time

that So there's of opportunities right sources DNA VAALCO's our we areas before, And geographies. accretive in do is those some where to never apply discipline know of but we -- maybe have the inside in real inherent the now. shareholders heard

William Dezellem

helpful. in you that And acquisitions very that's have Canada. is that? area of or to the heard George, that additional thinking had have Canada? there, you be one make would about given that success country And willing you we are -- How

George Maxwell

That's make how months gave make team over this look, question. same make the do a Board business, it executive They said, more the viable. nice that's cash I do more How that . And good we've done. exactly ago. is small the do you opportunities XX will it a the business, still respond And Canada? the you inside to exactly what How you a contributive it corporate while expanding generative plan? overall challenge

laterals taken we existing based to exactly they X-mile is right from investment activities X-mile see acquire instead there. to wells into we've Canadian we perhaps that's returns excellent parcels that as it get moving campaign I lateral have does we're a longer to land connect And to initially. the have the into opportunities X-year land one to to they want we're parcels and management adjoining to economic strategy, and we order with joint have go of them this didn't where XXX%. come where do that with that, some plan, land where parcels mentioned, It's that a went an together ventures decided that we in co-venture they disconnected was and have the to those that incumbent we or instance, land plan in that connecting where now partners have not. And -- the on going in We plan, the And In of put in parcels by we it our putting enhance have together. allow team. for a as lateral us commend agreements we

footprint into a we So see today. don't it I nice Xx very a X But contributing I now. growing grow strategy, have right X, have in to see but that business do opportunities or Canada we

William Dezellem

quarter. good a on again congratulations And you. Thank

Operator

Jamie Wilen Management. Next Wilen from question is with

James Wilen

A couple questions. on of quarter fronts. Nice cash all

So the as talk you acquisition. about

that You're it you assume quarter operation to of be the time million means closes? that $XX for when paying is million, $XX closes. in cash it but a I the generating will $X million $XX million it by north

Ronald Bain

Yes. I mean, Jim, it's Ron.

reduce first about the close. As to date is of that X,XXX effectively per us we the itself to is day before, we barrels going the is see said take effective equivalent we operating cash to business when we able be the payment October And XXXX. because overall that

somewhere effectively business So still $XX back it's prices cash. deliver And at million quickly. we that we're looking right oil at very, close to continuing paying $XX in said, very this deal present as and see going between itself being, million as until with that XXXX, through barrels I on business to those

James Wilen

end fourth quarter, about by I dividend about third million. program, of your And the realize the had building quarter $XX you the the of Wonderful. $XX payables million. in actually buyback you of At cash declined the and talked kind

that you like $XX target decline? looks shareholder it and payable So those returns for all less outflows million hit

Ronald Bain

invoices cash being QX. flow were that the the between would mean programs people transcript, I there's And from operations the quarter. we was that over, and an lag we and they Jamie. in million state guide $XX did our the outflow, over drilling That's that account correct, have for did see because that did we in a and processed,

James Wilen

very how our to I'm are. shares pleased acquisition to considering done see undervalued shares as was opposed for the you. Got cash

year program, the to over -- coming of up and good nearing of the expect would buyback have given $XX acquisition the outlook? look accretiveness for buyback additional end how the the operations reauthorize you the future sum and on million, been at the the we're you the As past an the

George Maxwell

good that's a mean I question.

acquisition. program key fully consideration we've the the inside As said address capital a the upcoming once and completed earlier, Svenska we're I the that going is understand meetings at to allocation

we had said, I've discussions operator. the direct haven't As with

we understand plans, management very despite us debt to thing we'll -- give cash make that down steer the sure until you're those going opportunities avoid and to opportunity we is longer-term debt sit allocate Not away strong our when fully planning have and we plan So to how make into to we sheet growth position. as from then allows it but that. these a bad a balance that sure to of be have, at we kind that looking

James Wilen

Excellent.

quarter? you the where talk a the about at the As second would period? end be the Or acquisition How to that's of looking middle, XX-day it the the you or quarter? -- quarter, closing you beginning second of are forecast end in of

George Maxwell

VAALCO to on to ministerial I X weeks' so from country. reception we that. been entering the d'Ivoire get and very comments But be the And in Cote time. Thor able have are far, I'll the based the traveling on answer positive minister,

Operator

from question Water of next Research. Tower follow-up a Jeff The is Robertson

Jeffrey Robertson

geopolitical what's just question. Given impacts the new that operations George, for your now you of Gabon Can and Egypt in government you've or going any on are the having comment export with cargoes? months. on X moving Red Sea then X operated

things on with comment a are going them? how Just

George Maxwell

EGPC with in resolved our that no with first impact the because the Sea, the On cargoes, still working very the we're instance, seeing and we're to hopeful discussions regard near on get Red that, future. plan to XXXX we're to primarily cargoes on

right I Sea, impact really these whatsoever. good in still I QX hopefully, we're to achieve with discussions in understood work the May, can And now no Gabon, we timing had call his with is the back to traveled with is I cargoes. and a have to the President we with our how to dinner So impact a that us XXXX in place very a with down aspirations and November some private for when regard Libreville, to country that had meeting cargoes. With minister them and for good resolution President that. the our But I shipping that the guess regarding give Red position from the incidences in are we the have absolutely a EGPC as taking to

and can we at added We November work the need we the out seen see the meeting not investment withholding opportunities finance announcement operations, overall, by to impacted tax, the our new in best we and is we're during have to have Gabon, Q, to impact look we that no work future mentioned with I changes going our with how impact which investing drilling year, last government program. But our when act, we efficiently, have we in some has in framework I the and particular, think which to regulatory to X% to attest the seen I of the in had in to have President, as Gabon. seen, no with,

partners, earlier, as BWE We G QX, and more have and with some and we've those of in Panoro, of discussions exciting got stalled around seen, QX I those on And opportunities. where QX. we've end the hopefully, an by H mentioned that acceleration seen block discussions we've our had news

Operator

session. over This George to like turn concludes closing question-and-answer to back our conference for Maxwell I the remarks. would any

George Maxwell

much. Thank you very

transactions degree XX, of these another jurisdiction asset TransGlobe, to had an XXXX bases with monumental and journey also reap exciting XXXX. happen that with post that couple in always at in all start think post I exciting. the a add look starting of pleasure more and production such to achievements company the then a of Gabon, it's at reconfiguration we we're is had the very to reorganization to work benefits least in to in to another long have another longevity, years our and both When XX of integration opportunity see and a

in work think hard of us, lot with I opportunities we should enjoy of of ahead a term lot a So develop to the moment. investment. We've near oil got the more capital

sheet. jurisdiction as I've the And that can of you a we've a like much We here strong you've thank sure make other got operate. to places every we call. in strong And and balance in -- as execute Thank I'd pointed very out, very world have we for Houston to the in team already everyone.

Operator

you attending The conference has today's for Thank now concluded. presentation.

now may disconnect. You

VAALCO Energy (EGY) 14 Mar 242023 Q4 Earnings call transcript