Financial Data and Key Metrics Changes - In Q1 2025, the company reported a net income of $7.7 million or $0.7 per share and adjusted EBITDAX of $57 million, driven by NRI production of 17,764 barrels of oil equivalent per day, exceeding guidance [6][20] - Working interest production was 22,402 barrels of oil equivalent, also at the high end of guidance, while NRI sales were 19,074 barrels of oil equivalent per day, matching guidance [6][20] - The unrestricted cash balance as of March 31, 2025, was $40.9 million, down approximately $40 million from year-end 2024 due to elevated capital spending and state lifting bond payments [21] Business Line Data and Key Metrics Changes - In Egypt, five wells were drilled in Q1 2025, with an average initial production rate of about 120 barrels of oil per day, and further drilling is expected in Q2 2025 [13] - In Gabon, production results were positive despite no drilling for over two years, with a drilling program planned to begin in Q3 2025 [14][15] - The FPSO project in Cote D'Ivoire is on schedule, with significant development drilling expected to begin in 2026 [11][12] Market Data and Key Metrics Changes - The company has observed a decline in commodity pricing, particularly oil, leading to a 10% reduction in the capital budget for 2025 [9][10] - The company expects to spend between $65 million and $85 million in capital expenditures for Q2 2025, with production guidance remaining unchanged [22][23] Company Strategy and Development Direction - The company aims to operate efficiently, invest prudently, and maximize its asset base while seeking accretive opportunities [25] - Long-term projects like the FPSO in Cote D'Ivoire and drilling campaigns in Gabon are continuing as planned, with a focus on enhancing production and reserves [10][11] - The company is also exploring opportunities in Equatorial Guinea, with a FEED study anticipated to lead to a final investment decision in 2025 [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the current macroeconomic environment's uncertainty due to softening commodity prices and is taking measures to reduce discretionary capital spending [9][10] - The company remains confident in its operational and financial performance, with a strong start to 2025 and a commitment to delivering shareholder returns [25][26] Other Important Information - The company paid a quarterly cash dividend of $6.25 per common share in Q1 2025, with plans for a second dividend payment later in June [26] - The company has a track record of delivering strong operational and financial results, with a focus on organic growth opportunities [24][25] Q&A Session Summary Question: Can you comment on the production profile at Gabon over the back half of 2025? - Management indicated no significant planned downtime related to the drilling program for 2025, with a slight uptick in production expected towards the end of Q4 [29][30] Question: How would you prioritize projects if oil prices remain low? - Management stated that projects enhancing production through existing facilities would be prioritized, with the Equatorial Guinea project being attractive even at lower oil prices [36][37] Question: Can you clarify the working capital swing later in the year? - Management explained that the state lift in February drove the outflow in working capital, but no further state lifts are expected until 2026, which should improve working capital [48][49] Question: Does the resolution of receivables in Egypt mean more CapEx will be put back into Egypt? - Management clarified that while receivables have improved, current receivables still present challenges, and the company is meeting its contractual requirements with the Egyptian government [50][52]

VAALCO Energy (EGY) Q1 2025 Earnings Call May 09, 2025 10:00 AM ET Company Participants Chris Delange - Investor RelationsGeorge Maxwell - Chief Executive Officer and DirectorJeffrey Robertson - Managing DirectorStephane Foucaud - Founding PartnerChris Wheaton - Managing DirectorRonald Bain - Chief Financial Officer Operator Good morning, and welcome to VAALCO Energy's First Quarter twenty twenty five Conference Call. All participants will be in listen only mode. After today's presentation, there will be an ...

Financial Data and Key Metrics Changes - In Q1 2025, the company reported a net income of $7.7 million or $0.7 per share, with adjusted EBITDAX of $57 million, driven by NRI production of 17,764 barrels of oil equivalent per day, exceeding guidance [5][6] - Working interest production was 22,402 barrels of oil equivalent, also at the high end of guidance, while NRI sales were 19,074 barrels of oil equivalent per day, matching guidance [5][6] - The unrestricted cash balance as of March 31, 2025, was $40.9 million, down approximately $40 million from year-end 2024, primarily due to elevated capital spending and state lifting bond payments [20] Business Line Data and Key Metrics Changes - The company has reduced its capital budget for 2025 by 10%, from a range of $270 million to $330 million down to $250 million to $300 million, while maintaining production and sales guidance unchanged [8][21] - In Egypt, five wells were drilled in Q1 2025, with an average initial production rate of about 120 barrels of oil per day, and further drilling is expected in Q2 [12][19] - In Gabon, production uptime has improved, and a drilling program is planned to begin in Q3 2025, with a focus on two wells to be drilled and one completed in 2025 [13][14] Market Data and Key Metrics Changes - The company is experiencing a decline in commodity pricing, prompting a reduction in discretionary capital spending and a delay of smaller projects [7][8] - The FPSO project in Cote D'Ivoire is on schedule, with significant development drilling expected to begin in 2026 [10][19] - The company has hedged 70,000 barrels of oil per month in Q2 with a floor price of $65, indicating a strategy to mitigate risks associated with commodity price fluctuations [23] Company Strategy and Development Direction - The company aims to operate efficiently, invest prudently, and maximize its asset base while seeking accretive opportunities [25] - Long-term projects like the FPSO in Cote D'Ivoire and drilling campaigns in Gabon are expected to enhance production and reserves, contributing to future growth [9][10] - The company is focused on delivering sustainable growth and strong results to fund capital programs while returning value to shareholders through dividends [26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the current macroeconomic environment's uncertainty due to softening commodity prices and emphasized the importance of maintaining operational excellence [6][7] - The company remains confident in its ability to execute plans and deliver on commitments, with a strong portfolio of organic projects expected to double its size and scale [24][25] - Management expressed optimism about the future, highlighting the diversified risk profile and multiple producing areas that will provide income for years to come [26] Other Important Information - The company has not had a lost time incident in 2024 and 2025, achieving over 4.3 million man hours without an incident, reflecting a strong commitment to safety [13] - The company plans to provide more details about its growth opportunities during the upcoming Capital Markets Day [24][60] Q&A Session Summary Question: Can you comment on the production profile at Gabon over the back half of 2025? - Management indicated no significant planned downtime related to the drilling program for 2025, with a slight uptick in production expected towards the end of Q4 [29] Question: Will the third quarter be the lowest quarter of the year for production? - Management confirmed that the third quarter is expected to be the lowest due to planned preventative maintenance downtime [30] Question: Can you discuss the development drilling campaign in Cote D'Ivoire for 2026? - Management stated that the Phase five drilling is scheduled to start mid-year 2026, with the operator actively working on securing a rig [32] Question: How would you prioritize projects if oil prices remain low? - Management explained that projects enhancing production through existing facilities are prioritized, with the Equatorial Guinea project being the most attractive due to its favorable terms [36][37] Question: How does the Aburi well's performance compare to expectations? - Management noted that the well's performance exceeded expectations, providing confidence in the redevelopment plans for Aburi [40][42] Question: Can you provide insights on working capital swings later in the year? - Management clarified that the state lift in February drove the working capital outflow in Q1, but future state lifts are not expected until 2026, indicating potential improvement in working capital [45][49] Question: Has the receivable issue in Egypt been resolved? - Management confirmed that the majority of the aged receivables have been collected, and the company is on track to meet its contractual requirements with the Egyptian government [51][55]