VAALCO Energy's Q1 2025: Key Contradictions in Gabon Drilling, Production Outlook, and Financial Health

Production profile and drilling campaign in Gabon, working capital and tax payments outlook, production decline rates in Gabon, rig availability and drilling program timeline, EGPC receivables and payment status are the key contradictions discussed in VAALCO Energy's latest 2025Q1 earnings call.



Strong Financial Performance:
- VAALCO Energy reported net income of $7.7 million, or $0.07 per share, and adjusted EBITDAX of $57 million for Q1 2025.
- This performance was driven by NRI production of 17,764 barrels of oil equivalent per day, working interest production of 22,402 barrels of oil equivalent, and NRI sales of 19,074 barrels of oil equivalent per day, all exceeding guidance targets.

Macroeconomic Adjustments and Capex Reduction:
- VAALCO reduced its full-year capital budget from $270 million to $330 million to $250 million to $300 million due to softer commodity pricing.
- The company cut about 10% from its capital budget, including the drilling program in Canada, to adjust discretionary capital spending and delay smaller projects.

Progress in Gabon:
- Gabon saw positive production results with strong production uptime and improved decline curves on wells, despite not drilling a well since 2020.
- A drilling rig was secured for a 2025-2026 program starting in Q3 2025, with a firm commitment for five wells and an option for five more.

Egyptian Operations and Receivables:
- VAALCO successfully collected $32 million from Egypt, representing a significant portion of aged receivables.
- The improvement in receivables was attributed to the completion of contractual backdated entitlements and alignment with regional partners to meet work programs.