VAALCO Energy Reports Q1 2026 Results, Raises 2026 Production Guidance and Details Growth Plans in Gabon, Egypt, Côte d’Ivoire – Minichart

Key Points for Investors

• Q1 2026 Net Loss: VAALCO reported a net loss of \$93.8 million (\$0.90 per diluted share), primarily driven by derivative losses and higher exploration expenses.
• Operational Successes:
  • Gabon: Successful drilling and production from Etame 14H and 15H development wells, with initial rates of 4,850 and 2,000 gross BOPD, respectively.
  • Côte d’Ivoire: Baobab FPSO refurbishment completed, reconnection underway, and production restart expected in Q2 2026.
  • Egypt: All wells in the recent drilling campaign successful; additional 2026 drilling initiated without raising capital guidance.
  • Canada: Complete divestment of Canadian properties for \$25.5 million in February 2026.
• Production & Sales: Q1 2026 NRI production was 15,110 BOEPD; Q2 2026 sales volumes guidance increased by 44% compared to Q1 2026, reflecting production ramp-up.
• 2026 Guidance Raised: Full-year production and sales volumes guidance increased by 8% and 12%, respectively, at the midpoint, while capital budget remains unchanged.
• Capital Expenditures: \$78.1 million invested in Q1, focused on Gabon drilling and Côte d’Ivoire FPSO work.
• Liquidity & Balance Sheet: Ended Q1 with \$48.0 million cash and \$152.0 million long-term debt; expanded reserves-based lending facility to \$300 million.
• Dividend: Declared a quarterly cash dividend of \$0.0625 per share, payable June 26, 2026.
• Hedging Impact: Reported \$70.6 million net loss on derivatives due to oil price increases; pragmatic hedging approach to protect cash flows during high investment period.
• Exploration Expense: Increased to \$22.4 million, mainly due to seismic and an unsuccessful well in Gabon.

Detailed Operational and Financial Review

Gabon Operations

The Phase Three Drilling Program in Gabon commenced Q4 2025. The ET-15H development well was brought online in February 2026, while the ET-14H was placed on production in April 2026. The ET-14H well encountered 325 meters of high-quality Gamba sands and delivered an initial flow rate of approximately 4,850 gross BOPD (2,850 net BOPD). The ET-15H well confirmed pilot results at 2,000 gross BOPD. Drilling continues at the Ebouri platform with additional opportunities at Ebouri and SEENT for further production and reserve additions.

A 3D seismic campaign on the Niosi and Guduma blocks was completed in January 2026, fulfilling minimum PSC commitments and informing future exploration.

Egypt

Following a successful 2024-2025 drilling campaign, a new 2026 program targeting six wells started in May, all without increasing the Company’s overall capital guidance. Recent workovers and optimized production management have resulted in higher average daily rates.

Côte d’Ivoire

The Baobab FPSO completed dry dock in February 2026 and returned to the field in April. Four of seven risers are reconnected, with production restart expected in Q2 2026. A rig has been secured for further drilling, targeting increased production from late Q3 2026.

VAALCO was confirmed as operator with a 60% WI in the Kossipo field (CI-40 block), with an updated field development plan due in H2 2026. Kossipo is a significant discovery with over 7,000 gross BOPD tested previously.

Equatorial Guinea

VAALCO continues to advance the Venus field development on Block P, with front-end engineering confirming concept viability and ongoing evaluation of alternative solutions.

Canada Divestment

All Canadian properties were sold for \$25.5 million, closing February 19, 2026. These assets were producing around 1,850 BOEPD at the time of sale, and Q1 results include only January and part of February.

Financial Highlights

• Q1 2026 net loss of \$93.8 million, driven by \$70.6 million in derivative losses (including \$55.9 million unrealized) and \$22.4 million in exploration expense.
• Adjusted Net Loss of \$47.2 million (\$0.45/diluted share).
• Adjusted EBITDAX of \$11.6 million, down from \$56.9 million Q1 2025, reflecting lower sales and realized prices.
• Q1 2026 gross sales: \$93.6 million (down 31% from Q4 2025); realized price: \$57.21/BOE; sales volumes: 1,094 MBOE.
• Production expense (ex-offshore workovers and stock comp): \$28.3 million (down 37% from Q1 2025).
• Depreciation, depletion, and amortization: \$18.2 million (down 40% YoY).
• Current income tax expense: \$14.9 million; deferred tax benefit: \$10.6 million.
• Q1 capital expenditures: \$78.1 million (below guidance); unrestricted cash: \$48.0 million; long-term debt: \$152.0 million.
• Expanded reserves-based lending facility to \$300 million in April 2026.
• Quarterly dividend of \$0.0625 per share declared for Q2 2026.

2026 Guidance (Revised Upwards)

• Sales Volumes: Q2 2026 NRI sales: 16,800–18,300 BOEPD (+44% QoQ); FY 2026: 7,200–9,200 (Egypt), 7,000–7,800 (Canada, partial), 2,400–2,700 (Côte d’Ivoire).
• Production Expenses: \$150.5–\$178 million (FY 2026); \$40.5–\$48.5 million (Q2 2026).
• Exploration Expense: \$26–\$31 million (FY 2026).
• CAPEX: \$290–\$330 million (FY 2026); \$110–\$130 million (Q2 2026).
• DD&A: \$16.00–\$20.00/BOE.
• Cash G&A: \$37 million (FY 2026); \$7–\$9 million (Q2 2026).

Hedging Program

The Company maintains a robust hedging program to protect cash flows. Current contracts (as of end Q1) include Brent-linked collars for the remainder of 2026 and into mid-2027, with floors in the \$63–\$71/bbl range and ceilings up to \$84.35/bbl. While this hedging generated significant non-cash losses in Q1 due to rising oil prices, unhedged sales are benefiting from the higher market prices.

What Shareholders Need to Know (Price-Sensitive Information)

• Raised 2026 guidance: Increased production and sales targets with unchanged capital guidance, highlighting operational execution and capital efficiency.
• Operational milestones: Gabon and Côte d’Ivoire projects on track; Baobab field restart imminent, which could drive near-term revenue and cash flow.
• Canadian asset sale: Streamlines portfolio and boosts liquidity.
• Significant derivative losses: Q1 impacted by large non-cash hedging losses, but higher future oil prices should benefit unhedged volumes.
• Liquidity and RBL facility: Expanded to \$300 million, providing flexibility for ongoing capital programs.
• Continued dividends: Commitment to shareholder returns despite Q1 losses, but future dividends remain subject to Board approval.
• Upcoming catalysts: Baobab field production restart, Q2 sales liftings in Gabon, and new drilling in Egypt and Côte d’Ivoire.
• Net debt increase: Net debt rose to \$104 million due to increased borrowings for the FPSO refurbishment and capital spending.

Conclusion and Outlook

Despite a challenging Q1 marked by derivative losses and lower sales (timing-related), VAALCO has made substantial progress operationally and strategically. With production set to ramp up, capital spending under control, and the portfolio streamlined, the Company is positioned for a stronger financial performance in Q2 and beyond. The restart of the Baobab field and additional drilling in Egypt and Gabon are key near-term value drivers.

Investors should monitor upcoming sales volumes, the impact of higher oil prices, and further operational updates on drilling and the Côte d’Ivoire restart. The continued payment of dividends and increased lending capacity provide confidence, but significant exposure to commodity prices and exploration risk remain.

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Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should consult the company’s official filings and their financial advisors before making investment decisions. Financial results and forward-looking statements are subject to risks and uncertainties as described in VAALCO’s regulatory filings.

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