VAALCO Energy, Inc. has entered into a consortium with BW Energy and Panoro Energy and the consortium has been provisionally awarded two blocks in the 12th Offshore Licensing Round in Gabon. The award is subject to concluding the terms of the production sharing contracts (“PSC”) with the Gabonese government. BW Energy will be the operator with a 37.5% working interest, with VAALCO (37.5% working interest) and Panoro Energy (25% working interest) as non-operating joint owners. The two blocks, G12-13 and H12-13, are adjacent to VAALCO’s Etame PSC as well as BW Energy and Panoro’s Dussafu PSC offshore Southern Gabon, and cover an area of 2,989 square kilometers and 1,929 square kilometers, respectively. Both Etame and Dussafu have been highly successful exploration, development and production projects undertaken by the consortium members over the past 20 years with approximately 250 million barrels discovered to date.
George Maxwell, VAALCO’s Chief Executive Officer, commented, “We are very excited to continue to expand our presence in Gabon and partner with BW Energy and Panoro Energy. This consortium is uniquely positioned with the knowledge, experience and expertise of progressing world class discoveries in Gabon adjacent to these awarded blocks. Our goal will be to efficiently and effectively explore, develop and potentially produce additional resources in Gabon. Our strategy remains unchanged, to maximize shareholder return opportunities in the area we know best, West Africa. This opportunity fits perfectly with that strategy and allows us to leverage our debt-free balance sheet and significant cash flow generation to help profitably and sustainably grow VAALCO.”
The two blocks will be held by the consortium and the PSCs over the blocks will have two exploration periods totaling eight years which may be extended by a further two years. During the first exploration period, the joint owners intend to reprocess existing seismic and carry out a 3-D seismic campaign on these two blocks and have also committed to drilling exploration wells on both blocks. In the event the consortium elects to enter the second exploration period, the consortium will be committed to drilling at least another exploration well on each of the awarded blocks.
