VAALCO Energy (NYSE: EGY): Potentially acquiring producing assets in Cote d’Ivoire?
• VAALCO is in discussions with Svenska Petroleum Exploration regarding a possible corporate transaction to acquire Svenska, whose primary asset is a 27.39% interest in Block CI-40, offshore Cote d'Ivoire. Current working interest production is approximately 4,500 boe/d net to Svenska. In 2022, Svenska generated after tax cashflow (before changes in working capital) of ~US$115 mm.• Block CI-40 includes the Baobab producing field with several additional prospects and the appraised Kossipo field.
• The operator is Canadian Natural Resources (CNR) that holds 57.61% interests in the licence. The remaining 15% is held by the national oil company, Petroci.
• Baobab was discovered in 2001 with production starting in 2005. The field was initially estimated to hold 1 bn bbl of oil in place according to Svenska. By YE18, recovery factor was only ~10%. The reservoir is located in water depths of 900-1,300 m, ~25 km from the coast. It was developed with an FPSO and gross production peaked at ~30 mbbl/d.
• CNR had indicated that the Kossipo discovery could be developed as a subsea tie-back to the Baobab FPSO.
• Pending further details on the transaction, we re-iterate our target price of US$9.00 per share.
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.
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.
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