VAALCO Energy(EGY) - 2025 Q3 - Quarterly Results

Financial Performance - Reported net income of $1.1 million ($0.01 per diluted share) for Q3 2025, down from $8.4 million ($0.08 per diluted share) in Q2 2025 and $11.0 million ($0.10 per diluted share) in Q3 2024[11] - Adjusted EBITDAX totaled $23.7 million in Q3 2025, a decrease from $49.9 million in Q2 2025 and $92.8 million in Q3 2024, primarily due to lower realized pricing and sales volumes[12] - In Q3 2025, Vaalco reported net revenue of $61.0 million, a decrease of 37% compared to Q2 2025 and a 57% decrease compared to Q3 2024[13] - Oil sales for Q3 2025 totaled $85.8 million, down from $127.3 million in Q3 2024, reflecting a 32% year-over-year decline[13] - Vaalco's net income for the first nine months of 2025 was $17.2 million, a significant decrease from $46.8 million in the same period of 2024[23] - For the nine months ended September 30, 2025, net revenue was $268.230 million, compared to $357.267 million for the same period in 2024, representing a decrease of approximately 25%[24] - Oil sales for the nine months ended September 30, 2025, totaled $353.981 million, down from $462.760 million in the prior year, reflecting a decline of about 24%[24] - The company experienced a 75% decrease in current income tax expense, reporting $8.6 million in Q3 2025 compared to $33.7 million in Q3 2024[19] - Total other income (expense), net, was an expense of $3.4 million in Q3 2025, compared to an expense of $0.5 million in Q3 2024[18] - Net income for the nine months ended September 30, 2025, was $17,212,000, a decline of 63.3% from $46,827,000 in the same period of 2024[51] - Adjusted Net Income for Q3 2025 was $(10,316) thousand, compared to $7,934 thousand in Q3 2024, reflecting a significant decrease[64] - Adjusted EBITDAX for Q3 2025 was $23,669 thousand, down from $92,764 thousand in Q3 2024, indicating a decline in operational performance[64] Production and Sales - Produced 15,405 net revenue interest (NRI) barrels of oil equivalent per day (BOEPD), at the high end of guidance, and sold 12,831 NRI BOEPD, also at the high end of guidance[4] - Increased full year production and sales guidance midpoints due to strong quarterly performance, with production expectations raised based on operational efficiency[4] - NRI sales volumes in Q3 2025 were 1,180,000 BOE, a 45% decrease compared to 2,134,000 BOE in Q3 2024[13] - Average daily sales volumes for Q3 2025 were 12,831 BOE, down 44.5% from 23,198 BOE in Q3 2024[52] - Total crude oil, natural gas, and natural gas liquids production for the nine months ended September 30, 2025, was 5,816 MBOE, a decrease of 13.8% from 6,753 MBOE in 2024[52] Expenses and Costs - Production expense in Q3 2025 was $29.8 million, down 29% from $42.2 million in Q3 2024[14] - Total production expense per BOE increased to $25.24 in Q3 2025, a 27% increase compared to $19.80 in Q3 2024[14] - Total operating costs and expenses for Q3 2025 were $60,109,000, a reduction of 37.6% compared to $96,353,000 in Q3 2024[50] - Property and equipment expenditures for the nine months ended September 30, 2025, totaled $152,728,000, significantly higher than $61,530,000 in 2024[51] - Production expenses are expected to be between $152.0 - $158.0 million for WI & NRI[38] - Production expenses for Q4 2025 are projected to be between $36.0 - $44.5 million for WI & NRI[38] Capital Expenditures and Guidance - Decreased full year capital guidance midpoint by 19% or $58 million from original 2025 guidance[4] - Net capital expenditures for Q3 2025 were $48.3 million on a cash basis, significantly below the guidance of $70 million to $90 million[26] - CAPEX excluding acquisitions is projected to be between $225 - $260 million for WI & NRI[38] - CAPEX for Q4 2025 is estimated to be between $90 - $110 million for WI & NRI[38] Cash Flow and Liquidity - As of September 30, 2025, the company had an unrestricted cash balance of $24.0 million and working capital of $7.5 million, down from $56.2 million at the end of 2024[27] - Cash flows from operating activities for the nine months ended September 30, 2025, were $67,494,000, slightly down from $69,185,000 in 2024[51] - The net cash at the end of the period was $32,114,000, a decrease from $104,977,000 at the end of the same period in 2024[51] - Adjusted Working Capital as of September 30, 2025, was $24,151 thousand, a decrease of $48,943 thousand from $73,094 thousand at the end of 2024[65] - Net debt as of September 30, 2025, was $27,886 thousand, compared to $(14,333) thousand as of June 30, 2025, indicating an increase in net debt obligations[67] Dividends and Shareholder Returns - Declared a quarterly cash dividend of $0.0625 per share of common stock to be paid on December 24, 2025[4] - A quarterly cash dividend of $0.0625 per share was paid on September 19, 2025, with the next dividend scheduled for December 24, 2025[31] - The company incurred $19,807 thousand in dividends paid during the nine months ended September 30, 2025, reflecting cash returned to shareholders[65] Operational Developments - Successfully completed a semi-annual redetermination of a $300 million reserves-based credit facility, increasing lender commitments from $190 million to $240 million, enhancing liquidity[3] - In Côte d'Ivoire, refurbishment of the FPSO vessel is progressing, with drilling campaigns planned for 2026 to augment production from the Baobab field[3] - In Gabon, a drilling program is set to commence in late November 2025, focusing on multiple development and appraisal wells[5] - In Egypt, four development wells were drilled in Q3 2025, contributing to enhanced production levels[7] Market Conditions - Average realized price for oil in Q3 2025 was $51.26 per BOE, a 22% decrease from $65.41 per BOE in Q3 2024[14] - The average realized price for the first nine months of 2025 was $57.42 per BOE, down 13% from $65.99 in the first nine months of 2024[22] - Average sales price for crude oil, natural gas, and natural gas liquids on a WI basis was $55.91 per BOE in Q3 2025, down from $69.07 in Q3 2024[53] - The average AECO price for natural gas received increased by 22% to $1.16 CAD/GJ compared to the previous year[24] - The unrealized derivative instruments loss for Q3 2025 was $737 thousand, compared to a gain of $(192) thousand in Q3 2024[64] - Transaction costs related to acquisition for Q3 2025 were $17 thousand, down from $327 thousand in Q3 2024, indicating reduced acquisition-related expenses[64]