VAALCO Energy, Inc. (NYSE: EGY; LSE: EGY) (the Company) today
provided an update on its 2019/2020 drilling program Offshore
Gabon.
Highlights
- Successfully completed Etame 9H development well including
approximately 1,000 feet of horizontal section in Gamba
reservoir;
- Brought onto production at a stabilized flow rate of 5,500
gross barrels of oil per day (BOPD), 1,500 net BOPD to VAALCO, with
no H2S;
- Due to high reservoir quality, production is higher than
the pre-drill estimate of 2,500 to 3,500 BOPD gross,
675 to 960 net to VAALCO;
- Increased its forecasted 2019 net exit production rate to 4,500
to 4,700 BOPD, up 16% from its prior estimate of 3,800 to 4,100
BOPD;
- Expects recategorization of 6.2 million barrels of undeveloped
2P oil reserves to developed 2P oil reserves;
- Commenced drilling of the Etame 11H horizontal development well
with production expected online in late January;
- Continued planning underway for workover activity on Etame 10H
and drilling of SE Etame 4P appraisal wellbore.
Cary Bounds, Chief Executive Officer, commented,
“We are very excited with the continued success that we have had in
the 2019/2020 drilling program thus far as we demonstrate the
development potential from the Etame field. The very strong
stabilized net rate of 1,500 BOPD from the Etame 9H well is a
significant first step toward increasing overall production by
approximately 25% in 2020 compared to 2019. With the Etame 9H
well online, we expect our 2019 net exit production rate to average
4,500 to 4,700 BOPD, 16% higher than our previous estimate of 3,800
to 4,100 BOPD net to VAALCO.
We are in the midst of drilling the Etame 11H
development well which will likely be followed by a workover on the
Etame 10H well to replace the ESP. The Etame 10H workover, if
undertaken, could restore additional production of 735 gross BOPD,
or 200 BOPD net to VAALCO. We then plan to move the rig to
the SEENT platform to drill the SE Etame 4P appraisal well, which
could confirm additional development well locations in the Gamba
reservoir.
We are executing on our strategic plan, building
positive momentum into 2020 and remain focused on maintaining our
record of operational success.”
VAALCO reached total depth of approximately
8,900 feet in the Etame 9H development well and drilled and
completed approximately 1,000 feet of the horizontal section within
the Gamba reservoir. The horizontal section is at the top of
the Gamba structure where the high-quality reservoir is
approximately 45 feet thick. After installing production
equipment, the well was brought online at a stabilized rate of
5,500 BOPD gross (1,500 BOPD net to VAALCO), with no H2S which
compares to the previously disclosed pre-drill expected stabilized
initial production rate of 2,500 to 3,500 gross BOPD (675 to 960
BOPD net to VAALCO). By year-end 2019, VAALCO expects to
convert approximately 6.2 million barrels of gross undeveloped 2P
oil reserves to developed 2P oil reserves. The Etame 9H
development well was drilled and completed as planned, with no
safety or environmental incidents.
Shortly after completion of the Etame 9H
development well, the Company began drilling the Etame 11H
horizontal development well from the Etame platform, targeting the
same Gamba reservoir at a different location in the Etame
field. If successful, the Etame 11H well is expected to
result in additional production of 2,500 to 3,500 gross BOPD (675
to 960 BOPD net to VAALCO) coming online in late January 2020.
After completing the Etame 11H well, VAALCO
plans to execute a workover to replace the electric submersible
pump (ESP) in the Etame 10H well on the same platform. The
Company then plans to move the rig to the Southeast Etame/North
Tchibala platform to drill the SE Etame 4P appraisal wellbore to
evaluate a Gamba step out area in Southeast Etame. Upon
drilling this second appraisal wellbore, the drilling commitment as
part of the PSC extension that VAALCO signed last year will be
complete. As discussed in the past, if the SE Etame 4P
appraisal wellbore indicates the presence of hydrocarbons in the
Gamba reservoir then VAALCO, subject to approvals from joint
interest owners and governmental authorities, plans to drill a
third development well as part of the 2019/2020 drilling
campaign.
About VAALCO
VAALCO, founded in 1985, is a Houston, USA
based, independent energy company with production, development and
exploration assets in the West African region.
The Company is an established operator within
the region, holding a 31.1% working interest in the Etame Marin
Block, located offshore Gabon, which to date has produced over 110
million barrels of crude oil and of which the Company is the
operator.
For Further Information
VAALCO Energy, Inc. (General and Investor
Enquiries) |
+00 1 713 623 0801 |
Website: |
www.vaalco.com |
|
|
Al Petrie Advisors (US Investor Relations) |
+00 1 713 543 3422 |
Al Petrie / Chris Delange |
|
|
|
Buchanan (UK Financial PR) |
+44 (0) 207 466 5000 |
Ben Romney / Chris Judd / James Husband |
VAALCO@buchanan.uk.com |
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. All statements,
other than statements of historical facts, included in this press
release that address activities, events, plans, expectations,
objectives or developments that VAALCO expects, believes or
anticipates will or may occur in the future are forward-looking
statements. Forward-looking statements include all
statements regarding well results, wells anticipated to be drilled
and placed on production, future levels of drilling and operational
activity and associated expectations, the implementation of the
Company's business plans and strategy, prospect evaluations,
prospective resources and reserve growth, as well as statements
including the words "believe," "expect," "plans" and words of
similar meaning. These statements are based on assumptions made by
VAALCO based on its experience and perception of historical trends,
current conditions, expected future developments and other factors
it believes are appropriate in the circumstances. Actual future
results, including project plans and schedules and resource
recoveries could differ materially due to changes in market
conditions affecting the oil and gas industry or long-term oil and
gas price levels, political or regulatory developments, reservoir
performance, the outcome of future exploration and development
efforts, technical or operating factors, inflation, general
economic conditions, the Company's success in discovering,
developing and producing reserves, production and sales differences
due to timing of liftings, decisions by future lenders, the risks
associated with liquidity, lack of availability of goods, services
and capital, environmental risks, drilling risks, foreign
regulatory and operational risks, and regulatory changes. There are
no assurances the Company can develop probable or possible
reserves, or that if developed, probable reserves will become
producing reserves to the level of estimates.These and other risks
are further described in VAALCO's annual reports on Form 10-K and
quarterly reports on Form 10-Q and other reports filed with the
U.S. Securities and Exchange Commission (“SEC”) which can be
reviewed at http://www.sec.gov, or which can be received by
contacting VAALCO at 9800 Richmond Avenue, Suite 700, Houston,
Texas 77042, (713) 623-0801. 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.References to thickness of oil pay or of a formation
where evidence of hydrocarbons have been encountered is not
necessarily an indicator that hydrocarbons will be recoverable in
commercial quantities or in any estimated volume. Well test results
should be considered as preliminary and not necessarily indicative
of long-term performance or of ultimate recovery. Well log
interpretations indicating oil accumulations are not necessarily
indicative of future production or ultimate recovery.
Inside Information
This announcement contains inside information as defined in
Regulation (EU) No. 596/2014 on market abuse (“MAR”) and is made in
accordance with the Company’s obligations under article 17 of
MAR.
Supplemental Reserves Disclosure
This press release contains oil and gas metrics which do not
have standardized meanings or standard methods of calculation as
classified by the SEC and therefore such measures may not be
comparable to similar measures used by other companies. Such
metrics have been included herein to provide readers with
additional measures to evaluate the Company’s performance; however,
such measures are not reliable indicators of the future performance
of the Company and future performance may not compare to the
performance in previous periods.
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