VAALCO Energy, Inc. ("Vaalco" or the "Company") reported operational and financial results for the fourth quarter and full year of 2025, including year-end 2025 reserves. Additionally, the Company provided operational and financial guidance for the first quarter and full year of 2026.
2025 Full Year Highlights:
锟� Sold 17,452 net revenue interest ("NRI")(1) barrels of oil equivalent per day ("BOEPD"), above the high end of the Company's increased guidance, while delivering production of 16,556 NRI(1) BOEPD or 21,160 working interest ("WI")(2) BOEPD, both above the midpoint of Vaalco's increased guidance;
锟� Reported full year ("FY") 2025 net loss of $41.4 million ($0.40 per diluted share) and Adjusted Net Loss(3) of $4.0 million ($0.04 per diluted share);
锟� Generated Adjusted EBITDAX(3) of $173.4 million and net cash from operating activities of $212.7 million in FY 2025;
锟� Reported year-end 2025 SEC proved reserves of 43.0 million barrels of oil equivalent ("MMBOE"), which included 4 MMBOE of positive revisions, organic additions and extensions, replacing two-thirds of 2025 production;
锟� Entered into new reserves based lending facility with a current commitment level of $255 million and the ability to grow to $300 million;
锟� Continued strong collection of receivables in Egypt and at year end 2025 this balance had fallen to $31 million;
锟� Acquired 70% WI(3) in and will operate the CI-705 block in offshore C锟絫e d'Ivoire, which covers approximately 2,300 square kilometers ("km2") located in the prolific Tano basin and is approximately 70 km to the west of Vaalco's CI-40 Block; and
锟� Returned $26.5 million to shareholders in 2025 through dividends and has returned over $115 million to shareholders since Q4 2021 through dividends and share buybacks.
Fourth Quarter 2025 Highlights:
锟� Sold 18,566 NRI BOEPD, 10% above the high end of guidance, while production was 16,128 NRI(2) BOEPD or 20,729 WI(2) BOEPD;
锟� Reported net loss of $58.6 million ($0.56 per diluted share), Adjusted Net Loss(3) of $2.3 million ($0.02 per diluted share) and Adjusted EBITDAX(3) of $42.9 million; and
锟� Invested $100.1 million in capital expenditures, which included the successful start to the Gabon Phase Three Drilling Program, continued C锟絫e d'Ivoire Floating Production Storage and Offloading vessel ("FPSO") Dry
Dock refurbishment and key long leads for the upcoming 2026 drilling campaign in C锟絫e d'Ivoire and drilling in
Egypt.
2026 Recent Key Items and Outlook:
锟� Confirmed as operator with a 60% WI in the Kossipo field on the CI-40 Block, located southwest of the Baobab field, with a field development plan ("FDP") expected to be completed in second half of 2026;
? Further information on the Kossipo field can be found in the Q4 2025 supplemental deck posted on Vaalco's website;
锟� Divested all Canadian properties for $25.5 million with a closing date of February 19, 2026;
锟� Successfully drilled, completed and placed on production the Etame 15H-ST development well, confirming expectations from the ET-15P pilot well results;
锟� Planning a 2026 capital budget of $290 to $360 million, including a drilling campaign at Etame, expected completion of the FPSO Refurbishment/Reconnection Project, initial Phase 5 Drilling Program at Baobab and continued field activity in Egypt; and
锟� Declared quarterly cash dividend of $0.0625 per share of common stock to be paid on March 27, 2026.
George Maxwell, Vaalco's Chief Executive Officer, commented, "In 2025, we successfully completed another year where we delivered consistent quarterly results that either met or exceeded our guidance. We repeatedly raised production and sales guidance in 2025 and continued to deliver on those increased guidance ranges. Operationally, we kicked off the Gabon Phase Three Drilling Campaign in Q4 2025, we continued to progress the FPSO project for Baobab and we successfully continued to drill in Egypt. Financially, we entered into a new reserves based lending facility with the ability to grow to $300 million and we ended 2025 with an additional $35 million in cash on hand compared to the prior quarter end and closed the year with a net debt position of around $1 million. We also generated $173 million in Adjusted EBITDAX, driven by strong sales and continued to have increased collections from our receivables, where all of our aged receivables are now largely current. We are particularly pleased with the progress our team have made in our Egyptian receivables in 2025. At the start of 2025 our outstanding accounts receivable for Egypt amounted to $113 million, and at year end 2025 this balance had fallen to $31 million even after invoicing over $129 million in revenue for the year. We are pleased to be working with strong partners and host nations that continue to be very positive toward capital investment in oil and gas projects."
"In 2026, we began the year by divesting all of our Canadian assets, and increased our future growth potential in C锟絫e d'Ivoire by being confirmed as operator with a 60% WI in the Kossipo field. The Kossipo field is a discovery with material oil in place, located in close proximity to our highly productive Baobab field on the CI-40 Block. We also have had a positive start to our Gabon drilling campaign with the ET-15H-ST well. Despite non-commercial Gamba sands in the West Etame exploration prospect, we are now using the well bore to side-track and drill another Gamba development well before moving to the SEENT and Ebouri platforms where we have several wells and workovers planned to enhance production, lower costs and potentially add reserves. The FPSO for Baobab is currently off the coast of South Africa and is expected to return to offshore C锟絫e d'Ivoire by late March, with the field expected to restart in Q2 2026. Soon thereafter, we plan to start the Phase 5 Drilling Program at Baobab. We are well on our way to another successful year, as indicated by our 2026 guidance and believe that we are well positioned to deliver on our forecasted 225% organic production growth by 2030."
Mr. Maxwell concluded, "I am proud of all that we have accomplished in these past five years and would like to thank our hard-working employees for helping us to achieve so many milestones. We have successfully grown Vaalco from a single asset delivering around 5,000 BOPD to a diversified, multi country operator well on our way to achieving our goal of 50,000 BOEPD. I believe that we are well positioned to continue to execute operationally and financially to achieve all of our growth targets and continue to generate and return value to our shareholders for the rest of the decade. Our track record of success in delivering results should provide our investors with assurance that we can execute on our expanded portfolio of opportunities."
Operational Update
Gabon
The Company's Phase Three Drilling Program in Gabon commenced in the fourth quarter of 2025 with the drilling of two pilot wells in the Etame field. Based on the results of the pilot wells, the Company proceeded with the drilling of the Etame 15H-ST1 development well in the 1V block of Etame in December 2025. The well was completed and placed on production in January 2026 confirming expectations from the ET-15P pilot well results. The Company recently announced that although the West Etame exploration well (ET-14P) encountered 10 meters of high quality sands, the target zone was water-bearing. The lower portion of the well will be plugged and abandoned but the well bore will be utilized and sidetracked in the upper portion of the well to drill the ET-14H development well in the Main Fault Block of Etame. Operations are expected to be completed in April.
After completing the program at the Etame platform, the Company expects to move the drill rig to the SEENT and Ebouri platforms where the Company has several wells and workovers planned to enhance production, lower costs and potentially add reserves.
In the Niosi and Guduma blocks, the partners initiated its 3D seismic campaign in November 2025 and was completed in January 2026. The seismic acquisition was executed to satisfy the minimum commitments under the terms of the Niosi PSC as well as to inform the decision on whether to proceed into the second exploration period for the Guduma Block.
Egypt
Vaalco conducted a drilling campaign in Egypt that began in December 2024 and concluded in the fourth quarter of 2025. During the fourth quarter of 2025, four development wells were drilled in the Eastern Desert, of which three were completed during the same period and the fourth well was completed in January 2026. The successful 2025 Egyptian drilling program included an exploration well in the H-Field, Eastern Desert, that opens a new development area with an initial flow rate of approximately 450 BOEPD. Additionally, continuous well interventions, workovers and optimization activities were carried out throughout the fourth quarter of 2025 to enhance production levels.
C锟絫e d'Ivoire
In connection with the planned dry dock refurbishment, the Baobab FPSO ceased hydrocarbon production on January 31, 2025, with the final crude oil lifting in February 2025. The vessel departed the field in late March 2025 for Dubai for the refurbishment work, which was completed in February 2026. The Baobab FPSO has commenced mobilization back to C锟絫e d'Ivoire and is expected to return to offshore C锟絫e d'Ivoire by late March 2026. A rig has been secured for the planned development drilling program at Baobab which is expected to begin during the fourth quarter of 2026 after the FPSO returns to service. The drilling campaign is expected to bring meaningful additions to production from the main Baobab field in CI-40.
In February 2026, the Company was confirmed as the operator with a 60% WI in the Kossipo field on the CI-40 Block with a field development plan ("FDP") to be completed in the second half of 2026. The field was discovered in 2002 with the Kossipo-1X well and later appraised in 2019 with the Kossipo-2A well, which tested at over 7,000 BOPD. Vaalco is continuing to analyze ocean bottom node ("OBN") seismic data that was recently acquired which is helping to drive and derisk the Company's updated evaluation and assisting with the FDP.
Equatorial Guinea
The Company owns a 60% WI in an undeveloped portion of Block P offshore Equatorial Guinea where it is the designated operator. The Company has an existing plan of development of the Venus field discovery on Block P, which focuses on key areas of drilling evaluations, facilities design, market inquiries and metocean review. Vaalco has completed the initial Front End Engineering and Design study that confirmed the viability of the development concept and is currently evaluating alternative technical solutions which may deliver enhanced economic value.
Canada
On February 5, 2026, Vaalco announced an agreement for the sale of all of its producing properties in Canada to a third party for approximately $25.5 million with a closing date of February 19, 2026. The Canadian properties were producing approximately 1,850 BOEPD at the time of the sale. Vaalco's first quarter 2026 results will include January and prorated February Canadian production and financial results.
Year-End 2025 Reserves
Vaalco's SEC proved reserves at December 31, 2025 decreased by 5% to 43.0 MMBOE. Year-end 2025 reserves included 17.5 MMBOE in proved developed reserves and 25.5 MMBOE in proved undeveloped reserves. The Company's SEC reserves were prepared by its third-party independent reserve engineers, Netherland, Sewell & Associates, Inc., ("NSAI") that has provided annual independent estimates of Vaalco's year-end SEC reserves for over 16 years. In 2025, the Company added 2.8 MMBOE of SEC proved reserves due to positive revisions and 1.2 MMBOE of SEC proved reserves through extensions and additions. These additions were offset by 6.0 MMBOE of full year 2025 production. Vaalco had a reserve replacement ratio of 66% compared to the 6.0 MMBOE of production in 2025.
The standardized measure of Vaalco's SEC proved reserves, utilizing SEC pricing increased to $410.0 million at December 31, 2025 from $379.4 million at December 31, 2024. This was primarily driven by the positive revisions, offset by widening differentials in Gabon and a decrease in year over year SEC prices which were utilized for the calculation and can be found in the Company's Annual Report on Form 10-K disclosure, which is expected to be filed with the SEC no later than March 16, 2026.
At year-end 2025, NSAI provided the 2P WI CPR estimates of proven and probable reserves which were 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, 2025 using Vaalco's management assumptions for future commodity pricing and costs shown below under "WI CPR Reserves". The 2P WI CPR reserves attributable to Vaalco's ownership are reported on a WI basis prior to deductions for government royalties. Management's year-end 2025 2P WI CPR estimate of reserves is 90.7 MMBOE to Vaalco's WI, a decrease of 6% from 96.1 MMBOE at December 31, 2024. The present value discounted at 10% ("PV-10") of Vaalco's 2P WI CPR reserves at year-end 2025, utilizing management timing assumptions and escalated pricing and cost assumptions, is $858.8 million, up 26% from $684.1 million at December 31, 2024.
See "PV-10 Value and Probable Reserves" and "WI CPR Reserves" for additional information related to 2P WI CPR reserves and 2P PV-10.
Financial Update - Fourth Quarter of 2025
Vaalco reported a net loss of $58.6 million ($0.56 per diluted share) for Q4 2025 which was down compared with net income of $1.1 million ($0.01 per diluted share) in Q3 2025 and net income of $11.7 million ($0.11 per diluted share) in Q4 2024. The decrease in earnings compared with Q3 2025 and Q4 2024 was driven primarily by a non-cash impairment charge of $67.2 million to the carrying value of proved and unproved oil and gas properties for Vaalco's Canadian assets reported as held for sale.
Adjusted EBITDAX totaled $42.9 million in Q4 2025, compared with $23.7 million in Q3 2025. The increase was primarily due to higher sales volumes and slightly higher realized pricing. Adjusted EBITDAX was down from $76.2 million generated in Q4 2024 primarily due to lower realized pricing and lower sales volumes.
In Q4 2025, Vaalco had a net revenue increase of $30.0 million or 49% compared to Q3 2025 primarily due to an increase in the total NRI sales volumes of 1,708 MBOE which was 45% higher than the Q3 2025 volumes of 1,180 MBOE and was lower compared to 1,872 MBOE for Q4 2024 and a higher average realized price received of $52.54 per BOE in Q4 2025 compared to $51.26 per BOE in Q3 2025. Q4 2025 NRI sales were 10% above the high end of Vaalco's guidance. The higher sales and production volumes in Q4 2025 compared to Q3 2025 was primarily a result of a planned and successful full field maintenance shutdown in Gabon which occurred in July 2025.
Total production expense (excluding offshore workovers and stock compensation) of $43.0 million in Q4 2025 increased by 44% compared to Q3 2025 and 18% compared to Q4 2024. The increase in Q4 2025 compared to Q3 2025 was driven by a 45% increase in sales volumes and compared to Q4 2024 was driven by an increase in production expenses in Gabon partially offset by a reduction in production expenses in C锟絫e d'Ivoire. Q4 2025 production expense per BOE was at the low end of Vaalco's guidance.
DD&A expense for Q4 2025 was $30.8 million, which was 50% higher than $20.6 million in Q3 2025 and 17% lower than $37.0 million in Q4 2024. The increase in Q4 2025 DD&A expense compared to Q3 2025 was due primarily to a 45% increase in sales volumes. The decrease in Q4 2025 DD&A expense compared to Q4 2024 was due primarily to a reduction in DD&A expenses in the C锟絫e d'Ivoire segment.
General and administrative ("G&A") expense, excluding stock-based compensation, decreased to $5.2 million in Q4 2025, compared to $7.2 million in Q3 2025 and $7.1 million in Q4 2024 primarily due to lower professional service fees and salaries and wages. Q4 2025 cash G&A was below the low end of the Company's guidance range of $7 million to $9 million.
Non-cash stock-based compensation expense was $1.5 million for Q4 2025 compared to $1.7 million for Q3 2025 and $1.4 million for Q4 2024.
Exploration expense was $6.0 million for Q4 2025 compared to $0.4 million for Q3 2025. This Q4 amount was primarily attributable to seismic acquisition costs with Niosi and Guduma blocks in Gabon as well as costs related to the Egyptian exploration well in South Ghazalat determined to be non-commercial. The Q3 2025 amount was due to seismic acquisition costs with Niosi and Guduma blocks in Gabon. There were minimal exploration costs incurred in Q4 2024.
Total other income (expense), net, was an income of $1.6 million for Q4 2025 compared to an expense of $3.4 million for Q3 2025 and an expense of $9.7 million during Q4 2024. Other income (expense), net, includes gains or losses on derivatives, interest expense and foreign currency losses. As previously disclosed, during Q4 2024, the bargain purchase gain for the Baobab acquisition was reduced by $6.4 million.
Vaalco reported an income tax benefit for Q4 2025 of $4.6 million which was comprised of a $5.2 million current tax expense, offset by a deferred tax benefit of $9.8 million. Income tax benefit includes a $7.3 million favorable oil price adjustment as a result of the change in value of the government of Gabon's allocation of Profit Oil between the time it was produced and the time it was taken in-kind. After excluding this impact, income taxes were $2.7 million for the period. Income tax expense for Q4 2024 was $17.2 million which is comprised of current tax expense of $26.2 million and deferred tax benefit of $9.0 million. Current quarter tax was impacted by non-deductible items (such as the C锟絫e d'Ivoire transaction costs) and the change in market value of tax barrels due to Gabon State mark-to-market at quarter end.
Financial Update - Full Year 2025
Net sales for the year ended December 31, 2025 decreased to 6,370 MBOE compared to 7,262 MBOE in the year ended December 31, 2024. The decrease was driven primarily by a reduction in sales volume from C锟絫e d'Ivoire due to the FPSO refurbishment.
The average realized price for the year ended December 31, 2025 was $56.11 per BOE, representing a decrease of 15% from $65.64 realized in the year ended December 31, 2024. This decrease in crude oil price reflects the softening of commodity prices over the past year.
The Company reported a net loss for the year ended December 31, 2025 of $41.4 million, which compares to a net income of $58.5 million for the year ended December 31, 2024. The decrease in net income for the year ended December 31, 2025 compared to the same period in 2024 was primarily driven by a non-cash impairment charge of $67.2 million to the carrying value of proved and unproved oil and gas properties for Vaalco's Canadian assets reported as held for sale. Also, the net loss was due to lower realized pricing in 2025 and a reduction in sales volume primarily in the Company's C锟絫e d'Ivoire segment in 2025. In addition, as previously disclosed, the year ended December 31, 2024 included a bargain purchase gain of $13.5 million related to the Baobab acquisition completed in April 2024.
Capital Investments/Balance Sheet
For the fourth quarter of 2025, net capital expenditures totaled $100.1 million on a cash basis and $88.8 million on an accrual basis, within its fourth quarter guidance of $70 million to $90 million. These expenditures were primarily related to project costs and long-lead items for Egypt and Gabon drilling program, continued FPSO refurbishment and key long leads for the upcoming 2026 drilling campaign in C锟絫e d'Ivoire.
As of December 31, 2025, Vaalco had an unrestricted cash balance of $58.9 million. The Company had a working capital deficit of $59.0 million at December 31, 2025 compared to a working capital of $56.2 million at December 31, 2024. In addition, Vaalco had an Adjusted Working Capital deficit of $41.2 million at December 31, 2025 compared to an Adjusted Working Capital of $73.1 million at December 31, 2024.
In March 2025, Vaalco entered into a new reserves based lending facility (the "2025 RBL Facility") that had initial aggregate commitments of $190.0 million and the ability to grow to $300.0 million, led by The Standard Bank of South Africa Limited, Isle of Man Branch with other participating banks and financial partners. The new facility, which is subject to customary administrative conditional precedents, replaces the Company's previously undrawn reserves based lending facility. The Company arranged the new facility primarily to provide short-term funding that may be needed from time-to-time to supplement its internally generated cash flow and cash balance as it executes its planned investment programs across its diversified asset base over the next few years. As of December 31, 2025, the Company had $60.0 million outstanding borrowings.
On February 4, 2026, the Company borrowed an additional $65.0 million under the 2025 RBL Facility. The borrowing accrues interest at a rate of 10.2% per annum which is based on the Term SOFR plus the Applicable Margin of 6.5% per annum. In addition, the borrowing is due to be repaid within one month from the drawdown date with, subject to certain conditions, the option to rollover the debt upon maturity.
Effective October 17, 2025, the Lenders unanimously approved an increase in the Company's borrowing base under the new facility from $186.6 million to $190.0 million after the Company completed its semi-annual borrowing base redetermination process. In addition, the Lenders also approved to (i) extend the first date on which the Initial Total Commitments will be reduced from September 30, 2026 to March 31, 2027, and (ii) update the semi-annual commitment reduction amounts from $19.0 million to $10.0 million on March 31, 2027, and $22.5 million starting on September 30, 2027.
In addition, on November 7, 2025, subject to certain conditions precedent, certain existing lenders under the new facility agreed to increase their initial commitment effective January 23, 2026 (the "Effective Increase Date") so that the aggregate borrowing base under the 2025 RBL Facility as of the Effective Increase Date would increase from $190.0 million to $255.0 million. The increase in commitments was undertaken with the existing accordion feature included in the new facility.
Quarterly Cash Dividend
Vaalco paid a quarterly cash dividend of $0.0625 per share of common stock for the fourth quarter of 2025 on December 24, 2025. The Company also recently announced its next quarterly cash dividend of $0.0625 per share of common stock for the first quarter of 2026 ($0.25 annualized), to be paid on March 27, 2026 to stockholders of record at the close of business on February 27, 2026. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Vaalco Board of Directors.
Hedging
The Company continued to hedge a portion of its expected future production to lock in cash flow generation to assist in funding its capital and shareholder return programs.
The Company has continued to add more hedges as part of a rolling hedging program to provide downside protection against a volatile commodity price backdrop. Taking advantage of higher oil prices in early 2026, the Company further secured the above additional hedge positions. As a result, approximately 2,900 MBbls of 2026 oil production is hedged at an average floor price of approximately $64.00 per barrel. In addition, approximately 700 MBbls of expected 2027 oil production is hedged with an average floor price of approximately $65.00 per barrel.
Conference Call
As previously announced, the Company will hold a conference call to discuss its fourth quarter 2025 financial and operating results, Friday, March 13, 2026, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time and 2:00 p.m. London Time). Interested parties may participate by dialing (833) 685-0907. Parties in the United Kingdom may participate toll-free by dialing 08002799489 and other international parties may dial (412) 317-5741. Participants should request to be joined to the "Vaalco Energy Fourth Quarter 2025 Conference Call." This call will also be webcast on Vaalco's website at www.vaalco.com. An archived audio replay will be available on Vaalco's website.
A "Q4 2025 Supplemental Information" investor deck will be posted to Vaalco's website prior to its conference call on March 13, 2026 that includes additional financial and operational information.