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VAALCO Energy, Inc. Provides Positive Additional Information Regarding Its Acquisition Of Svenska
EGYVAALCO Energy(EGY) Newsfilter·2024-07-16 06:00

Core Insights - VAALCO Energy, Inc. has successfully calculated its proved reserves for the acquisition of Svenska Petroleum Exploration AB, revealing higher reserves than initially disclosed, which enhances its strategic position in West Africa [2][9] - The acquisition includes significant producing assets in Côte d'Ivoire, with substantial future development opportunities, and was funded entirely by cash on hand without incurring debt or equity issuance [10][19] Reserves and Financial Metrics - As of December 31, 2023, VAALCO's SEC net proved reserves are reported at 16.9 million barrels of oil equivalent (MMBOE), which is a significant increase from the previously reported 1P working interest (WI) CPR reserves of 13.0 MMBOE as of October 1, 2023 [9][19] - The total 2P WI CPR reserves as of December 31, 2023, have increased to 22.5 MMBOE from 21.7 MMBOE, with a discounted value of future cash flows from these reserves totaling 240.9million[11][19]−Theacquisitionpriceof240.9 million [11][19] - The acquisition price of 40.2 million translates to approximately 2.37pernetprovedbarrelofreserves,indicatingacost−effectiveacquisitionstrategy[19]ContingentResources−Theindependentengineer′sreportidentifiescontingentresourcesattheBaobabfield,estimatingabestestimateworkinginterestcontingentresources(2C)of20.4MMBOE,whichcouldpotentiallybereclassifiedasreservesifdevelopmentplansareapproved[9][11][6]−Thereportemphasizesthatthecontingentresourcesaresubjecttouncertaintiesandmaynotberealizedasexpected,highlightingtheimportanceofaddressingdevelopmentcontingencies[6][19]PricingAssumptions−Thepricingassumptionsforthereservescalculationsinclude2.37 per net proved barrel of reserves, indicating a cost-effective acquisition strategy [19] Contingent Resources - The independent engineer's report identifies contingent resources at the Baobab field, estimating a best estimate working interest contingent resources (2C) of 20.4 MMBOE, which could potentially be reclassified as reserves if development plans are approved [9][11][6] - The report emphasizes that the contingent resources are subject to uncertainties and may not be realized as expected, highlighting the importance of addressing development contingencies [6][19] Pricing Assumptions - The pricing assumptions for the reserves calculations include 79.79 per barrel of oil for 2024, $69.79 for 2025, with a 2% inflation rate thereafter, which contrasts with the SEC's flat pricing methodology [11][24] - The BOE conversion ratios used for the reserves estimates differ, with a ratio of 5,800 cubic feet of natural gas to one barrel of oil equivalent applied for the December 31, 2023 estimates [7][11]