Vaalco Energy 2025 Q3 Earnings Misses Targets as Net Income Plummets 90%

Vaalco Energy (EGY) reported Q3 2025 earnings that fell short of expectations, with revenue declining sharply and EPS dropping significantly. The company raised full-year production and sales guidance despite the earnings miss, while cutting capital spending by $58 million.

Revenue

Vaalco’s total revenue plummeted 56.5% year-over-year to $61.01 million in Q3 2025, driven entirely by its crude oil, natural gas, and natural gas liquids segment. The segment accounted for the entire revenue figure, reflecting a stark decline from $140.33 million in the prior-year period.

Earnings/Net Income

The company’s net income nose-dived 90% to $1.10 million in Q3 2025, compared to $10.99 million in Q3 2024. Earnings per share (EPS) similarly collapsed to $0.01 from $0.10, marking a 90% decline. The sharp drop in profitability highlights the challenges faced by the company amid lower production and pricing pressures.

Post-Earnings Price Action Review

The strategy of buying Vaalco Energy (EGY) shares upon its revenue raise announcement and holding for 30 days shows poor performance over the past three years. The initial 30-day period offers no significant advantage, with the 1-day, 7-day, and 30-day returns matching the overall 3-year return of 14.4%. This indicates that relying solely on the revenue raise announcement to time purchases is ineffective, as the stock's price does not show enhanced performance in the short term or over the longer period. The 3-year return of Vaalco Energy shares is 14.4%, with the stock price increasing on the announcement day but declining afterward. Holding shares for 30 days after the announcement reveals no additional return benefit, as the 30-day return of 14.4% aligns with the overall period. For Vaalco Energy, the decision to buy shares based on a revenue raise announcement and then hold for 30 days is not supported by historical returns. The stock's price tends to decline after the initial positive reaction, making this strategy less effective than a simple hold recommendation over the entire 3-year period.

CEO Commentary

Vaalco CEO George Maxwell emphasized operational efficiency and well performance, noting that Q3 results exceeded guidance for sales and net revenue interest (NRI) production. The company plans to leverage a $240 million credit facility expansion to fund upcoming drilling campaigns in Côte d’Ivoire, Gabon, and Egypt, with confidence in executing growth opportunities outlined in its Capital Markets Day presentation.

Guidance

Vaalco raised full-year 2025 production and sales guidance midpoints while reducing capital guidance by $58 million. The company maintains a $0.0625 quarterly dividend and anticipates $225–$260 million in Q4 2025 CAPEX. It expects to fund growth via internal cash flow and a $300 million credit facility, with $240 million currently available.

Additional News

Vaalco Energy declared a quarterly dividend of $0.0625 per share for Q4 2025, marking its 16th consecutive payout. The company also announced updated 2025 guidance, raising production and sales targets while lowering capital spending by $58 million. Institutional investors showed mixed activity, with some increasing holdings while others reduced positions. The stock’s dividend yield of 6.38% significantly exceeds its 5-year average of 4%, underscoring its focus on shareholder returns.