vaalco+company+update+-+rbc june 2013 final

7/28/2019 VAALCO+Company+Update+-+RBC June 2013 Final

1/23

1

VAALCO ENERGY, INC.

RBC Global Energy Conference

June 3-4, 2013

New York

Robert Gerry IIIChief Executive Officer

KCA Deutag Ben Rinnes jackup drilling rig approaching Ebouri Platform


2/23

2

Corporate Information

Safe Harbor Statement

This presentation includes forward-looking statements within the meaning ofSection 27A of the Securities Act of 1933, as amended, and Section 21E of theSecurities Exchange Act of 1934, as amended. All statements other thanstatements of historical facts included in this presentation, including withoutlimitation, business strategies, plans and objectives of management of VAALCO for

future operations, and capital expenditures, are forward-looking statements. Therecan be no assurances that such forward-looking statements will prove to be correct.

Important factors that could cause actual results to differ materially from theforward-looking statements and projections include inflation, availability of goods,services and capital, environmental risks, drilling risks, volatility of commodity

prices, operational risks, foreign governmental risks and regulatory changes.

The United States Securities and Exchange Commission permits oil and gascompanies, in their filings with the SEC, to disclose only proved reserves that acompany has demonstrated by actual production or conclusive formation tests tobe economically and legally producible under existing economic and operatingconditions at oil and gas prices in effect at the time of the estimate, without futureescalation. We include in this presentation estimates of gross reserve potentialthat the SEC's guidelines strictly prohibit us from including in filings with the SEC.Investors are urged to consider closely the disclosure in our Form 10-K, available

from the SEC at www.sec.gov.

Inquiries:

VAALCO Energy, Inc.

Attn: Gregory R. Hullinger

4600 Post Oak Place, Suite 300

Houston, TX 77027

Ph: 713-623-0801

www.vaalco.com
http://www.vaalco.com/http://www.vaalco.com/


3/23

3

Company Profile

* As of 5/28/2013

Resources and Market Data Reserve Data as of 12/31 2012 2011

Ticker (NYSE) EGY Proved & Probable Reserves (MBOE) 11,427 9,242Employees - worldwide 100 Proved Reserves (MBOE) 7,745 6,368

*Market Capitalization ($MM) $370 Proved Developed Reserves (MBOE) 4,008 3,996Management Ownership 6% Proved Developed (%) 52% 63%*52 Week Price Range $6.07-$9.60 Percent Oil 98% 97%*Average Daily Volume (last90 days)

455,609

Key Financial Data ($MM) Q1 2013 2012 2011 Production Data

RevenueOperating Cash Flow

$44$21.5

$195$94.0

$210$89.6

Daily Production (BOEPD):

Net Income $7 $0.63 $34 Gross / VAALCO Net (after royalty) 17,000 / 4,150

Capex (excl. expl. dry holes) $15 $46 $33 Operated Production Percentage 100%Cash (incl. restricted) $116 $143 $149Debt - - - AcreageShares (Diluted - millions) 59 59 58

EPS (Diluted

per share) $0.12 $0.01 $0.59 International (gross/net ) in millions 2.5 / 0.9


4/23

West Africa Focus

4

GABONPort Gentil

Libreville

Nzeto

Luanda

Porto Amboim

ANGOLA

Block 5

1,400,000 gross acres

560,000 net acres

Offshore Exploration

Mutamba Iroru Permit

270,000 gross acres

111,000 net acres

Onshore Exploration

& Development

Etame Marin Permit

760,000 gross acres213,000 net acres

Offshore Production

and Exploration

EQUATORIAL

GUINEA

Block P

57,000 gross acres

18,000 net acres

Offshore Exploration

& Development


5/23

Offshore Gabon: Etame Marin Permit

5

VAALCO is the Operator with a 28.1% netW.I, in partnership with the Sinopec group(Addax), Sasol, Tullow, Sojitz andPetroEnergy

Production from four fields, all connectedto an FPSO facility

Eight wells currently producing

Oil production currently averagingapproximately 17,000 BOPD gross (4,150BOPD net to VAALCO after royalty)

Cumulative production as of 12/31/2012was approximately 72.4 million barrels

Multi-well drilling and workover programcommenced in late 2012

Construction of two new platformsunderway

Future exploration opportunities

EbouriEtame

North Tchibala

Avouma & South

Tchibala

ETAME MARIN

PERMIT

GABON

Port Gentil

Libreville


6/23

Offshore Gabon: Fields in the Etame Marin Permit

6

Ebouri Field

Etame Field

South Tchibala Field

Avouma Field

Southeast Etame Field

North Tchibala Field


7/23

Offshore Gabon: Etame Field

7

ExportPipeline

Etame Field

New Etame Platform

(Under construction)

Initial discovery made in 1998

Field declared commercial in 2001;largest of the four fields

First oil production September2002

Production is from four wells with

subsea completions Current production is

approximately 8,250 BOPD gross(2,000 BOPD net to VAALCO afterroyalty)

Cumulative production as of

12/31/2012 was approximately48.3 million barrels

New multi-well platformconstruction underway


8/23

Offshore Gabon: New Platform Construction

8

New Etame Platform

(Under construction)

ExportPipeline

Etame Field

New Etame Platform

Investment will result in moreefficient drainage of reservoirand increase proved reserves

Expected platform cost is $140million ($40 million net toVAALCO)

Up to 5 new development wellsplanned, at $25 million per well($7 million net to VAALCO)

Rate of Return expected to be inexcess of 60%

Installation expected in 2H 2014


9/23

Offshore Gabon: New Platform Construction

9

New Platform

(Under

construction)

SE Etame Field(Gamba)

North TchibalaField

(Dentale)

ExportPipeline

New SE Etame/N. Tchibala Platform

Objective to commercialize SE

Etame Gamba discovery and

exploit North Tchibala Dentale

reservoirs

Expected platform cost is $130

million ($37 million net to VAALCO)

Initially 3 new development wells

planned, at $25 million per well ($7

million net to VAALCO) Construction underway and

installation expected in 2H 2014


10/23

Offshore Gabon: Avouma & South Tchibala Fields

10

Avouma Platform

Avouma and South TchibalaFields

Discovery well completedAugust 2004

Production commenced inJanuary 2007

EAVOM-3H well came onlineApril 2013 with initial natural

flow rate of 3,000 BOPD Current production from fields is

approximately 5,500 BOPD gross(1,350 BOPD net to VAALCOafter royalty)

Cumulative production as of

12/31/2012 was approximately15.6 million barrels

Water knock-out facilitiesrecently installed-expect to beoperational in 2H 2013


11/23

Offshore Gabon: Ebouri Field

11

Ebouri Platform

EbouriField

Discovery well completed January2004

Platform installed August 2008

First production began in January2009; one well currently producingfrom the platform

H2S discovered in July 2012 in twowells now offline; sweeteningoptions being developed

Current production isapproximately 3,250 BOPD gross(800 BOPD net to VAALCO afterroyalty)

Cumulative production as of12/31/2012 was approximately 8.5million barrels

Drilling operations currentlyunderway for one exploration well


12/23

Offshore Gabon: Ovoka Prospect

12

Ovoka Exploration well scheduledafter Ebouri platform operations

Targeting 140 MMB gross unriskedreserves (34 MMB net to VAALCO)

from multiple horizonsWater Depth 60m

Well Depth 2,800m

Estimated costs $17 million ($5

million net to VAALCO)


13/23

ETAME MARIN PERMIT

Offshore Gabon: Future Exploration Potential

13

Elili Prospect

116m water depth

Well depth: 3,500m

GABON

Dussafu Discovery

(Harvest)

223 sq km of 3D data inEtame Marin block

completed 4Q 2011

Southwest Etame

78m water depth

Well depth: 2,000m

Kala Discovery

Drilled by Elf Gabon 1982

107m water depth

Well depth: 3,500m

Southwest Avouma

86m water depth

Well depth: 2,250m

Edge Lead

60m water depth

Well depth: 2,500m

Ovoka Prospect 60m water depth

Well depth: 2,800m

Northeast Avouma

85m water depth

Well depth: 2,200m

Awaiting partner approval

N MUKM Lead

50m water depth

Seismic processing &

interpretation underway


14/23

Floating Production, Storage and Offloading Facility

Operations began 2002

Long-term contract with Tinworth through 2020

1.1 million barrel storage capacity

Can accept up to 30,000 barrels of total fluids per day

25,000 BOPD oil processing limit

142 liftings through April 2013 totaling approximately 72.2 million barrels

Zero environmental incidents since inception of operations

Crude is sold in 2013 to Mercuria Trading NV based on Brent pricing structure

14

FPSO Petroleo Nautipa


15/23

Gamba-Ivinga Field

68 wells

Cum: 286 MMBO & 568 BCF

EUR 350 MMBO(From IHS)

Onshore Gabon: Mutamba Iroru Permit

15

NGongui Discovery welldrilled in Q4 2012

Encountered 49 feet of oilpay in the Gamba Formation

50% Partner TOTAL operatesthe Atora Field 6 miles to the

North Plan of Development

underway for submittal toGabon Government

Negotiations currently inprogress on establishing a

production area andrenewal of explorationacreage

Bende Field3 wells

Atora Field11 wells

Cum: 38 MMBO

Rabi Kounga Field240 wells

Cum: 840 MMBO

EUR 900 MMBO

NGongui Discovery


16/23

VAALCO-operated Block 5

LOENGO Subsalt Prospect330 Water Depth

Cobalt-operated Block 21

CAMEIA-1 Subsalt Discovery

5518 Water Depth

1180 of oil payTested to flow 5100 BOPD

(facilities constrained)

Maersk-operated Block 23

AZUL-1 Subsalt Discovery

3028 Water Depth

Estimate 3000 BOPD potential

Limits of Kwanza Basin

Offshore Angola: Kwanza Basin Republic of Angola

16


17/23

Offshore Angola: Block 5 Exploration

17

1.4 million acre license with water depthsfrom 0-500m in northern part of KwanzaBasin

VAALCO is Operator with 40% workinginterest, Sonangol P&P 20% carried interest.Sonangol sent positive recommendation fornew 40% partner to the Ministry of Mines forapprovaldecision expected soon

Potential on-block reserves of 1 BBO+ overmultiple pre-salt and post-salt prospects andleads

Block has history of 12 wells drilled by prioroperator

- 6 recorded oil or oil shows- 3 were drill stem-tested to produce 29

to 34 API oil at rates of between 700 and1,100 BOPD

1700 sq km of licensed and proprietary 3D


18/23

Offshore Angola: Block 5 Primary Prospects

18

Jack Prospect 40% WI

80m water depth

Well depth: 2200m

$30 million gross cost

40 MMBO gross unrisked potential

Loengo Prospect 40% WI

110m water depth

Well depth: 3800m


100+ MMBO gross unrisked potential

Kindele/Mubafo Prospect 40% WI

100m water depth

Well depth: 2000m


50 MMBO gross unrisked potential


19/23

19

Offshore Equatorial Guinea: Block P

Marathon1,100 mmboe

Libreville

Gabon

EG

EG

Cameroon

Block P

PDA

Hess

600 mmboe

Exxon

1,300 mmboe

PDA Boundary

57,000 acres

232 km2

Venus Field (17 - 21 mmbo)

Europa Discovery

Marte:

AlbianTurbidites

SW Grande:

Tertiary Channels

Acquired October2012

2 exploration wellsplanned in2013/2014

Venus oil discoveryon blockcurrentlyevaluatingdevelopment plans


20/23

20

Pro-forma Consolidated Balance Sheets

3/31/2013 12/31/2012

Assets

Cash & cash equivalents 102,641$ 130,800$

Restricted cash 12,949 12,131

Accounts receivables 33,307 13,113

Other current assets 3,261 3,955

PP&E, net 118,622 106,608

Other non-current assets 1,349 1,349

Total assets 272,129$ 267,956$

Liabilities & Owners' Equity

Current liabilities 40,125$ 45,063$

Asset Retirement Obligation & Other 10,750 10,368Shareholders' equity 221,254 212,525

Total liabilities & owners equity

(Amounts in thousands)

272,129$ 267,956$


21/23

21

2013 Capital Budget

Gross

$Millions

Net

$Million

Gabon Offshore

Development

Avouma 3H $ 28.5 $ 8.0

Construction of 2 new platforms

(Etame & SEENT)

144.7 40.6

Other 12.7 3.6

Exploration

Ebouri exploration well (success case costs) 26.6 7.5

Ovoka Prospect 17.0 5.0

Angola / Equatorial Guinea

Two Exploration Well Prospects 76.0 33.4

Total $ 305.5 $ 98.1


22/23

22

Pro-forma Income Statements

3 months

ended

3/31/2013

12 months

ended

12/31/2012

Revenues 44,137$ 195,287$

Operating costs and expenses (22,634) (108,694)

Operating Income 21,503$ 86,593$

Other expense, net 69 559

Income tax expense (14,246) (81,813)

Net Income 7,188$ 5,339$

Less net income - noncontrolling interest - (4,708)

Net income - VAALCO Energy, Inc.

(Amounts in thousands)7,188$ 631$


23/23

23

VAALCO - Summary

Stable production profile

100% operated

Multiple development opportunities

Attractive reserve base

98% oil

At 12/31/12, proved reserves increased by 22% as compared to 2011

Strong balance sheet No debt

2013 budget expected to be funded with cash flow

Large acreage inventory in focus area

Field development/expansion opportunities

High potential prospects

Growth Strategy

Focus on the existing West Africa asset base and acreage

positions to fully exploit the potential and expand West Africa footprint

Continue to pursue selective corporate and/or producing property

acquisitions with exploration upside

vaalco+company+update+-+rbc june 2013 final

Documents