VAALCO Energy's 2025 Q2 Earnings Call: Unpacking Contradictions in FPSO Timelines, Egypt's Payments, and Gabon Production

FPSO project timeline and production resumption, Egypt's payment of working capital receivables, Gabon production decline and drilling program, Côte d'Ivoire FPSO restart timeline and drilling campaign are the key contradictions discussed in VAALCO Energy's latest 2025Q2 earnings call.



Production and Sales Performance:
- VAALCO Energy reported NRI production of 16,956 BOE per day in Q2 2025, above the high end of guidance.
- The company also achieved working interest production of 21,654 BOE per day and NRI sales of 19,393 BOE per day, both at the high end of guidance.
- This performance was driven by strong production in Gabon and Egypt, despite Côte d'Ivoire being offline since late January.

Financial Performance and Guidance:
- VAALCO reported net income of $8.4 million or $0.08 per share and adjusted EBITDAX of $49.9 million for Q2 2025.
- The company maintained a strong financial position with unrestricted cash of $67.9 million and a dividend yield of around 7%
- Despite commodity price volatility, VAALCO's financial performance was supported by a disciplined hedging strategy and low production costs.

Organic Growth and Capital Projects:
- VAALCO entered a new reserve-based revolving credit facility with an initial commitment of $119 million and the ability to grow to $300 million.
- The company plans to commence significant development drilling in 2026 after the return of the FPSO in Côte d'Ivoire, with potential meaningful additions to production.
- This strategic allocation of resources aims to fund organic growth initiatives and further position VAALCO as a larger player in the industry.

Regulatory and Exploration Milestones:
- The Council of Ministers approved a 10-year extension to the license on CI-40 in Côte d'Ivoire, extending it to 2038.
- VAALCO invested $3 million to acquire a 70% working interest in the new Block CI-705, receiving seismic data in late June.
- These developments underscore VAALCO's commitment to acquiring, developing, and enhancing value through accretive acquisitions and strategic exploration investments.