Cobas AM: Nueva Gestora de Francisco García Paramés

VAALCO Provides Update on Drilling of Etame 9H Development Well and the Etame 9P Appraisal Wellbore

HOUSTON, Oct. 30, 2019 (GLOBE NEWSWIRE) -- VAALCO Energy, Inc. (NYSE: EGY; LSE: EGY) (the Company) today provided an update on its 2019/2020 drilling program Offshore Gabon.

At the Etame field, the Company has begun drilling the Etame 9H horizontal development well targeting the Gamba formation, as planned.  If successful, the Etame 9H well is expected to result in additional production coming online in December.  As previously disclosed, the Etame 9P appraisal wellbore was successfully drilled and encountered both the Gamba and Dentale reservoirs at targeted depths as anticipated.

After reaching total depth in the Etame 9P appraisal wellbore, the drillpipe and tools became stuck.  VAALCO was able to cut and pull the majority of the drillpipe but was unable to recover a portion of the drillpipe and tools at the bottom of the wellbore. The Etame 9P appraisal wellbore was successfully plugged back to a shallower depth, and the Company is currently drilling the Etame 9H development well as expected. The Etame 9P appraisal wellbore fulfills the commitment for one of the two appraisal wellbores agreed to under the Company’s PSC Extension and the Etame 9H development well will fulfill the Company’s commitment for one of the two development wells agreed to under the Company’s PSC Extension.

Based on further analysis, the Company now has additional positive information regarding the previously-announced results from the reservoir analysis.  The Company now estimates that there is at least a 45-foot oil column in the Gamba reservoir with no oil-water contact.  This oil column is thicker than predrill expectations and may result in higher ultimate oil recovery from the planned Etame 9H and Etame 11H development wells versus predrill expectations.  In addition, preliminary analysis now indicates that VAALCO encountered at least 45 feet of good-quality Dentale oil sands with estimated gross recoverable oil resources of 3.9 to 14.9 million barrels of oil present in subcropping Dentale reservoirs. 

Cary Bounds, Chief Executive Officer, commented, “We are pleased to have begun drilling the Etame 9H, our first development well in our 2019/2020 program which should add additional production in December. Furthermore, we are encouraged by the updated analysis of the data we obtained on the Gamba and Dentale reservoirs from the Etame 9P appraisal wellbore which should positively impact the estimated ultimate recoverable reserves and resources from the field. We are in the midst of an active work program drilling the Etame 9H  development well which will be followed by the Etame 11H development well in the same Gamba reservoir. We look forward to providing further details on our 2019/2020 drilling program during our  upcoming third quarter conference call scheduled for November 7.”

Highlights:

• Third quarter production averaged 15,943 boe/d (Egypt 13,750 bbls/d, Canada 2,193 boe/d), a decrease of 997 boe/d (6%) over the previous quarter, and sales averaged 14,122 boe/d. Production to date in October averaged approximately 15,206 boe/d (Egypt ~ 13,228 bbls/d, Canada ~ 1,978 boe/d);
   
• Production for the nine months ended September 30, 2019 averaged 16,269 boe/d (Egypt 14,010 bbls/d, Canada 2,259 boe/d), which was above guidance and 15% higher than the same period in 2018;
   
• 2019 production guidance is now expected to range from 15,500 to 16,000 boe/d with a midpoint of 15,750 boe/d for the year;
   
• Positive third quarter funds flow of $9.4 million ($0.13 per share). Third quarter net earnings of $3.0 million ($0.04 per share);
   
• Ended the third quarter with positive working capital of $47.2 million, including cash and cash equivalents of $24.4 million;
   
• NWG 38D-1 (drilled in Q2-2019) is confirmed as an oil discovery following completion and perforation, and will be put on production in Q4-2019 following stimulation;
   
• Completed SGZ-6X as an upper Bahariya oil producer in the Western Desert (approval received in Q3-2019), with construction of an early production facility on schedule for late Q4-2019, targeting an initial production rate of approximately 1,000 bbls/day;
   
• Drilled four horizontal Cardium oil wells in the Harmattan area of Canada during the quarter, including three development wells and one outpost appraisal well;
   
• Sold 380 thousand barrels ("mbbls") of inventoried entitlement crude oil to EGPC in September 2019;
  
  
• Continues to review opportunities for inorganic growth in line with our M&A strategy;
  
  
• Paid a dividend of $0.035 per share on September 13, 2019 to shareholders of record on August 30, 2019.