Vaalco Energy keeps steady dividend as quarterly earnings climb

Vaalco Energy Inc on Friday reported a pretax loss for its first half, but increased revenue and profit for a busy second quarter, and forecast higher sales and production to come.

The Africa-focused hydrocarbon explorer reported pretax income of USD59.2 million for the second quarter, up from USD15.4 million the year before.

Notably, the average realised barrel of oil equivalent price was USD80.77 in the second quarter, up 47% from USD54.87 a year prior.

Crude oil, natural gas and natural gas liquids sales revenue increased to USD135.2 million from USD96.9 million, with 17,812 net revenue interest production rising 10% to 16,688 barrels of oil equivalent per day from 15,110 boepd in the first quarter. Working interest average production increased 0.7% year-on-year to 21,796 boepd from 21,654 boepd.

Vaalco also sold 17,812 NRI boepd during the quarter, above its guidance midpoint and up 47% from in the first quarter.

Earnings before interest, tax, depreciation, amortisation and tax surged to USD54.8 million in the second quarter from USD11.6 million in the first. Vaalco noted that the period "included two liftings in Gabon and increased sales in Egypt".

For the first half, Vaalco swung to a pretax loss of USD51.3 million from a USD16.1 million profit the previous year. Revenue decreased to USD197.8 million from USD207.2 million.

"The first half of 2026 has seen material changes to Vaalco across our growing and diversified portfolio," Chief Executive Officer George Maxwell noted. "We increased our future growth potential in Côte d'Ivoire by being confirmed as operator with a 60% WI in the Kossipo field and divested all of our Canadian assets adding material cash to the balance sheet. We have drilled and brought online multiple wells in our Gabon drilling campaign. The floating production storage & offloading vessel at the Baobab field in offshore [Ivory Coast] was brought back online from a yearlong refurbishment and the field was successfully restarted with production commencing in June 2026. We also resumed our successful drilling program in Egypt in May 2026."

Vaalco declared a dividend of 6.25 US cents per share for the third quarter, unchanged from the second.

Looking ahead, CEO Maxwell stated: "As we look at the second half of 2026, we are projecting significant increases in production and strong sales, which coupled with continued attractive pricing should generate solid operational cash flow and adjusted Ebitdax generation.

"We are completing the Gabon drilling campaign, expanding the successful Egyptian drilling campaign and starting the Phase Five Drilling Program at Baobab that should provide material production uplift in 2027."

Vaalco expects production of between 19,600 and 21,600 NRI boepd for the third quarter, which will represent a roughly 23% increase, with sales volumes rising to between 17,200 barrels of oil per day and 18,900 bopd.

For the full year, its guidance includes NRI production between 22,300 and 24,850 boepd, and sales of 17,100 to 20,050 boepd.

Vaalco shares were 3.8% higher at 415.00 pence in London on Friday.

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