Vaalco swings to loss in 2025 amid revenue decline, higher costs

Vaalco Energy Inc on Friday expressed confidence in hitting its growth targets for 2026, as it reported a swing to a loss in 2025.

The Canada and Africa-focused hydrocarbon explorer reported a pretax loss of $26.6 million for 2025, swinging from $139.8 million profit in 2024.

Driving this was a combination of a top line contraction and higher expenses.

Revenue fell 25% to $359.3 million from $479.0 million, as net sales fell to 6,370 thousand barrels of oil equivalent from 7,262 thousand barrels in 2024.

‘The decrease was driven primarily by a reduction in sales volume from Cote d’Ivoire due to the FPSO refurbishment,’ said Vaalco.

For working interest production, Vaalco reported average daily production volumes of 21,160 barrels of oil equivalent, down from 24,738 barrels in 2024.

For NRI production, average daily production volumes were 16,556 barrels of oil equivalent, down from 19,935 barrels.

Total operating costs and expenses rose 10% to $377.5 million from £342.6 million, further hampering the bottom line.

Within this, Vaalco reported a $67.2 million impairment loss on assets held for sale, compared to a none in 2024.

This non-cash charge, which occurred in the fourth quarter, was to the carrying value of proved and unproved oil and gas properties for Vaalco’s Canadian assets reported as held for sale.

For the fourth quarter, Vaalco posted a pretax loss of $63.3 million, swung from profit of $28.9 million a year prior.

Revenue fell 25% to $91.0 million from $121.7 million, as net sales declined 8.8% to 1,708 thousand barrels of oil equivalent from 1,872 thousand barrels.

For working interest production, Vaalco reported average daily production volumes of 20,729 barrels of oil equivalent, down from 25,300 barrels a year earlier.

For NRI, average daily production volumes were 16,128 barrels of oil equivalent, down from 20,775 barrels.

Looking at 2026, Vaalco guided working interest production between 20,100 and 22,400 barrels of oil equivalent per day. For NRI, it sees production between 16,100 and 17,950 barrels of oil equivalent per day.

Chief Executive Officer George Maxwell said: ‘In 2025, we successfully completed another year where we delivered consistent quarterly results that either met or exceeded our guidance. We repeatedly raised production and sales guidance in 2025 and continued to deliver on those increased guidance ranges’.

He added: ‘In 2026, we began the year by divesting all of our Canadian assets, and increased our future growth potential in Cote d’Ivoire by being confirmed as operator with a 60% working interest in the Kossipo field...We have successfully grown Vaalco from a single asset delivering around 5,000 barrels of oil per day to a diversified, multi country operator well on our way to achieving our goal of 50,000 BOEPD. I believe that we are well positioned to continue to execute operationally and financially to achieve all of our growth targets and continue to generate and return value to our shareholders for the rest of the decade’.

Vaalco shares were down 1.3% to 395.00 pence each on Friday afternoon in London.

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