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Vaalco Energy Inc (EGY)
NYSE:EGY
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Vaalco Energy
(NYSE:EGY)
66Neutral
Positive Factors
Acquisition Performance
The acquisition in Cote d'Ivoire is delivering results ahead of expectations, driving a significant growth in EBITDAX.
Financial Health
VAALCO Energy has no debt and increased its unrestricted cash from $62.9M to $89.1M, indicating strong financial health.
Operational Performance
Record production and sales volumes for 2024.
Negative Factors
Free Cash Flow
FY24 FCF was only $1.5M, due to the significant working capital outflow of approximately $70M in the year.
Future Cash Flow
Although the company is forecasted to deliver lower FCF in 2025E than previously forecast, minimal change is made to the 2026E FCF forecast.
Production Guidance
FY25E production guidance reflects the shutdown of Cote d'Ivoire for the FPSO redevelopment project and the loss of its approximately 4kboe/d of production until some time in 2026.
Vaalco Energy (EGY) vs. S&P 500 (SPY)
Market Cap
$406.67M
Dividend Yield6.49%
Average Volume (3M)968.58K
Price to Earnings (P/E)6.9
Beta (1Y)0.86
Revenue Growth5.26%
EPS Growth-1.52%
CountryUS
Employees230
SectorEnergy
Sector Strength87
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.56
Shares Outstanding103,743,164
10 Day Avg. Volume1,370,980
30 Day Avg. Volume968,577
Financial Highlights & Ratios
PEG Ratio0.03
Price to Book (P/B)N/A
Price to Sales (P/S)0.84
Price to Cash Flow (P/CF)2.30
P/FCF Ratio2.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$8.14Price Target Upside107.65% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Vaalco Energy Business Overview & Revenue Model
Company DescriptionVAALCO Energy, Inc., an independent energy company, acquires, explores for, develops, and produces crude oil and natural gas. The company holds Etame production sharing contract related to the Etame Marin block located offshore in the Republic of Gabon in West Africa. It also owns interests in an undeveloped block offshore Equatorial Guinea, West Africa. VAALCO Energy, Inc. was incorporated in 1985 and is headquartered in Houston, Texas.
How the Company Makes MoneyVaalco Energy generates revenue primarily through the exploration, development, and production of oil and natural gas. The company's main revenue streams come from the sale of these hydrocarbons, particularly crude oil, in the global market. Vaalco sells its oil production to various customers, including refineries and commodity traders, under long-term and spot market contracts. Additionally, the company may engage in joint ventures and partnerships to share exploration and production costs and risks, which can also contribute to its earnings. The profitability of Vaalco Energy is significantly influenced by global oil prices, production levels, and operational efficiencies.
Vaalco Energy Financial Statement Overview
Summary
Vaalco Energy demonstrates robust financial performance with strong revenue growth and stable operational margins. The balance sheet is solid with a healthy equity position and manageable debt. Cash flow generation is positive but has some volatility in free cash flow.Income Statement
The company has shown a strong revenue growth over the years, with a notable increase from 2021 to 2023. Despite the revenue increase, recent profitability margins have fluctuated. The gross profit margin has significantly improved since 2020, indicating better cost management. However, the net profit margin has seen variability due to fluctuating net income. The EBIT and EBITDA margins have been relatively stable, showcasing consistent operational efficiency.65
Positive
Balance Sheet
Vaalco Energy's balance sheet exhibits a solid equity position, with stockholders' equity consistently growing over the years. The debt-to-equity ratio remains healthy, indicating prudent leverage management. The equity ratio shows a strong asset base supported by equity, which enhances financial stability. Overall, the company has maintained a robust balance sheet.70
Positive
Cash Flow
The cash flow statements reveal a consistent positive operating cash flow, which is a good sign of financial health. The free cash flow has fluctuated, with periods of negative growth, indicating potential reinvestment or expenditure needs. The operating cash flow to net income ratio is strong, suggesting good cash conversion efficiency. However, there are concerns with the consistency of free cash flow growth.60
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 506.42M | 0.00 | 455.07M | 354.33M | 199.07M | 67.18M | Gross Profit |
| 239.21M | 0.00 | 186.61M | 184.66M | 96.76M | 20.48M | EBIT |
| 180.76M | 136.50M | 158.66M | 171.28M | 79.10M | 29.74M | EBITDA |
| 307.24M | 279.10M | 276.54M | 183.41M | 77.33M | 14.09M | Net Income Common Stockholders |
| 90.82M | 58.49M | 60.35M | 51.89M | 81.84M | -48.08M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 46.20M | 82.65M | 121.00M | 37.20M | 48.67M | 47.85M | Total Assets |
| 201.50M | 954.95M | 823.22M | 855.64M | 263.09M | 141.23M | Total Debt |
| 36.63M | 98.17M | 90.80M | 89.06M | 10.23M | 22.56M | Net Debt |
| -9.56M | 15.53M | -30.20M | 51.85M | -38.45M | -25.29M | Total Liabilities |
| 85.20M | 453.37M | 344.43M | 389.54M | 118.79M | 79.77M | Stockholders Equity |
| 116.30M | 501.58M | 478.78M | 466.11M | 144.30M | 61.46M |
| Cash Flow | Free Cash Flow | ||||
| 101.11M | 113.72M | 126.37M | -31.05M | 11.05M | 3.12M | Operating Cash Flow |
| 120.97M | 113.72M | 223.60M | 128.85M | 50.12M | 27.45M | Investing Cash Flow |
| -80.98M | -102.12M | -97.22M | -123.21M | -39.06M | -24.33M | Financing Cash Flow |
| -46.70M | -43.05M | -56.82M | -17.95M | -57.00K | -929.00K |
Vaalco Energy Technical Analysis
Negative
3.92
Price Trends
4.10
Negative
4.46
Negative
5.24
Negative
Market Momentum
-0.06
Negative
46.72
Neutral
11.62
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EGY, the sentiment is Negative. The current price of 3.92 is above the 20-day moving average (MA) of 3.91, below the 50-day MA of 4.10, and below the 200-day MA of 5.24, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 46.72 is Neutral, neither overbought nor oversold. The STOCH value of 11.62 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EGY.
Vaalco Energy Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $3.46B | 4.62 | 19.62% | 2.47% | 13.33% | -2.72% | |
66 Neutral | $406.67M | 6.91 | 11.79% | 6.49% | 5.26% | -1.52% | |
66 Neutral | $4.03B | 9.52 | 13.06% | 3.13% | 5.12% | -47.76% | |
64 Neutral | $1.73B | 16.92 | -3.11% | ― | 35.37% | -131.25% | |
58 Neutral | $9.25B | 5.52 | -6.24% | 7.43% | -0.10% | -69.94% |
* Energy Sector Average
Performance Comparison
EGY
Vaalco Energy
3.92
-2.96
-43.02%
SM
SM Energy
30.25
-19.47
-39.16%
TALO
Talos Energy
9.61
-4.31
-30.96%
CRC
California Resources Corp
44.24
-8.01
-15.33%
Vaalco Energy Earnings Call Summary
Earnings Call Date: Mar 13, 2025 | % Change Since: -1.01% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted a strong financial and operational performance for 2024, with record-breaking metrics in several areas. However, challenges such as expected lower production in 2025 and high capital expenditure could pose future risks. Despite these challenges, the positive developments, especially in Côte d'Ivoire and successful safety milestones, present a balanced outlook.Highlights
Record-Breaking Financial Performance
VAALCO Energy achieved a record adjusted EBITDAX of $303 million for the full year 2024, marking a significant increase alongside record production of almost 25,000 working interest barrels equivalent per day.
Significant Reserve Growth
SEC proved reserves grew 57% year over year to 45 million BOE, and 2P CPR reserves increased to 96.1 million BOE.
Successful Acquisition Payback
The Svenska acquisition in April 2024 has already seen a 1.8 times payback on the initial investment by year-end 2024.
Safety Milestone in Egypt
Achieved over 3.5 million man-hours without a lost-time incident in Egypt, showcasing a strong commitment to safety.
Positive Developments in Côte d'Ivoire
Completion of the Svenska acquisition boosted reserves, and a ten-year extension of the CI-40 license was approved, extending operations to 2038.
Lowlights
Production Challenges in 2025
Projected production for 2025 is expected to be lower than 2024 due to the FPSO shut down and natural decline, with an anticipated jump in 2026.
High Upcoming Capital Expenditure
Planned capital expenditure for 2025 is projected to be between $270 million and $330 million, with potential impacts on cash flow.
Working Capital Challenges
Significant outflows in working capital were noted in 2024, impacting free cash flow generation, although improvements are expected in 2025.
Company Guidance
During the VAALCO Energy fourth-quarter and full-year 2024 earnings call, several key metrics and guidance for 2025 were discussed. The company reported a record adjusted EBITDAX of $303 million and record production of nearly 25,000 working interest barrels equivalent per day for 2024. For 2025, VAALCO expects production to be slightly lower due to the FPSO shutdown in Côte d'Ivoire and natural declines, forecasting a range of 19,250 to 22,210 working interest BOE per day. Capital expenditure for 2025 is projected to be between $270 million and $330 million, focusing on significant drilling campaigns in Gabon and FPSO refurbishment in Côte d'Ivoire. The company aims to sustain its operational momentum by leveraging recent acquisitions and targeting a production increase in 2026. VAALCO also highlighted its commitment to shareholder returns, having returned $83 million over the past two years through dividends and buybacks, and plans to maintain a $0.25 per share annual dividend for 2025.Vaalco Energy Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Vaalco Energy Cancels Credit Facility with Glencore
Neutral
Mar 20, 2025
On March 17, 2025, Vaalco Gabon, a subsidiary of Vaalco Energy, Inc., canceled its prior senior secured reserve-based revolving credit facility agreement with Glencore Energy UK Ltd., which was initially set up in 2022 and amended in 2023. The termination, effective March 18, 2025, involved no drawn amounts and released associated liens. Vaalco’s existing hedging agreements, including those with Glencore, were amended in connection with a new reserves-based facility agreement, while the company’s crude oil offtake arrangements with Glencore continue under the new facility’s security.
Private Placements and FinancingBusiness Operations and Strategy
Vaalco Energy Secures New $190M Credit Facility
Positive
Mar 10, 2025
On March 4, 2025, Vaalco Energy entered into a new reserves-based revolving credit facility agreement with an initial commitment of $190 million, which can increase to $300 million. This facility, led by The Standard Bank of South Africa Limited, is intended to provide short-term funding to support Vaalco’s investment programs across its diversified asset base. The agreement replaces an existing undrawn facility and is secured by Vaalco’s assets in Gabon, Egypt, and Côte d’Ivoire. The facility is expected to bolster Vaalco’s financial flexibility, enabling it to fund significant growth projects and potentially enhance its market position.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.