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• A smaller ConocoPhillips, focused on oil and gas exploration and production primarily in West Africa.
• Marathon Oil or Hess, but as a smaller independent oil and gas producer with operations concentrated in West Africa.
• An independent oil and gas producer, similar to a small-cap version of Occidental Petroleum, but primarily operating in West Africa.

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• Crude Oil: A raw fossil fuel extracted from underground reservoirs and sold to refineries for processing into various petroleum products.
• Natural Gas: A naturally occurring hydrocarbon gas, often extracted alongside or independently of crude oil, and sold as an energy source.

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VAALCO Energy (EGY) is an independent energy company focused on the acquisition, exploration, development, and production of crude oil and natural gas. As such, it sells its crude oil primarily to other companies rather than individuals.

According to their most recent annual report (10-K filing for the year ended December 31, 2023), VAALCO Energy's major customers, those accounting for 10% or more of their total revenue, are:

• Vitol S.A.: A private, international energy trading company. (Accounted for approximately 25% of 2023 revenue)
• Petrobras Netherlands B.V.: A subsidiary of Petróleo Brasileiro S.A. (Petrobras), which is a public company.
  • Parent Company: Petróleo Brasileiro S.A. (Petrobras)
  • Symbol: PBR (NYSE)
  (Accounted for approximately 17% of 2023 revenue)

VAALCO Energy notes that they have not historically been dependent on any single purchaser and sell their crude oil to multiple purchasers depending on market conditions, available lifting capacity, and price.

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• Vantage Drilling International (VDRIQ)

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George Maxwell, Chief Executive Officer and Director

Ronald Bain, Chief Financial Officer

William R. Thomas, President

Thor Pruckl, Executive Vice President, International Operations

Lynn Willis, Interim Chief Accounting Officer and Controller

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The key risks to VAALCO Energy (EGY) are primarily associated with the volatile nature of the oil and gas industry and its specific operational footprint.

1. Commodity Price Volatility: VAALCO Energy's financial performance, cash flows, and investment decisions are highly susceptible to fluctuations in the prices of crude oil, natural gas, and natural gas liquids (NGLs). An increase in operating costs due to inflationary pressures or supply chain disruptions, coupled with an inability to recover these through higher commodity prices, could negatively impact the company's profitability and financial condition.
2. Geopolitical and Operational Risks in Africa: A significant portion of VAALCO Energy's operations and assets are located in various African countries, including Gabon, Egypt, Côte d'Ivoire, Equatorial Guinea, and Nigeria. This geographic concentration exposes the company to substantial geopolitical, regulatory, and operational risks inherent to these regions, such as government interventions, political instability, and changes in local regulations, which are outside of the company's control.
3. Capital Expenditures and Financing: The exploration, development, and production of oil and gas assets demand substantial capital expenditures. VAALCO Energy faces the risk of not being able to obtain the necessary capital or financing to fund its activities, which could materially and adversely affect its business, financial position, and results of operations. Additionally, rising interest rates could increase debt servicing costs, reducing funds available for exploration and development and potentially impacting the company's stock price.

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• Energy Transition and Declining Long-Term Demand for Fossil Fuels: The accelerating global shift towards decarbonization, increased adoption of renewable energy sources, and electrification of transport are leading to a projected decline in the long-term demand for crude oil. This fundamental shift threatens the future viability and profitability of VAALCO's upstream oil production assets, potentially leading to stranded assets and reduced future revenues.
• Increasing Difficulty in Accessing Capital and Securing Favorable Financing: As a direct consequence of the energy transition and growing ESG (Environmental, Social, and Governance) pressures, financial institutions, investors, and lenders are increasingly restricting or divesting from fossil fuel projects, particularly for smaller independent producers. This makes it challenging for VAALCO to raise capital for exploration, development, or acquisitions, or to secure debt on favorable terms, thereby constraining growth and and potentially increasing the cost of operations.
• Heightened Geopolitical and Operational Risks in Key Operating Regions: VAALCO's primary assets are located in West Africa, particularly Gabon. Recent political instability, including the coup in Gabon in August 2023, introduces significant uncertainty regarding future regulatory frameworks, fiscal terms, and potential operational disruptions. Such events can lead to renegotiation of concession agreements, increased local content requirements, higher taxes, or direct operational interruptions, impacting the company's profitability and asset value in a crucial region.

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VAALCO Energy (EGY) primarily engages in the acquisition, exploration, development, and production of crude oil and natural gas. The addressable markets for their main products and services are identified by the regions in which they operate: Côte d'Ivoire, Egypt, Equatorial Guinea, Gabon, East Africa, and Canada. Their primary focus is on Africa.

Addressable Markets:

• Africa Crude Oil Market: The Africa crude oil market was valued at approximately USD 170 billion in 2025 and is projected to reach USD 220 billion by 2031, growing at a compound annual growth rate (CAGR) of around 4% from 2025 to 2031. Africa's crude oil production reached 6.9 million barrels per day in 2020.
• Africa Natural Gas Market: The African natural gas market was estimated to be approximately USD 50 billion in 2023 and is expected to reach around USD 75 billion by 2030, with an anticipated CAGR of 5-7% between 2024 and 2030. Africa's natural gas consumption is projected to increase by 4% in 2025. Natural gas demand across Africa is expected to grow at an average annual rate of 3% by 2050, increasing from 170 billion cubic meters (m³) in 2023 to 385 billion m³ by 2050.
• Gabon Oil and Gas Market: The crude oil segment of Gabon's oil and gas market was valued at an estimated USD 150 billion in 2023 and is projected to reach USD 250 billion by 2032, with a CAGR of 10.5%. The natural gas segment in Gabon is expected to reach USD 100 billion by 2032, with a CAGR of 12.5%. Overall, the Gabon Oil and Gas Market is projected to grow from USD 365.70 billion in 2024 to USD 1214.85 billion by 2035, with a CAGR of 11.53% from 2025 to 2035. Gabon produced approximately 215,000 barrels per day (bpd) of oil in August 2023.
• Egypt Oil and Gas Market: The Egypt oil and gas market size reached USD 71.0 million in 2024 and is expected to grow to USD 104.3 million by 2033, with a CAGR of 4.37% during the 2025-2033 forecast period. Egypt's crude oil production was approximately 507,000 barrels per day in 2025.
• Equatorial Guinea Oil and Gas: Equatorial Guinea's economy is heavily dependent on its oil and natural gas industry. The country held 1.1 billion barrels of proven crude oil reserves as of January 2017. Production of petroleum and other liquids averaged 244,000 barrels per day (b/d) in 2016. Dry natural gas production increased to 219 billion cubic feet (Bcf) in 2016. The Equatorial Guinea oil and gas downstream market is expected to have a CAGR of over 2.1% during the forecast period.

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VAALCO Energy (NYSE: EGY) is poised for future revenue growth over the next 2-3 years, driven by several key strategic initiatives and operational advancements:

1. Increased Production from Development Projects: VAALCO Energy anticipates a significant boost in production, reserves, and cash flow from multiple ongoing development projects across its diversified asset base. Notably, this includes drilling campaigns in Gabon and Egypt, as well as substantial investment and planned drilling commencing in mid-2026 in Côte d'Ivoire. The company aims to double its production by 2027 through these project developments. A key factor in this growth is the expected return to service of the Floating Production Storage and Offloading (FPSO) vessel in Côte d'Ivoire, which is projected to restore and substantially increase production.
2. Strategic Acquisitions and Market Expansion: The company has demonstrated a consistent focus on inorganic growth and expanding its footprint, particularly within Africa. The Svenska acquisition is frequently cited as a driver for strategic growth and enhanced profitability. VAALCO expanded its portfolio in 2023 by acquiring positions in Egypt and Canada. This strategy of mergers and acquisitions is integral to its plan of doubling production by 2027.
3. Exploration and Development of Existing Assets: Ongoing exploration efforts in regions like Equatorial Guinea and Canada are expected to contribute to future revenue. A development plan for approximately 20 million barrels offshore in Equatorial Guinea was approved in 2022 and is progressing towards a Final Investment Decision (FID). Furthermore, VAALCO maintains an "almost continuous drilling campaign" in Egypt, indicating sustained efforts to maximize output from its current holdings.
4. Operational Efficiency and Capital Expenditure Management: While not a direct driver of new revenue streams, VAALCO's consistent track record of meeting or exceeding production guidance and its strong operational performance are crucial for maximizing revenue from its asset base. The company has shown a commitment to efficiency, as evidenced by a 10% reduction in capital expenditure forecasts for 2025 without negatively impacting production or sales targets for the year. This disciplined approach helps ensure that development projects translate effectively into enhanced cash flow and revenue.

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Share Repurchases

• VAALCO Energy authorized a share buyback program of up to $30 million in August 2022, which was formally ratified in November 2022.
• By the first quarter of 2024, VAALCO had purchased approximately $30 million in shares since the program's inception.
• The company returned $33 million to shareholders in 2024 through dividends and buybacks.

Share Issuance

• In October 2022, VAALCO completed a strategic stock-for-stock business combination with TransGlobe Energy Corporation, issuing approximately 49.3 million VAALCO shares to TransGlobe shareholders. This transaction was valued at approximately $307 million.

Outbound Investments

• VAALCO Energy acquired all outstanding common shares of TransGlobe Energy Corporation in a stock-for-stock transaction valued at approximately $307 million, which closed in October 2022.
• In April 2024, the company completed the all-cash acquisition of Svenska Petroleum Exploration AB for a net purchase price of $40.2 million.
• In 2024, VAALCO diversified its portfolio by acquiring a 27.4% non-operated working interest in Block CI-40 offshore Côte D'Ivoire and in March 2025, invested $3 million to acquire a 70% working interest and operate the CI-705 block offshore Côte D'Ivoire.

Capital Expenditures

• VAALCO funded $159.9 million in cash capital expenditures during 2022. In 2023, the company invested over $70 million in a capital program focused primarily on Egypt and Canada.
• The capital budget for 2025 is planned to be between $270 million and $330 million, reduced by about 10% from the original forecast.
• The primary focus of 2025 capital expenditures includes a drilling campaign at Etame, the Côte d'Ivoire Floating Production Storage and Offloading vessel (FPSO) dry dock refurbishment project, and continued drilling in Egypt and Canada.