VAALCO Energy, Inc. · NYSE:EGY
VAALCO Energy — Investor Presentation (June 2006)
36 slides from VAALCO Energy's investor presentation, June 2006
Slide 1: VAALCO Energy, Inc.
VAALCO Energy, Inc. VAALCO Energy, Inc. June 2006
Slide 2: Forward-looking statements
VAALCO Energy, Inc. This presentation includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this prese
Slide 3: Etame Marin and Mutamba Iroru Permits
VAALCO Energy, Inc. D4 Etame Marin Permit - 3,072 sq kms - 760,000 acres Mutamba Iroru Permit - 1,094 sq kms - 270,327 acres
Slide 4: Etame Ownership
VAALCO Energy, Inc. Etame Ownership
Slide 5: Gabon Political Situation
VAALCO Energy, Inc. Gabon Political Situation • Former French colony. Achieved independence in 1960 • Population 1.3 million in area about size of Colorado • Republic – existing president in office since 1967, recently re- elected • French civil law • Long history of oil and gas production under sta
Slide 6: Why Explore In Gabon?
VAALCO Energy, Inc. Why Explore In Gabon? • Multiple Leads • Moderate Water Depth • Shallow Drilling Depth • Reasonable Fiscal Terms • Stable Government
Slide 7: Current Gabon Status
VAALCO Energy, Inc. Current Gabon Status • Etame Field producing at approximately 18,000 bbls per day • Avouma platform under tow to Gabon • Additional 10,000 –12,000 barrels per day expected 4th quarter 2006 • Ebouri 3D and adjoining leads being analyzed • New Concession – Mutamba Iroru
Slide 8: Mutamba Permit Summary
VAALCO Energy, Inc. Mutamba Permit Summary • Permit Area 1094 sq kms / 270,327 acres • Lagoon accessible to Ocean, with potential dry land (island) drilling locations • Rabi Pipeline runs within SW edge of permit
Slide 9: Regional Setting: Mutamba Iroru Permit Onshore Gabon
VAALCO Energy, Inc. Regional Setting: Mutamba Iroru Permit Onshore Gabon 1094 sq kms 270,327 acres Rabi Kounga Field EUR 1.1 Billion BO Gamba Ivinga Field EUR 290 MMBO Olowi Field (Undeveloped
Slide 10: Attributes
VAALCO Energy, Inc. Attributes • On trend with giant fields – World class source and reservoir rocks • Relatively shallow objectives (3,500 ft) – Inexpensive drilling • Geophysical challenges present opportunity – Last well drilled in 2000 prior to subsequent depth imaging software improvements • VA
Slide 11: Fields, Prospects and Leads, Etame Block
VAALCO Energy, Inc. Permit Outline Current 3D Outline Ebouri New (2005) 3D Outline Field Etame Etame Development Area Field Avouma Development Area ‘M’ Lead N. Tchibala Oil Accumulation/Field ‘J’ Prospect S. Tchibala Exploration Prospects Avouma Field 2D Lead (‘A’) ‘A’ Lead Fields, Prospects ‘B’ Pro
Slide 12: Etame Field
VAALCO Energy, Inc. Etame Field
Slide 13: History of Etame
VAALCO Energy, Inc. History of Etame • Located approximately 22 miles offshore Gabon in 250 feet of water • Production started September 7, 2002 at approximately 15,000 barrels per day • Cumulative gross oil production to April 2006 21.8 million barrels • Five year exploration extension agreed with
Slide 14: VAALCO Energy, Inc.
VAALCO Energy, Inc.
Slide 15: Etame FPSO Petroleo Nautipa
VAALCO Energy, Inc. Etame FPSO Petroleo Nautipa • 1.1 million barrel capacity • 48 liftings through May 2006 • 21.9 million barrels sold to date
Slide 16: Etame Field Daily Production
BOPD 0 2,500 5,000 7,500 10,000 12,500 15,000 17,500 20,000 22,500 25,000 Sep-02 Nov-02 Jan-03 Mar-03 May-03 Jul-03 Sep-03 Nov-03 Jan-04 Mar-04 ET-3H May-04 Jul-04 Sep-04 Nov-04 ETAME FIELD DAILY PRODUCTION Jan-05 Mar-05 ET-1VA ETAME May-05 Jul-05 Sep-05 Nov-05 Jan-06 ET-4H ET-6H ET-5H Mar-06 VAALCO
Slide 17: Avouma
VAALCO Energy, Inc. Avouma • Avouma exploration well completed August 2004 • Discovery logged 36 feet of pay in Gamba sandstone • Well tested 6,600 BOPD from 20 feet of perforations on a ½ inch choke • Reservoir virtually similar to Etame with 38° gravity oil and average porosity of 32% and permeabi
Slide 18: VAALCO Energy, Inc.
VAALCO Energy, Inc.
Slide 19: VAALCO Energy, Inc.
VAALCO Energy, Inc.
Slide 20: VAALCO Energy, Inc.
VAALCO Energy, Inc.
Slide 21: VAALCO Energy, Inc.
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Slide 22: VAALCO Energy, Inc.
VAALCO Energy, Inc.
Slide 23: Ebouri
VAALCO Energy, Inc. Ebouri • Ebouri exploration well completed January 2004 • Discovery logged 48 feet of pay in Gamba sandstone • Reservoir virtually similar to Etame with 33.5° gravity oil and average porosity of 32% and permeability range of 2-3 darcies • Engineering to tie well to FPSO
Slide 24: Etame Marin Permit: Prospects & Leads
VAALCO Energy, Inc. Etame Marin Permit: Prospects & Leads Ebouri Lead N Lead M Lead J Permit Boundary Etame Development Area Lead A Existing 3D Prospect B Forest/Fusion/VAALCO 3D 12/04 Acquisition New 3D Accessible to VAALCO (2005)
Slide 25: New Ventures
VAALCO Energy, Inc. New Ventures • Recently opened office in Aberdeen to support drilling activity and North Central North SeaBasin Sea exploration projects • Have agreed to enter into two partnerships for bidding on 24th Licensing Southern Gas Basin Round in the UK sector of the North Sea (June 200
Slide 26: New Ventures
VAALCO Energy, Inc. New Ventures • Qualified as Operator by Angolan Government for upcoming Bid Round • Awarded Block 5 in May • Sonangol estimates 50mm bbls proved • Sonangol estimates over 500mm bbls left to be discovered
Slide 27: VAALCO Awarded Block 5 Offshore Angola
VAALCO Energy, Inc. VAALCO Awarded Block 5 Offshore Angola • Signing Bonus $10.5 million (including Sonangol carry) • Work program 1000 sq km seismic and two wells (VAALCO cost $14.75 million) • $0.5 million Social Projects obligation per year during four year term of license • Three year extension
Slide 28: Financial Presentation
VAALCO Energy, Inc. Financial Presentation
Slide 29: Income Statement
VAALCO Energy, Inc. Incom e Statem ent Year Ended ($millions) 2004 2005 Oil and Gas Sales $ 56.5 $ 84.9 Operating Costs and Expenses 16.2 21.4 Operating Income 40.3 63.5 Income Taxes (12.0) (31.5) Minority Interest/Other (5.4) (2.8) Net Income 22.9 29.2 Diluted Income per share $0.39 $0.50
Slide 30: Income Statement
VAALCO Energy, Inc. Incom e Statem ent 1st Quarter Ended ($millions) 2005 2006 Oil and Gas Sales $ 23.1 $ 31.2 Operating Costs and Expenses 5.2 6.1 Operating Income 17.9 25.1 Income Taxes (9.9) (12.1) Minority Interest/Other (0.7) (2.0) Net Income 7.3 11.0 Diluted Income per share $0.12 $0.18
Slide 31: Production Sharing Contract
VAALCO Energy, Inc. Production Sharing Contract • Royalty deducted from gross barrel (Currently 15%) • Up to 70% of remaining oil applied against past costs (Cost Oil) • Remainder after Royalty and Cost Oil is Profit Oil • Profit Oil split with Gabon Government. Government pays income tax on behalf
Slide 32: Growth in Revenues and Operating Income
VAALCO Energy, Inc. Growth in Revenues and Operating Income Revenues Operating Income 90000 70000 80000 60000 70000 50000 60000 40000 50000 63577 84900 30000 40000 40267 56502 20000 30000 35983 10000 16402 20000 2882 10000 0 -2246 9980 1650 0 -10000 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005
Slide 33: Leading to Record Net Income and EPS
VAALCO Energy, Inc. Leading to Record Net Income and EPS Net Income Earnings Per Share - Diluted 35000 0.6 30000 0.5 25000 0.4 20000 0.3 0.54 31400 15000 0.2 0.39 22936 10000 0.1 0.16 5000 8936 0.01 0 445 -0.15 0 -3099 -0.1 -5000 -0.2 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005
Slide 34: 2006 - 2007 Planned Budget
VAALCO Energy, Inc. 2006 - 2007 Planned Budget Gross VAALCO Net Item $M M $M M FPSO M odifications $ 10.0 $ 3.0 Platform and Facilities $ 70.0 $ 21.2 T wo Wells $ 38.0 $ 11.5 Subtotal Avouma $ 108.0 $ 32.8 Platform and Facilities $ 61.0 $ 18.5 One Well $ 18.0 $ 5.5 Subtotal Ebouri (2006/2007) $ 79.0
Slide 35: VAALCO Today
VAALCO Energy, Inc. VAALCO Today • Barrels per day Net to VAALCO – 5,000 BOPD (1) • Net reserves at 12/31/05 – 7.8 MMBOE • Cash in bank (current) - $70 mm • Net to VAALCO Capital Expenditures for 2006 - $35.0 mm • Estimated Cash flow for 2006 - $40 mm ($50 oil) (1) Before royalties and taxes
Slide 36: The End
VAALCO Energy, Inc. The End THE END