Chris Wheaton, an analyst from Stifel Nicolaus, maintained the Buy rating on Vaalco Energy (EGY – Research Report). The associated price target remains the same with p753.00.
Chris Wheaton has given his Buy rating due to a combination of factors, including Vaalco Energy’s solid production performance and strategic investments. Despite a slight dip in production in the fourth quarter of 2024, the company has maintained a strong output, with a forecasted production range for 2025 that aligns with expectations, except for a higher-than-anticipated capital expenditure. This increased capex is likely directed towards significant projects in Equatorial Guinea and Cote d’Ivoire, which are expected to enhance the company’s future production capabilities.
Moreover, Vaalco Energy has demonstrated a robust reserves replacement ratio, achieving approximately 100% organically and over 300% when including the Cote d’Ivoire acquisition. This acquisition has already proven financially beneficial, returning 1.8 times its cash acquisition cost. The company’s strategic focus on maintaining dividends and its substantial upside potential to the target price further support the Buy rating, reflecting confidence in its long-term growth prospects.