VAALCO Energy (EGY) Q1 2026 earnings summary

Executive summary

• Divested all Canadian assets for $25.5 million, streamlining the portfolio and confirming operatorship in the Kossipo field (CI-40 Block) with a 60% interest and a field development plan due late 2026.

• Completed Baobab FPSO refurbishment and mooring in Côte d'Ivoire; production restart expected in Q2 2026, with sales from Q3 and Phase Five drilling to follow.

• Achieved strong drilling results in Gabon and Egypt, including successful completions and increased production, leading to raised 2026 production and sales guidance.

• Maintained flat capital expenditure guidance despite expanded drilling, reflecting operational efficiency and growth.

• Portfolio rationalization and operational execution position the company for significant production growth into 2027.

Financial highlights

• Q1 2026 net loss of $93.8 million, driven by $71 million in derivative losses and $22.4 million in exploration expense; adjusted EBITDAX was $11.6 million.

• Q1 2026 revenue was $62.6 million, down 31% from Q4 2025 due to lower sales volumes and asset divestment.

• Q1 production: 15,110 NRI BOEPD (19,884 WI BOEPD), both above guidance midpoint; sales: 12,157 NRI BOEPD.

• Q1 production costs and G&A below guidance; cash G&A at $6.9 million.

• Q1 capital expenditures: $78.1 million (cash basis), $73.3 million (accrual basis), mainly in Gabon and Côte d'Ivoire.

Outlook and guidance

• Q2 2026 production guidance: 21,600–23,800 WI BOEPD; 16,800–18,700 NRI BOEPD.

• Q2 sales guidance 44% higher than Q1 at midpoint; full-year 2026 production and sales NRI volumes raised by 8% and 12% respectively.

• Q2 production costs expected at $26–$31 per NRI BOE; Q2 production expense guidance: $40.5–$48.5 million.

• Q2 exploration expense forecasted at $2–$3 million, a 90% reduction from Q1.

• Full-year 2026 capital guidance remains $290–$360 million, unchanged despite increased drilling activity.