VAALCO Energy, Inc. · NYSE:EGY
VAALCO Energy — Shareholder Meeting (June 2010)
25 slides from VAALCO Energy's shareholder meeting presentation, Jun 2, 2010
Slide 1: Annual Meeting of the Shareholders
VAALCO Energy, Inc. Annual Meeting of the Shareholders June 2, 2010 Robert L. Gerry III, Chief Executive Officer and Chairman of the Board of Directors
Slide 2: Board of Directors
Board of Directors External Directors Robert H. Allen Frederick W. Brazelton Luigi P. Caflisch O. Donaldson Chapoton William S. Farish Arne R. Nielsen Executive Directors Robert L. Gerry III, Chairman W. Russell Scheirman 2 VAALCO Energy, Inc.
Slide 3: Corporate Officers
Corporate Officers Robert L. Gerry, III Chief Executive Officer W. Russell Scheirman President & Chief Operating Officer Gregory R. Hullinger Chief Financial Officer Gayla M. Cutrer Vice President and Corporate Secretary 3 VAALCO Energy, Inc.
Slide 4: Corporate Information / Safe Harbor Statement
Corporate Information Safe Harbor Statement This presentation includes “forward-looking statements” within the Robert L. Gerry III meaning of Section 27A of the Securities Act of 1933, as amended, Chairman and and Section 21E of the Securities Exchange Act of 1934, as Chief Executive Officer amended
Slide 5: Company Profile
Company Profile Resources and Market Data Reserve Data as of 12/31 2009 2008 Ticker (NYSE) EGY Proved & Probable Reserves (MBOE) 12,940 12,100 Employees 75 Proved Reserves (MBOE) 7,363 7,422 *Market Capitalization ($MM) $295 Proved Developed Reserves (MBOE) 4,795 4,751 Management Ownership 6% Proved
Slide 6: VAALCO's Strategy
VAALCO’s Strategy • Invest to increase reserves - through the drill bit and/or selective acquisitions • Optimize production and reservoir management at the four producing fields offshore Gabon • Focus on the West Africa asset base and acreage positions to exploit the potential • Seek additional conc
Slide 7: Current Focus Areas: West Africa
Current Focus Areas: West Africa Mutamba Iroru Concession 270,000 gross acres Onshore Exploration Etame Marin Concession 760,000 gross acres Offshore Production and Exploration Block 5 1,400,000 gross acres Offshore Exploration ANGOLA 7 VAALCO Energy, Inc.
Slide 8: VAALCO Gabon Offshore Operations
VAALCO Gabon Offshore Operations 8 VAALCO Energy, Inc.
Slide 9: Etame Marin Oil Spill Contingency
Etame Marin Oil Spill Contingency • VAALCO Gabon (Etame) has an established Oil Spill Contingency plan in place • Oil spill equipment is on the FPSO “Petroleo Nautipa” to handle process spills onboard the FPSO to prevent overboard spills • The “J. Roth” standby marine vessel maintains chemical dispe
Slide 10: VAALCO vs. BP Drilling in GOM
VAALCO vs. BP Drilling in GOM • “Dry” BOP’s on jack-up rig vs. “wet” BOP’s on ocean floor with semi-submersible drill ship • 250’ water depth vs. 5000’ • Drilling depth objective: 6000’ vs. 18000’ • Greatly reduced reservoir flow pressures • Much less complicated sub-surface mechanical well construc
Slide 11: Gabon: Etame Marin Concession
Offshore Gabon: Etame Marin Concession • VAALCO is the operator of the concession • Four fields producing, all with pipeline connections to an FPSO facility • Nine wells currently producing • Additional development and exploration wells planned for 2010 • Oil production currently averaging over 23,0
Slide 12: Gabon: Etame Field
Offshore Gabon: Etame Field • Initial discovery made in 1998 • Field declared commercial in 2001 • Largest of four fields FPSO • First oil production September 2002 • Production is from four wells with subsea completions • Plan to drill horizontal development well in 2H 2010 • Exploration well spudd
Slide 13: Gabon: Avouma & South Tchibala Fields
Offshore Gabon: Avouma & South Tchibala Fields • Exploration well completed August 2004 • 36 ft. of pay in Gamba sandstone • Production commenced in January 2007 • One well in each field on Platform production from a single platform 13 VAALCO Energy, Inc.
Slide 14: Gabon: Ebouri Field
Offshore Gabon: Ebouri Field • Exploration well completed January 2004 • Logged 48 ft. of pay in Gamba sandstone • Platform installed August 2008 • Appraisal well in January 2009 expanded the field • First production began in January 2009 • Three wells producing from the Platform platform 14 VAALCO
Slide 15: Floating Production, Storage and Offloading Facility
Floating Production, Storage and Offloading Facility FPSO “Petroleo Nautipa” • Long-term contract with Tinworth through 2015 • Operations began 2002 • 1.1 million barrel storage capacity • Can accept up to 30,000 barrels of total fluids per day • 25,000 bopd oil processing limit • 104 liftings throu
Slide 16: Gabon: Etame Marin Concession 2010 Exploration Opportunities
Offshore Gabon: Etame Marin Concession 2010 Exploration Opportunities Omangou Prospect • 30.35% WI Ebouri Field • 260’ water depth Concession Area • Well depth: 6,600 ft • $9.5 million gross cost • 20 mmbo mean gross unrisked potential • 2H 2010 spud date (pending partner approval) Etame Field SE Et
Slide 17: Gabon: Etame Marin Concession Future Exploration Opportunities
Offshore Gabon: Etame Marin Concession Future Exploration Opportunities ‘J’ Prospects Ca Lead Ba Lead Aa Lead Ebouri Field Da Lead M1 Lead Ea Lead M Lead Fa Lead Etame Field ABAMI Lead D Lead W Etame Prospect H Lead N Lead SW Etame Lead SE Etame Prospect E Lead I Lead Avouma/S. Tchibala Fields Elili
Slide 18: Onshore Gabon: Mutamba Iroru Concession
Onshore Gabon: Mutamba Iroru Concession • Permit Area 270,000 acres • Rabi Pipeline runs within SW edge of permit • Two wells drilled in 2009, both water-bearing & abandoned • Multiple leads being worked • 2D seismic program planned for 2010 Rabi Kounga Field EUR 1,100 MMBO • Final steps in progress
Slide 19: Offshore Angola: Block 5 Exploration
Offshore Angola: Block 5 Exploration Exploration Opportunities • 40% operated interest, four- year permit off SW Angola effective 12/1/06 • Approx. 1.4 million acres gross • Sonangol estimates 50 million proven barrels with possible 500 million barrels • Block has history of 12 wells drilled by prio
Slide 20: Angola: Block 5 Exploration Opportunities
Offshore Angola: Block 5 Exploration Opportunities Block 5 Outline Kindele Prospect • 50% WI • 415’ water depth • Well depth: 6,500 ft • $31 million gross cost • 41 mmbo mean gross unrisked potential Area Detailed at Left • 1H 2011 potential spud date Loengo Prospect • 50% WI • 510’ water depth Jack
Slide 21: Angola: Block 5 Future Exploration Opportunities
Offshore Angola: Block 5 Exploration Future Exploration Opportunities 2D spec 2D spec available to VAALCO 3D available to VAALCO 3D not available to VAALCO Water depth in m 21 VAALCO Energy, Inc.
Slide 22: Financial Flexibility
Financial Flexibility • $106 Million cash balance as of March 31, 2010 including amounts in escrow • No long-term debt – long term debt was repaid in October 2009 • Anticipate growing year-end cash balance • 2010 Capital Expenditure budget of approximately $25 - 40 million expected to be funded with
Slide 23: VAALCO Production and Reserves
VAALCO Production and Reserves Average Net Daily Production (BOPD) 5400 5300 5200 5100 5000 4900 4800 4700 4600 4500 2007 2008 2009 Year End Proved Reserves (MBBLS) 8000 7000 6000 5000 Proved Undeveloped 4000 Proved Developed 3000 2000 1000 0 2007 2008 2009 23 VAALCO Energy, Inc.
Slide 24: CAPEX Projection 2010 - 2011
CAPEX Projection 2010 - 2011 Reserves Opportunity (mln bbls) Type Country Location $Gross (mlns) $Net (mlns) Expected Timing Gross VAALCO net Development Gabon Ebouri 4H $25.4 $7.7 Completed 5 1 Workover Gabon Ebouri 3H $5.4 $1.6 Completed 0 0 Exploration Gabon SE Etame $13.8 $4.2 Drilling 27 6 Deve
Slide 25: Why VAALCO?
Why VAALCO? • Stable production profile – 99% oil – 100% operated – Good development opportunities • Attractive reserve base – 99% oil – 64% proved developed • Strong balance sheet – No long-term debt – Expect 2010 budget funded with cash flow • Large acreage inventory in focus area – Field developm