VAALCO Energy Inc. disclosed details on the growth in its year-end 2021 proved reserves net to VAALCO and announced the timing of its fourth quarter and full year 2021 earnings release and conference call.
Proved Reserves Highlights
- Increased year-end 2021 SEC proved reserves1 to 11.2 million barrels of oil (“MMBO”), up 250% compared to year-end 2020 SEC proved reserves of 3.2 MMBO;
- Added 5.0 MMBO as a result of positive revisions from improved well performance, field-life extension related to cost savings from the replacement Floating, Storage and Offloading vessel (“FSO”) being deployed later this year, and the addition of proved undeveloped reserves (“PUDs”) associated with future drilling locations;
- Increased 3.0 MMBO from 63% improved SEC oil pricing year-over-year;
- Added 2.6 MMBO through the acquisition of Sasol’s interest at Etame; and
- Replaced over 400% of 2021 production of 2.6 MMBO.
1SEC reserves" are Netherland, Sewell & Associates estimates prepared in accordance with the definitions and regulations of the U.S. Securities and Exchange Commission as of December 31, 2021.
George Maxwell, VAALCO’s Chief Executive Officer, commented, "We are very pleased with the substantial growth of our proved reserve base. The increase resulted from a combination of positive factors including improved well performance, Etame field life extension resulting from our changeover to a more cost-effective FSO this year, PUD additions, positive oil pricing revisions and acquisitions. As in prior years, we continue to see positive reserve revisions due to well performance which demonstrates the strength of our premier Etame asset. We have seen early success in our 2021/2022 drilling campaign and continue to grow production in a strong pricing environment. We have a strong, stable reserve base with substantial organic upside opportunities and will continue to look for additional accretive acquisitions to enhance our reserve base. We have begun 2022 with significant positive momentum that should allow us to generate meaningful value for our shareholders."
Reserve Summary
VAALCO’s SEC proved reserves at December 31, 2021 were 11.2 MMBO, with 7.2 MMBO in proved developed reserves and 4.0 MMBO in proved undeveloped reserves. The Company’s SEC reserves were fully engineered by its third-party independent reserve consultant, Netherland, Sewell & Associates, Inc., (“NSAI”) who has provided annual independent estimates of VAALCO’s year-end SEC reserves for over 15 years. In 2021, the Company added 2.6 MMBO of SEC proved reserves through the acquisition of Sasol’s interest at Etame, 3.0 MMBO due to positive oil price revisions and 5.0 due to positive well performance revisions and FSO-related field life extension, and the addition of four PUD locations. These additions were partially offset by 2.6 MMBO due to full year 2021 production. The SEC pricing (based on 12-month average of first-day-of-the-month Brent prices) utilized for year-end 2021 was $69.10 per barrel of oil, up 63% from $42.46 per barrel of oil for year-end 2020.
