EGY

On August 6, VAALCO Energy (NYSE:EGY) reported second-quarter 2026 results that mark a sharp reversal from the quarter before. Net income landed at $42.4 million, or $0.39 per diluted share, compared with a $93.76 million loss in the first quarter. Adjusted EBITDAX nearly quintupled to $54.8 million. Behind those numbers is a company juggling drilling programs across four countries, and this quarter is the clearest sign yet that several of them are starting to pay off. Sales volumes reached 17,812 net revenue interest barrels of oil equivalent per day, above the midpoint of the company's own guidance and up 47% from the first quarter. Much of that increase traces back to the Baobab field offshore Côte d'Ivoire, where production resumed in June following a yearlong refurbishment of the floating production, storage and offloading vessel. VAALCO expects the momentum to continue, forecasting third-quarter production between 19,600 and 21,600 NRI barrels per day, a 23% increase at the midpoint once a full quarter of Côte d'Ivoire output is included. Realized pricing moved in the same direction. The average commodity price per barrel of oil equivalent climbed to $80.77 in the second quarter, up from $57.21 in the first quarter and $54.87 a year earlier, pushing total commodity sales to $135.2 million from $62.6 million. Management affirmed the increased full-year 2026 production and sales guidance it raised in May, an 8% and 12% lift at the midpoint, without changing the capital budget even though additional Egypt drilling was added to the plan. Trade receivables in Egypt fell to $12.9 million at the end of June from $31.6 million at the end of December, freeing up cash that had been tied up for months. VAALCO also kept its quarterly dividend at $0.0625 per share, with the third quarter payment due to shareholders of record on September 22. That second quarter turnaround does not erase the first half's bottom line. VAALCO reported a net loss of $51.3 million for the six months ended June 30, compared with net income of $16.1 million over the same stretch in 2025, weighed down by losses on commodity derivative contracts, lower sales volumes and higher exploration and administrative costs. Even the second quarter's own earnings carried a derivative swing inside them: an $18.7 million net gain that combined a $43.7 million unrealized gain on hedges with a $25 million realized loss on contracts that had already matured. Costs are also climbing as production ramps up. Production expense per barrel of oil equivalent rose 23% from a year earlier to $28.06, and depreciation, depletion and amortization per barrel climbed 32% to $21.14, both driven by higher sales volumes and new wells coming online. General and administrative expense excluding stock compensation rose 35% year over year to $9.6 million, which the company attributed to non-recurring legal and professional fees. VAALCO is also carrying $177 million in long-term debt against $123 million of remaining liquidity on its reserves-based lending facility, one whose commitments begin stepping down in March 2027. Hedge fund ownership of VAALCO fell from 20 funds to 15 in the most recent quarter, a pullback that suggests some institutional holders trimmed exposure even as operations improved. Short interest sits at 7.94% of the float, a level that points to a real but not overwhelming bear camp. At the same time, as of September 8, the stock trades at a forward price-to-earnings ratio of just 8.57, a multiple that assumes little of the production growth management is projecting for the second half of the year. VAALCO's second quarter gave shareholders proof that its Baobab restart, Egypt drilling program and Gabon well campaign can all deliver in the same three months, and management backed that up by affirming higher full-year guidance without asking for more capital. But the first half's net loss and a derivative-driven earnings swing are reminders that results at an operator running four active drilling programs at once can move sharply in either direction. For the bulls, the third quarter's forecast production jump would need to show up in cash flow rather than just barrels produced. While we acknowledge the potential of EGY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 Best Future Stocks to Buy Under $10 and 12 Best Performing Semiconductor Stocks to Invest In. Disclosure: None. Follow Insider Monkey on Google News.

Image source: The Motley Fool. Friday, August 7, 2026 at 9:00 a.m. ET Director of Investor Relations and FP&A - Landis Blackburn Chief Executive Officer - George Maxwell Chief Financial Officer - Ronald Bain Operator: Good day, and welcome to the VAALCO Energy Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Landis Blackburn, Director of Investor Relations and FP&A. Please go ahead. Landis Blackburn: Thank you, operator. Welcome to VAALCO Energy's Second Quarter 2026 Conference Call. After I cover the forward-looking statements, George Maxwell, our CEO, will review key highlights of the second quarter. Ron Bain, our CFO, will then provide a more in-depth financial review. George will then return for some closing comments before you take your questions. [Operator Instructions] We would like to point out that we posted a supplemental investor deck on our website that has additional financial analysis, comparisons and guidance that should be helpful. With that, let me proceed with our forward-looking statement comments. During the course of this conference call, the company will be making forward-looking statements. Investors are cautioned that forward-looking statements are not guarantees of future performance and those 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. Accordingly, you should not place undue reliance on forward-looking statements. These and other risks are described in our earnings release, the presentation posted on our website and in the reports we file with the SEC, including our Form 10-K. Please note, this conference call is being recorded. Let me turn the call over to George. George Maxwell: Thank you, Landis. Good morning, everyone, and welcome to our second quarter 2026 earnings conference call. Over the past 2 years, we have streamlined and expanded our portfolio while delivering consistently solid operational results. In the first half of 2026, we have made material changes to our growing and diversified portfolio. We divested all of our Canadian assets while increasing our Cote d'Ivoire position. We were named operator with a 60% working interest in the Kossipo field on the CI40 block that had 2 discoveries drilled in the field and is located only 8 kilometers from Baobab. We are actively evaluating and processing seismic with our partners in Niosi Marin and Guduma Marin blocks offshore Gabon and on our exploration block CI-705 in Cote d'Ivoire. The Baobab FPSO successfully completed its refurbishment and the field resumed production in June as planned. At Etame, we continue to execute on our drilling campaign. All of these events have led to improving financial results driven by increases in production and sales that we believe will continue into the second half of 2026. We delivered $42.4 million in net income and $54.8 million in adjusted EBITDAX in the second quarter. We continue to deliver our increased sales and production targets, all while maintaining our capital expenditures in line with guidance. We are confident in our ability to continue and consistently execute and deliver value to our shareholders. I would now like to go through and provide a quick update on our diverse portfolio of high-quality assets, beginning with Cote d'Ivoire. We're excited to have production resume in Baobab in June 2026. As you know, in line with the project time line, the FPSO at Baobab ceased hydrocarbon operations in January 2025, spent a year being refurbished in Dubai and returned to Cote d'Ivoire in April 2026. We are very pleased how well the FPSO refurbishment went and that it was completed within the initial time line expected. All producing wells are online and production is slightly above our pre-start-up forecast with the first lifting expected later this month. The single Q3 lifting is expected to be about 950,000 gross barrels, but remember that we are a nonoperator with a 27.4% ownership. The FPSO refurbishment was undertaken to extend the life of the vessel and to increase its capacity as we begin a significant development drilling program in Baobab in Q3. This program includes 4 producers, 2 or 3 injectors and 2 workovers, providing potential meaningful additions to production from the main Baobab field, where we have a 10-year extension to the license to 2038. The current drilling plan in Baobab is to begin drilling in the third quarter on a batch basis, the top hole sections of all wells first. The completions will then commence, and we expect at least 1 well to be on production by year-end. With that said, production and sales uplift from the drilling program at Baobab will not make a significant impact until 2027. In February 2026, in accordance with the CI40 PSC, VAALCO and PetroCI elected to participate in the development of the Kossipo field. VAALCO was confirmed as operator with a 60% working interest in the Kossipo field on the CI40 block just 8 kilometers from the Baobab field. We are now working on a field development plan using new ocean bottom node seismic data that is expected to help derisk and enhance our evaluation and development plan. Our current assessment has a field with an estimated gross 2C resources of approximately 102 million barrels of oil equivalent and 293 million barrels of oil equivalent in place. Also in Cote d'Ivoire, we continue to evaluate the subsurface potential of our new exploration block CI-705, which we operate with a 70% working interest. We continue to see encouraging prospectivity on the block in play types proven throughout the Ivorian Basin, including both structural and stratigraphic traps in the Upper Cretaceous and Albian sections. We have met all current work commitments on the block and have been granted a 6-month extension on the first exploration phase, which now extends this phase into Q4 2026. Our subsurface work will continue to mature the encouraging prospectivity we see on block in preparation for a decision later this year to proceed to the second exploration phase, which carries a well commitment. I would like to remind you that we had no assets in Cote d'Ivoire prior to April 2024. So in less than 2 years, we have established a sizable position in Cote d'Ivoire, consisting of a producing asset with upside at Baobab, operatorship of a discovery at Kossipo with plans to develop and considerable upside potential on a prospective exploration block. We are excited about the prospects in Cote d'Ivoire and their ability to help us achieve our production growth target over the next several years. Moving to Gabon. In the fourth quarter of 2025, we began our Phase 3 drilling program. I would like to note that working interest production in Gabon in Q4 2025 was 7,743 barrels of oil equivalent per day and declining. This program was designed to reverse decline and increase production by accessing potential attic locations and less swept fault blocks across the Etame field as well as access deeper potential in the Dentale and test an exploration prospect from the platform. The program began with the drilling of 2 pilot wells in the Etame field. One of these was sidetracked and completed as Etame 15-8 development well in the 1V fault block. This well came online in late February. So our Q1 production results had only 1 month of production from this well, which coupled with decline and some downtime resulted in Q1 working interest production of 7,516 barrels of oil equivalent per day. The rig remained on the Etame platform to drill an exploration prospect in West Etame. While the well encountered 10 meters of high-quality Gamba sands, the target zone was water-bearing and not commercial. The lower portion of the well was plugged and abandoned, but the wellbore was utilized and sidetracked in the upper portion of the well to drill the ET-14H development well in the main fault block of Etame that was derisked from the results of the earlier pilot wells. In late April, the Etame 14H was brought online after encountering 325 meters of lateral net pay in high-quality Gamba sands in an attic position within the main fault block at Etame. Initial rates exceeded 4,800 gross barrels of oil per day and the well continues to produce about 3,000 gross barrels of oil per day. After completing our program at the Etame platform, we moved the rig to the Ebouri platform, where we drilled the Ebouri-5H development well. This well had 300 meters of lateral net pay in Gamba sands at the crest of the structure and came online in late June with initial rates of about 8,000 gross barrels of oil per day with minimal water cut. While the total fluid rate has remained fairly consistent, the well has increased water production, approaching the field-wide average of about 75% to 80% water cut. While we expected the water cut to ultimately rise to the field average, the rate at which it has increased was faster than we initially expected, implying more reservoir connectivity than we had originally modeled. We are currently evaluating this well performance with a view to remodeling the Ebouri structure, which should provide better predictability on 5-8 performance. With that said, for Q2, we saw Gabon production increase to over 9,300 working interest barrels of oil equivalent per day with the additional well. We moved the rig to the SEENT platform and drilled the ETBNM-3 well, a high GOR gas supply well that was completed a few days ago. Gas rates and volumes are in line with pre-drill estimates and will be used to improve field uptime, reduce costs associated with using higher-priced diesel and potentially add production uplift to existing wells. The rig has now skidded over to another slot on the SEENT platform and is drilling the ET-SEM3 pilot hole. Pilot is designed to aid in landing the lateral producer, test the original field oil water contact and also evaluate the potential of underlying Dentale formation. Once the pilot hole is completed, the horizontal development well is planned near the crest of the central fault block in Southeast Etame into Gamba sands. Upon completion of this horizontal well, we are planning to release the rig and not perform any further drilling or workovers in Gabon in the near term. We have reduced the expected workover spend in the second half of 2026 from a range of up to $10 million to no spend due to excellent ESP life. This is because the wells in Ebouri continue to perform well with the chemical treatment, and we do not want to take these wells offline to perform maintenance workovers until it is necessary. Furthermore, when we do need to work over these wells, we can use our workover unit that we have in country to perform the workovers at an expected material cost savings compared to using the current drilling rig. Regarding our exploration blocks in Gabon, the Niosi Marine and the Guduma Marine, we continue to work with our partners on plans for the 2 blocks moving forward. We commenced a 3D seismic survey in November of 2025, which was completed in the first quarter of 2026. The survey completed part of the exploration work program commitment for these blocks. Processing of the seismic data has begun with early products expected to arrive later this month. Given the proximity of these blocks to the prolific producing fields of Etame and Dussafu, we are excited about the future possibilities for these blocks and we'll continue to mature prospectivity using the new seismic data. With the inclusion of the gas well providing fuel, we expect to see a marked reduction in operations costs. In addition, we are reviewing the current operating model of the entire field to look for ways to structurally enhance our business to make the field more cost effective and efficient as we move forward. We expect this process will lead to a reduction in both CapEx and OpEx moving forward. Turning to Egypt. Over the past 2 years, we have drilled in excess of 20 wells across a drilling campaign that helped to increase production year-over-year in 2025 and 2026. We are very pleased with the operational performance and efficiency of the drilling program, which contributes to minimizing costs. Given these strong results, we resumed the drilling program in Egypt in May of this year. We are pleased with the overall production results, which is continuing to drive an increase in production rates into Q3. We are further expanding the scope of the Egyptian drilling program to include a total of 10 to 15 wells during the year. The corresponding production uplift can be seen in our increased Egyptian guidance with no impact on our overall CapEx guidance for the year, which Ron will explain in more detail later in this call. We also plan to continue optimizations, workovers and recompletions in 2026 that are focused on production enhancement. Egypt production remains strong as we continue to invest to drill development wells and delineate opportunities in Ghazalat that could open additional prospects in the future. We will provide further details of the drilling results in our Q3 earnings call. Turning to Equatorial Guinea. In March 2024, we announced the finalization of documents in Equatorial Guinea related to the Venus Block P plan of development. Last summer, we began a front-end engineering design or FEED study. The initial FEED study is now complete and confirms the technical viability of our plan of development, but also highlights some of the risk and challenges from the shelf location. We have expanded this review to explore more efficient development opportunities through a subsea development versus the original shelf development, which would also significantly simplify the drilling operations and well design, and this evaluation is currently underway. We are excited to proceed with our plans to develop, operate and begin producing from the discovery in Block P offshore. We are targeting Venus FID in Q4 2026. In closing, we have an outstanding diversified portfolio of both producing assets and assets with significant upside opportunities. We are executing on our programs and the second half of 2026 should build on the positive second quarter results. We remain focused on growing production, reserves and value for our shareholders. I'd like to thank the hard-working team who continue to operate and execute our plans. Over the past several years, we have significantly diversified our portfolio, enhanced our capacity to generate operational cash flow while returning capital to shareholders and increasing our credit facility capacity. We are well positioned to execute the project and our enhanced portfolio and our proven track record of success these past few years instill confidence for the future. With that, I would like to turn the call over to Ron to share our financial results. Ronald Bain: Thank you, George, and good morning, everyone. Following on from Q1 and as anticipated, we saw good growth both in revenue, profitability and operational cash flow. As George discussed, operationally, we were performing very well. And in the second quarter, we saw the impact being a material increase in our financial results. We had strong earnings in Q2 of $42.4 million or $0.39 per diluted share. We also generated $54.8 million in adjusted EBITDAX. I will highlight some of the factors that resulted in our improved Q2 financial results, including the timing and number of sales liftings, reduction in exploration expense and improvement in the unrealized derivative loss position for the year. A major factor impacting costs and indeed earnings in Q1 was exploration expense. In the first quarter, we had cost of an exploration well at West Etame that was determined to be unsuccessful and additional seismic costs at the Niosi and Guduma blocks in Gabon. In the second quarter, we had virtually no exploration expense, a nearly $23 million difference. Net revenue more than doubled in the quarter. And in Q2, we had 2 partner liftings in Gabon for around 900,000 barrels gross each. While the production came back online in Cote d'Ivoire in June, no liftings occurred in Q2, but our entitlement inventory on the vessel grew with an anticipated lift now likely in August. Egyptian production and sales has been both strong and is rising due to a successful drilling campaign and sales volumes through the first half of the year were 7% higher than the same period in 2025. Overall, production in Q2 was 16,688 NRI BOPD or 21,796 working interest BOPD, an increase of about 10% compared to Q1 2026. Sales of 17,812 NRI BOPD for Q2 were 47% higher than Q1 and above the midpoint of guidance. Revenue in Q2 was up $72.6 million compared to Q1, driven by higher realized pricing and the higher sales volume. Turning to costs. With a significant increase in sales, our production costs for Q2 on an absolute basis were higher than in Q1 and were slightly above the midpoint of guidance, driven by inflationary pressure on costs, primarily fuel driven by higher commodity pricing as well as freight costs impacting margin. Our focus remains on keeping our costs low to enable us to maximize margin and increase our cash flow. But with higher diesel and freight costs driven by the Iran conflict, we may see some expense increases in the near term. Looking at G&A, our cash G&A totaled $9.6 million. The increase in general and administrative expenses was primarily a result of a $1.9 million of nonrecurring professional service and legal fees. Turning to hedging. As I have discussed in the past, our reserves-based lending facility requires us to have a more programmatic hedging program, which is more consistent over a rolling time horizon. Our strategy prioritized downside protection to safeguard cash flow to help fund capital commitments for the Cote d'Ivoire Baobab FPSO refurbishment, the Gabon Phase 3 drilling campaign, our debt servicing and the [indiscernible] dividend program. In March, oil prices spiked and we both realized and unrealized losses as we mark-to-market. This is reevaluated at the end of each quarter and the pricing at June 30 declined materially from March 31, resulting in an unrealized gain of about $40 million in the quarter. Overall, we generally maintain between 30% to 40% of our production hedged at any period going out as far as 12 months. We have opportunistically entered into the market when we saw war premium spikes. You can see our overall hedge position with both the timing and the related Brent floor and collar strike for each period in our supplemental information deck. Moving to taxes. In the second quarter, we reported an income tax expense of $16.8 million, which was comprised of a $15.8 million current tax expense and a deferred tax expense of $1 million. Income tax expense included a $1 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 its present mark-to-market liability. In Q1, we had a state listing in Gabon, which settled our tax position. And we do not see another state listing in 2026 with our cost pool maximized with the spend under the drilling program, which is first to be recovered. Similarly, we do not see a state listing in Cote d'Ivoire in 2026. And in Egypt, the tax barrels are settled monthly from the government's take. Turning now to the balance sheet and cash flow statement. In Q2, we invested $103.6 million on a cash basis and $98.9 million on an accrual basis and net capital expenditures. This was well below the low end of our guidance range. This is primarily related to new wells drilled as part of the drilling campaign in offshore Gabon as well as expenditures associated with the refurbishment and reconnection activities of the FPSO in Cote d'Ivoire. Thus far in 2026, Cote d'Ivoire has seen some additional capital costs over what the operator originally guided to, but this has been offset primarily by our own drilling performance in Gabon as well as deferring some nonessential CapEx. We have seen excellent performance from our drilling team in Gabon, and we've seen each well to date come in below its predrill budgeted approval for expenditure. This, together with some Etame engineering projects moving into 2027 and continued good collections in our Egyptian business has allowed us to expand our capital budget in Egypt to allow us to drill more wells in 2026 at no overall increase in projected capital spend for the year and no overall impact to 2026 free cash flow. This will allow Egypt to exit the year at far higher production rates than we originally envisaged back in our guidance call in March. Unrestricted cash at the end of the second quarter was $30.4 million. In the second quarter, to help fund our capital programs, we did draw $25 million against the company's RBL. In April, the aggregate borrowing base under the 2025 RBL facility increased to $300 million. We now have $177 million drawn on the credit facility with net debt of $147 million. Last call, I discussed how pleased we were in 2025 and Q1 2026 with the progress made with our Egyptian receivables. We continued in the second quarter as we saw an additional reduction to our trade receivables of about $11.5 million with our trade receivables falling from just over $24 million at Q1 to just under $30 million at the end of Q2. We continue to work with the Egyptian General Petroleum Corporation to maintain this strong relationship and keep our receivables current. I'd like to call out specifically our leadership team in Cairo who continue to do great work in this area. In Q2 2026, VAALCO paid another quarterly cash dividend of $0.25 per common share or $6.7 million. We also announced the third quarter dividend payment, which will be paid in September. Let me now turn to guidance, where I'll give you some key highlights and updates. As discussed in the past, guidance for the remainder of 2026 has no contribution from the Canadian assets that were sold in February. With the strong performance of our drilling campaign, coupled with the restart of production at Baobab and some additional drilling in Egypt, we expect to see strong increases in production and sales continue into the second half of 2026. For Q3 sales, we are expecting the midpoint of guidance to be only slightly higher than the Q2 actuals. This is driven by cargo sizes and mix across our assets. In Q3, we will have our first lifting in 2026 at Cote d'Ivoire with the Baobab field resuming production in June. This lifting is expected to be around 950,000 barrels gross. We have a 27.4% working interest ownership. Additionally, we will have 2 partner liftings in Gabon as we did in Q2, but these liftings are expected to be smaller in size than the Q1 liftings. With the continued uncertainty around war premium pricing and physical needs due to the conflict, buyers and traders on the spot market are looking for smaller cargoes and deferring entering into agreements more than a few days out from the liftings. We expect the third quarter 2026 net revenue interest sales volumes to range between 17,200 and 18,900 barrels of oil per day. For Q3, we're also projecting total production to be higher by about 23% compared to Q2 as we see additional wells brought online and production in Gabon in Egypt and the full quarter's production in Cote d'Ivoire. For the total company, we are forecasting Q3 2026 production to be between 24,400 and 26,900 working interest barrels of oil per day and between 19,600 and 21,600 net revenue interest barrels of oil per day. For the full year production guidance, as George mentioned, we see some production increases in Egypt and Cote d'Ivoire that are offset by some slight decreases in Gabon. But overall, we are confident in the performance of our diversified assets, and we are reaffirming the sales and production increase we conveyed last quarter. Our full guidance breakout is in the earnings release and in our supplemental slide deck on our website with production breakout of both working interest and net revenue interest by asset area. We expect our absolute production cost for Q3 to be in the range of $25 to $29 per NRI barrel of oil. This is slightly lower than Q2 as we're expecting some sales increase with costs remaining flat or decreasing slightly on an absolute basis. For our exploration expense, we are forecasting a range between $3 million and $4 million for Q3. This is primarily seismic processing work in both CI-705 as well as similar processing work by our partner in Niosi and Guduma blocks. As George discussed, we are dropping the offshore workover guidance to 0 for Q3 and for the full year. We expect cash G&A to be in the range of $7 million to $9 million. Finally, looking at CapEx, our Q1 and Q2 spend has been below the guidance range, some of which is timing, some of savings. As George mentioned, we are adding wells to our Egyptian program, but maintaining our full year capital expenditure midpoint. For Q3 2026, our capital spend is projected to be between $75 million and $115 million as we continue the drilling campaign in Gabon, prepare for the drilling campaign at Baobab and drill additional wells in Egypt. George outlined the multiple programs across our assets, and we believe that our efforts in 2025 and 2026 are building the foundation for another step change in production in the future. In closing, we saw material improvements in our Q2 financial results that we guided to in May and expect the second half of 2026 will continue to see increasing production, sales volumes and margins depending on the stability of current Brent pricing, which should produce favorable financial results as we upscale our netbacks from the greater West African mix of barrels in the second half of the year as well as a switch from expensive bunker diesel running costs in the Teli in Gabon to field gas. We believe we will remain well positioned to continue executing our strategy of growing production and reserves while adding meaningful value. Early 2027, we'll continue to see growth in our production, sales and margins as our Cote d'Ivoire Phase 5 drilling comes online. With that, I'll now turn the call back over to George. George Maxwell: Thanks, Ron. We have started 2026 with some very positive results across our programs in Cote d'Ivoire, Gabon and Egypt. The restarting of the Baobab field in Cote d'Ivoire in June, the wells in our Gabon program and the ongoing drilling in Egypt are driving these increases. As we look at the second half of 2026, we are projecting significant increases in production and sales, which coupled with continued attractive pricing should generate solid operational cash flow and adjusted EBITDAX generation. As Ron outlined, our production and sales guidance is up about 10% compared to our original estimates and our CapEx has not changed. We have successfully delivered strong operational and financial results for the past several years where we have met or exceeded guidance on a quarterly basis, and we believe that we can continue to meet or exceed our guidance numbers in Q3 and beyond. Our ability to remain focused on successfully executing our strategy is key to growing the company profitably over the remainder of the decade. There are numerous macro events that we cannot control, but the things that we can control by operating efficiently, investing prudently and maximizing our production will help us to deliver the forecasted growth and profitability for our shareholders and partners. We are actively working to continue to deliver strong results that will fund our successful capital programs and drive growth, all while returning value to our shareholders through a top quartile dividend. We have maintained credibility over the past several years, having delivered on our commitments to the market and to our shareholders, and we'll continue to deliver with the exciting slate of projects that we have over the next few years. We are in an enviable position with a much stronger and diverse portfolio of producing assets with expected significant future upside potential. Thank you. And with that, operator, we're ready to take questions. Operator: [Operator Instructions] The first question today comes from David Round with Stifel. David Round: First one, just on the recent gas well, I mean, it looks like a good result in its own right. But could you just expand on what you saw in the shallower intervals and whether there are any potential implications from those, please? George Maxwell: Thanks, David. Well, in the shallower intervals, we did see some shows on hydrocarbons. We did expect that. But unfortunately, we can't, at the moment, produce that because of the well design. The well design was purely designed to go down to that specific zone for the gas development. But it has been tagged and sometime in the future, that could be recompleted as a producer. Ronald Bain: Yes. Just to add to that, I mean, we logged obviously on the way down and our subsurface people are looking at that. But yes, as George mentioned, it's not completed with the ability to produce in those zones. David Round: Okay. Great. And a follow-on, I guess, on a similar topic, in terms of the gas you have encountered, I'm interested how quickly we could see that feed through to OpEx. George, from what you were saying earlier, it sounds like there's some easy wins and then maybe a bigger piece of work going on here now. I don't know if that is as a result of encountering better pay than you expected or whether that maybe was always the case. But I suppose I'm just wondering if that bigger piece of work could result in even higher savings than maybe you've talked about before. George Maxwell: I'll let Ron talk about the savings, and then I'll jump in after that. Ronald Bain: David, if you look at the first half of the year, I mean, this gas well was brought online at the very end of July. So it's effectively 7 months. The key one here is the tell, which is the FSO it's operating in Gabon. Over that time period, indeed at the end of 2025, we were running that fully on diesel. We've now managed to switch that back fully on to gas. Now there are some elements of it on the platforms themselves, but the big one really is the Teli. And that's roughly about 300 to 350 cubes per month in volume. So that's really the guidance, I would say, from August through to December, you'll see that reduction in volume in diesel usage. Of course, that's a gross number. We were 58% of that. We have seen increasing pricing on that cube for diesel fuel through the first 6 or 7 months. I would use probably an average of between $1,500 and $1,600 per cube, but we definitely saw a 25% increase come in just in July. So it's opportune that we've got the switch to gas at this point in time. George Maxwell: The other thing to add there is, obviously, the gas is not just there for fuel. It's also there for gas lift and it's there to improve the performance of the compressors. And with that, we're going to see enhanced production. Ronald Bain: Reliability. George Maxwell: Reliability and production. I mean our subsea wells have been performing poorly because of lack of gas lift. Ronald Bain: Yes. I mean so some of our wells are on gas lift with the compressor. And under diesel, we just couldn't operate at the high enough RPMs to maximize or optimize the gas lift. With gas, we can do that, and we're already seeing that. In addition to that, gas is a lot more stable of a fuel for our turbines, which increases reliability. So it pushes our entire operation, I guess, to a far higher reliability factor than we are now. George Maxwell: So we haven't quantified yet, but we will see -- we will see enhanced oil recovery numbers coming from these wells. Operator: The next question comes from Stephane Foucaud with Actus Advisors. Stephane Guy Foucaud: So I'd like to come back to production. So I think you covered very well that the increased number in Egypt was based on increased activity. I think that on Gabon CI, from my understanding, that might be around the fact that the early production since you restarted has been better than expected. Could you perhaps come back on why then Gabon is at the lower end of expectation, whether it's timing of activity given the change of the work program, whether it's well, whether it's this issue that you described around the lower production efficiency. I think we have 93%. What's happening? That would be my first question. George Maxwell: Okay. Well, the main issue there comes down to the 5H well that I mentioned earlier on the call today. The level of decline in that well was far higher than we anticipated and modeled. So we started off at a very high production rate of over 8,000 barrels of oil per day, but the water cut raised far quicker than we anticipated, far quicker than we had modeled, as I mentioned in the call. And we're going to have to go back and look at that to increase our ability to accurately predict the 5H performance. So it's just -- we've predicted that 5H performance now as a plateau from where we are today as opposed to at this point in the original decline curve, we had a much higher production rates. And that's the main reason for the decline. Stephane Guy Foucaud: Okay. That's great. And the second one is on Kossipo. I think you have previously said you were looking to submit the FDP, I think, later in '26. I think now we are talking about H1 '27. So this is indeed a change of timing. What is behind that? What are the key steps that we need to watch for that FDP to be submitted? George Maxwell: Okay. So when we talked about the FDP in the previous call and as I mentioned in the Q1 call, we were still in discussions with the DGH at that time. We were committing to the DGH that we can pull out all the stocks possible to try and meet the original deadline that the original operator had committed to when we got the license extension. At the same time, with our partner, PetroCI, we were lobbying the DGH to say, look, in order to get this as accurate and as good as possible, we really look for a 6-month extension to the submission deadline, which we agreed to. And that's why that's the main change is we've been given that extension by the DGH and we're going to take that time to prepare both the teams and the higher quality FDP document for submission. Operator: The next question comes from Jeff Robertson with Water Tower Research. Jeffrey Robertson: George or Ron, can you talk a little bit about the cost structure in -- at Baobab and how with production rising into 2027, that might impact VAALCO's overall cost structure? George Maxwell: Yes. That's a good question, Jeff. Obviously, we came back up a little bit earlier in CDI than we originally had looked at together with the operator. We came back up and running in June. So that's good news. Obviously, as the wells come back online and then we proceed to Phase 5 drilling, again, the scale will help on the overall per barrel costs. Directionally, this year, we've probably got a couple of things in there that is causing the variable cost to be a little bit higher than what we anticipated when we went into the budget year. There's 2 things. The operator is changing out the O&M, but it's been taking a little bit longer for them to do that than they first anticipated. So we should see a saving as we go through 2027 as that rolls out. The second thing, and you'll see it in Q4, where our production cost comes up a little bit, they're taking the opportunity and the advantage with the vessels in that area to do some ROV inspection work. So again, Q4, I think, spikes up a little bit versus Q2 and Q3 in CDI. But overall, directionally, this is by far the lowest lifting costs that we have in our portfolio. And as we go through 2027, that's only good news for the overall cost structure of VAALCO. Jeffrey Robertson: Ron, as you move more barrels through that facility in 2027, would just the fixed cost over more barrels result in a lower unit lifting cost? Ronald Bain: That's exactly it, Jeff. I think what you'll see is 2 things. I think the run rate, which is really only just half a year for 2026. I think if you take that run rate, you'll see it come down in '27 on an absolute basis, and then you'll see the volumes go up. So I think what you'll see is a double advantage there on a per unit basis. Jeffrey Robertson: One last one on that. Ron, can you talk a little bit about what you expect for pricing relative to Brent for CI barrels? Ronald Bain: It's a little bit too early, Jeff. What I would say is we're seeing a very volatile market, as you're well aware. Depending on the news from Washington or Tehran, it's moving quite a bit. So what we've seen is that the refineries are basically delaying until they need to cargoes. So that's why if you look at our Q3 cargoes that we've got in Gabon, they're going to be probably 600,000 gross cargoes rather than the 900,000 that we had in Q2. And that's specifically people are waiting to the last minute because they're always thinking it Brent is going to fall in relation to any good news coming out from Washington or Tehran. So very difficult to say, but over the piece, that crude's a good assay, and it should at least trade at Brent. Operator: The next question comes from Bill Dezellem with Tieton Capital. William Dezellem: Ron, would you please circle back to the cost savings from shifting to natural gas from diesel. I apologize here on the fly, I don't have a conversion for cubes to gallons. And ultimately, I recognize that prices are higher today than maybe they will be on a normalized basis going forward. So could you tell us kind of the annual savings that you would expect based off of what historically have been normalized diesel prices and just maybe bring it right down to how many million. Ronald Bain: Yes, no problem, Bill, we can do that. So effectively, what you're looking at is a -- basically a cubic liter is 1,000 liters of diesel. That's been priced, I would say, in the first half of the year, our average is probably about $1,500 to $1,550 per cube. What you will see is from a gross basis, that's a reduction per month of about $500,000 to $600,000 per month. And of course, we are about 58% of that. So I would work that in from August onwards. William Dezellem: Okay. $5,000 to $6,000 a month... Ronald Bain: No $500,000 to $600,000 per month gross, and we're roughly 60% of that. William Dezellem: Great. Thank you for that clarification, and apologies for missing that. And then second, what do you anticipate to be the quarter where you have your peak level of debt given the current drilling program, assuming no future acquisitions, but just the CapEx from the drilling and then the offsetting benefit from production. Ronald Bain: Yes. I think I would point you back to our investment deck that we went out on our non-deal roadshow over the last 2 months, and we put some forecast in there that are still pretty good in relation to where we saw that debt going this year. At this point in time, my modeling is actually showing peak debt in Q1 2027 because we got Phase 5 drilling going through and into completions in 2027. So I see that kind of peaking out in Q1 2027, but it all depends on the $64,000 question, Bill, as to what Brent pricing does over that time period. William Dezellem: Absolutely. And then I'm going to squeeze in one more, if I may. The H2S problem that you've been working on in Gabon, is that now totally solved or partially solved? And if it's partially solved, how much future production could you get if you are able to fully solve it? George Maxwell: The H2S in the existing wells that we have is being controlled with downhole injection and topside injection. And we seem to be able to handle all the H2S that we're seeing coming out of those wells. So there's no problem with dealing with the H2S with the injection program we have now. Until we actually understand, I guess, the sort of ramifications of 5H, it's going to be hard for us to point to additional volumes there. Ronald Bain: Yes. I mean I think I mentioned, Bill, in the call earlier, we're going to have to -- because 5H decline was accelerated beyond our modeling position, we're going to have to rework the geo model. So probably over the next 4 or 5 months, we'll have a much better predictability. But the performance of the downhole injection, surface injection scavenger has been extremely good. And the breakthrough of what the scavenger is dealing with on H2S for PPM continues to be lower than our predicted models. William Dezellem: Great. And then I'm actually going to break the rules and ask one more, if I may. The Cote d'Ivoire production, what is the production rate coming as you've done the start-up versus when you took the field down? Is there an initial pressure benefit that you're experiencing? George Maxwell: Yes, there is flush production coming through, and we expect that to continue. We're probably running around 16,400 to 16,500 barrels a day gross production, which is about -- I'm going to say about 2,000 a day more than the original number that we were using or we had prior to shut down. The wells themselves came on extremely well and smoothly. There's obviously a concern after a well has been down for that length of time to bring it back on again, but we had absolutely no issues there. The operator did a great job in bringing them on. We're seeing no sand come through. We're seeing everything stable. And there is still a bit of upside on the wells. We're just very cautious or the operator is very cautious about opening those wells completely up. So yes, it's good news. Operator: We now have a follow-up from Stephane Foucaud with Actus Advisors. Stephane Guy Foucaud: Yes. I was wondering about the exploration program in Gabon and the seismic and whether on data review, you will be providing some sense of the size of the price on those exploration licenses? And if yes, when would that be? George Maxwell: Yes. We're still receiving some of the data sets. So it's probably on the size of the price around Niosi and Guduma and that's really going to be into mid-'27 before we can really target that with our partner, BW Energy and Panoro. We're probably going to be earlier than that when we look at CI-705 because obviously, we've got a decision we make this year, and we'll probably come out in Q4 with some bigger indications of what we see as targets for the Cote d'Ivoire exploration assets that we operate. But when I say Guduma, it's likely to be well into '27. Stephane Guy Foucaud: Okay. And secondly, for Ron. I was looking at the -- so the expected working interest of the sales in Q3 versus production because as you mentioned, the sales will be a bit lower than production for the reason you explained. Now does that suggest you would expect in Q4 a reversal of that? So should we expect a big Q4 looking at liftings? Ronald Bain: Can you repeat that question a little bit there? Stephane Guy Foucaud: So I was looking at -- so in Q3, working -- production is higher than sales for the reason, I think, of the lifting that you have described. But on a full year basis, it's quite similar. So does that suggest that you might have a very strong quarter in terms of sales, in terms of listings in Q4, offsetting Q3? Ronald Bain: Yes, yes. I mean if you look at Q4 at the moment, the way we planned, we're seeing 3 listings in Gabon and a couple of listings in Baobab. So yes, Q4 will be stronger than Q3. George Maxwell: Yeah. Would be strong. Operator: The next question comes from Jamie Wilen with Wilen Management. James Wilen: Wonderful results. But a question on taxes moving forward. Can you tell me what the cost oil is in Gabon as well as Cote d'Ivoire? And how much of the next generation -- generated pretax profits are going to run for VAALCO? Ronald Bain: Jamie, it's Ron. I'll do my best to answer that question in relation to, obviously, the taxes in U.S. GAAP. First and foremost, in relation to the cost pools, we are -- we've got a maximum cost pool in both Gabon and in CDI due to the spend on the drilling programs as well as obviously the monthly OpEx. So -- and I think we've communicated this in relation to the non-deal road shows. That Gabon cost pool should see us through. Again, the big question here always is going to be where Brent lies. Now if Brent is $100 per barrel, then it accelerates the recovery of that quicker. But if we look at long-term price maybe in the 70s, we see that Gabon cost pool being pretty robust right through 2027. So again, minimal state liftings, you would think in 2027 at those prices. CDI, we probably got multiple years' worth of shield in relation to the cost oil. So you're probably looking at about 3 years before the profit really creeps up in CDI. Obviously, when you look at U.S. GAAP purposes from a P&L point of view, you've got the picture of the cost pools themselves providing a deferred benefit. And obviously, the part of U.S. GAAP there is to smooth out these peaks and troughs. So your P&L and your actual cash cost on tax are completely 2 different things. What I would say to you is '26 and '27 will be our lowest, I would say, entitlement barrels to the state during those time periods in Gabon. And indeed in CDI, we see that benefit probably going out 2 or 3 years from now. Operator: At this time, there are no more questions. I would like to turn the conference back over to George Maxwell, CEO, for any closing remarks. George Maxwell: Thank you, operator. Well, once again, I think we've delivered a very strong quarter. We've indicated a stronger performance and guidance for 2026. Ron and I just completed an undue roadshow, which I would direct investors towards, it's on our website that shows the level of activity that the company have in our current portfolio going through to 2030. And you can see the growth opportunities that exist in the development of our assets that will take the company to a working interest position somewhere north of 60,000 barrels per day, which is quite meaningful from where we are today. But we have -- we should celebrate a great set of results for Q2, great operational performance by our drilling team here in -- the drilling team in Gabon coming under budget with the activity and allowing us to increase activity in Egypt without increasing our CapEx guidance, which is a significant result, resulting in the higher guidance on production that Ron announced today. So with that, I congratulate everyone in the company that's helped contribute towards these performances, and I look forward to talking to you in the Q3 earnings call. Thank you. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. VAALCO Energy (EGY) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Vaalco Energy Inc? Here are five stocks we like better. Strong second-quarter results: Vaalco Energy reported $42.4 million in net income and $54.8 million in adjusted EBITDAX, supported by higher production, improved pricing and a 47% sequential increase in sales volumes. Baobab restart boosts growth prospects: Production at Côte d’Ivoire’s Baobab field resumed above pre-shutdown levels, with first lifting expected in August and development drilling beginning in the third quarter. The company expects the drilling program’s larger production impact in 2027. Higher near-term production outlook: Vaalco expects third-quarter production to rise about 23% from the second quarter as Baobab contributes for a full quarter and Gabon and Egypt output increases, while maintaining its full-year capital-spending guidance. Vaalco Energy (NYSE:EGY) reported second-quarter net income of $42.4 million, or $0.39 per diluted share, and adjusted EBITDAX of $54.8 million as higher sales volumes, improved pricing and lower exploration expense lifted results from the prior quarter. Chief Executive Officer George Maxwell said the company’s portfolio changes and operational programs in Côte d’Ivoire, Gabon and Egypt supported higher production and sales during the period. Net revenue more than doubled from the first quarter, according to Chief Financial Officer Ron Bain, driven by a $72.6 million increase in revenue from higher realized prices and sales volumes. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth Second-quarter production totaled 21,796 working-interest barrels of oil per day, or 16,688 net-revenue-interest barrels per day, up about 10% from the first quarter. Sales averaged 17,812 net-revenue-interest barrels per day, up 47% sequentially and above the midpoint of company guidance. A key contributor to the company’s outlook is the June restart of production at the Baobab field offshore Côte d’Ivoire after its FPSO refurbishment. The vessel had ceased hydrocarbon operations in January 2025, underwent refurbishment in Dubai and returned to Côte d’Ivoire in April 2026. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling Maxwell said all producing wells were online and output was slightly above the company’s pre-startup forecast. In response to an analyst question, he said gross production was running at roughly 16,400 to 16,500 barrels per day, about 2,000 barrels per day above the rate before the shutdown. The first lifting is expected later in August, with the single third-quarter lifting projected at about 950,000 gross barrels. VAALCO holds a 27.4% interest in Baobab. The company expects to begin Baobab’s development drilling program in the third quarter. The program includes four producers, two or three injectors and two workovers. At least one well is expected to enter production by year-end, though Maxwell said the drilling program’s production and sales uplift is not expected to have a significant impact until 2027. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High VAALCO also is advancing plans for the nearby Kossipo discovery on the CI-40 block, where it is operator with a 60% working interest. The company is using new ocean-bottom-node seismic data for field development planning. Maxwell said the gross 2C resource estimate is approximately 102 million barrels of oil equivalent, with 293 million barrels of oil equivalent in place. The company received a six-month extension for submitting its field development plan and now expects submission in the first half of 2027. In Gabon, second-quarter working-interest production rose to more than 9,300 barrels of oil equivalent per day as wells from the Phase III drilling program came online. The Etame-14H development well began production in late April after encountering 325 meters of lateral net pay. Initial gross output exceeded 4,800 barrels per day, and the well was continuing to produce about 3,000 gross barrels per day, Maxwell said. The Ebouri-5-8 development well came online in late June with initial production of about 8,000 gross barrels per day and minimal water cut. However, the well’s water production increased faster than expected and was approaching the field-wide average water cut of roughly 75% to 80%. Maxwell said the company is remodelling the Ebouri structure to improve predictability of the well’s future performance. That accelerated water-cut increase was the primary reason for slightly lower Gabon expectations. VAALCO recently completed a gas-supply well at the SEENT platform. The gas is expected to improve field uptime, reduce diesel use and support gas lift operations. Bain said the switch from diesel to gas on the Teli FPSO could reduce diesel costs by roughly $500,000 to $600,000 per month on a gross basis, beginning in August. VAALCO holds about a 58% interest in those costs. The company plans to finish the current Gabon drilling sequence with a pilot hole and a planned horizontal development well at southeast Etame. Afterward, it expects to release the rig and does not anticipate further near-term drilling or workovers in Gabon. It reduced second-half and full-year offshore workover spending guidance to zero, citing strong ESP performance and the availability of an in-country workover unit when maintenance is required. VAALCO resumed its Egypt drilling program in May and expanded the planned 2026 scope to 10 to 15 wells. Bain said cost savings and below-budget drilling performance in Gabon, along with deferred nonessential capital projects, enabled the additional Egyptian activity without raising full-year capital expenditure guidance. Cash capital expenditures were $103.6 million in the second quarter, while accrued capital expenditures were $98.9 million, below the low end of the company’s guidance range. Unrestricted cash stood at $30.4 million at quarter-end. VAALCO drew $25 million on its reserves-based lending facility during the quarter, bringing borrowings to $177 million and net debt to $147 million. The borrowing base under the facility increased to $300 million in April. Trade receivables in Egypt declined by about $11.5 million during the quarter to just under $13 million. The company also paid a quarterly cash dividend of $0.0625 per common share, totaling $6.7 million, and said its third-quarter dividend will be paid in September. For the third quarter, VAALCO forecast working-interest production of 24,400 to 26,900 barrels of oil per day and net-revenue-interest production of 19,600 to 21,600 barrels per day. The company expects production to be about 23% higher than the second quarter, reflecting a full quarter from Baobab as well as additional output from Gabon and Egypt. Third-quarter sales are expected to range from 17,200 to 18,900 net-revenue-interest barrels per day. Bain said sales will lag production in the quarter because of cargo timing, but added that the company currently expects three Gabon liftings and two Baobab liftings in the fourth quarter, making Q4 stronger than Q3 for sales. VAALCO projected third-quarter capital spending of $75 million to $115 million, production costs of $25 to $29 per net-revenue-interest barrel, exploration expense of $3 million to $4 million and cash general and administrative expense of $7 million to $9 million. Vaalco Energy, Inc is an independent energy company principally engaged in the exploration, development and production of crude oil and natural gas. Headquartered in Houston, Texas, Vaalco concentrates on offshore assets in West Africa, with a strategic emphasis on maintaining and optimizing cash-flow–generating properties. Founded in the mid-1980s, the company has built its reputation by focusing on high-impact drilling prospects and extending the productive life of its core fields through targeted infill wells and enhanced recovery techniques. The company's primary producing asset is the Etame Marin block offshore Gabon, where Vaalco holds a majority interest and serves as operator. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Vaalco Energy Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance in Q2 was driven by a material increase in sales volumes and production, following the successful restart of the Baobab field in Cote d'Ivoire and drilling successes in Gabon. The company achieved significant cost savings in Gabon by bringing a high GOR gas supply well online, allowing a shift from expensive diesel fuel to field gas for operations. In Egypt, operational efficiencies and strong drilling results enabled the expansion of the drilling program to 10-15 wells without increasing the total annual capital expenditure budget. Management attributed the Gabon production increase to the Phase 3 drilling program, which successfully accessed attic locations and less swept fault blocks to reverse natural declines. The divestment of Canadian assets and the increase in Cote d'Ivoire working interests reflect a strategic pivot toward higher-upside West African offshore opportunities. Operational challenges were noted at the Ebouri-5H well in Gabon, where a faster-than-expected water cut increase implied higher reservoir connectivity than originally modeled. Strategic positioning was enhanced by being named operator of the Kossipo field, located near existing infrastructure to facilitate future development synergies. Management expects a significant production and sales uplift in the second half of 2026, supported by a full quarter of Baobab production and ongoing Egyptian drilling. The capital expenditure framework for the remainder of 2026 assumes no offshore workover spend due to extended electrical submersible pump (ESP) life and chemical treatment success. Final Investment Decision (FID) for the Venus Block P development in Equatorial Guinea is targeted for Q4 2026, with evaluations shifting toward a more efficient subsea development model. Production and sales uplift from the significant Baobab Phase 5 drilling program is expected to have its most meaningful impact starting in 2027. Guidance for Q3 sales volumes assumes smaller cargo sizes due to market volatility and buyers deferring agreements amid geopolitical uncertainty in the Middle East. Exploration expense decreased by nearly $23 million sequentially in Q2 following the completion of seismic work and the plugging of a non-commercial well in Q1. The company reported an unrealized gain of approximately $40 million on derivatives in Q2 due to a decline in Brent pricing at the end of the quarter. Management flagged inflationary pressures on fuel and freight costs, driven by regional conflicts, as a potential headwind for near-term production expenses. Tax liabilities in Gabon and Cote d'Ivoire are expected to be minimal for the remainder of 2026 as the company maximizes cost recovery from its current drilling programs. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management expects gross savings of $500,000 to $600,000 per month starting in August by switching the Teli FSO from diesel to field gas. Beyond direct fuel savings, the gas will be used for gas lift to improve reliability and enhance oil recovery in subsea wells that previously underperformed. The slight decrease in Gabon guidance was primarily due to the Ebouri-5H well reaching a 75-80% water cut faster than anticipated. Management is currently remodeling the Ebouri structure to improve predictability for future well performance in that block. The FDP submission was moved to H1 2027 after the company secured a six-month extension from the DGH. The extra time will be used to incorporate new ocean bottom node seismic data to further derisk the development and enhance the final plan. Baobab currently represents the lowest lifting cost in the portfolio, and unit costs are expected to decline further as Phase 5 drilling increases volumes. Management anticipates additional savings in 2027 as the operator completes a transition to a new operations and maintenance (O&M) provider.

HOUSTON, Aug. 06, 2026 (GLOBE NEWSWIRE) -- VAALCO Energy, Inc. (NYSE: EGY, LSE: EGY) (“Vaalco” or the “Company”) today reported operational and financial results for the second quarter 2026. Additionally, the Company provided operational and financial guidance for the third quarter and full year of 2026. Second Quarter 2026 Highlights and Recent Key Items: Sold 17,812 net revenue interest (“NRI”)(1) barrels of oil equivalent per day (“BOEPD”), above the midpoint of guidance, and up 47% from Q1 2026; Restarted production in June 2026 at the Baobab field in offshore Côte d’Ivoire, as planned, following a major refurbishment of the Floating Production Storage and Offloading vessel (“FPSO”); Produced 21,796 working interest (“WI”)(2) BOEPD or 16,688 NRI(1) BOEPD an increase of about 10% compared to Q1 2026; Reported net income of $42.4 million ($0.39 per diluted share), driven by significantly increased sales, lower exploration expense and a non-cash gain on derivative instruments, compared with Q1 2026; Generated Adjusted EBITDAX(3) of $54.8 million, an increase of almost five times from $11.6 million in Q1 2026; Affirmed the elevated full year 2026 NRI production and sales volumes that were raised in May by 8% and 12%, respectively at the midpoint, while maintaining 2026 capital budget guidance unchanged even with additional drilling in Egypt included; Invested $103.6 million in capital expenditures, which included the successful start to the Gabon Phase Three Drilling Program, completion of Côte d’Ivoire FPSO Dry Dock refurbishment and key drilling materials and services for the upcoming 2026 drilling campaign in Côte d’Ivoire; Reduced trade receivables in Egypt even further from $31.6 million at December 31, 2025 to $12.9 million at June 30, 2026; and Declared quarterly cash dividend of $0.0625 per share of common stock to be paid on September 22, 2026. (1)   All NRI sales and production rates are Vaalco's working interest volumes less royalty volumes, where applicable.(2)   All WI production rates and volumes are Vaalco's working interest volumes, where applicable.(3)   Adjusted EBITDAX, Adjusted Net Income (Loss), Free Cash Flow and Net Debt are Non-GAAP financial measures and are described and reconciled to the closest GAAP measure in the attached table under “Non-GAAP Financial Measures.” George Maxwell, Vaalco’s Chief Executive Officer, commented, “The first half of 2026 has seen material changes to Vaalco across our growing and diversified portfolio. We increased our future growth potential in Côte d’Ivoire by being confirmed as operator with a 60% WI in the Kossipo field and divested all of our Canadian assets adding material cash to the balance sheet. We have drilled and brought online multiple wells in our Gabon drilling campaign. The FPSO at the Baobab field in offshore Côte d’Ivoire was brought back online from a yearlong refurbishment and the field was successfully restarted with production commencing in June 2026. We also resumed our successful drilling program in Egypt in May 2026. In Q2 2026, we had strong sales volumes and increased realized pricing while we continued to positively progress our asset campaigns in Côte d’Ivoire, Gabon and Egypt. This drove improved earnings of $42.4 million or $0.39 per diluted share and $54.8 million in Adjusted EBITDAX. The strong first half results and our expectation of continued operational execution have given us the confidence to affirm our increased full year production and sales guidance for 2026. We have delivered positive results in 2026, meeting or exceeding expectations, driven by our successful drilling programs and capital investments.” Mr. Maxwell concluded, “As we look at the second half of 2026, we are projecting significant increases in production and strong sales, which coupled with continued attractive pricing should generate solid operational cash flow and Adjusted EBITDAX generation. We are completing the Gabon drilling campaign, expanding the successful Egyptian drilling campaign and starting the Phase Five Drilling Program at Baobab that should provide material production uplift in 2027. We remain confident in our strategic vision with continued operational success coupled with our recently increased full year 2026 production and sales guidance without increasing 2026 capital guidance. Vaalco is well positioned to deliver material organic production growth.” Operational Update Gabon Vaalco successfully drilled and completed the Ebouri-5H development well, as part of its ongoing Phase Three Drilling Program, with production commencing in June 2026. Following the completion of operations at the Ebouri platform, the drilling rig was mobilized to the SEENT platform where the Company spudded the ETBNM-3 gas-supply well. This well was directionally drilled adjacent to a discovery well and targeted gas and condensate resources in the Dentale D15 reservoir. The well was successfully brought online and the natural gas produced from this successful well is now being utilized for operational purposes in the field to significantly reduce the costs of higher priced diesel that is currently transported to the field by vessel. Vaalco also continued the drilling campaign in offshore Gabon by moving the rig on July 27th to a new slot on the SEENT platform to drill the ETSEM-3PH pilot hole and development well. This development well is planned with a completion length of 300 meters within the Gamba sands. Through the remainder of the Phase Three Drilling Program, the objective is to continue growing production volumes and adding proved reserves through the successful execution of Vaalco’s development program. In addition, the BWE Consortium completed its 3D seismic campaign across the Niosi and Guduma blocks in January 2026. The seismic data processing and interpretation are currently ongoing. Egypt The 2026 Egypt drilling program commenced in May 2026 with the drilling of the HE-9 development well, which was completed and brought on production in early June 2026. Vaalco subsequently initiated drilling two additional development wells in June 2026, both of which were successfully completed in July. The Company is continuing with its drilling program in Egypt in the third quarter of 2026. The Company also successfully executed a series of workovers, well interventions, well reactivations, water shut-off treatments, and production optimization activities that are contributing to the organic growth of its production and reserves in Egypt. Côte d’Ivoire Following completion of its planned dry dock refurbishment in February 2026, the Baobab FPSO returned to Côte d’Ivoire and was successfully reconnected to field infrastructure in early April 2026. Production resumed from all producing wells in June 2026. While production has restarted, Vaalco’s first crude oil lifting is scheduled for August 2026. A drilling rig has been mobilized and the drilling program is expected to start in September 2026. This development campaign is expected to provide meaningful production growth and further unlock the value of the main Baobab field in Block CI-40. The Company is also the operator of exploration license CI-705 with a 70% WI. Currently in the first exploration period subsurface interpretation and prospect maturation continues with the Company and its partners scheduled to make the decision whether to enter into the second phase of the exploration period by year-end 2026. In February 2026, the Company became the operator with a 60% WI in the Kossipo field on the CI-40 Block with a field development plan being actively progressed toward completion in the first half of 2027. Equatorial Guinea Vaalco owns a 60% working interest 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. The Company 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. Work is progressing towards Final Investment Decision expected in Q4 2026. 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 included January and prorated February Canadian production and financial results. Financial Update – Second Quarter of 2026 Vaalco reported net income of $42.4 million ($0.39 per diluted share) for Q2 2026 which was up compared with a net loss of $93.8 million ($0.90 per diluted share) in Q1 2026 and net income of $8.4 million ($0.08 per diluted share) in Q2 2025. The increase in earnings compared with Q1 2026 and Q2 2025 was driven primarily by hedging gains, higher realized pricing and lower exploration expenses, partially offset by increases in production expense, depletion and general and administrative expenses. Adjusted EBITDAX totaled $54.8 million in Q2 2026, a nearly five-fold increase when compared with $11.6 million in Q1 2026 and up 10% from $49.9 million generated in Q2 2025. The increase was primarily the result of higher realized commodity prices, which increased sales revenue, partially offset by increases in production expense and general and administrative expenses. (a) Reflects net revenues and sales volumes from January 1, 2026 through the closing date of the Canada Assets Divestment date on February 19, 2026. In Q2 2026, Vaalco had a net revenue increase of $72.6 million or 116% compared to Q1 2026 driven by an increase in the total NRI sales volumes of 1,621 MBOE which was 48% higher than the Q1 2026 volumes of 1,094 MBOE. This was primarily attributed to the timing of Gabon liftings partially offset by the sale of the Canadian assets in Q1 2026. Q2 2026 sales volumes were lower compared to 1,765 MBOE for Q2 2025 primarily due to the sale of the Canadian assets. Average realized price received of $80.77 per BOE in Q2 2026 was higher compared to $57.21 per BOE in Q1 2026 and higher than Q2 2025 of $54.87. Q2 2026 NRI sales were above the midpoint of Vaalco’s guidance. Total production expense (excluding offshore workovers and stock compensation) increased in Q2 2026 compared with Q1 2026 and Q2 2025 primarily driven by higher sales, offset by lower production expenses resulting from the Canadian divestment and the change in oil inventory adjustments in Cote d’Ivoire. Production expenses associated with unsold crude oil inventory are capitalized and included in inventory, which are then subsequently expensed when oil inventory is sold. General and administrative (“G&A”) expense, excluding stock-based compensation, increased in Q2 2026 primarily driven by non-recurring increases in legal and professional service fees. Exploration expense in Q1 2026 was primarily attributable to the cost of additional seismic data related to the Niosi and Guduma licenses and the costs of an exploration well at West Etame offshore Gabon that was determined to be unsuccessful. Exploration expense for Q2 2025 was attributable to the purchase of seismic data for Block 705 in Côte d’Ivoire. Other income (expense), net, includes gains or losses on derivatives, interest expense and foreign currency losses. In Q2 2026, Vaalco reported a net gain on derivative instruments of $18.7 million, which included an unrealized gain of $43.7 million related to the change in fair value of commodity derivative contracts primarily driven by a decrease in the futures curve for forecasted commodity prices and a realized loss of $25.0 million on matured commodity derivative contracts. Vaalco reported an income tax expense for Q2 2026 of $16.8 million, which includes a $1.0 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 $17.8 million for the period. Income tax expense for Q2 2025 was $7.0 million, which included a $3.1 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, current income taxes were $10.1 million for the period. Taxes paid by jurisdiction are as follows: Financial Update – First Six Months of 2026 Net sales for the first six months of 2026 decreased to 2,715 MBOE compared to 3,481 MBOE reported in the first six months of 2025. The decrease was driven primarily by the sale of the Canadian assets, Cote d’Ivoire FPSO refurbishment and the timing of Gabon liftings. The average realized crude oil price for the first six months was $71.28 per barrel, representing an increase of 20% from the $59.50 realized in the first six months of 2025. The increase primarily reflects higher benchmark crude oil prices during the current year. The Company reported a net loss for the six months ended June 30, 2026 of $51.3 million compared to a net income of $16.1 million for the same period in 2025. The decrease in the results of operations was primarily driven by losses on commodity derivative instruments, lower revenues due to reduced sales volumes, and higher exploration and G&A expenses, partially offset by lower production expenses. Capital Investments/Balance Sheet For the second quarter of 2026, net capital expenditures totaled $103.6 million on a cash basis and $98.9 million on an accrual basis, below the low end of second quarter guidance of $110 million to $130 million. These expenditures were primarily related to the new wells drilled as part of the Phase Three Drilling Campaign in offshore Gabon and the drilling campaign in Egypt, as well as expenditures associated with the refurbishment and reconnection activities of the FPSO in Côte d’Ivoire. At June 30, 2026, Vaalco had long-term debt of $177.0 million and approximately $123.0 million of liquidity remaining on its reserves based lending facility (the “2025 RBL Facility”). The Company arranged the 2025 RBL 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. The aggregate commitments will reduce semi-annually starting with a $15.8 million reduction on March 31, 2027, and a $35.5 million reduction for each of the subsequent semi-annual periods starting on September 30, 2027. In April 28, 2026, certain existing lenders further increased their commitments to $300.0 million, which is equal to the maximum aggregate commitments permitted under the facility. The increases in commitments were undertaken with the existing accordion feature included in the 2025 RBL Facility. Quarterly Cash Dividend Vaalco paid a quarterly cash dividend of $0.0625 per share of common stock for the second quarter of 2026 on June 26, 2026. The Company also recently announced its next quarterly cash dividend of $0.0625 per share of common stock for the third quarter of 2026 ($0.25 annualized), to be paid on September 22, 2026 to stockholders of record at the close of business on August 21, 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 protect cash flow generation to assist in funding its capital and shareholder return programs. The following includes hedges remaining in place as of the end of the second quarter of 2026: The table below presents commodity swaps entered into subsequent to June 30, 2026 . 2026 Guidance: The Company has provided third quarter 2026 guidance and its full year 2026 guidance. All of the quarterly and annual guidance is detailed in the tables below. Conference Call As previously announced, the Company will hold a conference call to discuss its second quarter 2026 financial and operating results, Friday, August 7, 2026, at 8:00 a.m. Central Time (9:00 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 +44 20 3769 4533 and other international parties may dial (412) 317-5741. Participants should request to be joined to the “Vaalco Energy Second Quarter 2026 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 following the call. A “Q2 2026 Supplemental Information” investor deck will be posted to Vaalco’s website prior to its conference call on August 7, 2026 that includes additional financial and operational information. About Vaalco Vaalco, founded in 1985 and incorporated under the laws of Delaware, is a Houston, Texas, USA based, independent energy company with a diverse portfolio of production, development and exploration assets across Gabon, Egypt, Côte d'Ivoire, Equatorial Guinea and Nigeria. Vaalco’s Legal Entity Identifier (LEI) is 549300CFHFVIWB8M6T24 For Further Information Forward Looking Statements This press release 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, which are intended to be covered by the safe harbors created by those laws (collectively, “forward-looking statements”). Where a forward-looking statement expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. All statements other than statements of historical fact may be forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “forecast,” “outlook,” “aim,” “target,” “will,” “could,” “should,” “may,” “likely,” “plan” and “probably” or similar words may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this press release include, but are not limited to, statements relating to (i) estimates of future drilling, production, sales and costs of acquiring crude oil, natural gas and natural gas liquids; (ii) expectations regarding future exploration and the development, growth and potential of Vaalco’s operations, project pipeline and investments, and schedule and anticipated benefits to be derived therefrom; (iii) expectations regarding future acquisitions, investments or divestitures; (iv) expectations of future dividends; (v) expectations of future balance sheet strength; and (vi) expectations of future equity and enterprise value. Such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to: risks relating to any unforeseen liabilities of Vaalco; the ability to generate cash flows that, along with cash on hand, will be sufficient to support operations and cash requirements; and the risks described under the caption “Risk Factors” in Vaalco’s most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q filed with the SEC. Dividends beyond the third quarter of 2026 have not yet been approved or declared by the Board of Directors for Vaalco. The declaration and payment of future dividends remains at the discretion of the Board and will be determined based on Vaalco’s financial results, balance sheet strength, cash and liquidity requirements, future prospects, crude oil and natural gas prices, and other factors deemed relevant by the Board. The Board reserves all powers related to the declaration and payment of dividends. Consequently, in determining the dividend to be declared and paid on Vaalco common stock, the Board may revise or terminate the payment level at any time without prior notice. Any forward-looking statement made by Vaalco in this press release is based only on information currently available to Vaalco and speaks only as of the date on which it is made. Except as may be required by applicable securities laws, Vaalco undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise. Other Oil and Gas Advisories Investors are cautioned when viewing BOEs in isolation. BOE conversion ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalencies described above, utilizing such equivalencies may be incomplete as an indication of value. Inside Information This announcement contains inside information as defined in Regulation (EU) No. 596/2014 on market abuse which is part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (“MAR”) and is made in accordance with the Company’s obligations under article 17 of MAR. The person responsible for arranging the release of this announcement on behalf of Vaalco is Matthew Powers, Corporate Secretary of Vaalco. VAALCO ENERGY, INC AND SUBSIDIARIESCondensed Consolidated Balance Sheets(Unaudited) VAALCO ENERGY, INC AND SUBSIDIARIESConsolidated Statements of Operations (Unaudited) VAALCO ENERGY, INC AND SUBSIDIARIESCondensed Consolidated Statements of Cash Flows(Unaudited) VAALCO ENERGY, INC AND SUBSIDIARIESSelected Financial and Operating Statistics(Unaudited) •Offshore workover costs and stock compensation associated with production expense excluded for Q2 2026, Q2 2025, and Q1 2026 are immaterial.••General and administrative expenses include $1.01, $0.78 and $1.23 per barrel of oil related to stock-based compensation expense for Q2 2026, Q2 2025, and Q1 2026, respectively. NON-GAAP FINANCIAL MEASURES Management uses Adjusted Net Income (Loss) to evaluate operating and financial performance and believes the measure is useful to investors because it eliminates the impact of certain non-cash and/or other items that management does not consider to be indicative of the Company’s performance from period to period. Management also believes this non-GAAP measure is useful to investors to evaluate and compare the Company’s operating and financial performance across periods, as well as to facilitate comparisons to others in the Company’s industry. Adjusted Net Income (Loss) is a non-GAAP financial measure and as used herein represents net income, plus deferred income tax expense (benefit), unrealized derivative instrument loss (gain), bargain purchase gain on the Baobab Acquisition, FPSO demobilization, transaction costs related to the Baobab acquisition and non-cash and other items. Adjusted EBITDAX is a supplemental non-GAAP financial measure used by Vaalco’s management and by external users of the Company’s financial statements, such as industry analysts, lenders, rating agencies, investors and others who follow the industry. Management believes the measure is useful to investors because it is as an indicator of the Company’s ability to internally fund exploration and development activities and to service or incur additional debt. Adjusted EBITDAX is a non-GAAP financial measure and as used herein represents net income, plus interest expense (income) net, income tax expense (benefit), depreciation, depletion and amortization, exploration expense, FPSO demobilization, non-cash and other items including stock compensation expense, bargain purchase gain on the Baobab Acquisition, other operating (income) expense, net, non-cash purchase price adjustment, transaction costs related to acquisition, credit losses and other and unrealized derivative instrument loss (gain). Management uses Free Cash Flow to evaluate financial performance and to determine the total amount of cash over a specified period available to be used in connection with returning cash to shareholders, and believes the measure is useful to investors because it provides the total amount of net cash available for returning cash to shareholders by adding cash generated from operating activities, subtracting amounts used in financing and investing activities, effects of exchange rate changes on cash and adding back amounts used for dividend payments and stock repurchases. Free Cash Flow is a non-GAAP financial measure and as used herein represents net change in cash, cash equivalents and restricted cash and adds the amounts paid under dividend distributions and share repurchases over a specified period. Free Cash Flow has significant limitations, including that it does not represent residual cash flows available for discretionary purposes and should not be used as a substitute for cash flow measures prepared in accordance with GAAP. Free Cash Flow should not be considered as a substitute for cashflows from operating activities before discontinued operations or any other liquidity measure presented in accordance with GAAP. Free Cash Flow may vary among other companies. Therefore, the Company’s Free Cash Flow may not be comparable to similarly titled measures used by other companies. Net debt, or outstanding debt obligations less cash and cash equivalents, is a non-GAAP financial measure. Management uses net debt as a measure of the Company’s outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand. Adjusted EBITDAX and Adjusted Net Income (Loss) have significant limitations, including that they do not reflect the Company’s cash requirements for capital expenditures, contractual commitments, working capital or debt service. Adjusted EBITDAX, Adjusted Net Income (Loss), Free Cash Flow and Net Debt should not be considered as substitutes for net income (loss), operating income (loss), cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDAX, Adjusted Net Income (Loss) and Net Debt exclude some, but not all, items that affect net income (loss), operating income (loss) and debt, as applicable, and the calculation of these measures may vary among other companies. Therefore, the Company’s Adjusted EBITDAX, Adjusted Net Income (Loss), Free Cash Flow and Net Debt may not be comparable to similarly titled measures used by other companies. The tables below reconcile the most directly comparable GAAP financial measures to Adjusted Net Income (Loss), Adjusted EBITDAX and Free Cash Flow. VAALCO ENERGY, INC AND SUBSIDIARIESReconciliations of Non-GAAP Financial Measures(Unaudited)(in thousands) (1)  No adjustments to weighted average shares outstanding VAALCO ENERGY, INC AND SUBSIDIARIESReconciliations of Non-GAAP Financial Measures(Unaudited)(in thousands)

Valaris Limited (VAL) came out with quarterly earnings of $0.72 per share, beating the Zacks Consensus Estimate of $0.46 per share. This compares to earnings of $1.61 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +56.52%. A quarter ago, it was expected that this company would post a loss of $0.05 per share when it actually produced a loss of $0.24, delivering a surprise of -380%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Valaris, which belongs to the Zacks Oil and Gas - Drilling industry, posted revenues of $539.2 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 7.84%. This compares to year-ago revenues of $615.2 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Valaris shares have added about 55% since the beginning of the year versus the S&P 500's gain of 13%. While Valaris has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Valaris was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.26 on $577 million in revenues for the coming quarter and $3.18 on $2.17 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Oil and Gas - Drilling is currently in the bottom 19% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Vaalco Energy (EGY), another stock in the broader Zacks Oils-Energy sector, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This oil and natural gas explorer is expected to post quarterly earnings of $0.05 per share in its upcoming report, which represents a year-over-year change of +150%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Vaalco Energy's revenues are expected to be $122.5 million, up 26.4% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Valaris Limited (VAL) : Free Stock Analysis Report Vaalco Energy Inc (EGY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Vaalco Energy (EGY) reported break-even quarterly earnings per share versus the Zacks Consensus Estimate of $0.04. This compares to earnings of $0.02 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -100.00%. A quarter ago, it was expected that this oil and natural gas explorer would post a loss of $0.07 per share when it actually produced a loss of $0.45, delivering a surprise of -542.86%. Over the last four quarters, the company has not been able to surpass consensus EPS estimates. Vaalco Energy, which belongs to the Zacks Oil and Gas - Exploration and Production - International industry, posted revenues of $135.17 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 3.18%. This compares to year-ago revenues of $96.89 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Vaalco Energy shares have added about 41.5% since the beginning of the year versus the S&P 500's gain of 12.8%. While Vaalco Energy has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Vaalco Energy was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.06 on $127.2 million in revenues for the coming quarter and $0.11 on $450 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Oil and Gas - Exploration and Production - International is currently in the bottom 33% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the broader Zacks Oils-Energy sector, T1 Energy Inc (TE), is yet to report results for the quarter ended June 2026. This company is expected to post quarterly loss of $0.13 per share in its upcoming report, which represents a year-over-year change of +38.1%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. T1 Energy Inc's revenues are expected to be $147 million, up 10.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Vaalco Energy Inc (EGY) : Free Stock Analysis Report T1 Energy Inc (TE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

HOUSTON, Aug. 06, 2026 (GLOBE NEWSWIRE) -- VAALCO Energy, Inc. (NYSE: EGY, LSE: EGY) (“Vaalco” or the “Company”) today announced that it declared its quarterly cash dividend of $0.0625 per share of common stock for the third quarter of 2026 ($0.25 annualized), which is payable on September 22, 2026, to stockholders of record at the close of business on August 21, 2026. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Board of Directors. George Maxwell, Vaalco’s Chief Executive Officer, commented, “We are pleased to announce our third quarter 2026 dividend, our 19th consecutive quarterly dividend. We are committed to investing in future growth with our ongoing capital programs across our diversified asset base while concurrently providing a meaningful and sustainable return to our shareholders through our quarterly dividend. This is underpinned by our strong cash generation from our high quality portfolio of assets.” About Vaalco Vaalco, founded in 1985 and incorporated under the laws of Delaware, is a Houston, Texas, USA based, independent energy company with a diverse portfolio of production, development and exploration assets across Gabon, Egypt, Côte d'Ivoire, and Equatorial Guinea. Vaalco's Legal Entity Identifier (LEI) is 549300CFHFVIWB8M6T24. For Further Information Forward Looking StatementsThis press release 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, which are intended to be covered by the safe harbors created by those laws and other applicable laws and “forward-looking information” within the meaning of applicable Canadian securities laws(collectively, “forward-looking statements”). Where a forward-looking statement expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. All statements other than statements of historical fact may be forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “forecast,” “outlook,” “aim,” “target,” “will,” “could,” “should,” “may,” “likely,” “plan” and “probably” or similar words may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this press release include, but are not limited to, statements relating to (i) estimates of future drilling, production, sales and costs of acquiring crude oil, natural gas and natural gas liquids; (ii) expectations regarding future exploration and the development, growth and potential of Vaalco’s operations, project pipeline and investments, and schedule and anticipated benefits to be derived therefrom; (iii) expectations regarding future acquisitions, investments or divestitures; (iv) expectations of future dividends; (v) expectations of future balance sheet strength; and (vii) expectations of future equity and enterprise value. Such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to: risks relating to any unforeseen liabilities of Vaalco; the ability to generate cash flows that, along with cash on hand, will be sufficient to support operations and cash requirements; risks relating to the timing and costs of completion for scheduled maintenance of the FPSO servicing the Baobab field; and the risks described under the caption “Risk Factors” in Vaalco’s most recent Annual Report on Form 10-K. Dividends beyond the third quarter of 2026 have not yet been approved or declared by the Board of Directors. The declaration and payment of future dividends remain at the discretion of the Board of Directors and will be determined based on Vaalco’s financial results, balance sheet strength, cash and liquidity requirements, future prospects, crude oil and natural gas prices, and other factors deemed relevant by the Board of Directors. The Board of Directors reserves all powers related to the declaration and payment of dividends. Consequently, in determining the dividend to be declared and paid on Vaalco’s common stock, the Board of Directors may revise or terminate the payment level at any time without prior notice. Any forward-looking statement made by Vaalco in this press release is based only on information currently available to Vaalco and speaks only as of the date on which it is made. Except as may be required by applicable securities laws, Vaalco undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise. Inside Information This announcement contains inside information as defined in Regulation (EU) No. 596/2014 on market abuse which is part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (“MAR”) and is made in accordance with the Company’s obligations under article 17 of MAR. The person responsible for arranging the release of this announcement on behalf of Vaalco is Matthew Powers, Corporate Secretary of Vaalco.