Vaalco Energy Provides Operational Update

Source Press Release
Company Vaalco Energy Inc 
Tags Strategy - Upstream, Upstream Activities
Date August 29, 2019

VAALCO Energy, Inc. (NYSE: EGY) (“VAALCO” or the “Company”) today provided an operational update with additional details on the commencement of its 2019/2020 drilling program, the successful completion of its full-field annual maintenance shutdown at Etame, and the extension of the lease contract for the floating, production, storage and offloading vessel (“FPSO”) Petróleo Nautipa offshore Gabon. 

Key Highlights

  • Delivery of the Vantage Drilling International Topaz jackup drilling rig to VAALCO is expected in early September  
  • Announced plans to drill the Etame 9P appraisal wellbore first, followed by the Etame 9H development well from the Etame platform
  • Confirmed plans to drill an additional appraisal wellbore and up to two more development wellbores later this year and into the first half of next year
  • Successfully resumed full production following completion of the planned full-field annual maintenance shutdown offshore Gabon at the Etame field in August on schedule and on budget
  • Exercised an election to extend the lease contract for the FPSO to September 2021 with an additional one-year option through September 2022

Cary Bounds, Chief Executive Officer, commented, “We are very pleased to have the Vantage Topaz jackup rig mobilizing to the Etame platform to commence our 2019/2020 drilling campaign in mid-September.  This represents the commencement of a busy and exciting period of operational activity for VAALCO, the ultimate objectives of which are to enhance cash flow and realize further value from our reserves and resources.  Our current plans are to drill up to three development wells and two appraisal wellbores funded from cash on hand and cash generated from operations.  The development wells will all be drilled from our existing platforms where the infrastructure is in place to bring production online quickly.  The appraisal wellbores are expected to help further define existing leads that may potentially add reserves and de-risk future drilling locations.” 

Bounds continued, “In addition, we have successfully completed our periodic full-field maintenance shutdown at Etame and most importantly, there were no safety or environmental incidents with production restored to pre-shutdown levels.  Our relationship with our FPSO provider remains positive, so we extended the FPSO contract for another year through September 2021.  By maintaining operational excellence, we are very pleased to have positioned the Company to deliver material organic growth through development drilling and create value for our shareholders.”   

2019/2020 Drilling Program

Vantage Drilling International has notified VAALCO that they expect to release the Topaz jackup rig to VAALCO in early September following completion of ENI Gabon’s drilling operations.  VAALCO plans to spud the Etame 9P appraisal wellbore first, followed back-to-back with the Etame 9H development well.  The Company plans to drill up to three development wells and two appraisal wellbores in the 2019/2020 drilling program. VAALCO believes that there is significant reserve upside associated with the two appraisal wellbores as they may confirm up to approximately five million net barrels of 2P oil reserves spread across six well locations targeted in future drilling campaigns.  The Company is forecasting that the 2019/2020 drilling program will be funded by cash on hand and cash generated from operations. The current estimated net drilling capital expenditures are $20 million to $25 million in 2019 with an additional $5 to $10 million of expenditures in 2020.

Gabon Operational Update

During August 2019, VAALCO completed its planned full field 2019 maintenance shutdown for the Etame Marin FPSO and four platforms.  The entire work scope was completed successfully with no adverse environmental or safety incidents.  The field was shut-in for approximately nine days during the shutdown and then returned to pre-shutdown production levels.

VAALCO has exercised an election to extend the lease contract for the FPSO Petróleo Nautipa at Etame through September 2021, with an additional one-year option to run through September 2022.

Source: EvaluateEnergy® ©2021 EvaluateEnergy Ltd