Slide 1: Investor Presentation May 2008
Investor Presentation May 2008 ND XK VAALCO ENERGY, INC. NANES DELORME
Slide 2: Table of Contents
Table of Contents + Overview of Nanes Delorme Partners | LP + Background to Solicitation + Need for new, independent voices on the Board + Proposition of three independent, highly qualified and experienced directors + Overview of director nominees + Summary
Slide 3: Overview of Nanes Delorme Partners | LP
Overview of Nanes Delorme Partners | LP Nanes Delorme Partners | LP is a U.S-based hedge fund with a very concentrated portfolio invested in undervalued small and mid cap oil and gas companies. Nanes Delorme Partners | LP pursues active investments in publicly traded companies that it believes are t
Slide 4: VAALCO's Desperate Lawsuit
VAALCO’s Desperate Lawsuit + After reviewing the complaint, Nanes Delorme Partners has concluded that the lawsuit is without merit and a baseless attempt by the Company to abuse the court process to usurp corporate democracy and disenfranchise stockholders + Industry commentator has referred to this
Slide 5: Background to This Solicitation
Background to This Solicitation + Nanes Delorme Partners, with associated entities, currently beneficially owns approximately 8%, making it the largest stockholder of VAALCO + We are invested in VAALCO because we believe the Company has premier oil and gas properties in West Africa but is undervalue
Slide 6: Need For New, Independent Voices On VAALCO's Board
Need For New, Independent Voices On VAALCO’s Board Elect Nanes Delorme’s Minority Slate
Slide 7: This Election Contest Is About Value and Accountability
This Election Contest Is About Value and Accountability + Stockholders have real cause to replace the three incumbent Class | Directors at the Annual Meeting on June 4th, 2008 ~ There are undeniable facts supporting the replacement ofthe incumbent ctectors: \VAALCO's disappointing tock performance (
Slide 8: Timeline of Events
Timeline of Events + Letter to the Board dated March 11, 2008: Our letter made suggestions to improve VAALCO’s weak corporate gavernance practices, recent poor performance and misguided strategic direction We asked the Company to retain a top tier investment bank to evaluate strategic altematives +
Slide 9: VAALCO's Dismal Share Performance
VAALCO’s Dismal Share Performance In the two year period prior to our public involvement, VAALCO’s stock was down 22% while the S&P 500 Oil and Gas Exploration and Production Index was up 74% 2. Years Relative Share Price Performance’ SAP on 8 Gu Ese 2 0 3 sar sa WaOh Mob 3000 Sepg8 Nona dana? MT S1
Slide 10: VAALCO Trades at a Substantial Discount to its U.S. Peers
VAALCO Trades at a Substantial Discount to its U.S. Peers a Sapa TH OTT, THR » ND RTT AT EVE + VAALCO's U.S. E&P peers are not Sanaa HE primarily focused on West Africa praca Tipe Rear RE] [Te | Te + No other small E&P company listed in a = a = the U.S. primarily derives its Sear se [ele production
Slide 11: VAALCO Trades at a Substantial Discount to Its European Peers
VAALCO Trades at a to Its European Peers bstantial Discou + WAALCO’s European peers have substantial assets and focus in Africa European E&P comparable trading multiples Company Ticker EVEBITOR Selected ESP Peer Group O08E ‘Rata Petroleum AXEL Zee Afren Ple AFRILN 7.2 Lundin Petroleum LUPE.ss 8.7 Ma
Slide 12: Third Party Quotes
Third Party Quotes “Our valuation represerts a premium of approximately 27% to the company current share price of approximately US$5 per share We believe the difference between our SEAM valuation ahd public market valuation 's that the public has not placed muah value 10 VAALCO’s exploration assets
Slide 13: Poor Financial Performance Reinforces the Fact that Change is Necessary
Poor Financial Performance Reinforces the Fact that Change is Necessary + Inthe 1@08 the Company aoa VAALCO EPS missed its EPS by 17 cents 028 in the 1Q08 earnings call, the Chairman and CEO of $0.20 VAALCO noted: “our 5048 earnings per share fell a litte s010 shart of what we had hoped os for” and
Slide 14: Disastrous Oil Exploration Diversification in the UK North Sea
Disastrous Oi Diversification i + August 8, 2007, VAALCO announced a farm-in agreement for a 25% minority interest on the 9/28b-19A exploration well. — The same day VAALCO's stock closed down 4% + February 6, 2008, VAALCO has signed another farm-in agreement for a 25% minority interest in another we
Slide 15: A Constant Story of Over-Selling its Exploration Potential
AConstant Story of Over-Selling its Exploration Potential + Allthe original exploration work on the Etame field was done by Western Atlas E&P (Baker Hughes). In 1997 Western Atlas acquired a 65% interest in Etame Marinin return for shooting the a 3D seismic survey and working up the location of the
Slide 16: Strong Stock Performance Since Our Public Involvement
Strong Stock Performance Since Our Public Involvement Since March 12, 2008, the date of our initial 13D filing, VAALCO’s stock is up approximately 64%. We believe that increase is clearly based not an corporate development, but rather an the strong hape by stockholders of immediate and substantial c
Slide 17: Estimated NAV For VAALCO
Estimated NAV For VAALCO + There is still an important disconnect between VAALCO's depressed stock price and our estimated net asset value. Based on $100 per barrel oil, we believe VAALCO’s NAV would be $8.63 per share + The current Board has proven that they are uninterested in taking steps to incr
Slide 18: Current Board is Not Aligned with Stockholders
Current Board is Not Aligned with Stockholders Amount of Shares of Outsanding Name Age Position since ‘Owned Shares Raber L, Gerry Il 70 Chairmanand CEO 1997 2,225,998 3.70% ©. Danaldson Chapaten n Director 2008 0 0.00% Robert H. Allen 80 Director 2003 a 0.00% Luigi Catfish 73 Director 2005, a 0.00%
Slide 19: Sub-Standard Corporate Governance Practices
ub-Standard Corporate Governance Practices + WVAALCO has a history of poor corporate governance — Staggered Board — Poison Pill adopted in September 2007, triggered at 15% — Combined position of Chairman and CEO — No formal COO position — Supermajority voting rules — Directors and Officers are not s
Slide 20: Stockholders Deserve Better Representation
Stockholders Deserve Better Representation The Company has a flawed strategic vision —- Maintaining non-core assets in the U.S. — Expanding in the North Sea + Lack of in-house technical team — Company doesn’t have a COO + Company has never used the abundant net cash on its balance sheet: $90 million
Slide 21: VAALCO's Desperate Lawsuit
VAALCO’S Desperate Lawsuit + After reviewing the complaint, Nanes Delorme Partners has concluded that the laws! without merit and a baseless attempt by the Company to abuse the court process to usurp corporate democracy and disenfranchise stockholders — We believe that the Board and the Company are
Slide 22: Misleading Claims Regarding Julien Balkany
Misleading Claims Regarding Julien Balkany + Neither Julien Balkany nor Nanes Delorme has been retained by ar is working for any competitor of VAALCO. + Mr. Balkany has executed several hundred million dollars worth of oll & gas transactions on both the buy-side and sell-side. His extensive experien
Slide 23: VAALCO's Conflicts of Interest
VAALCO’s Conflicts of Interest Brown Brothers Harriman & Co., previously the majority shareholder of VAALCO owning 65% of outstanding shares, sold their entire stake in March 2005 to various financial institutions* = While three former BBH employees resigned as directors of VAALCO's Board, Robert L.
Slide 24: Nanes Delorme Partners is Proposing Three Independent, Highly Qualified Directors
Nanes Delorme Partners is Proposing Three Independent, Highly Qualified Directors ¥ Vo
Slide 25: Elect Three Highly Qualified Nominees
Elect Three Highly Qualified Nominees + Seeking a minority representation on the Board + Our independent, experience directors are completely aligned with stockholders and understand the importance of accountability + Our Nominees are highly successful businessmen with deep oil and gas expertise + O
Slide 26: Director Nominees
Director Nominees Julien Balkany Mr. Balkany has been serving as a managing member of Nanes Balkany Partners, the general partner of Nanes Delorme Partners, a US-based hedge fund, since January 2008. Nanes Delorme Partners pursues active investments in publicly traded oll and gas exploration and pro
Slide 27: Director Nominees
Director Nominees ra Clarence Cottman Ill Mr. Cottman has over twenty-five years of experience in the oil and gas industry. Currently, Mr. Cottman has been the President and Founder of Legacy Energy, Inc., a U.S. private ail and gas exploration and production campany with assets in Louisiana and Cal
Slide 28: Director Nominees
Director Nominees 2 Leonard Toboroff Mr. Taboroff has been serving as a director and Vice Chairman of the Board af Allis-Chalmers Energy Inc., @ provider of products and services to the oll and gas industry listed on the NYSE (ticker: ALY), since May 1989, and served as Executive Vice President fram
Slide 29: The Nominees Will Take Appropriate Action to Maximize Stockholder Value
The Nanes Delorme Partners Nominees Will Take Appropriate Action to Maximize Stockholder Value
Slide 30: Nominees are Committed to Maximizing Value for All Stockholders
Nanes Delorme Partners’ Nominees are Committed to Maximizing Value for All Stockholders + If elected, the nominees intend to address the following issues: 1. Evaluate and explore all strategic alternatives: + Creation of an independent special committee to evaluate and explore all strategic alternat
Slide 31: Nominees are Committed to Maximizing Value for All Stockholders
Nanes Delorme Partners’ Nominees are Committed to Maximizing Value for All Stockholders + If elected, the nominees intend to address the following issues: 3. Implement Corporate Governance Reforms: + Redemption of the Sharenalders Rights Plan + Ellmnination of VAALCO’s anti-takeover provisions + Dec
Slide 32: Summary
Summary + VAALCO has materially underperformed under this Board's leadership. * Most of the current board members choose not to invest in VAALCO shares + Urgent need to rebuild stockholder value with the improvement of corporate governance and the review of strategic alternatives + Inaction and misl