Vaalco Energy Q2 Earnings Call Highlights

Vaalco Energy reported $42.4 million in net income and $54.8 million in adjusted EBITDAX, supported by higher production, improved pricing and a 47% sequential increase in sales volumes.

Production at Côte d’Ivoire’s Baobab field resumed above pre-shutdown levels, with first lifting expected in August and development drilling beginning in the third quarter. The company expects the drilling program’s larger production impact in 2027.

Vaalco expects third-quarter production to rise about 23% from the second quarter as Baobab contributes for a full quarter and Gabon and Egypt output increases, while maintaining its full-year capital-spending guidance.

Vaalco Energy NYSE: EGY reported second-quarter net income of $42.4 million, or $0.39 per diluted share, and adjusted EBITDAX of $54.8 million as higher sales volumes, improved pricing and lower exploration expense lifted results from the prior quarter. Chief Executive Officer George Maxwell said the company’s portfolio changes and operational programs in Côte d’Ivoire, Gabon and Egypt supported higher production and sales during the period. Net revenue more than doubled from the first quarter, according to Chief Financial Officer Ron Bain, driven by a $72.6 million increase in revenue from higher realized prices and sales volumes.

Second-quarter production totaled 21,796 working-interest barrels of oil per day, or 16,688 net-revenue-interest barrels per day, up about 10% from the first quarter. Sales averaged 17,812 net-revenue-interest barrels per day, up 47% sequentially and above the midpoint of company guidance.

The June restart of production at the Baobab field offshore Côte d’Ivoire after its FPSO refurbishment was a key contributor to the company’s outlook. The vessel had ceased hydrocarbon operations in January 2025, underwent refurbishment in Dubai and returned to Côte d’Ivoire in April 2026. Maxwell said all producing wells were online and output was slightly above the company’s pre-startup forecast. In response to an analyst question, he said gross production was running at roughly 16,400 to 16,500 barrels per day, about 2,000 barrels per day above the rate before the shutdown. The first lifting is expected later in August, with the single third-quarter lifting projected at about 950,000 gross barrels. VAALCO holds a 27.4% interest in Baobab. The company expects to begin Baobab’s development drilling program in the third quarter. The program includes four producers, two or three injectors and two workovers. At least one well is expected to enter production by year-end, though Maxwell said the drilling program’s production and sales uplift is not expected to have a significant impact until 2027.

VAALCO also is advancing plans for the nearby Kossipo discovery on the CI-40 block, where it is operator with a 60% working interest. The company is using new ocean-bottom-node seismic data for field development planning. Maxwell said the gross 2C resource estimate is approximately 102 million barrels of oil equivalent, with 293 million barrels of oil equivalent in place. The company received a six-month extension for submitting its field development plan and now expects submission in the first half of 2027.

In Gabon, second-quarter working-interest production rose to more than 9,300 barrels of oil equivalent per day as wells from the Phase III drilling program came online. The Etame-14H development well began production in late April after encountering 325 meters of lateral net pay. Initial gross output exce...