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Core Viewpoint - VAALCO Energy is an oil and gas company aiming to more than double its production by 2027 through a strong organic growth pipeline and value-accretive projects [1] Company Summary - VAALCO Energy is focused on developing its projects in the oil and gas sector [1] - The company has a target to increase production significantly by 2027, indicating a robust growth strategy [1] Industry Context - The oil and gas industry is experiencing a shift towards companies that can demonstrate strong organic growth and value creation [1]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________ FORM 10-Q ______________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or Table of Contents o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number 1-32167 ______________________ VAALCO Energy, Inc. (E ...

Financial Data and Key Metrics Changes - In Q2 2025, the company reported net income of $8.4 million or $0.08 per share and adjusted EBITDAX of $49.9 million, driven by NRI production of 16,956 BOE per day, which exceeded guidance [5][18] - NRI sales for the quarter were 19,393 BOE per day, a slight increase from the first quarter, while pricing decreased by approximately 15% quarter over quarter [19] - Production costs for Q2 were $40.4 million, a 10% reduction quarter over quarter, with a per barrel cost of $22.87 [20] Business Line Data and Key Metrics Changes - The FPSO project in Cote D'Ivoire is ahead of schedule, with significant investments expected to yield production increases starting in 2026 [9][10] - Gabon has shown positive production results, with strong uptime and improved decline curves, and a drilling program is set to begin in late Q3 2025 [10][12] - In Egypt, the company has drilled multiple wells in 2025, with plans for an additional eight wells in the second half of the year [13][59] Market Data and Key Metrics Changes - The company has seen higher volatility in the commodity price environment in 2025, impacting pricing despite increased sales [19] - The company’s unrestricted cash at the end of Q2 was $67.9 million, not including approximately $24 million in receipts collected in July [21] Company Strategy and Development Direction - The company remains focused on operational efficiency, prudent investments, and maximizing asset value while returning cash to shareholders through dividends [7][26] - A new reserve-based revolving credit facility was established with an initial commitment of $190 million, allowing for growth to $300 million to fund organic growth initiatives [6][22] - The company is committed to returning over $100 million to shareholders through dividends and share buybacks since 2022 [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute on multiple major projects that are expected to significantly grow production and reserves [27] - The company anticipates a strong year in 2025, with continued focus on organic growth and shareholder returns [71] Other Important Information - The FPSO refurbishment in Cote D'Ivoire is underway, with the vessel expected to return to service in early 2026 [8][9] - The company has maintained its full-year guidance despite a 10% reduction in CapEx forecast [23] Q&A Session Summary Question: Update on Cote D'Ivoire project status - The FPSO project remains ahead of schedule, with projections for reconnection in March 2026 [32] Question: Working capital and cash flow expectations - Working capital is expected to show a positive inflow in Q3, with improvements in receivables anticipated [34] Question: Cote D'Ivoire FPSO critical path concerns - The bearing swivel assembly is on track for installation, with no delays expected [41] Question: Impact of Gabon drilling program on production - Minimal disruptions are expected during the drilling program, with planned downtime aligned with rig movements [51] Question: Equatorial Guinea final investment decision timeline - The FID for Equatorial Guinea is projected for 2026, with ongoing evaluations to optimize expenditures [46] Question: Planned drilling activity in Egypt - The company plans to drill eight additional wells in the second half of the year, which is expected to positively impact production [59]

Q2 2025 Supplemental Information Profitably and Sustainably Growing Value August 2025 Q2 2025 Supplemental Information: Profitably and Sustainably Growing Value August 2025 Forward Looking Statements Safe Harbor This presentation of VAALCO Energy, Inc. ("Vaalco" or the "Company") 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 c ...

Financial Performance - Vaalco Energy reported quarterly earnings of $0.02 per share, matching the Zacks Consensus Estimate, but down from $0.22 per share a year ago [1] - The company posted revenues of $96.89 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.46%, and down from $116.78 million year-over-year [2] - Over the last four quarters, Vaalco has surpassed consensus EPS estimates just once and topped consensus revenue estimates three times [2][3] Market Performance - Vaalco Energy shares have declined approximately 16.5% since the beginning of the year, contrasting with the S&P 500's gain of 7.9% [3] - The company's current Zacks Rank is 4 (Sell), indicating expected underperformance in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.01 on revenues of $73.54 million, and $0.04 on revenues of $352.03 million for the current fiscal year [7] - The outlook for the Oil and Gas - Exploration and Production - International industry is currently in the bottom 18% of Zacks industries, which may negatively impact Vaalco's stock performance [8]

[Company Overview & Highlights](index=1&type=section&id=Company%20Overview%20%26%20Highlights) [Second Quarter 2025 Highlights and Recent Key Items](index=1&type=section&id=Second%20Quarter%202025%20Highlights%20and%20Recent%20Key%20Items) VAALCO Energy, Inc. achieved better-than-expected operational and financial results in Q2 2025, with robust net income and Adjusted EBITDAX, and NRI production and sales exceeding the upper end of guidance. The company continues to advance its drilling program across a diversified asset base and maintains its full-year guidance and quarterly cash dividend | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | :------ | | Net Income (Million USD) | 8.4 | 7.7 | 28.2 | | Diluted Net Income Per Share (USD) | 0.08 | 0.07 | 0.27 | | Adjusted Net Income (Million USD) | 2.3 | - | - | | Adjusted Diluted Net Income Per Share (USD) | 0.02 | - | - | | Adjusted EBITDAX (Million USD) | 49.9 | - | - | | NRI Production (BOEPD) | 16,956 | - | - | | WI Production (BOEPD) | 21,654 | - | - | | NRI Sales (BOEPD) | 19,393 | - | - | | Net Cash Position (Million USD) | 7.9 | - | - | | Quarterly Cash Dividend (USD Per Share) | 0.0625 | - | - | - Second quarter 2025 NRI production reached **16,956 barrels of oil equivalent per day**, exceeding the upper end of guidance[4](index=4&type=chunk) - Second quarter 2025 NRI sales reached **19,393 barrels of oil equivalent per day**, exceeding the upper end of guidance[4](index=4&type=chunk) - The company secured a new reserve-based credit facility in the first quarter of 2025 to support organic growth projects[3](index=3&type=chunk) - The company reaffirmed its full-year guidance, including an approximate **10% reduction in Q1 capital expenditures** without impacting full-year production or sales guidance[4](index=4&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO George Maxwell highlighted consistent quarterly performance exceeding guidance and active advancement of production-enhancing drilling across a diversified asset base, positioning the company for significant growth funded by internal cash flow and a new credit facility, committed to continuous shareholder value creation - The company consistently met or exceeded quarterly guidance, with **Q2 2025 sales and NRI production both above the upper end of guidance**[3](index=3&type=chunk) - In Côte d'Ivoire, the FPSO refurbishment project is progressing well, with drilling activities expected in **2026** to increase Baobab field production and economic life[3](index=3&type=chunk) - In Gabon, the **2025/2026 drilling program** is anticipated to commence by the end of **Q3 2025**[3](index=3&type=chunk) - In Egypt, successful drilling projects are expected to deliver incremental production in the **second half of 2025**[3](index=3&type=chunk) - The company secured a new reserve-based credit facility to supplement internal cash flow and cash balances, supporting robust organic growth projects[3](index=3&type=chunk) [Operational Update](index=2&type=section&id=Operational%20Update) [Gabon Operations](index=2&type=section&id=Gabon%20Operations) The company secured a drilling rig for its **2025/2026 Gabon drilling program**, expected to start by late Q3 2025, including development, appraisal/exploration, and workover operations, following a planned platform shutdown in July 2025 for safety and maintenance - The **2025/2026 drilling program** is expected to commence by the end of **Q3 2025**, including drilling at the Etame and Seent platforms, and re-drilling and workovers at the Ebouri field[5](index=5&type=chunk) - In July 2025, the company conducted a planned shutdown of its Gabon platforms for safety inspections and necessary maintenance to enhance asset integrity and reliability[6](index=6&type=chunk) [Egypt Operations](index=2&type=section&id=Egypt%20Operations) Drilling activities in Egypt continued in Q2 2025, completing six wells, with three scheduled for hydraulic fracturing in Q3, alongside incremental production achieved through workover completions, reactivations, and well optimizations - Egyptian drilling activities in **Q2 2025** completed **six wells**, with **three wells** scheduled for hydraulic fracturing in **Q3 2025**[7](index=7&type=chunk) - Incremental production was achieved through workover completions, reactivations, and well optimizations[7](index=7&type=chunk) [Canada Operations](index=2&type=section&id=Canada%20Operations) Five horizontal wells drilled and completed in Canada in **2024** continued to meet production expectations, but the company decided to defer further drilling in Canada in **2025** to reduce overall capital expenditures - Five horizontal wells drilled and completed in Canada in **2024** continue to meet production expectations[8](index=8&type=chunk) - In **2025**, the company decided to defer further drilling in Canada to reduce overall capital expenditures[8](index=8&type=chunk) [Côte d'Ivoire Operations](index=2&type=section&id=C%C3%B4te%20d%27Ivoire%20Operations) The Baobab FPSO ceased production on January 31, 2025, arriving at a Dubai shipyard in mid-May for refurbishment, with a drilling rig secured for a significant development drilling campaign in **2026** to substantially increase Baobab field production after FPSO recommissioning - The Baobab FPSO ceased hydrocarbon production on **January 31, 2025**, and arrived early at a Dubai shipyard in mid-May **2025** for refurbishment[9](index=9&type=chunk) - A drilling rig has been secured, with a significant development drilling campaign expected to commence in **2026** after the FPSO returns to service, aiming for substantial production increases at the Baobab main field in CI-40[9](index=9&type=chunk) - The company is evaluating the potential impact of future development at the Kossipo field[9](index=9&type=chunk) [Equatorial Guinea Operations](index=2&type=section&id=Equatorial%20Guinea%20Operations) Vaalco holds a **60% working interest** in the undeveloped portion of Block P offshore Equatorial Guinea, planning to develop the Venus field, with Front End Engineering Design studies completed and a Final Investment Decision targeted by the end of **2025** - Vaalco holds a **60% working interest** in the undeveloped portion of Block P offshore Equatorial Guinea, with plans to develop the Venus field[10](index=10&type=chunk) - Front End Engineering Design (FEED) studies have been completed, with a Final Investment Decision (FID) targeted by the end of **2025**[10](index=10&type=chunk) [Financial Performance - Second Quarter 2025](index=2&type=section&id=Financial%20Performance%20-%20Second%20Quarter%202025) [Net Income and Adjusted EBITDAX](index=2&type=section&id=Net%20Income%20and%20Adjusted%20EBITDAX) Net income for Q2 2025 was **$8.4 million**, an increase quarter-over-quarter but a decrease year-over-year, while Adjusted EBITDAX was **$49.9 million**, declining both sequentially and annually, primarily due to lower oil prices | Metric | Q2 2025 (Million USD) | Q1 2025 (Million USD) | Q2 2024 (Million USD) | QoQ Change | YoY Change | | :------------------- | :-------------------- | :-------------------- | :-------------------- | :--------- | :--------- | | Net Income | 8.4 | 7.7 | 28.2 | +9.1% | -70.2% | | Diluted Net Income Per Share | 0.08 | 0.07 | 0.27 | +14.3% | -70.4% | | Adjusted EBITDAX | 49.9 | 57.0 | 72.5 | -12.5% | -31.2% | - The sequential increase in net income was primarily driven by higher sales volumes, lower production expenses, DD&A, and income tax expense, partially offset by lower realized prices due to decreased oil prices[11](index=11&type=chunk) - The decrease in Adjusted EBITDAX was primarily due to lower realized prices, partially offset by higher sales volumes and lower production expenses[12](index=12&type=chunk) [Sales and Net Revenue](index=3&type=section&id=Sales%20and%20Net%20Revenue) Q2 2025 net revenue decreased **12%** sequentially, mainly due to a decline in average realized prices despite an increase in NRI sales volume, with average crude oil prices significantly lower both year-over-year and quarter-over-quarter | Metric | Q2 2025 | Q1 2025 | Q2 2024 | Q2 2025 vs Q1 2025 (%) | Q2 2025 vs Q2 2024 (%) | | :------------------------------------ | :------ | :------ | :------ | :--------------------- | :--------------------- | | Net Revenue (Million USD) | 96.893 | 110.329 | - | -12% | - | | NRI Sales (MBOE) | 1,765 | 1,717 | 1,764 | +3% | 0% | | Average Realized Commodity Price (USD/BOE) | 54.87 | 64.27 | 66.05 | -15% | -17% | | Total Commodity Sales (Million USD) | 96.9 | 110.3 | 116.5 | -12% | -17% | | NRI Production (BOEPD) | 16,956 | 17,764 | 20,588 | -5% | -18% | - Q2 2025 net revenue was **$96.9 million**, a **12% sequential decrease**, primarily due to a decline in average realized prices from **$64.27/barrel in Q1 2025 to $54.87/barrel in Q2 2025**[13](index=13&type=chunk) - Q2 2025 NRI sales volume was **1,765 MBOE**, a **3% sequential increase**, but flat compared to Q2 2024[13](index=13&type=chunk) - The average Brent crude oil price in Q2 2025 was **$68.07**, a **10% sequential decrease** from **$75.87 in Q1 2025**[13](index=13&type=chunk) [Costs and Expenses](index=4&type=section&id=Costs%20and%20Expenses) Q2 2025 production, DD&A, and G&A expenses (excluding stock-based compensation) all decreased sequentially, mainly due to reduced costs in Côte d'Ivoire operations, with exploration expenses at **$2.5 million** primarily for seismic data acquisition in Côte d'Ivoire | Metric | Q2 2025 (Million USD) | Q1 2025 (Million USD) | Q2 2024 (Million USD) | Q2 2025 vs Q1 2025 (%) | Q2 2025 vs Q2 2024 (%) | | :---------------------------------------------------- | :-------------------- | :-------------------- | :-------------------- | :--------------------- | :--------------------- | | Production Expenses (Excluding Offshore Workovers and Stock-Based Compensation) | 40.3 | 44.7 | 52.4 | -10% | -23% | | Production Expenses (Excluding Offshore Workovers) (USD/BOE) | 22.87 | 26.08 | 29.70 | -12% | -23% | | DD&A (Million USD) | 28.3 | 30.3 | 33.1 | -7% | -15% | | DD&A (USD/BOE) | 16.02 | 17.65 | 18.78 | -9% | -15% | | G&A (Excluding Stock-Based Compensation) (Million USD) | 7.1 | 7.8 | 6.6 | -9% | +8% | | Stock-Based Compensation Expense (Million USD) | 1.4 | 1.4 | 0.9 | 0% | +57% | | Current Income Tax Expense (Million USD) | 12.8 | 17.7 | 13.3 | -28% | -4% | | Deferred Income Tax Expense (Million USD) | -5.8 | -1.6 | -4.0 | +262% | +45% | | Exploration Expenses (Million USD) | 2.5 | 0 | 0 | - | - | - The decrease in production expenses (excluding offshore workovers and stock-based compensation) was primarily due to reduced production expenses from Côte d'Ivoire operations[14](index=14&type=chunk) - The decrease in DD&A expense was primarily due to reduced DD&A expense from Côte d'Ivoire operations[15](index=15&type=chunk) - G&A expenses (excluding stock-based compensation) decreased sequentially due to lower salaries, IT, and other expenses, but increased year-over-year due to higher professional services, salaries, and accounting and legal fees[16](index=16&type=chunk) - Q2 2025 exploration expenses were **$2.5 million**, incurred for seismic data acquisition in Block 705, Côte d'Ivoire[17](index=17&type=chunk) - Q2 2025 income tax expense was **$7.0 million**, including a **$3.1 million favorable oil price adjustment**[19](index=19&type=chunk) [Financial Performance - First Six Months of 2025](index=5&type=section&id=Financial%20Performance%20-%20First%20Six%20Months%20of%202025) [Sales and Net Revenue (Year-to-Date)](index=5&type=section&id=Sales%20and%20Net%20Revenue%20(YTD)) Year-to-date **2025 WI sales volume** increased year-over-year, influenced by crude oil lifting timing, volume, and size, while the average realized crude oil price decreased **12%** year-over-year, reflecting weaker commodity prices | Metric | H1 2025 | H1 2024 | YoY Change (%) | | :------------------------------------ | :------ | :------ | :------------- | | WI Sales (MBOE) | 4,358 | 4,134 | +5.4% | | Average Realized Crude Oil Price (USD/Barrel) | 65.62 | 74.75 | -12% | | Average Brent Crude Oil Price (USD/Barrel) | 72.03 | 83.83 | -14% | | Net Revenue (Million USD) | 207.222 | 216.933 | -4.5% | | Total Commodity Sales (Million USD) | 272.458 | 291.664 | -6.6% | - The increase in WI sales volume was primarily influenced by the timing, volume, and size of crude oil liftings in each quarter[21](index=21&type=chunk) - The decrease in average realized crude oil price reflects the weaker commodity prices over the past year[22](index=22&type=chunk) [Net Income (Year-to-Date)](index=5&type=section&id=Net%20Income%20(YTD)) Year-to-date **2025 net income** was **$16.1 million**, a significant decrease from **$35.8 million** in the same period of **2024**, primarily due to a bargain purchase gain related to the Svenska acquisition in **2024** and lower realized prices in **2025** | Metric | H1 2025 (Million USD) | H1 2024 (Million USD) | YoY Change (%) | | :------- | :-------------------- | :-------------------- | :------------- | | Net Income | 16.1 | 35.8 | -55.0% | - The decrease in net income was primarily due to a bargain purchase gain related to the Svenska acquisition in **2024** and lower realized prices in **2025**[23](index=23&type=chunk) [Capital Structure & Shareholder Returns](index=6&type=section&id=Capital%20Structure%20%26%20Shareholder%20Returns) [Capital Investments and Balance Sheet](index=6&type=section&id=Capital%20Investments%20and%20Balance%20Sheet) Q2 2025 net capital expenditures were **$45.9 million** (cash basis), primarily for project costs and development drilling in Gabon, Egypt, and Côte d'Ivoire; as of June 30, 2025, the company held **$67.9 million** in unrestricted cash and drew **$60.0 million** from a new **$190 million** revolving credit facility | Metric | Q2 2025 (Million USD) | H1 2025 (Million USD) | | :-------------------------------- | :-------------------- | :-------------------- | | Net Capital Expenditures (Cash Basis) | 45.9 | 104.426 | | Net Capital Expenditures (Accrual Basis) | 40.9 | - | | Unrestricted Cash Balance (As of June 30, 2025) | 67.9 | - | | Working Capital (As of June 30, 2025) | 62.8 | - | | Adjusted Working Capital (As of June 30, 2025) | 79.9 | - | | Outstanding Borrowings from New Credit Facility (As of June 30, 2025) | 60.0 | - | - Capital expenditures were primarily for project costs and development drilling programs in Gabon, Egypt, and Côte d'Ivoire[25](index=25&type=chunk) - In July 2025, the company received approximately **$24.0 million** in cash receivables, primarily from Gabon and EGPC[26](index=26&type=chunk) - The company entered into a new **$190 million** (expandable to **$300 million**) reserve-based revolving credit facility in March 2025 to supplement cash flow and cash balances, supporting its investment program[27](index=27&type=chunk) [Quarterly Cash Dividend](index=6&type=section&id=Quarterly%20Cash%20Dividend) Vaalco paid a **Q2 2025 quarterly cash dividend of $0.0625 per share** and declared the same amount for Q3 2025, payable on September 19 - A quarterly cash dividend of **$0.0625 per share** was paid for **Q2 2025**[28](index=28&type=chunk) - A quarterly cash dividend of **$0.0625 per share** was declared for **Q3 2025**, payable on **September 19, 2025**[28](index=28&type=chunk) [Hedging Activities](index=6&type=section&id=Hedging%20Activities) The company continues to hedge a portion of its future anticipated production to lock in strong cash flows, supporting its capital and shareholder return programs, holding crude oil swaps and call options, and natural gas swap contracts as of the end of Q2 2025 - The company hedges a portion of its future anticipated production to lock in strong cash flows, supporting its capital and shareholder return programs[29](index=29&type=chunk) Hedging Position as of End of Q2 2025 | Instrument | Index | Settlement Period (July-Sept 2025) | Settlement Period (Oct-Dec 2025) | Settlement Period (Jan-Mar 2026) | Settlement Period (Apr-Jun 2026) | | :-------------------- | :---------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | **Crude Oil:** | | | | | | | Swaps (Total Barrels) | Dated Brent | 100,000 | — | — | — | | Swaps (Weighted Average Fixed Price USD/Barrel) | Dated Brent | 65.45 | — | — | — | | Call Options (Total Barrels) | Dated Brent | 405,000 | 480,000 | 400,000 | 360,000 | | Call Options (Weighted Average Floor Price USD/Barrel) | Dated Brent | 63.02 | 60.83 | 62.29 | 61.88 | | Call Options (Weighted Average Cap Price USD/Barrel) | Dated Brent | 74.36 | 67.81 | 68.63 | 67.95 | | **Natural Gas:** | | | | | | | Swaps (Total GJ) | AECO 7A | 342,000 | 114,000 | — | — | | Swaps (Weighted Average Fixed Price CAD/GJ) | AECO 7A | 2.15 | 2.15 | — | — | Commodity Swap Contracts Entered into After June 30, 2025 | Instrument | Index | Settlement Period (Oct-Dec 2025) | Settlement Period (Jan-Mar 2026) | Settlement Period (July 2026) | | :-------------------- | :---------- | :--------------------- | :--------------------- | :---------------- | | **Crude Oil:** | | | | | | Call Options (Total Barrels) | Dated Brent | — | — | 75,000 | | Call Options (Weighted Average Floor Price USD/Barrel) | Dated Brent | — | — | 65.00 | | Call Options (Weighted Average Cap Price USD/Barrel) | Dated Brent | — | — | 71.00 | | **Natural Gas:** | | | | | | Swaps (Total GJ) | AECO 7A | 100,000 | 150,000 | — | | Swaps (Weighted Average Fixed Price CAD/GJ) | AECO 7A | 2.86 | 2.86 | — | [Outlook and Guidance](index=7&type=section&id=Outlook%20and%20Guidance) [Full Year 2025 Guidance](index=7&type=section&id=Full%20Year%202025%20Guidance) The company reaffirmed its **full-year 2025 guidance**, projecting WI production between **19,250-22,310 BOEPD** and NRI production between **14,500-16,710 BOEPD**, with capital expenditures (excluding acquisitions) estimated at **$250-300 million** | Metric | FY 2025 Guidance Range | | :------------------------------------ | :--------------------- | | WI Production (BOEPD) | 19,250 - 22,310 | | NRI Production (BOEPD) | 14,500 - 16,710 | | WI Sales (BOEPD) | 19,850 - 22,700 | | NRI Sales (BOEPD) | 14,900 - 17,200 | | Production Expenses (Million USD) | $148.5 - $161.5 MM | | Production Expenses (USD/BOE, WI) | $18.00 - $21.50 | | Production Expenses (USD/BOE, NRI) | $24.00 - $28.00 | | Offshore Workover Expenses (Million USD) | $0 - $10 MM | | Cash G&A (Million USD) | $25.0 - $31.0 MM | | Capital Expenditures (Excluding Acquisitions) (Million USD) | $250 - $300 MM | | DD&A (USD/BOE, NRI) | $16.00 - $20.00 | [Third Quarter 2025 Guidance](index=8&type=section&id=Third%20Quarter%202025%20Guidance) The company provided **Q3 2025 guidance**, forecasting WI production between **18,900-20,800 BOEPD** and NRI production between **14,400-15,600 BOEPD**, with capital expenditures (excluding acquisitions) projected at **$70-90 million** | Metric | Q3 2025 Guidance Range | | :------------------------------------ | :--------------------- | | WI Production (BOEPD) | 18,900 - 20,800 | | NRI Production (BOEPD) | 14,400 - 15,600 | | WI Sales (BOEPD) | 16,000 - 17,900 | | NRI Sales (BOEPD) | 11,900 - 13,100 | | Production Expenses (Million USD) | $26.5 - $35.0 MM | | Production Expenses (USD/BOE, WI) | $18.00 - $22.00 | | Production Expenses (USD/BOE, NRI) | $25.00 - $29.00 | | Offshore Workover Expenses (Million USD) | $0 - $0 MM | | Cash G&A (Million USD) | $6.0 - $8.0 MM | | Capital Expenditures (Excluding Acquisitions) (Million USD) | $70 - $90 MM | | DD&A (USD/BOE, NRI) | $16.00 - $20.00 | [Additional Information](index=8&type=section&id=Additional%20Information) [Conference Call Details](index=8&type=section&id=Conference%20Call%20Details) The company will host a conference call on **August 8, 2025**, to discuss its **Q2 2025 financial and operational results**, with details and webcast information provided - The company will host a conference call on **August 8, 2025**, to discuss its **Q2 2025 financial and operational results**[35](index=35&type=chunk) - The call will be accessible via telephone and webcast on the company's website, www.vaalco.com[35](index=35&type=chunk) - A 'Q2 2025 Supplemental Information' investor presentation will be posted on the company's website prior to the conference call[36](index=36&type=chunk) [About Vaalco](index=8&type=section&id=About%20Vaalco) Vaalco Energy, Inc., founded in **1985** and headquartered in Houston, Texas, is an independent energy company with a diversified portfolio of production, development, and exploration assets across Gabon, Egypt, Côte d'Ivoire, Equatorial Guinea, Nigeria, and Canada - Vaalco Energy, Inc. was founded in **1985** and is headquartered in Houston, Texas, USA[37](index=37&type=chunk) - The company holds a diversified portfolio of production, development, and exploration assets in Gabon, Egypt, Côte d'Ivoire, Equatorial Guinea, Nigeria, and Canada[37](index=37&type=chunk) [Forward Looking Statements](index=8&type=section&id=Forward%20Looking%20Statements) This press release contains forward-looking statements regarding expectations for future events or results, including drilling, production, sales, costs, acquisition integration, dividends, balance sheet strength, and enterprise value, which are subject to risks and uncertainties that could cause actual results to differ materially - Forward-looking statements include estimates of future drilling, production, sales, and acquisition costs for crude oil, natural gas, and natural gas liquids[40](index=40&type=chunk) - Forward-looking statements also include expectations regarding Vaalco's ability to effectively integrate the Svenska acquisition assets, future exploration and operational developments, future dividends, and future balance sheet strength[40](index=40&type=chunk) - These statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from forward-looking statements, including risks related to FPSO maintenance timing and costs[41](index=41&type=chunk) - Dividends beyond Q3 2025 have not been approved or declared by the Board, and future dividend declarations and payments will be at the discretion of the Board based on financial performance, balance sheet strength, and other factors[42](index=42&type=chunk) [Other Oil and Gas Advisories](index=9&type=section&id=Other%20Oil%20and%20Gas%20Advisories) Investors should note that the barrel of oil equivalent (BOE) conversion ratio is primarily applicable at the burner tip and does not represent a wellhead value equivalent, thus using BOE alone may not fully reflect value - The barrel of oil equivalent (BOE) conversion ratio is primarily applicable at the burner tip and does not represent a wellhead value equivalent[44](index=44&type=chunk) - Given the current price ratio of crude oil to natural gas is significantly different from the energy equivalent ratio, using BOE alone may not fully reflect value[44](index=44&type=chunk) [Inside Information](index=9&type=section&id=Inside%20Information) This announcement contains inside information as defined in the Market Abuse Regulation (EU) No. 596/2014 and is disclosed in accordance with the company's obligations under Article 17 of the Market Abuse Regulation - This announcement contains inside information as defined in the Market Abuse Regulation (EU) No. 596/2014[45](index=45&type=chunk) - This announcement is disclosed in accordance with the company's obligations under Article 17 of the Market Abuse Regulation[45](index=45&type=chunk) [Financial Statements](index=10&type=section&id=Financial%20Statements) [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were **$964.9 million**, slightly up from **$954.9 million** at December 31, 2024, with cash and cash equivalents decreasing, trade receivables increasing, and long-term debt rising from zero to **$60.0 million** | Metric (Thousand USD) | June 30, 2025 | December 31, 2024 | | :------------------------------------------------------------------------------------------------ | :------------- | :---------------- | | **Assets:** | | | | Cash and Cash Equivalents | 67,871 | 82,650 | | Net Trade Receivables | 132,879 | 94,778 | | Egyptian Receivables and Other | 3,991 | 35,763 | | Total Current Assets | 223,729 | 237,927 | | Net Oil, Gas, and NGLs Properties | 587,263 | 538,103 | | Deferred Tax Assets | 43,659 | 55,581 | | Total Assets | 964,922 | 954,950 | | **Liabilities and Stockholders' Equity:** | | | | Total Current Liabilities | 160,917 | 181,728 | | Long-Term Debt | 60,000 | — | | Total Liabilities | 453,363 | 453,367 | | Total Stockholders' Equity | 511,559 | 501,583 | | Total Liabilities and Stockholders' Equity | 964,922 | 954,950 | - As of **June 30, 2025**, long-term debt increased from zero at **December 31, 2024**, to **$60.0 million**[46](index=46&type=chunk) - Net trade receivables increased from **$94.778 million** at **December 31, 2024**, to **$132.88 million** at **June 30, 2025**[46](index=46&type=chunk) [Consolidated Statements of Operations](index=11&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 net income was **$8.38 million**, a sequential increase but a significant year-over-year decrease, while year-to-date net income was **$16.111 million**, substantially lower than the prior year, primarily due to decreased commodity sales revenue and a **2024** bargain purchase gain | Metric (Thousand USD) | Q2 2025 | Q1 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------ | :------ | :------ | :------ | :------ | :------ | | Oil, Gas, and NGLs Sales Revenue | 96,893 | 110,329 | 116,778 | 207,222 | 216,933 | | Production Expenses | 40,393 | 44,806 | 52,446 | 85,198 | 84,535 | | Exploration Expenses | 2,520 | — | — | 2,520 | 48 | | DD&A | 28,273 | 30,305 | 33,132 | 58,578 | 58,956 | | G&A Expenses | 8,496 | 9,051 | 7,591 | 17,548 | 14,301 | | Operating Income | 17,182 | 26,194 | 20,400 | 43,376 | 53,906 | | Net Gain (Loss) on Derivative Instruments | 400 | -74 | 257 | 326 | -590 | | Net Interest Expense | -2,572 | -1,295 | -1,117 | -3,866 | -2,052 | | Bargain Purchase Gain | — | — | 19,898 | — | 19,898 | | Income Tax Expense | 6,983 | 16,083 | 9,303 | 23,066 | 31,541 | | Net Income | 8,380 | 7,730 | 28,151 | 16,111 | 35,837 | | Diluted Net Income Per Share | 0.08 | 0.07 | 0.27 | 0.15 | 0.34 | - Q2 2025 commodity sales revenue was **$96.893 million**, a **17% decrease** from **$116.78 million** in Q2 2024[47](index=47&type=chunk) - Net income for the first six months of 2025 was **$16.111 million**, a **55% decrease** from **$35.837 million** in the same period of 2024[47](index=47&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of **2025**, net cash from operating activities was **$51.049 million**, investing activities used **$107.46 million**, and financing activities provided **$32.922 million**, resulting in period-end cash, cash equivalents, and restricted cash of **$74.333 million**, a decrease from the beginning of the period | Metric (Thousand USD) | H1 2025 | H1 2024 | | :------------------------------------ | :------ | :------ | | Net Cash Provided by Operating Activities | 51,049 | 21,394 | | Net Cash Used in Investing Activities | -107,460 | -48,687 | | Net Cash Provided by (Used in) Financing Activities | 32,922 | -23,567 | | Effect of Exchange Rate Changes | 96 | -233 | | Net Change in Cash, Cash Equivalents, and Restricted Cash | -23,393 | -51,093 | | Cash, Cash Equivalents, and Restricted Cash at End of Period | 74,333 | 78,085 | - Net cash provided by operating activities for the first six months of 2025 significantly increased from **$21.394 million** in the same period of 2024 to **$51.049 million**[48](index=48&type=chunk) - Expenditures for property and equipment for the first six months of 2025 were **$104.426 million**, higher than **$49.099 million** in the same period of 2024[48](index=48&type=chunk) - Cash provided by financing activities for the first six months of 2025 was **$32.922 million**, primarily from **$60.0 million** in borrowings, compared to a **$23.567 million** outflow in the same period of 2024[48](index=48&type=chunk) [Selected Financial and Operating Statistics](index=13&type=section&id=Selected%20Financial%20and%20Operating%20Statistics) Q2 2025 average daily NRI sales were **19,393 BOEPD**, and average daily WI production was **21,654 BOEPD**; average daily NRI production was **16,956 BOEPD**, a **18% year-over-year decrease**, with average sales price (NRI basis) at **$54.87/BOE**, down **17%** year-over-year | Metric | Q2 2025 | Q1 2025 | Q2 2024 | H1 2025 | H1 2024 | | :---------------------------------------------------- | :------ | :------ | :------ | :------ | :------ | | NRI Sales (MBOE) | 1,765 | 1,717 | 1,764 | 3,481 | 3,254 | | Average Daily NRI Sales (BOEPD) | 19,393 | 19,074 | 19,386 | 19,234 | 17,881 | | Average Daily WI Production (BOEPD) | 21,654 | 22,402 | 25,411 | 22,026 | 23,607 | | Average Daily NRI Production (BOEPD) | 16,956 | 17,764 | 20,588 | 17,358 | 18,716 | | Average Sales Price (NRI Basis, USD/BOE) | 54.87 | 64.27 | 66.05 | 59.50 | 66.22 | | Production Expenses (USD/BOE Sales) | 22.89 | 26.10 | 29.74 | 24.47 | 25.98 | | DD&A (USD/BOE Sales) | 16.02 | 17.65 | 18.78 | 16.83 | 18.12 | | G&A Expenses (USD/BOE Sales) | 4.81 | 5.27 | 4.30 | 5.04 | 4.41 | | Property and Equipment Expenditures (Cash Basis, Thousand USD) | 45,899 | 58,527 | 32,481 | 104,426 | 49,099 | - Q2 2025 average daily NRI production was **16,956 BOEPD**, a **18% decrease** from **20,588 BOEPD** in Q2 2024[49](index=49&type=chunk) - Q2 2025 average sales price (NRI basis) was **$54.87/BOE**, a **17% decrease** from **$66.05/BOE** in Q2 2024[50](index=50&type=chunk) [Non-GAAP Financial Measures](index=14&type=section&id=Non-GAAP%20Financial%20Measures) [Non-GAAP Definitions](index=14&type=section&id=Non-GAAP%20Definitions) This section defines the company's non-GAAP financial measures, including Adjusted Net Income, Adjusted EBITDAX, Adjusted Working Capital, and Free Cash Flow, explaining their purpose and limitations - Adjusted Net Income is used to evaluate operational and financial performance, excluding non-cash and/or other specific items management believes are not indicative of recurring performance[52](index=52&type=chunk) - Adjusted EBITDAX is used to measure the company's ability to internally fund exploration and development activities and to service or incur additional debt[53](index=53&type=chunk) - Adjusted Working Capital is used to assess the company's working capital position for ongoing operations, excluding the impact of lease obligations[54](index=54&type=chunk) - Free Cash Flow is used to evaluate financial performance and determine the total amount of cash available to return to shareholders over a specified period[55](index=55&type=chunk) - All non-GAAP measures have limitations and should not be considered as substitutes for net income, operating income, cash flow from operating activities, or other liquidity measures under GAAP[58](index=58&type=chunk) [Reconciliations of Non-GAAP Financial Measures](index=16&type=section&id=Reconciliations%20of%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations of net income to Adjusted Net Income, net income to Adjusted EBITDAX, working capital to Adjusted Working Capital, and Free Cash Flow, illustrating the impact of various adjustments on GAAP metrics Reconciliation of Net Income to Adjusted Net Income (Thousand USD) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------ | :------ | :------ | :------ | :------ | :------ | | Net Income | 8,380 | 7,730 | 28,151 | 16,111 | 35,837 | | Total Adjustments | -6,063 | -1,390 | -5,574 | -7,453 | -6,747 | | Adjusted Net Income | 2,317 | 6,340 | 22,577 | 8,658 | 29,090 | | Diluted Adjusted Net Income Per Share | 0.02 | 0.06 | 0.22 | 0.08 | 0.28 | Reconciliation of Net Income to Adjusted EBITDAX (Thousand USD) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------ | :------ | :------ | :------ | :------ | :------ | | Net Income | 8,380 | 7,730 | 28,151 | 16,111 | 35,837 | | Net Interest Expense | 2,572 | 1,295 | 1,117 | 3,866 | 2,052 | | Income Tax Expense | 6,983 | 16,083 | 9,303 | 23,066 | 31,541 | | DD&A | 28,273 | 30,305 | 33,132 | 58,578 | 58,956 | | Exploration Expenses | 2,520 | — | — | 2,520 | 48 | | Total Non-Cash or Unusual Items | 1,165 | 1,548 | 60,772 | 2,710 | 5,785 | | Adjusted EBITDAX | 49,893 | 56,958 | 72,475 | 106,851 | 134,219 | Reconciliation of Working Capital to Adjusted Working Capital (Thousand USD) | Metric | June 30, 2025 | December 31, 2024 | Change | | :------------------------------------ | :------------- | :---------------- | :----- | | Working Capital | 62,812 | 56,199 | 6,613 | | Add: Lease Liabilities - Current Portion | 17,072 | 16,895 | 177 | | Adjusted Working Capital | 79,884 | 73,094 | 6,790 | Reconciliation of Free Cash Flow (Thousand USD) | Metric | First Six Months of 2025 | | :------------------------------------ | :----------------------- | | Net Cash Provided by Operating Activities | 51,049 | | Net Cash Used in Investing Activities | -107,460 | | Net Cash Provided by Financing Activities | 32,922 | | Effect of Exchange Rate Changes | 96 | | Net Change in Cash | -23,393 | | Add Back Cash Paid to Shareholders: | | | Dividends Paid | 13,127 | | Free Cash Flow | -10,266 |

Core Insights - Vaalco Energy, Inc. reported strong operational and financial results for Q2 2025, with net income of $8.4 million and Adjusted EBITDAX of $49.9 million, exceeding guidance expectations [3][6][11] Operational Update - The company is preparing for multiple drilling campaigns in Côte d'Ivoire, Gabon, and Egypt, with significant projects planned for 2026 and beyond [3][4][9] - In Gabon, a drilling rig has been secured for the 2025/2026 drilling program, expected to commence near the end of Q3 2025 [4] - The FPSO refurbishment project in Côte d'Ivoire is underway, with drilling planned to enhance production in the Baobab field starting in 2026 [3][9] - In Egypt, six wells were completed in Q2 2025, with further hydraulic fracturing planned for Q3 2025 [7] Financial Performance - Vaalco's Q2 2025 net income was $8.4 million ($0.08 per diluted share), an increase from $7.7 million in Q1 2025 but a decrease from $28.2 million in Q2 2024 [11][25] - Adjusted EBITDAX for Q2 2025 was $49.9 million, down 12% from Q1 2025 and down 31% from Q2 2024, primarily due to lower realized pricing [12][11] - The company produced 16,956 NRI BOEPD, exceeding guidance, and sold 19,393 NRI BOEPD, also above guidance [6][11] Capital Investments and Balance Sheet - Net capital expenditures for Q2 2025 totaled $45.9 million, primarily for projects in Gabon, Egypt, and Côte d'Ivoire [29] - As of June 30, 2025, Vaalco had an unrestricted cash balance of $67.9 million, with working capital increasing to $62.8 million from $56.2 million at the end of 2024 [30][31] - The company entered a new reserves-based revolving credit facility with an initial commitment of $190 million, aimed at supporting its growth initiatives [31] Dividend and Shareholder Returns - Vaalco declared a quarterly cash dividend of $0.0625 per share for Q2 2025, with the next dividend scheduled for September 19, 2025 [32] Hedging Strategy - The company continues to hedge a portion of its expected future production to secure cash flow for capital and shareholder return programs [33]

Core Viewpoint - Vaalco Energy, Inc. has declared a quarterly cash dividend of $0.0625 per share for Q3 2025, marking its 15th consecutive quarterly dividend, despite facing weaker commodity prices [1][2]. Company Overview - Vaalco Energy, founded in 1985 and incorporated in Delaware, is an independent energy company based in Houston, Texas, with a diverse portfolio of production, development, and exploration assets across multiple countries including Gabon, Egypt, Cote d'Ivoire, Equatorial Guinea, Nigeria, and Canada [3]. Dividend Information - The declared dividend of $0.0625 per share is annualized to $0.25 and will be payable on September 19, 2025, to stockholders of record as of August 22, 2025 [1]. - Future dividends are subject to approval by the Board of Directors and will depend on various factors including financial results, balance sheet strength, and commodity prices [6][7].

The market expects Vaalco Energy (EGY) to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended June 2025. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The earnings report, which is expected to be released on August 7, might help the stock move higher if these key numbers are better t ...