VAALCO Energy, Inc.Maxim Dolinsky

ACG2021 Sec. 080AInstructor: Susan Crosson

Executive Summary VAALCO company has been growing

in the past years. It has increased its profits as opened up new drilling wells. The stock however has been suffering in the past several months, it went down from >5 to < 4 in its value.

Introduction Robert L. Gerry III - Chairman and

Chief Executive Officer W. Russell Scheirman - President

and Chief Financial Officer Company’s headquarters are located

in Cranford, New Jersey, 07016 Ending date of the latest fiscal year:

December 31

Introduction continued VAALCO is an independent energy

company focused on exploration, development and production of crude oil and natural gas. VAALCO lowers risk of acquisitions and exploratory drilling. The Company’s production is done in two regions Texas Gulf Coast region

• Manages all of the domestic production in U.S. Gabon, West Africa

• Manages all of the international production in Africa

Stock Market Information Most recent price of the company’s stock is

3.78 Trading range for the previous 12 months is 3.06 – 5.68

No dividends were yielded The above data as of 10/10/05 I personally almost invested $2,000 at the

end of May when the stock was just under 4.0. Once I saw the peak in Aug. I was disappointed about not buying it, but Sep. low made me feel better about my decision. See figure on the next page

Stock Market Information cont.

BUY? SELL? HOLD? If I’d only knew.

Industry Situation and Company Plans Right now the company is in a decent

shape due to shortage of oil supplies in U.S., in the future the competition will definitely get tougher, especially once/if they rebuild New Orleans.

The company does spend a lot of money on the research, if it goes successfully then VAALCO will stay in a decent shape, otherwise it can hit a bottom.

Industry Situation and Company Plans continued In the future the company is

planning to expand in the South Africa. http://www.vaalco.com/start.html http://english.pravda.ru/comp/

2002/06/18/30608.html http://finance.yahoo.com/q/pr?s=egy

Income Statement VAALCO (EGY) Vs. its competitors

EGY KMG PXD Pvt1 Industry

Market Cap: 213.11M 9.93B 7.06B N/A 344.91MEmploy ees: 12 4,084 1,550 65,901 50Qtrly Rev Growth (yoy): 43.00% 69.60% 30.80% N/A 30.30%Revenue (ttm): 76.48M 6.52B 2.05B 8.00B1 67.85MGross Margin (ttm): 85.30% 59.24% 80.05% N/A 70.91%

EBITDA (ttm): 60.88M 3.17B 1.35B N/A 33.74MOper Margins (ttm): 71.86% 27.94% 34.84% N/A 30.21%Net Income (ttm): 28.19M 873.00M 374.92M 1.21B1

7.41M

Income Statement continued The format is most likely a multi

step format.56,502   35,983   9,992  

10,225   11,438   3,028  

46,277   24,545   6,964  

Total Revenue

Cost of Revenue

Gross Profit

Research Development -   -   -  Selling General and Administrative 1,260   2,267   1,956  Non Recurring -   -   -  Others 4,749   5,876   2,126  

Operating Expenses

Income Statement continued The company has been steadily

increasing in its revenues, profits, expenses. VAALCO has been simply growing in the past two years. A previous figure proves the statement.

Balance Sheet

20,564   21,813   33,365  

47,808   24,554   15,198 

68,372   46,367   48563Total Assets

=

+Total Liabilities

Total Stockholder Equity