VAALCO Energy, Inc. Secures Rig for 2025/2026 Drilling Campaign
VAALCO Energy (NYSE: EGY) has secured a contract with Borr Drilling for its 2025/2026 drilling campaign in Gabon. The program, set to commence in mid-2025, includes multiple development wells, appraisal/exploration wells, and workovers, with options for additional wells. The campaign will focus on three main areas: multiple wells in the Etame field, multiple wells at the SEENT platform, and a redrill and several workovers in the Ebouri field to access previously shut-in production and reserves due to H2S. The company aims to enhance production and add reserves through this drilling program.
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开始）。该计划包括多个开发井、评估/勘探井和工作，而还包括其他井选择。此项活动将集中在三个主要区域：多个井在乙太地下、多个井在同一平台以及在启动的地区之前要求多次工作，以恢复其产量和储备。该公司旨在通过此钻探项目提升其评估结果并增加储备。
- Secured rig contract for major drilling campaign starting mid-2025
- Multiple development wells planned across three fields
- Potential to access previously shut-in production and reserves in Ebouri field
- Flexibility in drilling and workover plans through contract terms
- None.
Insights
This strategic rig contract with Borr Drilling marks a significant development for VAALCO's growth trajectory. The planned 2025/2026 drilling campaign across multiple fields in Gabon represents a comprehensive approach to value creation through both development and exploration activities. The program's focus on the Etame field, SEENT platform and Ebouri field demonstrates a balanced strategy targeting both new production and the revival of previously shut-in reserves.
The H2S-related shut-ins at Ebouri present a particularly interesting opportunity - successful redrills and workovers could unlock significant value from reserves that were previously written off. The flexibility built into the contract through additional well options provides VAALCO with operational adaptability, which is important for optimizing returns in response to field performance and market conditions.
The timing of this drilling campaign aligns well with VAALCO's capital allocation strategy, allowing for proper planning and potential cost optimizations. While specific capital expenditure figures aren't disclosed, the multi-well program represents a substantial investment in future production growth. The company's approach to targeting both new wells and workovers suggests a balanced risk-reward profile, with workovers typically offering lower-cost opportunities to boost production compared to new well drilling.
The focus on previously shut-in reserves due to H2S issues at Ebouri could provide a meaningful uplift to the company's reserve base if successful, potentially improving the company's valuation metrics. This comprehensive drilling program could serve as a significant catalyst for VAALCO's future cash flow generation.
HOUSTON, Dec. 11, 2024 (GLOBE NEWSWIRE) -- VAALCO Energy, Inc. (NYSE: EGY; LSE: EGY) (“Vaalco” or the “Company”) today announced that, in conjunction with its 2025/2026 drilling program planned to begin mid-2025 in Gabon, it has executed a contract with Borr Jack-Up XIV Inc., an affiliate of Borr Drilling Limited (“Borr”), to drill multiple development wells and appraisal/exploration wells, as well as perform workovers, with options to drill additional wells.
George Maxwell, Vaalco’s Chief Executive Officer commented, “We are excited about the major projects planned for 2025 that are expected to deliver a step-change in organic growth across our portfolio in the coming years. In Gabon, we continue to work with our joint owners at Etame on our shared goal of executing another successful drilling campaign designed to enhance production and add reserves. We have signed a contract with Borr that we believe allows us the flexibility to optimize our drilling and workover plans offshore Gabon.”
“We anticipate the program to begin in mid-2025 with the sequencing and exact number of wells yet to be finalized. We are planning on multiple wells in the Etame field, multiple wells at our SEENT platform and a redrill and several workovers in the Ebouri field to access production and reserves that were previously shut in and removed from proved reserves due to H2S. Over the past three years, we have delivered on our focused strategy and believe we will continue to do so with the organic growth programs across our diversified portfolio over the coming years.”
About Vaalco
Vaalco, founded in 1985 and incorporated under the laws of Delaware, is a Houston, Texas, USA based, independent energy company with a diverse portfolio of production, development and exploration assets across Gabon, Egypt, Cote d’Ivoire, Equatorial Guinea, Nigeria and Canada.
For Further Information
| Vaalco Energy, Inc. (General and Investor Enquiries) | +00 1 713 543 3422 |
| Website: | www.vaalco.com |
| Al Petrie Advisors (US Investor Relations) | +00 1 713 543 3422 |
| Al Petrie / Chris Delange | |
| Buchanan (UK Financial PR) | +44 (0) 207 466 5000 |
| Ben Romney / Barry Archer | VAALCO@buchanan.uk.com |
Forward Looking Statements
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created by those laws and other applicable laws and “forward-looking information” within the meaning of applicable Canadian securities laws. Where a forward-looking statement expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. All statements other than statements of historical fact may be forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “forecast,” “outlook,” “aim,” “target,” “will,” “could,” “should,” “may,” “likely,” “plan” and “probably” or similar words may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this press release include, but are not limited to, statements relating to (i) estimates of future drilling, production, sales and costs of acquiring crude oil, natural gas and natural gas liquids; (ii) expectations regarding Vaalco’s ability to effectively integrate assets and properties it has acquired as a result of the Svenska acquisition into its operations; (iii) expectations regarding future exploration and the development, growth and potential of Vaalco’s operations, project pipeline and investments, and schedule and anticipated benefits to be derived therefrom; (iv) expectations regarding future acquisitions, investments or divestitures; (v) expectations of future dividends; (vi) expectations of future balance sheet strength; and (vii) expectations of future equity and enterprise value.
Such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to: risks relating to any unforeseen liabilities of Vaalco; the ability to generate cash flows that, along with cash on hand, will be sufficient to support operations and cash requirements; risks relating to the timing and costs of completion for scheduled maintenance of the FPSO servicing the Baobab field; and the risks described under the caption “Risk Factors” in Vaalco’s 2023 Annual Report on Form 10-K filed with the SEC on March 15, 2024 and subsequent Quarterly Reports on Form 10-Q filed with the SEC.
Dividends beyond the fourth quarter of 2024 have not yet been approved or declared by the Board of Directors for Vaalco. The declaration and payment of future dividends remains at the discretion of the Board and will be determined based on Vaalco’s financial results, balance sheet strength, cash and liquidity requirements, future prospects, crude oil and natural gas prices, and other factors deemed relevant by the Board. The Board reserves all powers related to the declaration and payment of dividends. Consequently, in determining the dividend to be declared and paid on Vaalco common stock, the Board may revise or terminate the payment level at any time without prior notice.
Inside Information
This announcement contains inside information as defined in Regulation (EU) No. 596/2014 on market abuse which is part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (“MAR”) and is made in accordance with the Company’s obligations under article 17 of MAR. The person responsible for arranging the release of this announcement on behalf of Vaalco is Matthew Powers, Corporate Secretary of Vaalco.
FAQ
When will VAALCO Energy (EGY) begin its new drilling campaign in Gabon?
Which drilling contractor will VAALCO Energy (EGY) use for its 2025/2026 Gabon campaign?
What fields will VAALCO Energy (EGY) target in its 2025/2026 drilling program?
Why is VAALCO Energy (EGY) planning workovers in the Ebouri field?
