VAALCO Energy Sees African Oil Deals as Majors Exit Mature Assets

VAALCO Energy sees continued African acquisition opportunities as major oil companies divest mature assets to focus on ultra-deepwater projects. The company favors assets with established infrastructure, production-sharing contracts and existing export routes. VAALCO’s portfolio spans Gabon, Egypt and Côte d’Ivoire, with Etame producing about 17,000 barrels per day, Egyptian operations typically producing 10,000–12,000 barrels per day, and the Baobab field contributing roughly 4,500 barrels per day. The company is advancing projects including Venus, Kossipo and Côte d’Ivoire’s Phase V drilling program, while expecting stronger free cash flow after 2027. VAALCO also plans to maintain dividends and other shareholder returns, having returned more than $130 million since 2021.

Vaalco Energy NYSE: EGY outlined its approach to investing in African oil and gas assets, emphasizing established infrastructure, production-sharing contracts and opportunities created as major energy companies divest mature positions in favor of ultra-deepwater projects. Speaking with Water Tower Research analyst Jeff Robertson, VAALCO representative Ron said Africa offers underinvested basins, existing export routes and growing domestic energy demand. He said production-sharing contracts can align government and contractor interests while providing a framework for recovering capital investments through production barrels.

“Ultimately you've got the majors who have started divesting non-core African positions over the years providing a sort of sustained pipeline of accretive entry points,” Ron said, adding that VAALCO expects such opportunities to continue as larger companies concentrate on ultra-deepwater developments.

VAALCO’s core operated asset is the Etame field offshore Gabon, where the company has held an interest since 2002 and production began in 2004. Ron said Etame continues to produce approximately 17,000 barrels per day and has cumulatively produced about 150 million barrels of oil. After Sasol elected to sell its working interest in the Etame license in 2021, VAALCO increased its position in the asset. Ron described Gabon as a prolific asset base for the company and said its experience operating offshore there has built capabilities across geology, reservoir management, engineering and operations.

Egypt became part of VAALCO’s portfolio through its 2022 acquisition of TransGlobe. Ron said the transaction added production, reserves and cash flow while creating savings from combining two public-company structures. He described Egypt as a stable cash-flow business with low onshore lifting and finding-and-development costs that can be scaled up or down depending on the economic environment. VAALCO typically maintains Egyptian production between 10,000 and 12,000 barrels per day, according to Ron. He said the business performed particularly well in 2025.

In Côte d’Ivoire, VAALCO acquired Svenska’s interest in the Baobab field in 2024, partnering with operator Canadian Natural Resources. Ron said VAALCO paid approximately $42 million in net cash, or roughly $9,000 per fluid barrel at the time. He said the acquisition had paid itself back before the field’s floating production, storage and offloading vessel left for refurbishment in 2025. The vessel has since returned to production, contributing about 4,500 barrels per day to VAALCO.

Ron said VAALCO’s production-sharing contracts generally compensate the company through production barrels, allowing it to recover operating and capital costs up to specified ceilings before ...