Report
Stephane Foucaud

VAALCO Energy (NYSE: EGY): Increased reserves and resources estimate in Cote d’Ivoire

• The YE23 SEC net 1P reserves in Cote d’Ivoire are estimated at 16.9 mmboe; which compares very favorably with the previous estimate for the WI 1P reserves of 13 mmboe (as of 01/10/2023).
• The YE23 WI 2P reserves are now estimated at 22.5 mmboe. Adding back production over November and December 2023 (assuming ~5 mbbl/d production), the new estimate represents an increase of ~1.1 mmboe vs the previous estimate of 21.7 mmboe at the end of October 2023.
• 20.4 mmboe 2C contingent resources have also been identified on the Baobab field. This is in addition to the 10.7 mmboe WI resources we carry for Kossipo.
• We re-iterate our target price of US$10 per share in line with our new ReNAV. The current dividend yield is ~3.6% and the inventory of organic growth opportunities is very large. We believe that visibility on (1) the redevelopment of Baobab and (2) the development of Ebouri (Gabon) and EG will be a catalyst to the share price.

Cote d’Ivoire valuation
The value of the SEC 1P net reserves in Cote d’Ivoire has been estimated at US$195.5 mm while the 2P WI reserves are independently valued at US$240.9 mm. The 2P WI reserves valuation assumes oil prices of US$79.79/bbl in 2024, US$69.79/bbl in 2025 and 2% escalation per year thereafter. This compares very favorably with our NPV15% of US$145 mm (US$70/bbl flat without escalation from 4Q24).

Valuation
As we increase our 2P reserves estimate in Cote d’Ivoire and add 20.4 mmbbl of 2C contingent resources for Baobab (that we are conservatively attributing a 30% chance of development), our ReNAV is revised to ~US$9.80 per share (US$9.51 per share previously). The development of Ebouri could add >US$1.00/sh to our Core NAV.
Underlying
Vaalco Energy Inc.

VAALCO Energy is an independent energy company engaged in the acquisition, exploration, development and production of crude oil. The company is primarily engaged in its Etame Production Sharing Contract related to the Etame Marin block located offshore the Republic of Gabon in West Africa. The company also owns interests in an undeveloped block offshore Equatorial Guinea, West Africa.

Provider
Auctus Advisors
Auctus Advisors

Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector.

The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy.

Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors.

Auctus provides Corporate Broking, Equity Research and Investment Banking services. 

Analysts
Stephane Foucaud

Other Reports on these Companies
Other Reports from Auctus Advisors

ResearchPool Subscriptions

Get the most out of your insights

Get in touch