HOUSTON, Oct. 24, 2014 /PRNewswire/ -- VAALCO Energy, Inc.
(NYSE: EGY) today announced that the Company has entered into the
Subsequent Exploration Phase ("SEP") on Block 5 offshore
Angola together with its working
interest partner, Sonangol P&P, as provided for in the
Production Sharing Agreement signed in 2006 with the Republic of
Angola.
The SEP extends the exploration license for an additional three
year period such that the new expiry date for exploration
activities is November 30,
2017. The SEP requires the Company and its partner to acquire
a 3D seismic program covering six hundred square kilometers and to
drill two additional exploration wells. The seismic
obligation has been satisfied with a seismic program already
completed covering 1,058 square kilometers over the outboard
portion of the block.
By entering the SEP, the Company is now required to drill a
total of four exploration wells during the exploration extension
period. The four well obligation includes the two well
commitment under the primary exploration period that carries over
to the SEP period. A ten million
dollar assessment (five million
dollars net to VAALCO) applies to each of the four
commitment exploration wells, if any, that remain undrilled at the
end of the exploration period in 2017.
As previously announced, the Company has contracted for the
Transocean "Celtic Sea" semi-submersible rig to drill the first
exploration well, the post-salt, Kindele-1 well. The Kindele
well is targeting the Mucanzo sand (Pinda group) with a planned
total depth of 2,250 meters in a water depth of 101 meters.
Gross unrisked recoverable resources are estimated to be between
20-49 million barrels. The rig is currently estimated to
be on location in mid-December 2014.
The decision to enter the SEP was made in part to remove
uncertainty that the primary term of the exploration license would
be extended by the Republic of Angola before the November 30, 2014 expiration date.
Steve Guidry, Chairman and CEO,
commented, "We believe entering into the SEP is a sound strategy
for the Company. Although the SEP comes with additional
commitments, we believe this is a coveted block with potential in
the deep syn-rift and sag play. The SEP allows VAALCO and its
partner to properly assess the results of the current seismic
reprocessing that is being merged with previously licensed seismic
data through pre-stack depth migration. This will help us
determine the best opportunities in the pre-salt horizons.
The action we took to enter into the SEP removes the uncertainty of
an exploration license extension and allows us to focus on our
exploration activities on the block."
Forward-Looking Statements
This document includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements are those concerning
VAALCO's plans, expectations, and objectives for future drilling,
completion and other operations and activities. All
statements included in this document that address activities,
events or developments that VAALCO expects, believes or anticipates
will or may occur in the future are forward-looking
statements. These statements include expected capital
expenditures, future drilling plans, prospect evaluations,
negotiations with governments and third parties, acquisition
opportunities and reserve growth. These statements are based
on assumptions made by VAALCO based on its perception of historical
trends, current conditions, expected future developments and other
factors it believes are appropriate in the circumstances.
Such statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond VAALCO's control.
These risks include, but are not limited to, inflation, general
economic conditions, oil and gas price volatility, the Company's
success in discovering, developing and producing reserves,
lack of availability of goods, services and capital, environmental
risks, drilling risks, foreign operational risks, and regulatory
changes. These and other risks are further described in
VAALCO's annual report on Form 10-K for the year ended December 31, 2013 and other reports filed with
the SEC which can be reviewed at http://www.sec.gov, or which can
be received by contacting VAALCO at 4600 Post Oak Place, Suite 300,
Houston, Texas 77027, (713)
623-0801. Investors are cautioned that forward-looking
statements are not guarantees of future performance and that actual
results or developments may differ materially from those projected
in the forward-looking statements. VAALCO disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events,
or otherwise.
About VAALCO
VAALCO Energy, Inc. is a Houston based independent energy company
principally engaged in the acquisition, exploration, development
and production of crude oil. VAALCO's strategy is to increase
reserves and production through the exploration and exploitation of
oil and natural gas properties with high emphasis on international
opportunities. The company's properties and exploration
acreage are located primarily in Gabon, Angola
and Equatorial Guinea in
West Africa.
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SOURCE VAALCO Energy, Inc.