VAALCO Energy, Inc. (NYSE: EGY; LSE: EGY) (VAALCO or the Company)
today provided an operational update on its 2019/2020 drilling
program offshore Gabon.
Highlights
- Successfully completed a planned workover on the Etame platform
for the Etame 10H well and restored 600 gross barrels of oil per
day (BOPD), 160 net(1) BOPD to VAALCO;
- Reported stabilized production rates of 1,000 gross BOPD, 270
net BOPD to VAALCO from the Etame 4H well brought online in
December 2019;
- Mobilized the drilling rig to the Southeast Etame North
Tchibala (SEENT) platform and commenced drilling the Southeast
Etame 4P appraisal wellbore which will evaluate a previously
undrilled Gamba formation step out area;
- Pending positive results from the appraisal wellbore, VAALCO
plans to promptly drill a third development well, the Southeast
Etame 4H well, to develop the Gamba step out area;
- Continued planning for additional workovers to proactively
replace electric submersible pumps (ESPs) that are approaching the
end of their expected life; and
- Increased total Company net production to just over 6,000 BOPD,
representing a 73% increase over the 2019 full year average of
3,476 net BOPD.(1) As has been disclosed in the past, all “net”
production rates and volumes are VAALCO’s 31% working interest less
13% royalty payment.
Cary Bounds, Chief Executive Officer, commented,
“We continue to see outstanding results from our 2019/2020 drilling
campaign. Our recent workover has restored production from a
previously shut-in well at the Etame platform and we are now
entering the next phase which is at the SEENT platform. Our
2019/2020 program has significantly increased production and we are
excited about drilling our next appraisal wellbore, the Southeast
Etame 4P wellbore. If successful, we plan to immediately
drill a development well that can add new production and
reserves. In addition, a successful appraisal wellbore can
also provide us with supplementary development opportunities for
future drilling campaigns. Upon drilling of the Southeast Etame 4P
wellbore, VAALCO will have satisfied the drilling requirements
associated with the PSC extension that we finalized in 2018 with
the government of Gabon.
Following the drilling in the Southeast Etame
field, we plan to complete additional workovers that we believe
will save VAALCO time and money by replacing ESP systems that are
nearing the end of their expected lives. In addition to
installing our current ESP design, we believe these workovers may
add production and improve operational efficiency.”
Operational Update
VAALCO recently began drilling the Southeast
Etame 4P appraisal wellbore to evaluate a Gamba step out area in
Southeast Etame. Once this second appraisal wellbore is
drilled, VAALCO will have satisfied the drilling commitment under
the PSC extension that was signed in late 2018.
As previously noted, if the Southeast Etame 4P
appraisal wellbore indicates the presence of hydrocarbons in the
Gamba formation, then VAALCO plans to promptly drill a third
development well, the Southeast Etame 4H well, which will target
4.0 to 10.0 million gross barrels of prospective resources, as part
of the ongoing 2019/2020 drilling campaign.
Prior to drilling the Southeast Etame 4P
appraisal wellbore, the Company began the workover of the Etame 10H
well to replace the ESP. The workover was successfully
completed, and the ESPs were replaced, which has restored
production of approximately 600 gross BOPD, 160 BOPD net to
VAALCO. The ESP failed in September 2019 after 4.5 years of
service. In addition, VAALCO restored production on the Etame 4H
well by repairing the subsea wellhead. The well was brought online
in December 2019 and is flowing at a rate of approximately 1,000
gross BOPD, or 270 net BOPD to VAALCO.
The Company has additional workovers planned to
preemptively replace ESP systems that have been online for four to
six years which is the expected life of those systems. VAALCO is
awaiting joint owner approval on these workovers but using the
contracted drilling rig can save time and money and prevent
prolonged future production downtime. VAALCO plans to install
its current ESP design, which has been successfully implemented and
operated in other wells since mid-year 2018. In addition,
replacing the ESP systems could potentially add production and
allow for operational efficiencies.
About VAALCO
VAALCO, founded in 1985, is a Houston, USA
based, independent energy company with production, development and
exploration assets in the West African region.
The Company is an established operator within
the region, holding a 31.1% working interest in the Etame Marin
Block, located offshore Gabon, which to date has produced over 110
million barrels of crude oil and of which the Company is the
operator.
For Further Information
VAALCO Energy, Inc.
(General and Investor Enquiries) |
+00 1 713 623 0801 |
Website: |
www.vaalco.com |
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Al Petrie Advisors (US
Investor Relations) |
+00 1 713 543 3422 |
Al Petrie / Chris Delange |
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Buchanan (UK Financial PR) |
+44 (0) 207 466 5000 |
Ben Romney / Kelsey
Traynor / James Husband |
VAALCO@buchanan.uk.com |
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Forward-Looking Statements
This press release includes "forward-looking
statements" within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. All statements, other than statements of
historical facts, included in this press release that address
activities, events, plans, expectations, objectives or developments
that VAALCO expects, believes or anticipates will or may occur in
the future are forward-looking statements.
Forward-looking statements include all statements regarding
well results, wells anticipated to be drilled and placed on
production, future levels of drilling and operational activity and
associated expectations, the implementation of the Company's
business plans and strategy, prospect evaluations,
prospective resources and reserve growth, as well as statements
including the words "believe," "expect," "plans" and words of
similar meaning. These statements are based on assumptions made by
VAALCO based on its experience and perception of historical trends,
current conditions, expected future developments and other factors
it believes are appropriate in the circumstances. Actual future
results, including project plans and schedules and resource
recoveries could differ materially due to changes in market
conditions affecting the oil and gas industry or long-term oil and
gas price levels, political or regulatory developments, reservoir
performance, the outcome of future exploration and development
efforts, technical or operating factors, inflation, general
economic conditions, the Company's success in discovering,
developing and producing reserves, production and sales differences
due to timing of liftings, decisions by future lenders, the risks
associated with liquidity, lack of availability of goods, services
and capital, environmental risks, drilling risks, foreign
regulatory and operational risks, and regulatory changes. There are
no assurances the Company can develop probable or possible
reserves, or that if developed, probable reserves will become
producing reserves to the level of estimates.
These and other risks are further described in
VAALCO's annual reports on Form 10-K and quarterly reports on Form
10-Q and other reports filed with the U.S. Securities and Exchange
Commission (SEC) which can be reviewed at http://www.sec.gov, or
which can be received by contacting VAALCO at 9800 Richmond Avenue,
Suite 700, Houston, Texas 77042, (713) 623-0801. VAALCO
disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise, except as required by law.
References to thickness of oil pay or of a
formation where evidence of hydrocarbons have been encountered is
not necessarily an indicator that hydrocarbons will be recoverable
in commercial quantities or in any estimated volume. Well test
results should be considered as preliminary and not necessarily
indicative of long-term performance or of ultimate recovery. Well
log interpretations indicating oil accumulations are not
necessarily indicative of future production or ultimate
recovery.
Inside Information
This announcement contains inside information as
defined in Regulation (EU) No. 596/2014 on market abuse (MAR) and
is made in accordance with the Company’s obligations under article
17 of MAR.
Supplemental Reserves
Disclosure
This press release contains oil and gas metrics
which do not have standardized meanings or standard methods of
calculation as classified by the SEC and therefore such measures
may not be comparable to similar measures used by other companies.
Such metrics have been included herein to provide readers with
additional measures to evaluate the Company’s performance; however,
such measures are not reliable indicators of the future performance
of the Company and future performance may not compare to the
performance in previous periods.
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