VAALCO Energy Reports Strong Q1 2025 Earnings, Exceeds Production Expectations, and Adjusts Budget Amid Commodity Price Volatility and Project Delays.

VAALCO Energy reported Q1 2025 net income of $7.7 million and adjusted EBITDAX of $57 million. Production exceeded guidance at 17,764 barrels of oil equivalent per day. The company secured a new $190 million credit facility and extended its Cote d'Ivoire license until 2038. VAALCO prioritizes shareholder returns with quarterly dividends and aims to pay $0.25 per share annually. Due to commodity price volatility, the capital budget has been reduced by 10% to $250-$300 million.

VAALCO Energy Inc. (NYSE: EGY) reported a net income of $7.7 million and adjusted EBITDAX of $57 million for the first quarter of 2025. The company exceeded its production guidance, achieving 17,764 barrels of oil equivalent per day (BOEPD) in net revenue interest (NRI) production and 22,402 BOEPD in working interest (WI) production. This performance was driven by strong production numbers and operational excellence [1].

VAALCO secured a new reserve-based revolving credit facility with an initial commitment of $190 million, which can grow to $300 million. This facility supports the company's growth initiatives and provides a solid financial foundation [1]. Additionally, VAALCO extended its license on CI40 in Cote d'Ivoire until 2038, further solidifying its position in the region [1].

Despite the positive developments, the company faced challenges due to commodity pricing volatility. VAALCO reported a 10% reduction in its capital budget for the year, bringing it down to $250-$300 million. This reduction was necessitated by the uncertainty in commodity pricing and the need to delay some smaller projects [1]. The company also experienced a significant outflow in working capital due to elevated capital spending and state lifting bonds to settle in-kind taxes [1].

In terms of production, VAALCO has not drilled a well in Gabon for over two years. The timing of the drilling program is dependent on rig availability, and the company expects a slight uptick in production towards the end of 2025 with the delivery of the first well [1]. The company's operational update for Egypt showed that it completed one well in Q4 2024 and an additional five wells in Q1 2025, with four of these wells brought online and averaging approximately 135 barrels of oil per day (BOPD) [2].

VAALCO's strategic focus on shareholder returns is evident with the declaration of a quarterly cash dividend of $0.0625 per share, with a plan to pay $0.25 per share annually. The company aims to continue this dividend policy while maintaining its growth initiatives [2].

The company's Capital Markets Day presentation, scheduled for May 14, 2025, will provide further details on its diversified asset portfolio and the opportunities for future organic growth [2].

References:
[1] https://finance.yahoo.com/news/vaalco-energy-inc-egy-q1-070608229.html
[2] https://www.vaalco.com/investors/news-events/press-releases/detail/423/vaalco-energy-inc-announces-first-quarter-2025-results