Loading...
01/10 20:11
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents mixed signals: while production costs have reduced and dividends are being maintained, the CapEx reduction is permanent, and the Canadian drilling program is postponed. The Q&A reveals uncertainties in South Ghazalat's potential and Cote d'Ivoire's drilling timeline, which tempers optimism. Despite a dividend yield of 7% and efficient operations in Egypt, unclear guidance on key projects and market conditions suggest a neutral stock price movement.
NRI production 15,405 BOE per day, at the high end of guidance.
Working interest production 19,887 BOE, above the midpoint of guidance.
NRI sales 12,831 BOE per day, at the high end of guidance.
Net income $17.2 million or $0.0016 per share for the first 9 months of 2025.
Adjusted EBITDAX $130.5 million for the first 9 months of 2025.
Production costs $29.87 million, a 26% reduction quarter-over-quarter, and $25.24 per barrel.
Income tax benefit $3.6 million for Q3 2025, comprised of an $8.6 million current tax expense offset by a deferred tax benefit.
Unrestricted cash $24 million at the end of the third quarter.
Collections from EGPC $103.6 million since January 1, 2025.
Outstanding borrowings $60 million as of September 30, 2025.
Cash CapEx $48.3 million in Q3, below the guidance of $70 million to $90 million.
Dividends returned to shareholders $6.7 million in Q3 and $20 million in the first 9 months of 2025.
FPSO refurbishment in Cote d'Ivoire: The FPSO refurbishment is well underway, with significant development drilling expected to begin in 2026 after the FPSO returns to service. This project is expected to add meaningful production from the Baobab field.
Drilling campaign in Gabon: A drilling campaign is set to begin in late Q4 2025, with plans to start on the Etame field platform and later move to the Ebouri wells. The Ebouri 4H well has been producing at a gross average of 1,000 barrels of oil per day in 2025.
Drilling and workover program in Egypt: Multiple wells have been drilled and completed in the first 9 months of 2025, with operational efficiency contributing to cost minimization. The program has positively impacted production.
Farm-in agreement for CI-705 block in Cote d'Ivoire: VAALCO operates with a 70% working interest and 100% paying interest. Seismic data is being analyzed to assess the block's potential, which is located in a proven hydrocarbon system.
Exploration blocks in Gabon: Seismic surveys are planned for late 2025 or early 2026 for the Niosi Marin and Guduma Marin blocks, which are near prolific producing fields.
Production and sales performance: NRI production of 15,405 BOE per day and working interest production of 19,887 BOE per day in Q3 2025 exceeded guidance. Full-year production and sales guidance midpoint was raised by 5%, while capital guidance was reduced by 20%.
Cost management: Production expenses per BOE decreased by $1, and capital expenditure for Q3 2025 was below guidance, reflecting operational efficiency.
Dividend strategy: Approximately $20 million was returned to shareholders in the first 9 months of 2025 through dividends, with a 7% dividend yield for the year.
Hedging program: Hedges were added for 2026, targeting 40% of H1 2026 oil production to be hedged by year-end, with average floors of $61-$62 per barrel.
FPSO Project Delays: Production in Cote d'Ivoire came offline in Q1 2025 due to the FPSO project, delaying meaningful production uplift until 2026 and 2027.
Drilling Rig Availability: The drilling campaign in Gabon has been delayed until late Q4 2025 due to the rig's existing commitments, impacting the timeline for production increases.
Commodity Price Volatility: Lower commodity prices in 2025 have led to the postponement of the Canadian drilling program and impacted sales and pricing in Q3.
Hedging Program Risks: The company has moved to a more programmatic hedging approach, but volatility in oil prices could still impact financial stability.
Exploration Risks in South Ghazalat: Uncertainty in exploration results in South Ghazalat, with varying reservoir pressures and oil and gas net pay zones, could affect future production plans.
Technical Challenges in Equatorial Guinea: The FEED study for the Venus Block P highlights risks and challenges from the shelf location, requiring exploration of alternative development opportunities.
Increased Production Costs: Additional production costs for chemicals in Gabon due to H2S treatment have been incurred, impacting margins.
Receivables Collection in Egypt: While progress has been made, the company still faces risks related to receivables collection from the Egyptian General Petroleum Corporation.
Full Year Production and Sales Guidance: The midpoint of full year production and sales guidance has been raised by about 5%.
Capital Guidance: Capital guidance has been reduced by almost 20%.
Production Uplift from Major Projects: Meaningful production uplift is projected for 2026 and into 2027 from major projects in Cote d'Ivoire and Gabon.
Cote d'Ivoire FPSO Project: The FPSO refurbishment is underway, with significant development drilling expected to begin in 2026 after the FPSO returns to service. This is anticipated to add meaningful production from the Baobab field.
Gabon Drilling Campaign: A drilling campaign in Gabon is set to begin in late Q4 2025, with plans to start on the Etame field platform and later move to the Ebouri wells.
Exploration Blocks in Gabon: A seismic survey is planned for late 2025 or early 2026 to fulfill work commitments on the Niosi Marin block.
Egypt Drilling Program: The drilling program in Egypt is ongoing, with multiple wells drilled and completed in 2025. The program has been efficient, minimizing costs and positively impacting production.
Equatorial Guinea Venus Block P Development: The Front End Engineering Design (FEED) study is complete, confirming technical viability. Development is planned to proceed with production expected in the next few years.
Canada Drilling Program: The Canadian drilling program has been postponed for 2025 due to the current commodity price environment, but future opportunities are being monitored.
Q4 2025 Production and Sales Forecast: Production is forecasted to be between 20,300 and 22,200 working interest BOE per day and between 15,600 and 17,300 NRI BOE per day. Sales are expected to be higher compared to Q3 due to more offshore listings in Gabon.
Hedging Program: Approximately 500,000 barrels of 2025 oil production are hedged with an average floor of $61 per barrel, and 800,000 barrels for the first half of 2026 are hedged with an average floor of $62 per barrel.
Dividend Yield: The company has maintained a dividend yield of approximately 7%.
Dividend Payments: In the first 9 months of 2025, the company returned around $20 million to shareholders through dividends.
Quarterly Dividend: The Q4 dividend announcement confirmed another $0.0025 per share annual dividend for 2025.
Share Repurchase: No share repurchase program was mentioned in the transcript.
The earnings call presents mixed signals: while production costs have reduced and dividends are being maintained, the CapEx reduction is permanent, and the Canadian drilling program is postponed. The Q&A reveals uncertainties in South Ghazalat's potential and Cote d'Ivoire's drilling timeline, which tempers optimism. Despite a dividend yield of 7% and efficient operations in Egypt, unclear guidance on key projects and market conditions suggest a neutral stock price movement.
The earnings call highlights strong operational performance with net income and EBITDAX at high levels. Despite a CapEx reduction, the company maintains a solid dividend yield and plans for increased production. The Q&A section reveals positive cash flow expectations and progress in key projects. While some uncertainties exist, such as FPSO timelines, the overall sentiment is positive, with optimistic guidance and shareholder returns supporting a likely stock price increase of 2% to 8%.
The earnings call presents a mixed picture: strong production and shareholder returns are offset by risks in taxation, operational challenges, and financial liquidity concerns. The Q&A highlighted uncertainties in future drilling campaigns and management's reluctance to provide detailed guidance, which could dampen investor sentiment. Despite positive aspects like record production and shareholder returns, the lack of clear guidance and financial risks lead to a neutral outlook for the stock price in the short term.
The company's financial performance is strong, with increased reserves, production, and shareholder returns, despite some challenges. The Q&A revealed positive prospects for production increases and effective cost management. However, concerns remain about supply chain issues and economic factors. Overall, the positive developments, including the Svenska acquisition and shareholder returns, outweigh the negatives, suggesting a positive stock price movement in the near term.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
