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Estimate Update Including Cote d'Ivoire Contribution

Our updated estimates include the impact of the Svenska acquisition, which closed on April 30, 2024, and was included in management’s latest guidance update following the release of 1Q24 financial and operating results (Figure 1). The acquisition added a 27.39% non-operated working interest in the CI-40 license located offshore Côte d’Ivoire. On May 7, 2024, management increased the midpoint of FY24 working interest (WI) production guidance to ~25.0 MBOE/d from 22.1 MBOE/d. Production ranges for VAALCO’s assets in Gabon, Egypt, and Canada were maintained. CI-40 is expected to add WI production of 2.8 – 3.1 BOE/d to FY24 volumes. The producing Baobab field was discovered in 2001 approximately 30km offshore Côte d’Ivoire in ~900 – 1,300 meters of water. A maintenance program is planned to upgrade the Baobab Ivoirien MV-10 floating production storage and offloading (FPSO) vessel in 2025 before the next anticipated development campaign begins in 2026. With the FPSO expected to be off station for much of FY25, our updated estimates only include ~1.0 MBOE/d production for the year. Our updated FY24 adjusted EBITDA estimate is $350.1 million, a 25% increase from $280.4 million in FY23. For FY25, our adjusted EBITDA estimate is $277.4 million. The Y/Y decrease is largely driven by the FPSO maintenance program which will result in Baobab’s production being shut in for the majority of the year. Our estimates incorporate average Brent oil price estimates of $84.21/bbl for FY24 and $85.00/bbl for FY25. Figures 2 – 4 summarize our estimates. Our estimates suggest VAALCO could generate ~$160 million of free cash flow in FY24, strengthening an already strong liquidity position (Figure 5). At the end of 1Q24, VAALCO had $157.1 million of total liquidity. The company funded the $40.2-million Svenska acquisition with cash at closing. VAALCO is well positioned to fund a renewed development program in Gabon in 2025, which could be the centerpiece of next year’s capital program. Management is considering a 5 – 7 well drilling campaign to include a mix of development and exploration wells along with a natural gas well to supply infield power needs. Management is also determining the best option to sweeten crude oil at the Ebouri field to commercialize stranded oil reserves. As of December 31, 2023, VAALCO’s estimated pro forma proved reserves under SEC guidelines were 45.6 MMBOE, including 16.9 MMBOE added in the Svenska acquisition. The 16.9 MMBOE (93% oil) estimate represents a 30% uplift from the original 1P WI CPR estimate as of October 1, 2023. Management also reported a slight increase in 2P WI CPR estimated reserves in Cote d’Ivoire to 22.5 MMBOE (93% oil) from the original estimate at the time the acquisition was announced of 21.7 MMBOE (97% oil). The information was included in an 8K filed with the SEC on July 16, 2024. VAALCO’s asset portfolio includes producing assets in four countries and a development project in Equatorial Guinea with 2P WI CPR reserves totaling ~100 MMBOE (Figure 6).