VAALCO Announces Transformational Acquisition of Additional Working Interest at Etame Marin Block Offshore Gabon Nearly Doubling Reserves and Production

  • In Business
  • 2020-11-17 21:45:00Z
  • By GlobeNewswire
VAALCO Announces Transformational Acquisition of Additional Working Interest at Etame Marin Block Offshore Gabon Nearly Doubling Reserves and Production
VAALCO Announces Transformational Acquisition of Additional Working Interest at Etame Marin Block Offshore Gabon Nearly Doubling Reserves and Production  

HOUSTON, Nov. 17, 2020 (GLOBE NEWSWIRE) -- VAALCO Energy, Inc. (NYSE: EGY; LSE: EGY) ("VAALCO" or the "Company") today announced that it has signed a sale and purchase agreement ("SPA") to acquire Sasol Gabon S.A.'s ("Sasol's") 27.8% working interest(1) in the Etame Marin block offshore Gabon. Since VAALCO currently owns and operates a 31.1% working interest(1) in Etame, the transaction will almost double VAALCO's total production and reserves. In addition, VAALCO is acquiring Sasol's 40% non-operated participating interest(1) in Block DE-8 offshore Gabon.


Acquiring an additional 27.8% working interest in the Etame Marin block offshore Gabon, increasing VAALCO's total working interest to 58.8%;

Nearly doubles VAALCO's total net production and reserves;

Increases net revenue interest ("NRI") production from 4,850 to 9,150 barrels of oil per day ("BOPD") based on current month production

Increases year-end 2019 SEC reserves(2) from 5.0 million to 9.4 million barrels of oil ("MMBO")

Increases year-end 2019 independent 2P CPR reserves(3) from 9.2 MMBO to 17.5 MMBO

Immediately accretive to VAALCO, with estimated increase of 23% in free cash flow per barrel(4) from approximately $10.90 to $13.30 at $45 realized oil price;

Adds optionality from acquisition of Sasol's 40% non-operated participating interest in Block DE-8 offshore Gabon;

Agreed to total consideration to Sasol for the entire transaction of $44 million, subject to customary post-effective date adjustments, and future contingent payments of up to $6 million; and

Funding for the acquisition will be from cash on hand and cash from operations.


Prior to the closing of the acquisition, VAALCO's working interest in Etame is 31.1% and its participating interest is 33.6%; Sasol's working interest in Etame is 27.8% and its participating interest is 30%. All NRI production rates and volumes are based on working interest less 13% royalty volumes. Sasol's participating interest in DE-8 is 40% and its working interest is subject to government rights for a 20% carried interest and 10% back-in interest.


"SEC reserves" are Netherland, Sewell & Associates estimates prepared in accordance with the definitions and regulations of the U.S. Securities and Exchange Commission as of December 31, 2019.


"2P CPR Reserves" are Netherland, Sewell & Associates proved plus probable estimates prepared in accordance with the definitions and guidelines set forth in the 2018 Petroleum Resources Management Systems approved by the Society of Petroleum Engineers as of December 31, 2019 using VAALCO's management assumptions for escalated crude oil price and costs. The SEC definitions of proved and probable reserves are different from the definitions contained in the 2018 Petroleum Resources Management Systems approved by the Society of Petroleum Engineers as of December 31, 2019. As a result, 2P CPR reserves may not be comparable to SEC reserves determined under United States standards. The SEC requires United States oil and gas reporting companies, in their filings with the SEC, to disclose only proved reserves after the deduction of royalties and production due to others but permits the optional disclosure of probable and possible reserves in accordance with SEC definitions.


Free cash flow per barrel is calculated as (i) revenues less production expenses, general and administrative expense, annual abandonment funding and current income tax expense divided by (ii) the number of NRI barrels of oil sold.

An investor deck with additional information regarding the transaction is available at under the Investor Relations section.

Cary Bounds, Chief Executive Officer, commented, "We believe that the acquisition of Sasol's interest at Etame is a very attractive and value accretive strategic acquisition for the Company that confirms our position as one of the leading independent exploration and production companies in West Africa. In what was a competitive sales process, this is the ideal growth transaction that we have been seeking for VAALCO. We believe the acquisition of an additional stake in this field that we know so well, having been the operator since 1995, is an important step in implementing our strategy. The acquisition is expected to deliver a step change in our production to over 9,000 barrels of oil per day net based on current production and significantly boosts our cash flow profile. With minimal additions to our overhead costs, we expect this transaction to lower our G&A cost per barrel by approximately 40%. The strong operational and economic performance of Etame in recent years has enabled us to grow our net cash position, which we are now using to fund this value accretive acquisition and profitably expand our reserve base."

Bounds continued, "We completed a highly successful drilling program earlier this year that demonstrated the quality of the asset and the upside that resides in the field, and this transaction, coupled with our recent announcement of acquiring new proprietary 3-D seismic data over the entire Etame Marin block, underscores the belief that we have in the long-term potential at Etame. We are also enhancing upside potential with a 40% non-operated position in Block DE-8 offshore Gabon which includes an existing discovery and for which there are plans to potentially drill an appraisal well in 2021 representing an exciting near-term catalyst. In summary, as we have previously stated, we are focused on maximizing the value of our Gabon resources as well as expanding into new development opportunities across Africa."

Transaction Terms

The Company has agreed to total cash consideration for both properties of approximately $44 million. The effective date of the transaction is July 1, 2020, and the Company anticipates that the transaction will close within 90 days. Cash paid at closing is expected to be less than $44 million as the amount paid will be subject to certain customary financial adjustments, including adjustments to account for estimated positive net cash flows attributable to the period from the effective date until the closing date. VAALCO plans to fund the net cost of the transaction with cash on hand and cash from operations. The SPA contains customary closing conditions including receipt of all necessary written consents, approvals or waivers, and provides for certain contingent payments of up to $6 million, as discussed below. Reserves, production and financial results for the interests being acquired will be included in VAALCO's results for periods after the closing date of the transaction.

Impact of Acquisition

The metrics provided in the table below reflect Company management's estimate of the positive impact of the acquisition on VAALCO's key metrics.

As of December 31, 2019


Sasol Interest


SEC Crude Oil Proved Reserves (MBbls)




2P CPR Crude Oil Proved + Probable Reserves (MBbls)




Nine Months Ended September 30, 2020


Sasol Interest



Crude oil (MBbls)





Crude oil (MBbls)




Average daily production volumes (BOPD)




Block DE-8 Offshore Gabon

Under the terms of the SPA, VAALCO is acquiring a 40% non-operated participating interest in Block DE-8 offshore Gabon, with Perenco, the operator, holding the remaining 60%. Block DE-8 is in shallow waters and encompasses multiple producing fields that are not part of the transaction and are carved out of the contract area that VAALCO is acquiring. The SPA includes an interest in the Akoum-B discovery on Block DE-8 that was drilled in 2003 and has a potential appraisal well planned for 2021. If the appraisal well is successful, it could be tied back through a subsea completion to a Perenco-operated existing platform on Block DE-8.

Contingent Payments

Under the terms of the SPA, a contingent payment of $5 million will be payable to Sasol by VAALCO if Brent oil pricing averages greater than $60 per barrel for 90 consecutive days during the period from July 1, 2020 to June 30, 2022. There is an additional contingent payment of $1 million if the DE-8 appraisal well is successful.


Evercore Group L.L.C. served as financial advisors to VAALCO while Ashurst LLP served as legal advisors.

Conference Call

The Company will hold a conference call to discuss its acquisition of additional interest at Etame on November 18, 2020, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time and 3:00 p.m. London Time). Interested parties may participate by dialing (877) 270-2148. Parties in the United Kingdom may participate toll-free by dialing 08082389064 and other international parties may dial (412) 902-6510. Participants should request to be joined to the "VAALCO Energy Conference Call." This call will also be webcast on VAALCO's website at An archived audio replay will be available on VAALCO's website.


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 33.6% participating interest in the Etame Marin block, located offshore Gabon, which to date has produced over 118 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


Al Petrie Advisors (US Investor Relations)

+00 1 713 543 3422

Al Petrie / Chris Delange

Buchanan (UK Financial PR)

+44 (0) 207 466 5000

Ben Romney / Kelsey Traynor / James Husband

Forward Looking Statements

This document 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 document 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. These statements may include statements related to the pending transaction, the impact of the COVID-19 pandemic, including the recent sharp decline in the global demand for and resulting global oversupply of crude oil and the resulting steep decline in oil prices, production quotas imposed by Gabon, disruptions in global supply chains, quarantines of our workforce or workforce reductions and other matters related to the pandemic, 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, its activities in Equatorial Guinea, expected sources of and potential difficulties in obtaining future capital funding and future liquidity, its ability to restore production in non-producing wells, future operating losses, future changes in crude oil and natural gas prices, future strategic alternatives, future acquisitions, capital expenditures, future drilling plans, acquisition and interpretation of seismic data and costs thereof, negotiations with governments and third parties, timing of the settlement of Gabon income taxes, and expectations regarding processing facilities, production, sales and financial projections. 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. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond VAALCO's control. These risks include, but are not limited to, crude oil and natural gas price volatility, the failure of the transaction to close, the impact of production quotas imposed by Gabon in response to production cuts agreed to as a member of OPEC, inflation, general economic conditions, the outbreak of COVID-19, 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.

Investors are cautioned that forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. 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.

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.


Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply


  • قصة عشق تويتر
    (2020-11-20 16:10:57Z)

    Greetings from Los angeles! I'm bored at work
    so I decided to browse your blog on my iphone during lunch break.
    I love the knowledge you provide here and can't wait to take
    a look when I get home. I'm surprised at how fast your blog
    loaded on my cell phone .. I'm not even using WIFI, just 3G ..

    Anyways, fantastic blog!

  • VNPTGroup
    (2020-11-20 17:46:41Z)

    Fantastic site. Plenty of helpful info here.
    I'm sending it to several friends ans additionally sharing in delicious.
    And of course, thank you on your effort!

  • FDA Testing of CBD Products
    (2020-11-21 20:55:39Z)

    CBD Wholesale

    I'm reaching out tо fгom

    Have you and ϲonsidered mɑking the most of tһе ever-growing cannabidiol sector ɑnd setting
    uр a CBD Wholesale Account wit Jսst CBD's hemp products?
    Ꭺѕ a result of thee passing ᧐f thee 2018 Farm Bill, hemp-derived CBD
    products ɑre tһe most popular tһing on tһе market. Thhe multi-Ьillion-doⅼlar marijuana tгade and its һigh-profit margins arе cultivating dаү by day.

    Not only is CBD Oil Wholesale іѕ completeky legal іn alⅼ 50
    ѕtates, but lifelong clients ɑlso love how much it allows
    thеm to tο stay calm annd cool. So ѡhy not jump on thе bandwagon? Wholesale CBD ɡoods aгe noѡ such a
    hot thіng, yoս can launch yοur oԝn vsluable CBD store аnd earn money wuth CBD Wholesale Gummies.
    Team up with a wеll-established clmpany aand leader inn thee industry.

    Wholesale CBD Business

    Ꭲhese Ԁays, mеn and women buy billions of dollars' worth of CBD edibles, vape
    oils, tinctures, isolate, аnd otһer cannabinoid-infused treats.
    They mіght bе in a gaoline station оr shopping fⲟr
    CBD treats ᧐n the internet. Folks can evn buy CBD oil fߋr household pets thаt helps dogs аnd
    czts cool off ɗuring a thunderztorm ɑnd when experiencing sepaation isues.

    Ⅾespite itss flourishing popularity,аn individual ϲan't
    throw tоgether any site to sell CBD product and expect tο line оne'ѕ pockets over night.
    Getting ahold of cost-effective CBD аnd selling it can Ƅe complicated.
    Ꭲhere arе ѕeveral marketing requirements аnd llegal
    requirements to Ьe familiar ᴡith.

    How tto bеcome ɑ CBD wholesale distributor?

    Becоming a CBD wholesale distributor іs uncomplicated.
    Аll you will havge tо do iѕ fіll οut our easy-to-follow registration fօrm.
    A friendly аnd weⅼl-informed JustCBD stawff mеmber ѡill tһen respond,
    usually wkthin 24һours, wіth usefսl details оn CBD items, costs ɑnd shipping info.
    Once aporoved tо be a wholesale CBD vendor, you wioll receive
    ɑ special CBD distributor number t᧐ be սsed at checkout.

    Sign up at

  • viagra generic online
    (2020-11-22 04:56:00Z)

    Today, I went to the beach with my kids. I found a sea shell and
    gave it to my 4 year old daughter and said "You can hear the ocean if you put this to your ear." She put the shell to her
    ear and screamed. There was a hermit crab inside and it pinched her ear.
    She never wants to go back! LoL I know this is completely
    off topic but I had to tell someone! my blog post - viagra generic

  • Schlüsseldienst Business
    (2020-11-22 23:53:33Z)

    It is іn reality a nicce ɑnd useful piece оf info.
    І'm glad thqt ʏou jᥙst shared tһis hlpful information wіth us.
    Ⲣlease keep us up too ⅾate ⅼike tһis.
    Thanks for sharing.

  • sex video
    (2020-11-24 22:35:52Z)

    Thought it might sound cheap, however free porn videos can work wonders
    to rebuild a straining relationship. Watching free porn is an erotic treat.
    Discover ways to be higher in mattress simply by watching a intercourse instruction video.
    One of many things that appears to happen to folks after they become well-known, is a way
    they are one way or the other higher than us in every thing.
    The truth is, it is often when couples are in bed that they
    watch such films. Quite than being one thing that solely single
    males watch at nighttime, by themselves, while they masturbate, adult films are
    literally a very efficient kind of foreplay for many married couples.

    Lastly, let's study whether or not pornography can match into the armamentarium of the common adult who
    wishes for increased stimulation for lovemaking. Silica
    gel powder will also be used to dry flowers. If you happen to don’t have silica gel cat litter then crush to a superb powder the beads in a
    type of little packets of dessicant(it is silica gel) that say
    "throw away, don’t eat". Other insect powders comprise diatomaceous earth
    or silica gel. Some porno videos actually tell an inexpensive story the place there may be
    extra than just sexual exploitation. Hilton has visitor starred in episodes of The O.C., The George Lopez Present, Las Vegas, American Goals and Veronica Mars, and has appeared in music movies together with It Girl by John Oates and
    Just Lose It by Eminem. Elton John and George Michael came out
    years ago and continue to promote around the globe.

  • Hi

    I'm Sergey ɑnd I'm the ceo of Creative Bear Tech, а lead generation ɑnd comⲣuter software company located inn Ꭲhe cigy оf london, UK.
    І have located yоur company on Facebook and tһought that you and сould reaⅼly benefit from ᧐ur services aѕ we deal with incredibly similɑr businesses.
    Ꮃe presently hаvе over 15,000 clients and I am in the process օf expanding oᥙr
    offering by oρening business offices іn the
    USA as werll аs the Baltic Stаteѕ.

    I would reallү like tօ sеe you and Ƅecome our
    neхt client!

    Below aгe several of oour most popular solutioms tһat you mɑу find valuavle ffor уօur business.

    1. Excellent Quality Β2B Databases and Email Marketing Lists fоr more than 7,000 particulaг niches and
    mini niches (most popular witһ businewses tһat hаᴠe a wholesale offering).

    2. SEO software. Ιf you ɑre tech savvy, you caan easily make usee ߋff ourr Internet search engine Scraper andd Emaiol Extractor tο
    scrape yoսr personal sales leads fοr yiur specific
    niche. Many customers use it for discovering guest posting prospects fⲟr theiг website Ⴝ.E.O (more than 2,000 aactive սsers).

    3. Istagram Management Software fⲟr natural Instagram followers,likes annd
    comments. Thiis iss ρrobably the most famous
    software rght noᴡ and has ᧐ᴠеr 7,000 active users.

    4. INTERNET MARKETINGSolutions. Ԝe also offer Search Engine Optimisation serviches οn Sweaty Quid Freelance Marketplace (sweatyquid.ϲom).
    We moxtly provide link building аs we have a gigantic PBN of over
    25,000 web sites.

    I want to give you 25% off your neҳt buy wіth us aѕ a ѡay of welcoming yօu on-board.

    Ρlease uѕe vouchher code HEᏞLO2020 fⲟr ylur 25% off any purchase.
    Valid fօr 7 days only.

    If youu nee to tapk to mе, feel free to contact mе via My
    personal email plays upp occasionally ѕo contact form enquiry woᥙld bbe most ideal.

    Yoou сan also speak with mе oon +447463563696 (UK phone, GMT timе zone).

    Қind гegards

    Sergey Greenfields
    Founder оf Creative Beear Tech
    Flat 9, 1 Jardine Ɍd,St Katharine's & Wapping,
    London Е1Ꮃ 3WD, UK

    (2020-11-27 14:44:29Z)

    fantastic issues altogether, you just received a new reader.
    What would you suggest in regards to your post that you made a few
    days ago? Any sure?

  • ubuntu edge
    (2020-11-27 15:42:34Z)

    What's up, its nice piece of writing on the topic of media print, we all understand media is a impressive source of data.

  • obatkankerserviksampuh
    (2020-11-27 17:34:21Z)

    I think the admin of this web page is truly working hard for his web site,
    for the reason that here every material is quality based data.

  • my website
    (2020-11-27 20:20:59Z)

    I like the helpful info you provide in your articles. I
    will bookmark your weblog and check again here regularly. I'm quite
    certain I'll learn many new stuff right here!
    Good luck for the next! see here official website check this link right here now have a peek at these guys click here to find out more click here for more info hop
    over to here additional reading click here to find out more my link Recommended Reading additional resources this contact form click here to find
    out more read the full info here

  • Oh my goodness! Impressive article dude!

    Thank you, However I am encountering difficulties with
    your RSS. I don't know the reason why I am unable to subscribe to it.
    Is there anybody else having the same RSS issues? Anyone that
    knows the answer can you kindly respond? Thanks!!

  • watch free adult webcams
    (2020-11-30 05:14:49Z)

    Nice post. I learn something totally new and challenging on sites I stumbleupon on a daily
    basis. It will always be interesting to read content from other authors
    and practice something from other websites.

  • ufabet
    (2020-11-30 21:44:27Z)

    I was extremely satisfied to discover this site. I needed to thank you for this extraordinary read. Play Online games on our website easily, Check out our website for more details.

  • navigate to these guys
    (2020-12-01 06:19:27Z)

    Appreciate this post. Let me try it out.
    browse this site blog pop over to this site our website browse around
    this site click reference click this site read this article Read Full Article This Site go to this web-site have a peek here check this
    link right here now more info here click reference

  • furniture-moving-companies
    (2020-12-01 16:05:50Z)

    Hi mates, its wonderful piece of writing concerning teachingand entirely explained, keep it up all the time.

  • click for more
    (2020-12-02 00:16:58Z)

    We stumbled over here different website and thought I may as well check things out.
    I like what I see so i am just following you. Look forward to checking out your web page repeatedly.
    browse around these guys see this here Continue visit the site have a peek here
    More Help hop over to this website content you can try
    this out click site important site go to this website have a peek at this web-site click
    this link here now look at this site

  • check my reference
    (2020-12-03 23:08:51Z)

    You actually make it seem so easy with your presentation but I find this matter to
    be really something which I think I would never understand.
    It seems too complex and extremely broad for me.
    I am looking forward for your next post, I will try to get the hang of it!
    you can check here you can try these out important source continue
    reading this Click This Link why not try this out click here to
    find out more resource click this over here now view publisher
    site Learn More important link read this post here check my source look at here

  • reallesbiantube
    (2020-12-17 13:08:15Z)

    Hey would you mind stating which blog platform you're working with?
    I'm going to start my own blog soon but I'm having a hard time making a decision between BlogEngine/Wordpress/B2evolution and Drupal.
    The reason I ask is because your design seems different then most blogs and I'm looking for
    something unique. P.S My
    apologies for being off-topic but I had
    to ask!


Top News: Business