VAALCO Energy, Inc. announced that in connection with planning for future drilling programs at the Etame Marin block offshore Gabon, it will begin acquiring and processing new three-dimensional (“3-D”) seismic data in the fourth quarter of 2020. The Company also announced estimated third quarter 2020 production.
- Committed to acquiring new proprietary 3-D dual-azimuth seismic data over the entire Etame Marin block which will be used to optimize and de-risk future drilling locations as well as identify new potential locations;
- Expects completion of seismic acquisition by year-end 2020 with processing to be fully completed by Q4 2021;
- Estimates the costs of both acquisition and processing of seismic data is approximately $4 to $5 million, net to VAALCO, and will be fully funded with cash on hand and cash from operations;
- Enhances and updates current seismic, some of which dates back to the field’s discovery in the 1990s, while offering the first continuous 3-D seismic over the entire block;
- Maintained strong production performance in Q3 2020 with production estimated at 4,370 net barrels of oil per day (“BOPD”) to VAALCO, at the midpoint of guidance; and
- Continues to fully fund operations year to date in 2020 with internally generated cash flow and expects a cash balance of approximately $37 million at September 30, 2020, excluding any joint venture owner advances.
Cary Bounds, Chief Executive Officer, commented, “We are proud of the highly successful and transformational drilling program that we completed earlier this year and look to build on that success by beginning to plan for future drilling programs. Our long-term strategy is to optimize every location that we plan to drill and identify new locations to add to our drillable inventory. We believe that by acquiring and processing a state-of-the-art proprietary 3-D, dual-azimuth seismic survey over our entire Etame block we are accomplishing these goals. As a result of our strong operational performance to date in 2020, we continue to be cash flow positive and the Company is fully funded for all current activities including the upcoming seismic program. We have lowered our operating cost per barrel and remain committed to optimizing production to ensure that we continue to generate free cash flow to fund future field development. We are confident in the long-term potential at Etame and believe acquiring and processing seismic is the first step toward preparing for our future drilling campaigns that we believe will deliver long-term growth, in line with our strategic objectives.”
VAALCO expects the seismic survey to begin and conclude in the fourth quarter of 2020, with processing to be fully completed by the fourth quarter of 2021. The Company expects the full field 3-D survey will optimize future drilling locations, provide better imaging of existing satellite and infill locations, as well as identify additional upside opportunities. VAALCO projects the gross cost of both the acquisition and processing of the seismic survey to be between $13 and $15 million, or $4 to $5 million net to VAALCO. The Company plans to fund the costs with cash on hand and through cash from operations.