Vaalco Energy’s Strategic Growth and Value Creation Justifies Buy Rating

Analyst Chris Wheaton of Stifel Nicolaus maintained a Buy rating on Vaalco Energy (EGY – Research Report), boosting the price target to p781.00.

Chris Wheaton has given his Buy rating due to a combination of factors that highlight Vaalco Energy’s potential for value creation. The company’s recent capital markets day and first-quarter results have led to an increased valuation, with the risked net asset value (NAV) rising by 11% from 704p to 781p per share. This increase is attributed to the acceleration of the production profile in Equatorial Guinea, now expected to commence in 2028, and the inclusion of the Kossipo development in Cote d’Ivoire in the risked NAV for the first time.
Furthermore, Vaalco Energy’s production levels have remained within guidance, and the company has managed to reduce its capital expenditure forecast for 2025. Despite the high near-term capital expenditures, the company’s debt facilities support the sustainability of its dividend, even with oil prices projected to be below $60 per barrel through 2027. These strategic adjustments and financial metrics underpin the confidence in Vaalco Energy’s growth prospects, justifying the Buy rating.