vaalco energy, inc. -...
TRANSCRIPT
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VAALCO ENERGY, INC.
IPAA Oil & Gas Investment Symposium
April 15 - 17, 2013
New York
Robert Gerry III
Chief Executive Officer
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Corporate Information
Safe Harbor Statement
This presentation includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this presentation, including without limitation, business strategies, plans and objectives of management of VAALCO for future operations, and capital expenditures, are forward-looking statements. There can be no assurances that such forward-looking statements will prove to be correct. Important factors that could cause actual results to differ materially from the forward-looking statements and projections include inflation, availability of goods, services and capital, environmental risks, drilling risks, volatility of commodity prices, operational risks, foreign governmental risks and regulatory changes.
The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions at oil and gas prices in effect at the time of the estimate, without future escalation. We include in this presentation estimates of gross reserve potential that the SEC's guidelines strictly prohibit us from including in filings with the SEC. Investors are urged to consider closely the disclosure in our Form 10-K, available from the SEC at www.sec.gov.
Inquiries:
VAALCO Energy, Inc.
Attn: Gregory R. Hullinger
4600 Post Oak Place, Suite 300
Houston, TX 77027
Ph: 713-623-0801
www.vaalco.com
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Company Profile
* As of 04/10/2013
Resources and Market Data Reserve Data as of 12/31 2012 2011
Ticker (NYSE) EGY Proved & Probable Reserves (MBOE) 11,427 9,242
Employees - worldwide 100 Proved Reserves (MBOE) 7,745 6,368
*Market Capitalization ($MM) $423 Proved Developed Reserves (MBOE) 4,008 3,996
Management Ownership 6% Proved Developed (%) 52% 63%
*52 Week Price Range $6.81-$9.65 Percent Oil 98% 97% *Average Daily Volume (last 90 days)
414,400
Key Financial Data ($MM) 2012 2011 2010 Production Data
Revenue Operating Cash Flow
$195 $94.0
$210 $89.6
$134 $45.5
Daily Production (BOEPD):
Net Income $0.63 $34 $37 Gross / VAALCO Net (after royalty) 17,000 / 4,150
Capex (excl. expl. dry holes) $46 $33 $40 Operated Production Percentage 100%
Cash (incl. restricted) $143 $149 $97
Debt - - - Acreage
Shares (Diluted - millions) 59 58 57
EPS (Diluted – per share) $0.01
$0.59
$0.65 International (gross/net ) in millions
2.5 / 0.9
West Africa Focus
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GABON
Port Gentil
Libreville
N’zeto
Luanda
Porto Amboim
ANGOLA
Block 5 1,400,000 gross acres
560,000 net acres Offshore Exploration
Mutamba Iroru Permit 270,000 gross acres 111,000 net acres
Onshore Exploration
Etame Marin Permit 760,000 gross acres 213,000 net acres
Offshore Production and Exploration
EQUATORIAL GUINEA
Block P 57,000 gross acres 18,000 net acres
Offshore Exploration
Offshore Gabon: Etame Marin Permit
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VAALCO is the Operator with a 28.1% net W.I, in partnership with the Sinopec group (Addax), Sasol, Tullow, Sojitz and PetroEnergy
Production from four fields, all connected to an FPSO facility
Eight wells currently producing
Oil production currently averaging approximately 17,000 BOPD gross (4,150 BOPD net to VAALCO after royalty)
Cumulative production as of 12/31/2012 was approximately 72.4 million barrels
Multi-well drilling and workover program commenced in late 2012
Construction of two new platforms underway
Future exploration opportunities
Ebouri Etame
North Tchibala
Avouma & South Tchibala
ETAME MARIN PERMIT
GABON
Port Gentil
Libreville
Offshore Gabon: Currently Producing Fields
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Ebouri Field
Etame Field
South Tchibala Field
Avouma Field
Offshore Gabon: Etame Field
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Expo
rt Pip
eline
Etame Field
New Etame Platform (Under construction)
Initial discovery made in 1998
Field declared commercial in 2001; largest of the four fields
First oil production September 2002
Production is from four wells with subsea completions
Current production is approximately 8,250 BOPD gross (2,000 BOPD net to VAALCO after royalty)
Cumulative production as of 12/31/2012 was approximately 48.3 million barrels
New multi-well platform construction underway
Offshore Gabon: New Platform Construction
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New Etame Platform (Under construction)
Expo
rt Pip
eline
Etame Field
New Etame Platform
Investment will result in more efficient drainage of reservoir and increase proved reserves
Expected platform cost is $140 million ($40 million net to VAALCO)
Up to 5 new development wells planned, at $25 million per well ($7 million net to VAALCO)
Rate of Return expected to be in excess of 60%
Installation expected in 2H 2014
Offshore Gabon: New Platform Construction
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New Platform (Under
construction)
SE Etame Field (Gamba)
North Tchibala Field
(Dentale)
Expo
rt Pip
eline
New SE Etame/N. Tchibala Platform
Objective to commercialize SE Etame Gamba discovery and exploit N. Tchibala Dentale reservoirs
Expected platform cost is $130 million ($37 million net to VAALCO)
Initially 3 new development wells planned, at $25 million per well ($7 million net to VAALCO)
Construction underway and installation expected in 2H 2014
Offshore Gabon: Avouma & South Tchibala Fields
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Avouma Platform
Avouma and South Tchibala Fields
Discovery well completed August 2004
Production commenced in January 2007
EAVOM-3H well came online April 2014 with initial natural flow rate of 3,000 BOPD
Current production from fields is approximately 5,500 BOPD gross (1,350 BOPD net to VAALCO after royalty), expected to increase following the EAVOM-2H workover
Cumulative production as of 12/31/2012 was approximately 15.6 million barrels
Water knock-out facilities recently installed-expect to be operational in 1H 2013
Offshore Gabon: Ebouri Field
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Ebouri Platform
Ebouri Field
Discovery well completed January 2004
Platform installed August 2008
First production began in January 2009; one well currently producing from the platform
H2S discovered in July 2012 in two wells now offline; Sweetening options being developed
Current production is approximately 3,250 BOPD gross (800 BOPD net to VAALCO after royalty)
Cumulative production as of 12/31/2012 was approximately 8.5 million barrels
One exploratory appraisal well scheduled in 1H 2013
Floating Production, Storage and Offloading Facility
Operations began 2002
Long-term contract with Tinworth through 2020
1.1 million barrel storage capacity
Can accept up to 30,000 barrels of total fluids per day
25,000 BOPD oil processing limit
141 liftings through March 2013 totaling approximately 72 million barrels
Zero environmental incidents since inception of operations
Crude is sold in 2013 to Mercuria Trading NV based on Brent pricing structure
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FPSO “Petroleo Nautipa”
ETAME MARIN PERMIT
Offshore Gabon: Future Exploration Potential
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Elili Prospect • 110m water depth • Well depth: 3,500m
GABON
Dussafu Discovery (Harvest)
223 sq km 3D survey completed 4Q 2011
Southwest Etame • 78m water depth • Well depth: 2,000m
Kala Discovery • 107m water depth • Well depth: 3,500m
Southwest Avouma • 86m water depth • Well depth: 2,250m
Edge Lead • 60m water depth • Well depth: 3,600m
Mu Prospect • 60m water depth • Well depth: 2,700m
Northeast Avouma • 85m water depth • Well depth: 2,200m • Awaiting partner approval
N Lead • 50m water depth • Seismic processing & interpretation underway
Gamba-Ivinga Field
68 wells
Cum: 286 MMBO & 568 BCF
EUR 350 MMBO (From IHS)
Onshore Gabon: Mutamba Iroru Permit
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N’Gongui Discovery well drilled in Q4 2012
Encountered 49 feet of oil pay in the Gamba Formation
50% Partner TOTAL operates the Atora Field 6 miles to the North
Plan of Development underway for submittal to Gabon Government
Bende Field
3 wells
Atora Field
11 wells
Cum: 38 MMBO
Rabi Kounga Field
240 wells
Cum: 840 MMBO
EUR 900 MMBO
N’Gongui Discovery
VAALCO-operated Block 5
LOENGO Subsalt Prospect
330’ Water Depth
Cobalt-operated Block 21
CAMEIA-1 Subsalt Discovery
5518’ Water Depth
1180’ of oil pay
Tested to flow 5100 BOPD
(facilities constrained)
Maersk-operated Block 23
AZUL-1 Subsalt Discovery
3028’ Water Depth
Estimate 3000 BOPD potential
Limits of Kwanza Basin
Offshore Angola: Kwanza Basin – Republic of Angola
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Offshore Angola: Block 5 Exploration
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1.4 million acre license with water depths from 0-500m in northern part of Kwanza Basin
VAALCO is Operator with 40% working interest, Sonangol P&P 20% carried interest. Sonangol sent positive recommendation for new 40% partner to the Ministry of Mines for approval – decision expected soon
Potential on-block reserves of 1 BBO+ over multiple pre-salt and post-salt prospects and leads
Block has history of 12 wells drilled by prior operator - 6 recorded oil or oil shows - 3 were drill stem-tested to produce 29°
to 34° API oil at rates of between 700 and 1,100 BOPD
1700 sq km of licensed and proprietary 3D
Offshore Angola: Block 5 Primary Prospects
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Jack Prospect • 40% WI • 80m water depth • Well depth: 2200m • $30 million gross cost • 40 MMBO gross unrisked potential
Loengo Prospect • 40% WI • 110m water depth • Well depth: 3800m • $35 million gross cost • 100+ MMBO gross unrisked potential
Kindele/Mubafo Prospect • 40% WI • 100m water depth • Well depth: 2000m • $31 million gross cost • 50 MMBO gross unrisked potential
Offshore Equatorial Guinea:
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Acquired 31% working interest in 57,000 gross acres (PDA area)
Block has 2005 discovery – Venus is believed to be commercial as a standalone development project
Exploration upside
Two exploration wells expected to be drilled in 2013/2014 timeframe
GEPetrol is operator of the block
EQUATORIAL GUINEA
Plock P PDA Area
57,000 acres
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Offshore Equatorial Guinea: Block P
Marathon 1,100 mmboe
Libreville
Gabon
EG
EG
Cameroon
Block P PDA
Hess 600 mmboe
Exxon 1,300 mmboe
PDA Boundary 57,000 acres
232 km2
Venus Field (17 - 21 mmbo)
Europa Discovery
Marte: AlbianTurbidites
SW Grande: Tertiary Channels
Onshore USA
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East Poplar Field
• Three exploration wells drilled in 2012
• Two wells, a vertical test well and a Bakken/Three forks horizontal well, were unsuccessful efforts
• Third well scheduled for completion testing in the first half of 2013 in the Nisku formation
Salt Lake / Flat Lake Field
• Two exploration wells drilled in 2012 and both were non-commercial efforts
Evaluating options for exiting onshore USA
MONTANA NORTH DAKOTA
East Poplar Dome
Salt Lake
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2013 Capital Budget
Gross $Millions
Net $Million
Gabon – Offshore
Development
• Avouma 3H $ 28.5 $ 8.0
• Construction of 2 new platforms (Etame & SEENT)
144.7 40.6
• Other 12.7 3.6
Exploration
• Ebouri appraisal well 26.6 7.5
• Prospect Mu 14.0 4.2
Angola / Equatorial Guinea
• One Exploration Well Prospect 76.0 33.4
Total $ 302.5 $ 97.3
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Pro-forma Consolidated Balance Sheets
12/31/2012 12/31/2011
Assets Cash & cash equivalents 130,800 $ 137,139 $
Restricted cash 12,131 12,209
Accounts receivables 13,113 21,300
Other current assets 3,955 3,170
PP&E, net 106,608 99,848
Other non-current assets 1,349 1,349
Total assets 267,956 $ 275,015 $
Liabilities & Owners' Equity
Current liabilities 45,063 $ 25,090 $
Asset Retirement Obligation & Other 10,368 16,858
Shareholders' equity 212,525 233,067
Total liabilities & owners equity (Amounts in thousands)
267,956 $ 275,015 $
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Pro-forma Income Statements
12 months
ended
12/31/2012
12 months
ended
12/31/2011
Revenues 195,287 $ 210,436 $
Operating costs and expenses (108,694) (77,875)
Operating Income 86,593 $ 132,561 $
Other expense, net 559 1,469
Income tax expense (81,813) (93,468)
Net Income 5,339 $ 40,562 $
Less net income - noncontrolling interest (4,708) (6,417)
Net income - VAALCO Energy, Inc. (Amounts in thousands)
631 $ 34,145 $
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VAALCO - Summary
Stable production profile
• 100% operated
• Multiple development opportunities
Attractive reserve base
• 98% oil
• At 12/31/12, proved reserves increased by 22% as compared to 2011
Strong balance sheet
• No debt
• 2013 budget expected to be funded with cash flow
Large acreage inventory in focus area
• Field development/expansion opportunities
• High potential prospects
Growth Strategy
• Focus on the existing West Africa asset base and acreage positions to fully exploit the potential and expand West Africa footprint
• Continue to pursue selective corporate and/or producing property
acquisitions with exploration upside