VAALCO Energy (EGY) Water Tower Research Fireside Chat summary

Operational performance and efficiency

• Gabon production averaged 8,800 barrels per day in Q3, with improved field performance and reduced decline rates expected to positively impact year-end 2024 reserves.

• Achieved 97% uptime in Gabon, with $10–$15 million in permanent OpEx reductions and deferred maintenance, though some maintenance costs will rise in 2025.

• Infrastructure improvements have enabled cost savings and operational efficiencies, supporting future production growth.

Drilling and development plans

• New drilling campaign in Gabon to start mid-2025, focusing on infill wells at Etame and Ebouri, with sequencing dependent on equipment delivery.

• Etame infill wells target both acceleration and reserve additions, with multiple pilot opportunities per wellbore to reduce risk.

• Ebouri field reactivation hinges on successful chemical injection to manage H2S, potentially reclassifying reserves in year-end 2025.

• Exploration and gas wells are sequenced after production wells, with the gas well expected to extend field life and reduce OpEx by replacing diesel with field gas.

Production, reserves, and cost impacts

• Drilling program aims for a significant step increase in production from five development wells, with potential for new reserve additions.

• Higher production volumes expected to lower unit lifting costs, though Ebouri’s chemical injection will increase OpEx per barrel.

• No significant change anticipated in crude price realizations as blend quality remains stable.