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7/28/2019 VAALCO+Company+Update+-+RBC June 2013 Final
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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
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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/7/28/2019 VAALCO+Company+Update+-+RBC June 2013 Final
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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
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West Africa Focus
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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
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Offshore Gabon: Etame Marin Permit
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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
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Offshore Gabon: Fields in the Etame Marin Permit
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Ebouri Field
Etame Field
South Tchibala Field
Avouma Field
Southeast Etame Field
North Tchibala Field
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Offshore Gabon: Etame Field
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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
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Offshore Gabon: New Platform Construction
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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
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Offshore Gabon: New Platform Construction
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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
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Offshore Gabon: Avouma & South Tchibala Fields
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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
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Offshore Gabon: Ebouri Field
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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
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Offshore Gabon: Ovoka Prospect
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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)
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ETAME MARIN PERMIT
Offshore Gabon: Future Exploration Potential
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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
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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
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FPSO Petroleo Nautipa
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Gamba-Ivinga Field
68 wells
Cum: 286 MMBO & 568 BCF
EUR 350 MMBO(From IHS)
Onshore Gabon: Mutamba Iroru Permit
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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
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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
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Offshore Angola: Block 5 Exploration
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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
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Offshore Angola: Block 5 Primary Prospects
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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
$35 million gross cost
100+ MMBO gross unrisked potential
Kindele/Mubafo Prospect 40% WI
100m water depth
Well depth: 2000m
$31 million gross cost
50 MMBO gross unrisked potential
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Offshore Equatorial Guinea: Block P
Marathon1,100 mmboe
Libreville
Gabon
EG
EG
Cameroon
Block P
PDA
Hess
600 mmboe
Exxon
1,300 mmboe
PDA Boundary
57,000 acres
232 km2
Venus Field (17 - 21 mmbo)
Europa Discovery
Marte:
AlbianTurbidites
SW Grande:
Tertiary Channels
Acquired October2012
2 exploration wellsplanned in2013/2014
Venus oil discoveryon blockcurrentlyevaluatingdevelopment plans
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Pro-forma Consolidated Balance Sheets
3/31/2013 12/31/2012
Assets
Cash & cash equivalents 102,641$ 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$
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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
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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$
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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