TIDMEGY
RNS Number : 7400U
Vaalco Energy Inc
03 August 2022
VAALCO ENERGY PROVIDES OPERATIONAL UPDATE
HOUSTON - August 3, 2022 - VAALCO Energy Inc. (NYSE: EGY; LSE:
EGY) ("VAALCO" or the "Company") today provided an update on the
South Tchibala 1HB-ST well, as well as updated full year production
guidance.
Highlights
-- South Tchibala 1HB-ST well:
o Penetrated a thin section of the Gamba sand that is not
economically viable to complete in this wellbore;
o Discovered two potential Dentale producing zones, the Dentale
D1 sand and the Dentale D9 sand;
o Completed the Deep Dentale D1 sand interval with a small frac
pack;
-- This sand interval has good quality oil with low gas oil
ratio ("GOR") that has produced an average of 150 to 200 net
revenue interest ("NRI") barrels of oil per day ("BOPD");
-- Production rates have been well below the minimum recommended
operating range of the electrical submersible pump ("ESP") which
has required more frequent well cycling to prevent ESP damage;
o Plan to evaluate and recomplete the D9 interval during the
next drilling campaign;
-- Expected higher oil production rates from the D9 interval
which is analogous to the North Tchibala sands currently on
production;
-- Dentale D9 interval has an estimated original oil in place
("OOIP") range of 4 to 15 million barrels of oil ("MMBO"); and
-- Due to low flow volumes below the minimum recommended
operating range of the ESP, the South Tchibala 1HB-ST well will be
intermittently flowed, using well cycling, to determine if
production improvements will occur and to project future reserve
recovery expectations ; and
-- Primarily due to the South Tchibala 1HB-ST well performance,
VAALCO's full year 2022 net production guidance is being reduced by
750 NRI BOPD at the midpoint to a range of 9,000 to 9,500 NRI
BOPD.
George Maxwell, VAALCO's Chief Executive Officer commented, "The
production from the D1 formation of the South Tchibala 1HB-ST has
been below expectations and as a result, we are lowering full year
2022 production guidance by 750 NRI BOPD at the midpoint. Despite
this, we remain optimistic about the D9 formation and plan to
recomplete that interval in the South Tchibala 1HB-ST wellbore
during our next drilling campaign. We plan to drill additional
wells in the 2021/2022 drilling campaign that could positively
impact our production toward the end of the year and into 2023. By
exercising our additional options on the current drilling rig in a
time of continued strong pricing, we are maximizing our potential
to add meaningful reserves and production to VAALCO's portfolio.
The Etame asset is a premier, high-quality field that has produced
over 126 million barrels of oil since we began producing it over 20
years ago and we believe there is still significant upside to be
captured over the next decade."
Etame: The South Tchibala 1HB-ST
The South Tchibala 1HB-ST discovered two potential Dentale
producing zones, the Dentale D1 sand and the Dentale D9. The first
completion was in the shallower D1 which included a hydraulic
fracture treatment to increase both the production flow rate and
recovery from the D1 interval.
To date, production rates have been well below the minimum
recommended operating range of the ESP which has required more
frequent well cycling to prevent ESP damage. Pressure transient
analysis has been used during well shut-in periods to determine D1
reservoir characteristics in this area. According to several
analyzed pressure build-ups, multiple boundaries near the well and
low permeability have combined to restrict the capability of the
well to continuously provide oil at stable rates. Production and
shut-in cycling of the well will be continued to determine if
production improvements will occur and to project future reserve
recovery expectations.
The additional Dentale D9 (15 meters net hydrocarbons) interval
can be tested and completed in the future and has an estimated OOIP
range of 4 to 15 MMBO.
Production Guidance
In conjunction with the South Tchibala 1HB-ST well performance,
VAALCO's full year 2022 net production guidance is being reduced by
750 NRI BOPD at the midpoint to a range of 9,000 to 9,500 NRI BOPD.
Previously VAALCO's full year 2022 production guidance was 9,500 to
10,500 NRI BOPD.
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 63.6% participating interest in the Etame Marin block,
located offshore Gabon, which to date has produced over 126 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 / J on Krinks /Chris Judd VAALCO@buchanan.uk.com
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.
All statements, other than statements of historical facts, included
in this document 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. These statements may include statements
related to the impact of the COVID-19 pandemic, including the
recent sharp decline in the global demand for and resulting global
oversupply of crude oil and the resulting steep decline in oil
prices, production quotas imposed by Gabon, disruptions in global
supply chains, quarantines of our workforce or workforce reductions
and other matters related to the pandemic, 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, its
activities in Equatorial Guinea, expected sources of and potential
difficulties in obtaining future capital funding and future
liquidity, its ability to restore production in non-producing
wells, our ability to find a replacement for the FPSO or to renew
the FPSO charter, future operating losses, future changes in crude
oil and natural gas prices, future strategic alternatives, future
and pending acquisitions, capital expenditures, future drilling
plans, acquisition and interpretation of seismic data and costs
thereof, negotiations with governments and third parties, timing of
the settlement of Gabon income taxes, and expectations regarding
processing facilities, production, sales and financial projections.
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. 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, crude oil and natural gas price volatility, the
impact of production quotas imposed by Gabon in response to
production cuts agreed to as a member of OPEC, inflation, general
economic conditions, the outbreak of COVID-19, 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.
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.
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.
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