EGY

VAALCO ENERGY INC /DE/

NYSE · ENERGY · CRUDE PETROLEUM & NATURAL GAS

6.39

−0.11 −1.69%

USD · close Oct 27

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MKT CAP $672.2MP/E —DIV YIELD 3.91%FCF YIELD —REV TTM $349.8M −25.5%NET INCOME −$108.8M −380.7%NET DEBT $146.6M52W 3.37 – 6.67SEC XBRL · TTM TO Invalid Date

How EGY rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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We have a diversified African-focused portfolio of production, development and exploration assets located in Gabon, Egypt, Cote d'Ivoire, Equatorial Guinea, Nigeria, as well as, prior to the Canada Asset Divestment, producing properties in Canada.
Recent Developments and Outlook 2025 Acquisition In March 2025, the Company farmed into the CI-705 block offshore Côte d’Ivoire as the operator with a 70% working interest and a 100% paying interest though a commercial carry arrangement with two other parties inclusive of the State Oil Company.
The total amount of acquisition costs for this transaction is approximately $ 3.0 million.
Divestment of Non-Core Assets On February 4, 2026, the Company entered into an asset purchase agreement (the “Canada APA”) to sell all its operating assets in Canada (the “Canada Asset Divestment”) for a purchase price of $24.4 million (C$33.4 million Canadian dollars), subject to customary adjustments.
The Canada Asset Divestment closed on February 19, 2026 with an effective date of February 1, 2026 for an adjusted purchase price of $25.5 million.
The Canada Asset Divestment represents the Company’s complete exit of its Canadian oil and gas operations.
Acquisitions and Divestiture and Note 20.
Subsequent Events , to the Consolidated Financial Statements for further discussion on the Canada Asset Divestment.
Capital Program We expect our 2026 capital program to range between $290.0 million to $360.0 million, assuming normal operating conditions, which prioritizes free cash flow generation and meaningful return of capital to shareholders.
The program includes estimated spending of approximately between $110.0 million to $135.0 million for Gabon, $9.0 million to $12.0 million for Egypt, $0.5 million to $1.5 million for Equatorial Guinea, $170.0 million to $210.0 million for Cote d'Ivoire for oil and natural gas development and $0.5 to $1.5 million related to corporate and other capital costs.
See below under “Capital Resources, Liquidity and Cash Requirements” for further discussion on the capital spending for each of our operating segments.
Trends and Uncertainties Geopolitical Conflict and Other Market Forces – The Company continues to monitor geopolitical developments globally, and specifically in Europe, the Middle East, Africa, and North America, where they have the potential to impact operational continuity and market dynamics.
On October 9, 2025, Israel, Hamas, the United States and other countries in the region agreed to a framework for a ceasefire in Gaza between Israel and Hamas, which if sustained, could reduce regional instability in the Eastern Mediterranean, and improve security conditions affecting Egypt operations and related energy supply chains.
However, such ceasefire has not progressed beyond the first phase, and whether the ceasefire will be sustained or will result in a lasting de-escalation of tensions in the region is unknown.
Additionally, geopolitical tensions and localized disruptions persist in parts of West Africa, where we hold significant producing and development interests, require ongoing vigilance regarding political, economic, and security risks.
Global markets are also experiencing volatility and uncertainty connected to the United States-Israel-Iran war and U.S intervention in Venezuela.
Following the February 2026 missile strikes in Iran, there has been increased instability, including airspace closures in the Middle East, damage to airports and the de facto closure of Strait of Hormuz, a waterway that transports approximately 20% of the world’s petroleum.
The duration and impact of these ongoing armed conflicts, and the potential of these conflicts spreading to more regions is uncertain and could adversely affect the global economy, financial markets, our customers and in turn us.
Additionally, global market forces including inflation, supply chain constraints due to lingering impacts from conflicts such as the Russia-Ukraine war, and shifts in U.S. trade policy including tariffs on energy-related goods, continue to increase costs and extend lead times for equipment and materials essential to drilling and production activities.
These factors could affect project timing, cost structures, and overall operational efficiency.
The Company also notes ongoing volatility in commodity prices driven by dynamic supply and demand fundamentals, energy transition policies, and broader macroeconomic uncertainties.
Vaalco actively manages exposure to these risks through operational flexibility, diversified sourcing, and prudent financial planning to safeguard long-term growth and value creation.
Tariffs and Global Trade Policies – In 2025, the U.S. administration enacted sweeping trade legislation, including significant tariff increases on industrial goods, energy-related equipment, and certain critical minerals, with a stated intent to prioritize domestic manufacturing and energy security.
Global trade policy continues to evolve and the ultimate impact of recent developments with respect to U.S. tariffs is unclear.
On February 20, 2026, the United States Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”).
Following the Supreme Court’s decision, the U.S. presidential administration announced its intention to invoke other laws to collect tariffs and announced new tariffs on imports from all countries, in addition to any existing non-IEEPA tariffs.
While there is significant uncertainty as to the duration of these and any further tariffs, and the impacts these tariffs and any corresponding retaliatory tariffs will have on the oil and gas industry and on commodity prices, these tariffs, along with anticipated retaliatory measures from affected trading partners, have introduced new volatility into the global supply chain for energy infrastructure.
While we do not maintain U.S. based production assets, our operations on the continent of Africa rely on equipment, services, and materials that are often sourced, engineered, or consolidated through the United States or through U.S. aligned trading routes.
As a result, we may experience increased costs and longer lead times for the procurement and delivery of drilling and production equipment, particularly if suppliers adjust pricing in response to increased duties or if we are required to diversify sourcing channels.
These impacts could affect the timing, cost structure and execution risk of certain development activities, especially in frontier offshore environments.
Additionally, the evolving global trade environment may increase compliance complexity and affect the cost efficiency of international operations.
Enhanced documentation requirements and new rules of origin associated with U.S. trade actions could impact our ability to efficiently move materials through international logistics hubs, such as those in Houston, Texas and could necessitate additional internal resources to maintain compliance.
These complexities necessitate additional internal resources to ensure sustained compliance and efficient material flow.
The broader geopolitical trade environment, including retaliatory tariffs and ongoing trade tensions with key partners, continues to inject volatility into the global supply network, necessitating vigilant risk management and strategic sourcing to mitigate operational disruptions and cost impacts.
Enactment of the One Big Beautiful Bill Act of 2025 – On July 4, 2025, the budget reconciliation bill known as the One Big Beautiful Bill Act of 2025 (“OBBBA”) was signed into law, which includes significant changes to federal tax law and other regulatory provisions that may impact the Company.
Among other provisions, the OBBBA makes permanent key elements of the Tax Cuts and Jobs Act of 2017.
The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.
The impact of provisions effective in 2025 are not material and the Company is still assessing the impact of provisions that are not yet effective.
Moreover, to the extent U.S. policy shifts create uncertainty in bilateral relations or disrupt traditional trade partnerships, there could be indirect effects on our ability to manage risk and maintain favorable operating conditions in host countries.
While we continue to monitor the evolving regulatory and trade landscape, we cannot predict the full impact of current or future tariffs, trade restrictions or retaliatory actions on our operations, financial condition or future capital deployment decisions.

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We have a diversified African-focused asset portfolio in Gabon, Egypt, Cote d'Ivoire, Equatorial Guinea and Nigeria, as well as producing properties in Canada.
Recent Developments and Outlook 2024 Acquisition On April 30, 2024, we completed the acquisition of Svenska Petroleum Exploration Aktiebolag, a company incorporated in Sweden whereby we acquired all of the issued shares in the capital of Svenska and Svenska became a direct, wholly-owned subsidiary of the Company (“Svenska Acquisition”) for a net adjusted purchase price of $40.2 million.
The purchase price was funded with the Company's cash on hand.
As a result of the Svenska Acquisition, we acquired Svenska’s primary asset: a 27.39% non-operated working interest in the deepwater producing Baobab field in Block CI-40, offshore Cote d’Ivoire in West Africa.
We also acquired a 21.05% non-operated working interest in OML 145, a non-producing discovery located offshore of Nigeria that is not expected to be developed at this time.
Capital Program We expect our 2025 capital program to range between $270 million to $330 million, assuming normal operating conditions, that prioritizes free cash flow generation and meaningful return of capital to shareholders.
The program includes estimated spending of approximately between $115 million to $135 million for Gabon, $30 million to $40 million for Egypt, $8 million to $13 million for Canada, $1 million to $3 million for Equatorial Guinea, $115 million to $135 million for Cote d'Ivoire for oil and natural gas development and $1 million related to corporate and other capital costs.
See further discussion below under “Capital Resources, Liquidity and Cash Requirements” for further discussion on the capital spending for each of our operating segments.
RESULTS OF OPERATIONS Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 We reported net income for the year ended December 31, 2024 of $58.5 m illion compared to a net income of $60.4 million for the year ended December 31, 2023.
The year-over-year decrease in net income was due to higher depreciation, depletion and amortization expense, production expenses and credit losses during the year, partially offset by the increase in revenues and a bargain purchase gain related to the Svenska acquisition.
Year Ended December 31, Increase/ 2024 2023 (Decrease) (in thousands except per Boe information) Net crude oil, natural gas, and NGLs sales volume (MBoe) 7,262 6,832 430 Average crude oil, natural gas and NGLs sales price (per Boe) $ 65.64 $ 65.83 $ (0.19) Net crude oil, natural gas, and NGLs revenue $ 478,988 $ 455,066 $ 23,922 Operating costs and expenses: Production expense 163,500 153,157 10,343 FPSO demobilization and other costs — 7,484 (7,484) Exploration expense 48 1,965 (1,917) Depreciation, depletion and amortization 143,034 115,302 27,732 General and administrative expense 29,684 23,840 5,844 Credit (recovery) losses and other 6,304 (4,906) 11,210 Total operating costs and expenses 342,570 296,842 45,728 Other operating income (expense), net 78 433 (355) Operating income $ 136,496 $ 158,657 $ (22,161) The revenue changes between the years ended December 31, 2024 and 2023 identified as related to changes in price or volume are shown in the table below: (in thousands) Price $ (1,376) Volume 28,338 Other (1) (3,040) Total net revenue $ 23,922 (1) The Other in the table above includes revenues attributed to carried interests.
The table below shows net production, sales volumes and realized prices for both years.
Year Ended December 31, 2024 2023 Net crude oil, natural gas and NGLs production (MBoe) 7,296 6,833 Net crude oil, natural gas and NGLs sales (MBoe) 7,262 6,832 Average realized crude oil, natural gas and NGLs price ($/Boe) $ 65.64 $ 65.83 Average Dated Brent spot price* ($/Bbl) $ 80.52 $ 82.49 * Average of daily Dated Brent spot prices posted on the U.S.
Costs and Expenses 2024 2023 % Change 2024 vs. 2023 Production expense, excluding offshore workovers ($/BOE) $ 22.50 $ 22.42 — % Depreciation, depletion and amortization ($/BOE) $ 19.69 $ 16.88 17 % General and administrative expense, excluding stock-based compensation ($/BOE) $ 3.48 $ 3.49 — % Crude oil, natural gas and NGLs net revenues increased $23.9 million, or approximately 5%, during the year ended December 31, 2024 compared to the same period of 2023.
The revenue increase is primarily attributable to revenues recognized within the Cote d'Ivoire segment during the year ended December 31, 2024 that were not present in the prior period.
The Company’s Gabon segment contributed $206.0 million of revenue to the Company’s total revenue during the year ended December 31, 2024.
This compares to the $260.3 million of revenue contributed by the segment during the year ended December 31, 2023.
The decrease in revenues is primarily due to lower sales volume in Gabon.
The total sales volume in Gabon for the year ended December 31, 2024 was 2,584 MBbls or 612 MBbls lower than the sales volumes of 3,196 MBbls in the same period in 2023.
Further, we had a decrease in the Gabon average realized price per barrel received during the year ended December 31, 2024 of $78.81 per barrel (Bbl) compared to the price received in 2023 of $79.80 per Bbl.
Our share of crude oil inventory, excluding royalty barrels, was approximately 267,754 barrels and 68,766 barrels at December 31, 2024 and 2023, respectively.
The Company’s Egypt segment contributed $146.0 million of revenue to the Company’s total revenue for the year ended December 31, 2024.
This compares to the $161.0 million of revenue contributed by the segment during the year ended December 31, 2023.
The decrease in revenues was primarily due to the decrease in sales volumes during the year ended December 31, 2024 to 2,585 MBbls compared to 2,771 MBbls during the same period in 2023.
The average realized price received in Egypt was $56.47 per Bbl during the year ended December 31, 2024, which was also lower compared to the $58.11 per barrel received in 2023.
At December 31, 2024, the Company’s Egypt segment had zero barrels in oil inventory.
Canada Crude oil sales in Canada are normally sold through pipelines to a third party.
The Company’s Canadian segment contributed $32.0 million of revenue to the Company’s total revenue for the year ended December 31, 2024.
This compares to the $33.7 million of revenue contributed by the Canada Segment during the year ended December 31, 2023.
The decrease in revenues is due to the lower average realized sales price received during the year ended December 31, 2024 of $36.77 per MBoe or a decrease of $1.79 per Boe from the $38.92 per Boe received during the same period in 2023.
The decrease in the average realized price was offset by the increase in sales volumes during the same period.
In Canada, the total sales volumes for the year ended December 31, 2024 was 870 MBoe or 5 MBoe higher than the 865 MBoe sold during the year ended December 31, 2023.
Cote d'Ivoire Crude oil sales in Cote d’Ivoire are sold through a marketing contract with an international oil trading company which offers the cargo shipments to buyers, mainly refineries, around the world.
The Company's Cote d’Ivoire Segment contributed $95.1 million of revenue to the Company’s total revenue during the year ended December 31, 2024.
Total sales volumes in Cote d'Ivoire for the year ended December 31, 2024 was 1,223 MBbls and the average realized sales price received was $77.74 per barrel.
Production expenses increased $10.3 million , or approximately 7%, to $163.5 million in the year ended December 31, 2024 compared to the same period of 2023.
The increase in production expense was primarily driven by the crude oil inventory acquired in the Svenska Acquisition that was recorded at fair value upon acquisition and lower of cost or net realizable value in subsequent periods.
In addition, VAALCO has seen inflationary pressure on personnel and contractor costs.
In February 2024, the government in Gabon enacted new regulation which has resulted in an increase to withholding taxes on foreign supplied goods and services.
On a per barrel basis, production expense, excluding workover expense and stock compensation expense, for the year ended December 31, 2024 decreased to $22.48 per barrel from the prior year of $22.59 per barrel primarily as a result of higher production volumes for the current period.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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