Q4 2023 VAALCO Energy Inc Earnings Call

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Operator: Good morning, and welcome to the VAALCO Energy fourth quarter 2023 earnings conference call. All participants will be in listen-only mode.

Good morning, and welcome to the VAALCO Energy fourth quarter 2023 earnings Conference call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad.

After today's presentation there'll be an opportunity to ask questions.

To ask a question you May press Star then one on your telephone keypad.

Operator: To withdraw your question, please press star then 2. Please note, this event is being recorded. I would now like to turn the conference over to Al Petrie, Investor Relations Coordinator. Please go ahead.

To withdraw your question. Please press Star then two.

Please note this event is being recorded.

I would now like to turn the conference over to Al Petrie Investor Relations coordinator. Please go ahead.

Al Petrie: Thank you, operator. Welcome to VAALCO Energy's fourth quarter and full year 2023 conference call. After I cover the forward-looking statements, George Maxwell, our CEO, will review key highlights of the fourth quarter and full year 2023. Ron Bain, our CFO, will then provide a more in-depth financial review. George will then return for some closing comments before we take your questions. During our question and answer session, we ask you to limit your questions to one and a follow-up. You can always re-enter the queue with additional questions.

Thank you operator, welcome to VAALCO Energy's fourth quarter and full year 2023 conference call.

After I cover the forward looking statement George Maxwell, our CEO will review key highlights of the fourth quarter and full year 2023.

And Dane our CFO will then provide a more in depth financial review George will then return for some closing comments before we take your questions.

During our question and answer session. We ask you to limit your questions to one and a follow up you can always reenter the queue with additional questions I'd like to point out that we posted a supplemental investor deck on our website that has additional financial analysis comparisons and guidance that should be helpful.

Al Petrie: I'd like to point out that we posted a supplemental investor deck on our website that includes additional financial analysis, comparisons, and guidance that should be helpful. With that, let me proceed with our forward-looking statement of comments. During the course of this conference call, the company will be making forward-looking statements. Investors are cautioned that forward-looking statements are not guarantees of future performance, and actual results or developments may differ materially from those projected in the forward-looking statement. VAALCO disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Accordingly, you should not place undue reliance on forward-looking statements.

With that let me proceed with our forward looking statement comment during the course of this conference call. The company will be making forward looking statements investors are cautioned that forward looking statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward look.

Thanks, Dave.

<unk> disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information future events or otherwise accordingly, you should not place undue reliance on forward looking statements. These and other risks are described in our earnings release the presentation posted.

George Walter: These and other risks are described in our earnings release, the presentation posted on our website, and in the reports we file with the SEC, including our Form 10-K. Please note that this conference call is being recorded. I now turn the call over to George. Thank you, Al.

On our website and in the reports, we file with the SEC, including our Form 10-K.

Please note that this conference call is being recorded let me now turn the call over to George.

Thank you all.

George Walter: Good morning, everyone, and welcome to our fourth quarter and full year 2023 earnings conference call. I am very pleased with our ability to deliver exceptional operational and financial results in 2023, exceeding our guidance and expectations following the transwove combination that occurred in late 2022. Our focus has been on optimizing production, managing our costs, and capturing operational and cost synergies, all while executing capital drilling campaigns to enhance profitability and growth. Through the execution of this strategy, we have significantly grown our cash position, while fully funding our capital program, shareholder dividends, and buybacks, all while remaining bank debt free. We returned over $50 million to shareholders in 2023 through dividends and buybacks.

Good morning, everyone and welcome to our fourth quarter full year 2023 earnings conference call.

I'm very pleased with our ability to deliver exceptional operational and financial results in 2023 exceeding our guidance and expectations for when the Time's womb combination that occurred in late 2022.

Our focus has been on optimizing production managing our cost on capturing operational and cost synergies.

All well executing capital drilling campaigns to enhance profitability and growth.

Through the execution of this strategy, we have significantly grown our cash position, while fully funding our capital program shareholder dividends and buybacks all while remaining bank debt free.

We returned over $50 million to shareholders in 2023 through dividends and buybacks.

George Walter: And in 2024, we have already announced an acquisition that will utilize a portion of that $121 million in cash on the balance sheet to add 4,500 working interest barrels per day and 13 million barrels of 1P working interest CPR reserves. Before I go into more detail on our many accomplishments over the past year and the upcoming 2024 key items, let me first summarize some high-level financial and operational results that led to a record-breaking year. We grew production by 83% year-over-year, which helped us deliver a record-breaking adjusted EBIT DAX of $280 million in 2023. This was a 50% increase over 2022 despite a 26% decrease in realized commodity prices.

And in 2024, we have already announced an acquisition that will utilize a portion of that $121 million in cash on the balance sheet to add 4500, working interest barrels per day, and 13 million bottles of one P. Working interests C. P. R reserves.

Before I go into more detail on our many accomplishments over the past year and upcoming 'twenty 'twenty four key items, let me first summarize some high level financial and operational results led to a record breaking year.

We grew production by 83% year over year, which helped us deliver record breaking adjusted EBITDAX of $218 million in 2023.

This was a 50% increase over 2022, despite a 26% decrease in realized commodity pricing.

George Walter: Our record production levels were driven by our successful drilling campaign programs in Egypt and Canada, as well as high operational uptime in Gabon. At mid-year, we increased our production guidance, given the strong performance that we had experienced in the first half of 2023, and we finished the year at the top end of our increased production guidance with 18,710 NRI barrels of oil equivalent per day, or 23,946 barrels on a working interest basis. The diversity of our asset base has allowed us to grow and generate significant operational cash flow to fund our activities. In 2023, we generated almost $120 million in free cash flow and returned over $50 million of that free cash flow back to shareholders through dividends and buybacks.

Our record production levels were driven by our successful drilling campaign programs in Egypt, and Canada as well as high operational uptime in Gabon.

By midyear, we increased our production guidance given the strong performance that we had experienced in the first half of 2023 and me.

Finished the year at the top end of our increased production guidance with 18710 N O I barrels of oil equivalent per day or 23946 bottles on a working interest basis.

The diversity of our asset base has allowed us to grow and generate significant operational cash flow to fund our activities.

In 2023, we generated almost $120 million in free cash flow and returned over $50 million of that free cash flow back to shareholders through dividends and buybacks.

George Walter: After fully funding our capital program and paying dividends and buybacks, we grew unrestricted cash to over $120 million at the end of 2023. We have positive momentum as we enter 2024, both operationally and financially. And we are building size, scale, and profitability to sustainably grow VAALCO. We recently announced an accretive all-cash acquisition of Svenska that expands our diversified portfolio of assets to include offshore Côte d'Ivoire. Let's begin our overview of VAALCO's assets with the new acquisition. A few weeks ago, we announced that we were acquiring Savinska Petroleum Exploration in an all-cash deal with no issuance of debt or equity. The gross purchase price of $66.5 million has an effective date of October 1, 2023 and is subject to customary closing adjustments.

After fully funding our capital program and paying dividends and buybacks, we grew unrestricted cash to over $120 million at the end of 2023.

We have positive momentum as we enter 2024, both operationally and financially.

We are building size scale and profitability to sustainably grow vocal.

We recently announced an accretive all cash acquisition of <unk> that expands our diversified portfolio of assets to include offshore Cote d'ivoire.

Let's begin on overview of vault because assets with the new acquisition.

A few weeks ago, we announced that we were acquiring Svenska petroleum exploration in an all cash deal with no issuance of debt or equity.

The gross purchase price of $66 $5 million has an effective date of October one 2023 and is subject to customary closing adjustments.

George Walter: We believe that the net cash we will need to pay at closing, which we expect to occur in the second quarter of 2024, will be between $30 and $40 million. We are adding an asset with strong current production and reserves at a very attractive price. This acquisition is highly accretive on key metrics to our shareholder base and provides another strong asset to support future growth. It provides us with additional diversification and strategically expands our West African focus area. The Côte d'Ivoire baobab field in Block CI40 has a strong production of about 4,500 working interest barrels of oil equivalent and is 99% oil.

We believe that the net cash we will need to pay at closing, which we expect to occur in the second quarter of 2024 will be between 30 and $40 million.

We are adding an asset with strong current production and reserves at a very attractive price.

This acquisition is highly accretive on key metrics to our shareholder base and provides another strong asset to support future growth.

It provides us with additional diversification and strategically expands our west African focused area.

The code the Wild Bill Bob Field in block C. I 40, a strong production of about 4500, working interest barrel of oil equivalent and is 99% oil.

George Walter: The 1P working interest CPR reserves from this proven producing asset are 13 million barrels at October 1st, 2023, and the 2P working interest CPR reserves are 21.7 million barrels. We are very excited about the significant organic upside opportunity that is well defined in the potential 2026 drilling campaign at Baobab and the future Kisipo development opportunity. The BABA field has many parallels with the TAMI in terms of the historic production profile and how the upside is realized through development drilling campaigns, meaning this is an asset type that we understand well.

The one P working interests CPR reserves from this proven producing asset or 13 million barrels at October one 2023, and the two P. Working interests CPR reserves are $21 7 million bottles.

We're very excited about the significant organic upside opportunity, but as well defined and the potential 2026 drilling campaign at baobab in the future to support development opportunity.

The baobab field as many parallel with the Tommy in terms of the historic production profile and how the upside is realized through development drilling campaigns. I mean, this is an asset type that we understand well.

George Walter: The field has been significantly de-risked through the drilling of 24 production wells, five injection wells, and a near 20-year production history. The planned dry docking and upgrading of the FPSO in 2025 will position the field for the expected production growth from the potential 2026 drilling program and for future drilling campaigns for many years to come. We are partnering with a great operator and believe our significant development experience offshore West Africa and the successful management of our FPSO changeover in 2022 will provide insight and experience to help enhance future success at Beobab. This acquisition contributes to our ability to generate sustainable cash flow for many years and provides another producing asset base that should enhance our ability to continue to return cash to shareholders. As some condition precedents remain outstanding, we have not included production from Svenska in our 2024 guidance or any capital expenditures in our 2024 capital budget.

The field has been significantly derisked through the drilling of 24 production wells five injection wells and a near 20 year of production history.

The planned dry docking on upgrading of the F. P. S. O in 2025 will position the field for the expected production growth from the potential 2026 drilling program and for future drilling campaigns for many years to come.

We are partnering with a great operator, I believe a significant development experience offshore West Africa, and the successful monitoring of our F. P. S. O change over in 2022 will provide insight and experience to help enhance future success a buildup.

This acquisition contributes to our ability to generate sustainable cash flow for many years and provides another producing asset base that should enhance our ability to continue to return cash to shareholders.

Are some condition precedence romantic standing we have not included production from <unk>, and our 2024 guidance or any capital expenditures in 2020 for capital budget.

George Walter: Turning to Egypt, our 2023 drilling campaign saw some very positive results. We completed our 2023 campaign faster and at a lower cost than we originally planned, which allowed us to increase the drilling program from the original 2023 budgeted position. We finalized the last well in the program in October, and in 2023, we drilled 18 vertical wells, including one injector well and two exploration wells, as well as a horizontal well.

Turning to Egypt, our 2023 drilling campaign saw some very positive results.

We completed our 2023 campaign faster and at lower costs than we originally planned which allowed us to increase the drilling program from the original 2023 budgeted position.

We finalized the last well in the program at TOBA on in 2023, we drilled 18 vertical wells, including one injector, well and two exploration wells as well as a horizontal well.

George Walter: Overall, we had a very economical drilling program with strong production performance, and we're very pleased with our drilling performance in 2023. For the vertical wells, we're seeing significantly faster drilling performance, moving from a 2022 average of about three wells drilled every four months to now drilling two wells per month, which is a 60% reduction in cycle time. By drilling the wells faster, we are cutting costs meaningfully and improving the economics of our wells in Egypt. In addition to the drilling efficiencies, we have also spent time and effort in Egypt reviewing the facilities and overall production operations. These efforts have resulted in increased production, lower costs, and better safety and environmental performance in Egypt.

Overall, we had a very economic drilling program with strong production performance and we're very pleased with our drilling performance in 2023.

On the vertical wells, we're seeing significantly faster drilling performance moving from a 2022 average of about three wells drilled every four months to now drilling two wells per month, which is a 60% reduction in cycle times.

By drilling the wells faster, we're cutting costs meaningfully and improving the economics of our wells in Egypt.

In addition to the drilling efficiencies. We have also spent time and effort in Egypt, reviewing the facilities and overall production operations.

These efforts resulted in increased production lower cost and better safety and environmental performance in Egypt.

George Walter: In addition, we achieved a major milestone in the first quarter of 2024 with 1 million man-hours without a lost time in service. The improvement in process flow and the drilling program resulted in SEC 1P additions of 4.8 million barrels on an NRI basis. As we look to 2024, we are currently planning to reduce capital spend as we evaluate a potential growing program. We are focusing on the first half of the year on capital workovers that are forecasted to offset decline rates for the first half of this year. We have a 10 to 15 well drilling program that we are currently evaluating for the second half of the year. This program remains contingent on completion of the program evaluation and confirmation of a drilling rig for this period.

In addition, we achieved a major milestone in the first quarter of 2024 with 1 million man hours without a lost time incident.

The improvement in process flow and the drilling program resulted in SEC One P additions of $4 8 million bottles on an NOI basis.

As we look to 2024, we're currently planning to reduce capital spend as we evaluate a potential drone program.

We're focusing on the first half of the year on capital Workovers that are forecasted to offset decline rates for the first half of this year.

We have a 10 to 15 well drilling program that we are currently evaluating for the second half of the year.

This program remains contingent on completion of the program evaluation and confirmation of a drilling rig for this period.

George Walter: We have not included this program within our firm CAPEX guidance until it is confirmed. However, if successful, we anticipate additional CAPEX of approximately $18 million, which will also generate additional production. The macroeconomic position in Egypt has seen some headwinds recently, but we have seen some positive announcements from the government over the past few weeks, which are encouraging. In Canada, we drilled two wells in the first quarter of 2023, a 1.5-mile lateral and a 3-mile lateral. Both wells were drilled and completed safely and cost-effectively without installation.

We have not included this program within our firm Capex guidance until confirmed however, if successful we anticipate additional capex of approximately $18 million, which will also generate additional production.

The macro economic position in Egypt has seen some headwinds recently however, we have seen some positive announcements from the government over the past few weeks, which are encouraging.

In Canada, we drilled two wells in the first quarter of 2023 at one five mile lateral on the three mile lateral.

Both wells were drilled and completed safely and cost effectively without incident.

The wells were tied in and equipped in April and early May with overall cycle times that were significantly less than historical cycle times.

George Walter: The wells were tied in and equipped in April and early May with overall cycle times that were significantly less than historical cycle times. The wells began flowing in May, with good production rates, and in early July, the pump and rods were run on both wells. Both VAAL's initial production rates exceeded expectations, and we are now continuing to produce at slightly above the expected type curve. Canada set a production record for us in 2023 by eclipsing 3,000 barrels per day working equivalent on working interest in Q2. Another reason we perform so well in Canada and exceed our production target. We're using the results and learnings from our 2023 drilling and completions program to enhance our 2024 drilling program. We believe that to better optimize our Canadian prospects going forward, we will move to 2.5 and 3 mile laterals almost exclusively, which we believe will further improve the economics of our development program. In addition, we have optimized facilities and pads while also refining our completion techniques. We have continued to add acreage around our existing land footprint to help extend the lateral length of our well.

The wells began flowing EMEA with good production rate on the narrow lid July the pump and Rod will run on both wells.

Both wells initial production rates exceeded expectations and we are now continuing to produce a slightly above the expected type curves.

Kind of just a production record for us in 2023 by eclipsing 3000 barrels per day working equivalent from working interest in Q2.

Another reason, we performed so well in Canada and exceeded our production targets.

We're using the results and learnings from our 2023 drilling and completions program to enhance our 2020 for drilling.

We believe that to better optimize our Canadian prospects going forward, we will move to 2.5 and three mile laterals almost exclusively which we believe will further improve the economics of our development program.

In addition, we have optimized facilities and parts, while also refining our completion technique.

We have continued to add acreage around our existing land footprint to help extend the lateral length of our wells.

We had a small increase in year end proved reserves in Canada tied to additional proved undeveloped locations from these acquisitions.

In the first half of 2024, we're drilling four wells in the northern part of or at least holding the our 2.5 and three mile laterals and anticipate having them all completed and flowing in the second quarter.

George Walter: We had a small increase in year-end proved reserves in Canada tied to additional proved undeveloped locations from these acquisitions. In the first half of 2024, we are drilling four wells in the northern part of our lease holdings that are 2.5 and 3 mile laterals and anticipate having them all completed and flowing in the second quarter. In addition, we're also targeting an exploration appraisal well in the south after completing these development wells. This should provide a strong production boost in Canada, and as you can see from our guidance, we expect our production in Canada to increase in 2024. Our Canadian assets continue to produce strong production and contribute to our overall ability to generate strong operational cash. Turning to Gabon,

In addition, we're also targeting an exploration appraisal well in the south after completing these development wells.

This should provide a strong production boost in Canada and as you can see from our guidance, we expect our production in Canada to increase in 2024.

Our Canadian assets continue to produce strong production and contribute to our overall ability to generate strong operational cash flow.

Turning to Gabon.

As you know we completed our previous drilling campaign in the fourth quarter of 2022, Uninvested only minimal capex dollars in Gabon in 2020 to be primarily related to maintenance capex and long lead drilling equipment.

We have seen strong overall production results in 2023 through reduced maintenance requirements and improved decline tariffs in the world.

The S. S O M field reconfiguration projects in 2022 have allowed us to capture the efficiency and Opex savings in the full year 2023, while enhancing production uptime and minimizing field decline prior to the next drilling campaign.

George Walter: As you know, we completed a previous drilling campaign in the fourth quarter of 2022 and invested only minimal CAPEX dollars in Gabon in 2023, primarily related to maintenance CAPEX and long-lead drilling equipment. We have seen strong overall production results in 2023 through reduced maintenance requirements and improved decline curves on the wells. The FSO and field reconfiguration projects in 2022 allowed us to capture efficiency and op-ex savings in the full year 2023 while enhancing production uptime and minimizing field decline prior to the next drilling campaign. Looking at 2024 and into 2025.

Looking at 2024 and into 2025.

We are preparing for our next drilling campaign at Tommy.

We initially apply in the three to four well campaign in Gabon with a mix of development appraisal wells and the Goswell for infield power requirement.

We also initiated a review of the Liberty field with a view to development opportunities to drill additional wells and Workovers, which will target between eight to 12 million barrels of oil. This is currently in our one C and to see reserve numbers.

This will require some enhancements of the aboody platform to handle crude sweetening equipment.

Our engineering and subsurface plans are meeting completion to allow a move towards F. I D. Later, this year, which if approved will enhance the planned drilling program in Gabon.

George Walter: We are preparing for our next drilling campaign at TAMI. We initially have planned a 3-4 well campaign in Gabon with a mix of development, appraisal, and gas wells for infield power requirements. We have also initiated a review of a Liburi field with a view to development opportunities to drill additional wells and workovers which will target between 8 to 12 million barrels of oil. This is currently in our 1C and 2C reserve numbers. This will require some enhancement of the ability of the platform to handle crude sweetening equipment.

Some technical and regulatory approvals are still to be obtained in addition to completing their evaluation and we will provide a further update on this exciting project when we confirm the scope and timing of our Gabon drilling program.

We're expecting to spend between 30 and $40 million and long lead items in 2020 for preparing for and in anticipation of the drilling campaign.

Turning to blocks G and H, we held discussions with our partners and have made some encouraging progress this quarter and plan to move towards further discussions and negotiations in the second quarter of this year, where we will provide a further update.

George Walter: Our engineering and subsurface plans need to be completed to allow a move towards FID later this year, which, if approved, will enhance the planned drilling program in Gabon. Some technical and regulatory approvals are still to be obtained in addition to completing the evaluation, and we will provide a further update on this exciting project when we confirm the scope and timing of our Gabon drilling program. We're expecting to spend between $30 and $40 million in long-lead items in 2024, preparing for and in anticipation of the drilling campaign. Turning to blocks G and H, we held some discussions with our partners and have made some encouraging progress this quarter, and plan to move towards further discussions and negotiations in the second quarter of this year, when we will provide a further update. On Equatorial Guinea, efforts have continued and intensified to finalize the JOA with our partners.

In Equatorial Guinea.

Airports have continued and have intensified to finalize the JV with our partners I am pleased to say that we have only some confirmatory details remaining outstanding and upon receipt. We expect to move this project into firm Capex feed study in the very near future.

Turning to reserves, we are very pleased with the growth of our SEC proved reserve base. Despite a significant decline in pricing.

Our positive reserve revisions due to positive field performance in Gabon, and drilling results in Egypt, and Canada, coupled with the reserves added with some land purchases in Canada helped to more than offset production and downward pricing.

SEC proved reserves at year end increased by 3% to $28 6 million barrels of oil equivalent.

The lower FCC pricing impacted our PV 10 values for 2023, despite the slight increase in one P bottles.

Overall, our PV 10 decreased 45% from $624 million to $342 million.

George Walter: I am pleased to say that we have only some confirmatory details remaining outstanding, and upon receipt, we expect to move this project into a firm CAPEX feed study in the very near future. Turning to reserves, we are very pleased with the growth of our SEC-approved reserve base despite a significant decline in prices. Our positive reserve revisions due to positive field performance in Gabon and drilling results in Egypt and Canada, coupled with the reserves added with some land purchases in Canada, help to more than offset production and downward prices. SEC-approved reserves at year-end increased by 3% to 28.6 million barrels of oil equivalent.

R to P. C. P. R estimate, which includes proven and probable reserves using vocals management assumptions for future pricing and cost reported in our working interest basis prior to deductions for government royalties. So our year over year increase of 1% to $77 3 million barrels of oil equivalent.

Once again strong operational performance and reserves additions outweighed the impact of lower pricing and production.

The two P. C. P. R. M. PV 10 value was impacted mainly by pricing and cost inflation as we saw a 23% decrease to $631 million I eat into 2023.

George Walter: The lower SEC pricing impacted our PV10 values for 2023, despite the slight increase in 1P barrels. Overall, our PV10 decreased 45% from $624 million to $342 million. Our 2P CPR estimate, which includes proven and probable reserves using VAALCO's management assumptions for future pricing and costs, reported on a working interest basis prior to deductions for government royalties, saw a year-over-year increase of 1% to 77.3 million barrels of oil equivalent. Once again, strong operational performance and reserve additions outweighed the impact of lower pricing and production. The 2P CPR NPV10 value was impacted mainly by pricing and cost inflation, as we saw a 23% decrease to $631 million at year-end 2023.

In closing we delivered outstanding results in 2023, and I'm excited about 2024 and beyond.

We're focused on growing production reserves and value for our shareholders. We have delivered significant shareholder returns during 2023 and have retained a strong balance sheet.

I'd like to thank our hard working team who continues to operate and execute our plans we have bank debt free and remain firmly focused on our strategic vision of accretive growth, while maximizing shareholder return opportunities and operating with the highest regard towards ESG.

With that I would like to turn the call over to Ron to share our financial results.

Thank you George and good morning, everyone.

I will provide some insight into the drivers for our financial results and drama of them repeating what you can reading the earnings release or our turnkey I will focus on the key points.

Let me begin by echoing George's comments about our continued success in 2023, driven by strong operational performance that yielded record financial results.

George Walter: In closing, we delivered outstanding results in 2023, and I'm excited about 2024 and beyond. We are focused on growing production, reserves, and value for our shareholders. We have delivered significant shareholder returns during 2023 and have retained a strong balance sheet. I would like to thank our hard-working team who continue to operate and execute our plan. We are bank debt free and remain firmly focused on our strategic vision of accretive growth while maximizing shareholder return opportunities and operating with the highest regard for ESG. With that, I would like to turn the call over to Ron to share our financial results. Thank you, George, and good morning, everyone.

In the fourth quarter, we generated $44 million in that income of 41 cents per share on 96 million and adjusted EBITDAX.

Both were significant increases compared to prior quarters and ahead of consensus estimates.

The exceptional fourth quarter numbers helped to push our full year 2023, net income to $64 million or 56 cents per share and adjusted EBITDAX to $218 million.

We have a strong cash position, a clean balance sheet and no bank debt.

I'm proud to say that we're in much better position today, with a growing and diversified asset base than ever before in <unk> history.

Let's turn to production and sales, which along with realized pricing drives our revenue.

Production for the fourth quarter remains solid.

Ronald Y. Bain: I will provide some insight into the drivers of our financial results, and rather than repeating what you can read in the earnings release or our 10K, I will focus on the key points. Let me begin by echoing George's comments about our continued success in 2023, driven by strong operational performance that yielded record financial results. In the fourth quarter, we generated $44 million in net income of $0.41 per share and $96 million in adjusted EBITDA.

At the high end of our guidance with our sales for the quarter also at the higher end of guidance.

The production performance of our assets in 2023 was buoyed by a successful drilling in Egypt on Canada, and mitigating decline in Gabon through operating efficiencies.

With a diversified portfolio of assets, we will have changes from quarter to quarter in the mix of sales from each of our producing areas.

This change in mix impacts of realized pricing and ultimately our revenue and earnings but if you look at the bigger picture and over a full year, you'll see impressive growth across our expanding portfolio of producing assets.

Ronald Y. Bain: Both were significant increases compared to prior quarters and ahead of consensus estimates. The exceptional fourth quarter numbers helped to push our full year 2023 net income to $60.4 million, or $0.56 per share, and adjusted EBITDAX to $280 million. We have a strong cash position, a clean balance sheet, and no bank debt. I'm proud to say that we're in a much better position today with a growing and diversified asset base than ever before in VAALCO's history. Let's turn to production and sales, which, along with realized pricing, drive our revenue. Production for the fourth quarter remains solid, at the high end of our guidance, with our sales for the quarter also at the higher end of guidance. The production performance of our assets in 2023 was buoyed by successful drilling in Egypt and Canada and a mitigating decline in Gabon through operator efficiencies. With a diversified portfolio of assets, we will have changes from quarter to quarter in the mix of sales from each of our producing areas.

We saw growth in total sales volumes quarter over quarter, and overall realized pricing increase from the third quarter due to higher sales mix in Gabon versus Egypt.

This drove our fourth quarter revenues to $149 million.

For the full year 2023, we saw revenue increase by a little over $100 million.

This was driven by sales, increasing 86% year over year, but somewhat offset by lower realized pricing, which declined 26%.

You will note in our earnings release yesterday, we provided a detailed breakout sales volumes along with commodity pricing by country.

Regarding hedging.

As shown in our earnings release, we continued to implement a hedging program that helps mitigate risk and protect our commitment to shareholder return.

We have costless collars in place for Q1 through Q3 2024.

All of our callers have a floor price of $65 for around 15% of our production through Q3, 'twenty 'twenty four with bauxite onto colors to between 92 and $100.

Ronald Y. Bain: This change in mix impacts our realized prices and ultimately our revenue and earnings. But if you look at the bigger picture, and over a full year, you'll see impressive growth across our expanding portfolio of producing assets. We saw growth in total sales volumes quarter over quarter and an overall realized pricing increase from the third quarter due to higher sales mix in Gabon versus Egypt. This drove our fourth quarter revenues to $149 million. For the full year 2023, we saw revenue increase by a little over $100 million. This was driven by sales increasing 86% year over year but somewhat offset by lower realized pricing which declined 26%.

It's worth, noting we have 85% of our production through Q3, 2024, unhedged, whilst protecting our commitment to our dividend.

Turning to cost our production cost for the full year 2023 were below the low end of guidance on an absolute basis under the bottom end of guidance on a per barrel basis.

We remain focused on capturing synergies and keeping our costs low to enable us to maximize margins and increase our cash flow.

Well, obviously costs were up 36% year over year, primarily due to higher sales volumes, our production cost per barrel or 27% lower year on year.

Ronald Y. Bain: You will note in our earnings release yesterday, we provided a detailed breakout of sales volumes along with commodity pricing by country. Regarding hedging, as shown in our earnings release, we continue to implement a hedging program that helps mitigate risk and protect our commitment to shareholder return. We have costless collars in place for Q1 through Q3 2024. All our collars have a floor price of $65 for around 15% of our production through Q3 2024, with upside on the collars to between $92 and $100.

This demonstrates that we are delivering on capturing synergies and cost saving initiatives like the FSU a project last year.

G&A costs were also in line with guidance when compared to the combined G&A costs seen in 2022 by both VAALCO on Transco.

We've seen meaningful reductions in costs, well ahead of our target synergies.

The final integration and reorganization of the business is behind us.

And we've commenced our back office process improvement project with the implementation of a single cloud based ERP across the whole company.

Noncash DD&A costs decreased considerably quarter over quarter, primarily due to year end depletion adjustments, mostly in Egypt that were made in the fourth quarter. Once we completed our reserves evaluation under 2023 competent person's report.

Ronald Y. Bain: It's worth noting we have 85% of our production through Q3 2024 unhedged, whilst protecting our commitment to our dividends. Turning to costs, our production costs for the full year 2023 were below the low end of guidance on an absolute basis and at the bottom end of guidance on a per barrel basis. We remain focused on capturing synergies and keeping our costs low to enable us to maximize margins and increase our cash flow. While absolute costs were up 36% year-over-year, primarily due to higher sales volumes, our production costs per barrel are 27% lower year-on-year.

Compared to the prior year and 2023, we have seen an increase in DD&A cost due to the step up of the Trans group asset valuation and because of the additional investment in new wells brought online for both Egypt and Canada.

In the fourth quarter, we agreed on a protocol with the Gaba state for a long standing dead on T V together with an outstanding debt from the government owned cigar refinery.

This was probably way of transfer of state profile, all bottles to etame contractors and settlement of its debts.

Ronald Y. Bain: This demonstrates that we are delivering on caption synergies and cost-saving initiatives like the FSO project last year. G&A costs were also in line with guidance. When compared to the combined G&A costs seen in 2022 by both VAALCO and Transglob, we've seen meaningful reductions in costs well ahead of our target synergies. The final integration and reorganization of the business is behind us.

This reduced the quantity of bottles were holding as foreign taxes payable and that will likely be settled by state lifting of the remaining bottles in 2024.

We had no gabonese state lifting in 2023, primarily due to the protocol agreement, but how does state lifting in 2022 of approximately 600000 barrels.

Ronald Y. Bain: And we've commenced a back-office process improvement project with the implementation of a single cloud-based ERP across the whole company. Non-cash dDNA costs decreased considerably quarter over quarter, primarily due to year-end depletion adjustments, mostly in Egypt, that were made in the fourth quarter once we completed our reserves evaluation and our 2023 Confident Persons Report. Compared to the prior year, in 2023, we have seen an increase in dDNA. That's due to the step-up of the Transglobe Asset Valuation and because of the additional investment in new wells brought online in both Egypt and Canada. In the fourth quarter, we agreed on a protocol with the Gabonese state for a long-standing debt on TVA, together with an outstanding debt from the government-owned Sugara refinery.

<unk> costs in the fourth quarter of about $37.6 million resulted in effective tax rate of about 46% in the quarter.

This was lower than prior quarters, and driven by the revaluation of tax oil barrels held for Gabon.

As I stated before in Gabon, our foreign income taxes are settled by the government through any kind of oil payments.

The end of each quarter, we have to mark to market. The in kind oil so in general when the prices rise it has a negative impact to our accrued taxes and if prices fall, we see a benefit thus reducing our tax liability.

We cannot control the movement of the underlying commodity price to which this in kind O as mark too.

We continue to guide that 60% to 65% effective tax rate is a correct effective tax rate over the long term excluding discrete items.

Ronald Y. Bain: This was by way of transferring state profit all barrels to Itami Contractors in settlement of its debt. This reduced the quantity of barrels we are holding as foreign taxes payable, and that will likely be settled by a state lifting of the remaining barrels in 2024. We had no Gabonese state listing in 2023, primarily due to the Protocol Agreement, but we had a state listing in 2022 of approximately 600,000 barrels. Tax costs in the fourth quarter of about $37.6 million resulted in an effective tax rate of about 46% in the quarter.

Turning now to the balance sheet and cash flow statement.

Unrestricted cash rose to $121 million also December 31st 2023.

We plan to use a portion of this cash to fund the Svenska acquisition.

Last call, we discussed likely working capital movements, some of which occurred in the fourth quarter of 2023 related to the reduction in accounts payable associated with the 2023 capital program.

Ronald Y. Bain: This was lower than prior quarters and driven by the revaluation of tax oil barrels held for Gibbon. As I've stated before, in Gabon, our foreign income taxes are settled by the government through in-kind oil payments. At the end of each quarter, we have to mark-to-market the in-kind oil. So, in general, when prices rise, it has a negative impact on our accrued taxes, and if prices fall, we see a benefit, thus reducing our tax liability.

At the beginning of 2024, we're projecting a built in Egyptian accounts receivable associated with domestic sales in the first quarter and that will be partially offset by our annual modernization payment.

Additionally, we're certain annual cash payments that tend to be paid early in the new year, including the domestic market obligations in Gabon and insurances.

Ronald Y. Bain: We cannot control the movement of the underlying commodity price to which this in-kind all is marked. However, we continue to guide that 60-65% is the correct effective tax rate over the long term, excluding discrete items. Turning now to the balance sheet and cash flow statement, unrestricted cash rose to $121 million as of December 31, 2023. We plan to use a portion of this cash to fund the Swenska acquisition. On last call, we discussed likely working capital movements, some of which occurred in the fourth quarter of 2023, related to the reduction in accounts payable associated with the 2023 capital program. At the beginning of 2024, we are projecting a build in Egyptian accounts receivable associated with domestic sales in the first quarter that will be partially offset by our annual modernization payment. Additionally, there are certain annual cash payments that tend to be paid early in the new year, including the domestic market obligation in Gibbon and insurance.

Finally, as part of being a responsible operator and community partner in Gabon, we are executing on community engagement projects sanctioned by the PSC that were previously accrued these.

These items will impact our working capital position in the first quarter of 2024.

Also has been the case since the third quarter of 2018, we're cutting no bank debt and credit facilities available to utilize for additional accretive acquisition opportunities to continue to build value.

In Q4, 2023 vocal paid a quarterly cash dividend of $6 quarter cents per common share or $6 $7 million under our share buyback was about $6 million.

For the full year 2023, we returned $53 million or 42% of our free cash flow to shareholders through dividends and share buybacks.

In February we announced the first dividend payment of the year at the same quarterly rate as 2023.

Aside from fully funding our shareholder returns, we also fully funded over $17 million of capital expenditures in 2023.

Ronald Y. Bain: Finally, as part of being a responsible operator and community partner in Gabon, we are executing on community engagement projects sanctioned by the PSC that were previously accrued. These items will impact our working capital position in the first quarter of 2024. As has been the case since the third quarter of 2018, we are carrying no bank debt, and the credit facilities are available to utilise for additional accretive acquisition opportunities to continue to build value. In Q4 2023, VAALCO paid a quarterly cash dividend of 6.25 cents per common share, or $6.7 million, and their share buyback was about $6 million.

These expenditures were primarily related to our drilling program in Egypt in Canada with some maintenance capex on long lead items for Gabon.

Let me now turn to guidance, what I will give you some key highlights and updates.

I want to remind you that guidance does not include the recently announced Vanska acquisition and will be updated once the acquisition is finalized.

Also our full guidance breakout is in the earnings release and in our supplemental slide deck on our website with production breakout of both working interest net revenue interest.

For the total company. We are forecasting Q1 2024 production to be between 21000 722400, working interest barrel of oil equivalent per day and between 16000 817300 net revenue interest.

Ronald Y. Bain: For the full year 2023, we returned $50.3 million, or 42% of our free cash flow to shareholders through dividends and share buybacks. In February, we announced the first dividend payment of the year at the same quarterly rate as in 2022. Aside from fully funding our shareholder returns, we also fully funded over $70 million of capital expenditures in 2023. These expenditures were primarily related to our drilling program in Egypt and Canada, with some maintenance CAPEX and long-lead items for Gabon. Let me now turn to guidance, where I will give you some key highlights and updates. I want to remind you that guidance does not include the recently announced Venska acquisition and will be updated once the acquisition is finalized. Also, our full guidance breakout is in the earnings release and in our supplemental slide deck on our website, with production breakout of both working interest and net revenue interest. For the total company, we are forecasting Q1 2024 production to be between 21,700 and 22,400 work and interest barrels of oil equivalent per day, and between 16,800 and 17,300 net revenue interest barrels of oil equivalent per day. This is down slightly from the fourth quarter of 2023 due to natural decline.

Barrels of oil equivalent per day.

This is down slightly from the fourth quarter of 2023 due to natural decline.

With that said, we do expect solid production growth in Canada due to our drilling program in 2024.

For the full year 2024, we are forecasting our total company production to be between 20000 823400, working interest barrels of oil equivalent per day and between 16000 118300 net revenue interest barrel.

All of equivalent per day.

Looking at production by asset where expected natural decline in Gabon in Egypt, Although we do have a capital Workover program in Egypt in the first half of 2024, so that should help mitigate decline.

In Canada as I've mentioned, we expect year over year growth from our drilling campaign.

For full year 2024, we're assuming our sales will be in line with our production.

For the first quarter this may not be the case.

You will notice that Q1 sales in Gabon.

Wide range. This is because of lifting in Gabon is scheduled for the end of March and could potentially shift into April of.

Of course, if that happens it will not impact our full year sales, but impact their first and second quarter sales in Gabon.

Our absolute operating costs are expected to remain in line with 2023, but we are projecting our per barrel of oil equivalent range to potentially increase slightly due to less projected revenue bottles.

Ronald Y. Bain: With that said, we do expect solid production growth in Canada due to our drilling program in 2024. For the full year 2024, we are forecasting our total company production to be between 20,800 and 23,400 work and interest barrels of oil equivalent per day, and between 16,100 and 18,300 net revenue interest barrels of oil equivalent per day. Looking at production by asset, we are expecting natural decline in Gabon and Egypt, although we do have a capital workover program in Egypt in the first half of 2024 that should help mitigate the decline.

We're also expecting small increases in absolute G&A per barrel of oil equivalent G&A costs, primarily due to resourcing requirements.

Finally, looking at Capex, our 2020 for capital spend of $70 million to $90 million includes drilling for long lateral development wells in our northern acreage in Canada long lead items in Gabon preparing for the 2025 drilling campaign and.

Capital Workovers in Egypt.

For the first quarter, we're expecting a range of between $22 million and $28 million for our Capex.

In closing, we continue to trade very low multiple of EBIT docks, despite having a strong dividend yield and being bank debt free.

Ronald Y. Bain: In Canada, as I've mentioned, we expect year-over-year growth from our drilling campaign. For full year 2024, we're assuming our sales will be in line with our production. But for the first quarter, this may not be the case.

At year end 2023, we had over $120 million in cash on the balance sheet.

Generated $218 million and adjusted EBIT docks and trading well below two times EBITDAX.

Ronald Y. Bain: You will notice that Q1 sales in Gabon have a wide range. This is because a lifting in Gabon is scheduled for the end of March and could potentially shift into April. Of course, if that happens, it will not impact our full-year sales but impact our first and second quarter sales in Gabon. Our absolute operating costs are expected to remain in line with 2023, but we are projecting our per barrel of oil equivalent range to potentially increase slightly due to lower projected revenue barrels. We are also expecting small increases in absolute G&A and per barrel of oil equivalent G&A costs primarily due to resourcing requirements. Finally, looking at CAPEX, our 2024 capital spend of $70 to $90 million includes drilling four long-lateral development wells in our northern acreage in Canada, long lead items in Gabon preparing for the 2025 drilling campaign, and capital workovers in Egypt. For the first quarter, we are expecting a range of between $22 million and $28 million for Orcapex.

With the <unk> acquisition, we should see an increase in production and sales, while we continue to generate significant adjusted EBITDAX and operational cash flow in 2024.

We are very well positioned to execute and fund our capex program across multiple producing assets over the next several years.

With that I'll now turn the call back over to George.

Thanks, Ron.

Our strategy remains unchanged.

Efficiently invest prudently maximize our asset base and look for accretive opportunities.

As you have heard this morning, we have successfully delivered strong operational and financial results in 2023 by executing on our strategic vision.

Our effective drilling campaigns in Egypt, and Canada helped both areas grew production in 2023, and a continued focus on operational uptime helped Gabon minimize decline.

All three areas of strong production performance that exceeded guidance.

We generated record adjusted EBITDAX of $280 million and free cash flow of $120 million.

Ronald Y. Bain: In closing, we continue to trade a very low multiple of EBITDA, despite having a strong dividend yield and being bank debt-free. At year-end 2023, we had over $120 million in cash on the balance sheet, generated $280 million in adjusted EBIT debt, and traded well below two times EBITDA. With the Svenska acquisition, we should see an increase in production and sales while we continue to generate significant adjusted EBITDAX and operational cash flow in 2024. We are very well positioned to execute and fund a CAPEX program across multiple producing assets over the next several years. With that, I'll now turn the call back over to George. Thanks, everyone. Our strategy remains unchanged.

We're funding all of our Capex quarterly dividends and share buybacks with cash flow and cash on hand.

We ended the year with over $121 million in cash on hand, and we're using some of that cash to make it very accretive acquisition.

We have delivered on our commitment to the market onto our shareholders and we are in an enviable financial position with no bank debt and a greater portfolio of producing assets with future potential upside.

In addition to funding our capital program and growing our cash position. We have remained focused on returning value to our shareholders.

In 2023, we returned $53 million to shareholders through dividends and buybacks.

42% of the free cash flow that we generated.

We nearly doubled our quarterly dividend and have continued to hire rate into 2024.

George Walter: Operate efficiently, invest prudently, maximize our asset base, and look for attritive opportunities. As you have heard this morning, we have successfully delivered strong operational and financial results in 2023 by executing on our strategic vision. Our effective drilling campaigns in Egypt and Canada helped both areas grow production in 2023, and our continued focus on operational uptime helped Gabon minimize decline. All three areas had strong production performance that exceeded guidance.

We are on pace to deliver another 25 cents per share annual dividend for 2020 for matching what we paid out in 2023, which are our current share price as a dividend yield of nearly 6%.

We've continued to repurchase common shares through the buyback program approved in 2022.

Since inception of the program back in November 2022, we have returned over $28 million to shareholders and repurchased in excess of 6 million common shares.

We are committed to returning value to shareholders and in 2024, we're targeting returning over $25 million of free cash flow to shareholders.

George Walter: We generated record-adjusted EBITDAX of $280 million and free cash flow of $120 million for funding all of our CAPEX, quarterly dividends, and shared buybacks with cash flow and cash on hand. We ended the year with over $121 million in cash on hand, and we're using some of that cash to make a very accretive acquisition. We have delivered on our commitment to the market and to our shareholders, and we are in an enviable financial position with no bank debt and a greater portfolio of producing assets with future potential upside. In addition to funding our capital program and growing our cash position, we have remained focused on returning value to our shareholders. In 2023, we will return $50.3 million to our shareholders through dividends and buybacks; that's 42% of the free cash flow that we generate.

We are expecting to close the <unk> acquisition sometime in the second quarter of 2024 and once it closes we will see an immediate boost to production adjusted EBITDAX and cash flow in both absolute and per share terms.

Our current 2024 guidance does not have the Svenska acquisition incorporated but once it closes we will provide updated guidance.

We're truly excited about the future and VAALCO is now in a very enviable position, we have multiple producing areas in future prospects to have completely diversified our risk profile under sources of income we.

We will remain disciplined in our approach to maximize value for our shareholders by delivering growth in production reserves and cash flow.

We are drilling for longer lateral wells right now in Canada purchasing long lead items and preparing for the planned drilling campaign in Gabon and in Egypt, we have multiple workovers in honor of evaluating an additional 10 to 15 well drill program.

Our success over the past two years has generated meaningful change at VAALCO and created significant development opportunities well into the future.

George Walter: We nearly doubled our quarterly dividend and have continued that higher rate into 2024. We are on pace to deliver another $0.25 per share annual dividend for 2024, matching what we paid out in 2023, which at our current share price is a dividend yield of nearly 6%. We have continued to repurchase common shares through the Buy Back Programme approved in 2022.

We're very excited for the future of Volcker and remain confident that we will continue to deliver superior long term volume to our shareholders.

Thank you and with that operator, we're ready to take questions.

We will now begin the question and answer session to.

To ask a question you May press Star then one on your telephone keypad.

If you were using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.

George Walter: Since the inception of the program back in November 2022, we have returned over $28 million to shareholders and repurchased in excess of 6 million common shares. We are committed to returning value to our shareholders, and in 2024, we are targeting returning over $25 million of free cash flow to shareholders. We are expecting to close the Svenska acquisition sometime in the second quarter of 2024, and once it closes, we will see an immediate boost to production, adjusted EBITDAX, and cash flow in both absolute and per share terms. Our current 2024 guidance does not include the Svenska Acquisition, but once it closes, we will provide updated guidance. We're truly excited about the future, and VAALCO is now in a very enviable position.

At this time, we will pause momentarily to assemble our roster.

Our first question today is from Sylvain Fugard with Curtis excuse me artist Advisors. Please go ahead.

Thank you good morning afternoon, James Thanks for taking my question.

I'd like to if possible to go back to the to the guidance the Capex and production guidance I think George you talk about the the Gabon Capex. The same capex being 30 to 40 could you come back on the or the items. Please and particularly if there is I don't think there is a bit concerned if there was anything associate.

Did we see steady.

For for EG and related to that so should I understand that there should not be any a T.

George Walter: We have multiple producing areas and future prospects that have completely diversified our risk profile and our sources of income. We will remain disciplined in our approach to maximize value for our shareholders by delivering growth in production, reserves, and cash flow. We are drilling four longer lateral wells right now in Canada, purchasing long lead items and preparing for the planned drilling campaign in Gabon. And in Egypt, we have multiple workovers and are evaluating an additional 10 to 15 well drill program. Our success over the past two years has generated meaningful change at VAALCO and created significant development opportunities well into the future. We are very excited about the future of VAALCO and remain confident that we will continue to deliver superior long-term value to our shareholders. Thank you, and with that, operator, we are ready to take. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key.

Chicken production in gambling around the end of the year because the drilling program that is more likely to start in 'twenty five rather than 24. Thank you.

Thank you Stefan so yes, we were looking at $30 million to $40 million of Capex within our Gabon, which is primarily related to maintenance capex and long lead items for the drilling program.

One thing that I mentioned during the introduction was that we do have a we're currently evaluating and.

Drilling program in Egypt, which is nothing guidance, but should that get confirm that would add an additional $18 million of capex for those that 10 to 15 wells.

You are correct in that when they were looking at the program and particularly the focus on the revision.

<unk> of the brewery field.

That is the reason that we're delaying slightly the Gabonese program is to allow that program to have a much wider scope and therefore, a greater number of wells, which will lower the overall cost from the drilling because we will have more wells to spread mobilization demobilization over.

And that makes it much more efficient and also what targeting effectively what were originally proven reserves for Gabon, and the aboody field and converting them from contingent.

Operator: To ask your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Our first question today is from Stephane Foucaud with Octus Advisors. Please go ahead.

There's quite a lot of of opportunities.

Stephane Guy Patrick Foucaud: Thank you, morning and afternoon, for taking my question. I'd like, if possible, to go back to the guidance, the CAPEX and production guidance. I think, George, when you talk about the Gabon CAPEX, the firm CAPEX means 30 to 40. Could you come back on the other items, please? And particularly, if there is, I don't think there is, but confirm if there is anything associated with the FIT study for EG.

Within.

Within the Capex program.

Thank you.

The split between Egypt, and Canada for the Capex.

Okay.

Hi, Stefan it's Ron let me take that element for for you on the breakdown of the Capex. So as we said in the guidance, we got $70 million to $80 million I would say for guidance purposes, Youre looking at Gabon being between 40 and 45% of that.

George Walter: And related to that, should I understand that there should not be any uptick in production in Gabon around the end of the year because the drilling program is now more likely to start in 25 rather than 24? Thank you, Steph. And so, yes, we're looking at 30 to 40 million dollars of CAPEX within Gabon, which is primarily related to maintenance CAPEX and long-lead items for the drilling program. And one thing that I mentioned during the introduction was that we do have, or we're currently evaluating a drilling program in Egypt, which is not in guidance, but should that get confirmed, that would add an additional $18 million of CAPEX for those You're correct in that when we looked at the program and particularly the focus on the revision of the Aburi field, that is the reason that we're delaying the Gabonese program slightly to allow that program to have a much wider scope and therefore a greater number of wells, which will lower the overall cost from the drilling because we'll have more wells to spread mobilization, and demobilization over, and that makes it much more efficient, and Thank you.

E jet between 10 and 15%.

Canada sacrifice to 40% and then the other will be corporate and possibly feed studies.

And you're referring for that maybe for EG.

The feed study.

Yeah, I mean, so just to.

Recap that I mean, we as I mentioned earlier on the coal we have made significant progress on on block P with the the position with the partners.

And whilst we're not in a position right now at this time to confirm move towards a feed study on the on the Venus development I do anticipate in the very near future we will be.

Thank you this is great.

Thanks Evan.

The next question is from Charlie Sharp with Canaccord. Please go ahead.

Yes, good morning, gentlemen, and thanks for taking my call and congratulations on a great set of results. If I could just just try and clarify a little bit more Gabon, if I may I think George you said at the beginning of your piece on Gabon that you initially planned a three or four well program.

Presumably that did not include the potential additional to see eight to 12 million barrels for resources that you highlighted.

Ronald Y. Bain: And so the split between Egypt and Canada for the firm CAPEX... Hi Stephane, it's Ron. Let me take that element for you on the breakdown of the CapEx. So, as we said, in the guidance we got $70 to $80 million. I would say for guidance purposes you're looking at Gabon being between 40 and 45% of that, and Egypt between 10 and 15%.

My might it be more than three or four wells, that's what I'm trying to get that and exactly what might that encompass in terms of.

<unk> reserves versus resources.

Yeah. So so you're you're correct in that the initial program did not include the opportunity of the redevelopment of the Aboody field.

The total we would say probably an additional two wells and one workover.

George Walter: Canada, 35 to 40 percent, and then the other will be corporate and possibly feed studies, and you're referring to that, maybe for Yeah, I mean, just to recap, as I mentioned earlier on the call, we have made significant progress on Block P with the position with the partners, and whilst we're not in a position right now at this time to confirm or move towards a feed study on the Venus development, I do anticipate in the very near future we will be. Thank you. This is great!

So that would take the program.

On them almost firm basis, depending six and seven wells and overhead we will carry options onto that as well.

Good for contingent resource to conversion to reserves for the Buda redevelopment remains between eight to 12 million barrels as I mentioned in the commentary one of the wells is for a field fuel supply so it's a gas well.

And anything but it will reduce further reduce our opex and in the field as we replace our natural gas with diesel.

Charlie Sharp: The next question is from Charlie Sharp with Canaccord. Please go ahead. Yes, good morning gentlemen, and thanks for taking my call and congratulations on that result. If I could just try and clarify a little bit more on Gabon, if I may. I think George you said at the beginning of your piece on Gabon that you initially planned a three or four well program. Presumably, that did not include the potential additional 2C... 12 million barrels of resources that you highlighted. Might it be more than three or four wells? That's what I'm trying to get at.

And the other targets, obviously, it's difficult to give you a range and we're looking at an appraisal step out well, but we'd be looking between two to 4 million barrels on the other two wells.

That's great. Thank you and can I just follow up with one question.

On let's see I 40 license and I think you've indicated that U S.

Yes, I won't be going in for maintenance and upgrades in 2025 for presumably for a year or more.

George Walter: And exactly what might that be... Post-Infirmary...

What was the reason for that and how much is that all going to cost and presumably that will all be cost recoverable in the following year.

George Walter: So you're correct in that the initial program did not include the opportunity for the redevelopment of the Aburi field. The total, we would say, is probably an additional two wells and one workover. So that would take the program on an almost firm basis between six and seven wells, and obviously, we will carry options on to that as well. The target for contingent resource to conversion to reserves for the Aburi redevelopment remains between eight to 12 million barrels.

Hard question really because obviously, we're not the operator of baobab and those plans have yet to be finalized by the operator.

Our anticipation is obviously this would be fully cost recoverable. There is a time schedule that would.

Take the vessel oxidation for a period of time.

We once we are in a position to have the right discussions with the operator and obviously it will be in a position to comment more accurately on both the the outage and timing delays cleared the dry docking will take place.

George Walter: As I mentioned in the commentary, one of the wells is for field fuel supply, so it's a gas well, so it won't add anything, but it will further reduce our op-ex in the field as we replace natural gas with diesel. And the other targets, obviously, it's difficult to give you a range when we're looking at an appraisal step-out well, but we'd be looking between two to four million barrels for the other two wells. Great, thank you. And can I just follow up with one question?

And and the nature of the upgrades.

The in our evaluation clearly we included our estimates both for time and Capex within that and no where we're very confident that our estimates are on the conservative side too.

George Walter: You've indicated that the FPSO will be going in for maintenance and upgrades in 2012, presumably for a year or more. What's the reason for that, and how much is that all going to cost? Presumably, that will all be cost recoverable in the following year. Hard question really because, obviously, we're not the operator of BAOBAB, and those plans have yet to be finalized by the operator. Our anticipation is that these would be fully cost recoverable. There is a time schedule that would take the vessel off station for a period of time.

To make the statement of how accretive we believe this transaction is.

But it would really be upon completion will be able to give a more accurate picture Charlie.

Okay. Thank you.

The next question is from Jeff Robertson with water Tower Research. Please go ahead.

Good morning, George.

Maybe premature based on your answer to the previous question, but from your understanding as the U S. P. S. So work that is expected to be done in the Ivory coast is it similar at all to what.

George Walter: Once we are in a position to have direct discussions with the operator, obviously, we'll be in a position to comment more accurately on both the outage and time delays, where the dry docking will take place, and the nature of the upgrades. In our evaluation, clearly, we included estimates both for time and CAPEX within that, and we're very confident our estimates are on the conservative side to allow us to make the statement of how accretive we believe this transaction is. But it would really be, upon completion, we'd be able to give a more accurate picture of our letter. The next question is from Jeff Robertson with Water Tower Research. Please go ahead. Thank you. Good morning, George. This may be premature based on your answer to the previous question, but from your understanding, is the FPSO work that is expected to be done in the Ivory Coast similar at all to what VAALCO did at the time in terms of trying to upgrade the field to lower costs? Create a Better Runtime. I'll let Thor answer that one; he's sitting behind me.

Alco did at Tommy in terms of.

Trying to upgrade the field to lower costs.

Great better run times.

Well I'll, let Paul answer that when he said he's sitting beside me.

The upgrade is really based around the class on the vessel itself. So if you recollect in Gabon, we actually changed the vessel out.

From an S. P S. Alton SSO in this case, what's happening is is that the vessel has reached class limits and needs to go into dry dock to get class resumed so that's the first part of it.

While it's there.

So we pick up some metal.

Replacement.

They'll do some additional work probably on the process equipment I would expect.

Cleaning it up.

Re reinvigorating it for the next phase of its life.

And then the other part that needs to be done is there needs to be some bearing replacements on the turn.

On the subsea side, there's really not a lot of work that's happening there. So it's the same but somewhat different more of a top side sculpsure in the subsea scope.

Ronald Y. Bain: Mr. Ron McClatchy. All the best. If you recollect, in Gabon, we actually changed the vessel out, and FPSO to an FSO. In this case, what's happening is that the vessel has reached its class limit.

Thanks.

From our perspective on the rig program in Gabon, and ultimately if you get the J L. A finalized for EG.

George can you talk about the effect if any of just.

Ronald Y. Bain: This is just the first part of it. While it's there, they'll obviously pick up some metal. I'll do some additional work probably on the process equipment, www.vaalco.com re-invigorating it for the next phases. And the other part that needs to be done is there needs to be some bearing replacements on the tool. On the subsea side, there's really not a lot of work that's happening. It's the same, but somewhat different, more of a topside. Thanks.

Cost fluctuations that are having an impact on how you evaluate.

The work going into the F D in the feed work.

Yeah, I can Jeff I mean, obviously from where vehicle where two years ago. Our capital allocation was relatively simple one is a single asset company capital allocation and our multi asset company becomes not I wouldn't say more problematic it becomes a challenging as to as to where we get the best return for the <unk>.

<unk> now when they look at our where we were 18 months ago and preparing the plan of development for Venus and Equatorial Guinea.

George Walter: From a perspective on the RIG program in Gabon, And finally, if you get the JOA finalized for EG, George, can you talk about the effect, if any, of cost fluctuations that are having an impact on how you evaluate the work going into the FID and the feed work? Yeah, I can, Jeff.

Although the pricing both on drilling units on production units has moved considerably now we believe we've maybe seen the top of that cycle now with starting to maybe see at that plot too often.

George Walter: I mean, obviously, from where VAALCO was two years ago, capital allocation was relatively simple, and as a single-asset company, capital allocation in a multi-asset company becomes, I wouldn't say more problematic; it becomes challenging as to where we get the best return for the investment. Now, when we look at where we were 18 months ago in preparing the plan of development for Venus in Equatorial Guinea, obviously, pricing both on drilling units and on production units has moved considerably. Now, we believe we've maybe seen the top of that cycle now.

From where it was.

And its historic highs in 2023, and that's really the purpose of the feed study and it's not really to go on.

Reconfirm, our challenge the technical position inside the plan of development.

The plan of development. However, if we do see a better way of doing it and we do see a more economic way of doing it that will come into that feed study, but.

The project itself had fairly robust economics, despite capex intensity.

We've been looking at that that Capex position and seeing how we can challenge that between Catholics and leasehold we've been looking at but also from a tax perspective.

George Walter: We're starting to maybe see it plateau off from where it was at its historic highs in 2023, and that's really the purpose of the feed study. It's not really to go and... reconfirm or challenge the technical position inside the plan of development. However, if we do see a better way of doing it, and we do see a more economical way of doing it, that will come into that phase study. But the project itself had fairly robust economics despite its CAPEX intensity.

But bear in mind that, albeit a relatively small project at at about 17 to 20 million barrels recoverable.

It's a very short life, which gives it an attractive cash flow so.

Throughout 2024 will be working on that feed to firm up both the timing of the development how it fits into our overall corporate Capex program and ensuring that they the feed study can deliver us towards an <unk> position.

Thank you.

George Walter: We've been looking at that CAPEX position and seeing how we can challenge that between CAPEX and leasehold. We've been looking at that also from a tax perspective, but bear in mind that albeit a relatively small project at about 17 to 20 million barrels recoverable, it has a very short life, which gives it an attractive cash flow. So throughout 2024, we'll be working on that feed to firm up both the timing of the development, how it fits into our overall corporate CAPEX program, and ensuring that the feed study can deliver us to an FID position. Thank you. The next question is from Chris Wheaton with Spiefel. Please go ahead. Thanks. Good afternoon.

The next question is from Chris Wheaton with Stifel. Please go ahead.

Thanks, Good afternoon, good morning, guys.

Two questions if I may firstly, I Wonder if you got back to Equatorial Guinea and just.

Understand what the timing might be.

Of the stages, you need to get through to be able to get to X y D.

There's obviously you are in the feed stage. It sounds like you would in the feed stage at the moment you need to get through to everybody.

At some point.

I'm, assuming now that that is going to be next year sometime around 2025.

Because you need to get the data.

Operating agreement sorted out as well.

My second question is kind of related to Equatorial Guinea, but after you folded in <unk> acquisition of the fab stake.

Christopher Courtenay Wheaton: Good morning, guys. I have two questions, if I may. Firstly, I wonder if you could go back to Equatorial Guinea and just understand what the time might be. All of the stages you need to get through to be able to get to FID here, because obviously you're in the feed state, the feed stage at the moment. To FID at some point, I'm presuming now that that was going to be next year sometime, i.e. 2025. Still operating. My second question is kind of related to Equatorial Guinea, but after you fold Spencer Acquisition of the Bay of, I'm presuming you'd quite like to do both Equatorial Guinea and... The Cote d'Ivoire Redevelopment Simplaneous. Financially, I'm interested in whether you see there's a risk of you see any risk of you not being able to do that because I would have thought you're www.vaalco.com We're quite able to do both of those projects simultaneously. If you want to, I guess the question is, how good are their returns when you stack them up against each other? That's my second question.

Presuming you would quite like to do both Equatorial Guinea and.

The character for redevelopment.

Painlessly.

Yes.

Financially I'm interested in whether you see that as a risk you see any risk of you not being able to do that because I would've thought you're.

Given your cash flow and your balance sheet strength.

Are you able to do both of those projects simultaneously.

I want to I guess the question is how.

How could you dive returns when you stack them up against each other.

Thank you.

Okay. The first question.

We are positioned with our with Equatorial Guinea.

Through through efforts from from everyone in particular efforts from the MMA.

The MMA to the government in Equatorial Guinea, we've got.

I would say, 99% alignment on where we want to be within the G. L. A M and I have indicated.

George Walter: Okay, the first question: we are at a position now with Equatorial Guinea where, through efforts from everyone, in particular efforts from the MMH, the government in Equatorial Guinea, we've got, I would say, 99% alignment on where we want to be within the GOA. And, as I've indicated, I can't say for sure today, but I do expect to say for sure in the very near future that the GOA issues are Like I said in my opening remarks, we're looking at confirmatory documentation as opposed to negotiating documentation, which is a big step forward from where we were previously. That does allow us to move into feed. I'm kind of guessing that when we move into feed, given the complexity of a blue water development, that we're estimating nine months on feed. It could go quicker. It could go slower.

I can't say for sure today, but I do expect to see for sure in the very near future that the GLA issues are extensively behind us like I said in my opening remarks, we're looking at confirmatory documentation as opposed to negotiating documentation, which is a big step forward from where we've been previously.

That does not allow us to move into feed and I'm kind of guessing that and when we move into feed given the complexity on our blue water development that we are estimating nine month on feed it could go quicker it could go floor, but given we have D C bed surveys environmental impact assessments.

And like I said, starting from a blue water location.

We do anticipate nine months is a reasonable timeframe to get to feed and feed will deliver and we do anticipate delivering F. I D.

George Walter: But given we have to do seabed surveys, environmental impact assessments, and, like I say, starting from a blue water location, I do anticipate nine months is a reasonable time frame to get to feeding. And feed will deliver. And we do anticipate feed delivering FID. During that same period, obviously, we'll be able to give much more certainty and clarity around what's happening in the Swenska acquisition, which we do expect to close in Q2 and become a full partner with the operator, CNRL, throughout the rest of this year. As we get into that position, we can give more clarity as to what the costing and timings are for the rehabilitation of the MV10, and The challenges, as you've pointed out, Chris, about a number of CapEx opportunities coming together at the same time, the challenges, as you've pointed out, Chris, about a number of CapEx opportunities coming together at the same time, We'll all be looked at on their merits. There are certain things that must happen, and clearly, there's a time frame that we will be engaged with CNRL around what is happening for that field to shut down and recommence.

During that same period, they will be able to give much more clarity and quality around what's happening in the fence acquisition, which we do expect to close in Q2 and become a full partner with the operator C. N O now throughout the rest of this year as we as we.

Get into that position, we can give more clarity as to what the costing and timings are.

For the the rehabilitation of the MD 10.

The <unk>.

Talent is as you pointed out Chris abate, a number of capex opportunities coming together at the same time.

<unk>.

We'll all be looked out the merits of a certain things that must happen and clearly there's a timeframe that we will be engaged with the CNR rail around at what is happening for that field to to shut down and recommence Suez.

As a commitment there.

We are absolutely committed to based on the the operator's time scheduled as soon as we can discuss that with them.

When you look at our own operations with regard to the drilling program and enhancement that we talked about the opportunities in Gabon for early 2025, and the timing around the.

The EG development again as I said, we've looked at AEG development and said well. It's capex intensive. However, we were looking at opportunities, where we replace capex with lease opportunities given the tax environment in EG.

George Walter: So there's an obligation there that we are absolutely committed to based on the operator's time schedule as soon as we can discuss that with them. When we look at our own operations with regard to the drilling program and enhancement that we talked about and the opportunities in Gabon for early 2025 and the timing around the EG development. Again, as I said, we've looked at the EG development and said, well, it's CAPEX intensive. However, we're looking at opportunities where we replace CAPEX with lease opportunities given the tax environment in EG.

And also given that the there's a nice dovetail opportunity between drilling programs in Gabon, and Equatorial Guinea. So we can as I mentioned earlier back to.

I think it was Charlie that we may have a a.

Seven up to seven well program opportunity in Gabon, we can tag that the potential 10, well opportunity in a much more exciting program for a rig operator.

George Walter: And also, given that there's a nice dovetail opportunity between drilling programs in Gabon and Equatorial Guinea, so we can, as I mentioned earlier to Charlie, that we may have a seven, up to a seven well program opportunity in Gabon; we can tag that to potentially a 10 well opportunity and a much more exciting program for a rig operator if we dovetail the wells that we have planned in Equatorial Guinea I do agree with you, financially, we're placed exceptionally well to execute all of these projects, but we're not challenged to the extent that we see we'd have to delay any as a result of financial constraints; it's really going to be on technicality. Great That's really helpful.

Dovetail the wells that we have planned in Equatorial Guinea.

I do agree with you where we're at.

Financially were placed exceptionally well to execute all of these projects.

But but we're not challenge to the extent that we see we would have to delay any.

As a result of financial constraints, it's really going to be on technical.

Okay.

Great. That's really helpful. Thanks, very much indeed.

The next question is from build to sell them with Teton capital. Please go ahead.

Thank you and congratulations on a great quarter.

Could you please talk about the sourcing of the <unk> deal and.

George Walter: Thanks very much indeed. The next question is from Bill Dezellem with Teton Capital. Please go ahead.

And talk about if you would be willing to do an additional transaction in 'twenty four or if this is enough for now.

William J. Dezellem: Thank you. Congratulations on a great deal. Would you please talk about the sourcing of the Svenska deal and talk about if you would be willing to do an additional transaction in 2024 or if this is enough for now? Uh, I think, I think, Obviously, additional transactions are difficult to comment on, Bill, as you'd appreciate, but we do look for opportunities where our natural experience and the experience we have inside the company can get a deal structure that we see as immediately accretive and immediately adding production. So are we a company that's going to look around for blue water exploration acreage? That really doesn't fit our bill, but we will be looking at opportunities where we see production. Now, do we have enough for now?

Yeah.

I think I think.

The additional transactions are difficult to comment on bill as you appreciate but we do look for opportunities, where our natural experience and the experience we have inside the company and where we can get a deal structure that we see is immediately accretive.

And and immediately adding production. So are we a company that's going to look around for blue water exploration acreage, that's not really it doesn't fit our bill.

But we will be looking at opportunities, where we see production now do we have enough for now yeah. We've got a lot of opportunities and with the opportunities. We've acquired to date, we've created considerable longevity to the production profile of the vocal hub.

George Walter: Yeah, we've got a lot of opportunities, and with the opportunities we've acquired to date, we've created considerable longevity for the production profile that VAALCO has, and when we look at the source, I'm not quite sure what you're referring to when it comes to the source. We've got lots of information around opportunities as they exist in West Africa and in other parts of the world. When we looked at this particular opportunity that we've managed to conclude, subject to closing precedents, we actually looked at it some time ago when we were running another company called Eland. A lot of these deals, as some of you will be aware, in Africa can take a long time to percolate.

When you look at the source I'm not quite sure what you're referring to when it comes to source.

We've got lots of information.

Asian around opportunities as they exist and are in West Africa, and other parts of the world. When we looked at this particular opportunity that we've managed to conclude subject to closing.

Closing President says, we actually looked at that some time ago. When we were running a another company called <unk> and then we a lot of these deals.

Some of you will be aware in Africa can take a long time to percolate and what really aided and abetted.

George Walter: What really aided and abetted VAALCO's opportunity to close this particular deal was our knowledge of the asset, which came from a number of years ago, and the speed at which we could do technical and financial due diligence. That came from the knowledge base we have inside the company. The real source is inherent inside VAALCO's DNA right now, and we do apply that to areas where maybe some of our shareholders have never heard of before, but we know there are accretive opportunities in those geographies. George, that's very helpful. Thank you very much. And one country that or area that we have heard of is Canada.

VAALCO has opportunity to close this particular deal was a knowledge of the asset which came from from a number of years ago, and our speed at which we could do technical and financial due diligence and that came from the knowledge basically harm inside the company. So the real sources.

Is inherent inside Volcker's DNA right now and we do apply that to areas, where maybe some of our shareholders I've never heard of before but we know there's accretive opportunities and those disciplines and geographies.

George that's very helpful. Thank you very much and.

One country that or area that we have heard of is Canada and given the success that you have had out there.

William J. Dezellem: And given the success that you have had there, would you be willing to make additional acquisitions in Canada? How are you thinking about that? That's a good question, and I will respond exactly to the same challenge that the board gave the executive team over 12 months ago. They said, look, This is a nice business, a small business. How do you make it more viable?

Would you be willing to make.

Additional acquisitions in Canada, how are you thinking about that.

That's a good question and I will respond exactly the same challenge that the board gave the executive team over over 12 months ago, and they said look.

This is a nice business a small business how do you make it more viable how do you make it more contributors to the overall corporate plan, how do you make it cash generative pulse still expanding the opportunities inside Canada.

George Walter: How do you make it more contributive to the overall corporate plan? How do you make it cash generative while still expanding the opportunities inside Canada? And that's exactly what we did. We have a five-year plan that was put together by the Canadian management team. It's an excellent plan, and I have to commend them for putting it together. In that plan, as we mentioned, we're moving to longer-term lateral wealth to enhance the economic returns that we get from our investment activities there. And in order to do that, we have to acquire land parcels that connect the disconnected land parcels, so we have to allow three-mile laterals instead of one-mile laterals.

And that's exactly what we've done we have a five year plan that was put together by the Canadian management team. It's an excellent plan and I have to commend them for putting it together.

And that plan is as we mentioned, we're moving to longer lateral wells to enhance the economic returns that we get from from our investment activities there and in order to do that we have to acquire land parcels that connect the disconnected land parcels that we have to allow the three mile laterals instead of a one mile lateral.

George Walter: Or we have to go into joint ventures where we see opportunities for connecting those land parcels where perhaps the existing incumbent does not. And that's exactly – some of this campaign we're doing right now is based on that strategy where we have gone into agreements with partners and are joining land parcels with us where they come in as a co-venturer initially, and in one instance, they decided they didn't want to, and we've taken it 100%. So I see opportunities to grow that strategy, but I don't see it growing into three or four or five times the footprint we have today. But we do have a very nice contributing business in Canada right now. Thank you, and congratulations again. The next question is from Jamie Wilen with Wilen Management. Please go ahead.

Well, we have to go into joint ventures, where we see opportunities.

And connecting those land parcels, where perhaps the existing incumbent does not and that's exactly some of this campaign of drilling right. Now is based on that strategy as well, where we have them.

Went into agreements with partners and I, joining land parcels with us where they come in as a co adventurer.

And initially or in one instance, they decided they didn't want to we've taken at 100%, so I see opportunities to grow that strategy.

But I don't see it.

Growing and too.

<unk> three.

Three or four or five times, a group than we have today, but we do have a very nice contributing business in Canada right now.

Thank you and congratulations again on a good quarter.

Thanks Bill.

The next question is from Jamie Wilen with Wilen management. Please go ahead.

James R. Wilen: A nice quarter on all fronts, fellas. A couple of cash questions. As you talk about the acquisition, you're paying $60 million, but it'll be $30 to $40 million in cash by the time it closes. I assume that means that the operation is generating north of $5 million a quarter for you when it closes? I mean, Jamie, it's Ron.

Nice quarter on all fronts Fellas couple of cash question tissue.

About the acquisition.

Paying 60 million, but it'll all be $30 million to $40 million in cash by the time. It closes I assume that means that the operation is generating north of $5 million a quarter for you.

When it when it closes.

Yeah I mean.

Ronald Y. Bain: As we said before, the business itself is operating about 4,500 barrels equivalent to us per day when we close, and we see that is effectively going to be able to reduce the overall cash payment that we pay because the effective date is the 1st of October 2023. So we're looking at this deal as being, as I say, we're going to close somewhere between 30 and 40 million in cash. And with that business still continuing to deliver on those barrels right through until 2025, we see that business effectively paying itself back, at present oil prices, very, very wonderful. At the end of the third quarter, you talked about kind of building cash in the fourth quarter of about $50 million. And I realized you had the buyback program, the dividend, and your payables actually declined by $20 million. So it looks like you hit that $50 million target less all those outflows for shareholder returns and payable decline. That's correct, Jamie.

Jimmy it's wrong.

As we said before the business itself is operating about 4500 barrels equivalent to us per day, when we close.

And we see that effectively.

I'm going to be able to reduce the overall cash payment that we take is the effect of the first of October 2023. So we're looking at this deal as being.

As I say kind of close somewhere between 30 and $40 million in cash and Whatsapp business still continuing to deliver on those those bottles right through until 2025.

We see that business effectively paying itself back at present oil prices very very quickly.

Wonderful.

At the end of the third quarter, you talked about kind.

Kind of building cash in the fourth quarter of about $50 million and I realized you had the buyback program the dividend.

Your payables actually declined by 20 billion. So it looks like you hit that $50 billion target less all those outflows for shareholder returns.

Payable decline.

Ronald Y. Bain: I mean, our cash flow from operations was over $51 million for the quarter. And we did guide, in the transcript, we did state that because the drilling programs were over, and there's a lag between that and the invoices being processed, that we'd have an accounts payable outflow, and we did see that. Gotcha.

That's correct, Jamie I mean, our cash flow from operations was over $51 million for the quarter and we did guide that.

See in the transcript we did state that are because of their drilling programs, but over and Theres a lag between between now and the invoices being process. They would have in our hands people outflow and we did see that in Q4.

Gotcha and very pleased to see the acquisition was done for cash as opposed to shares considering how undervalued. Our shares are a as you look at the buyback program, we're coming up on they are nearing the end of the $30 million would you expect to reauthorized, an additional sum for the buyback given the accretive nature of the acquisition of Alka Dr.

James R. Wilen: And very pleased to see the acquisition was done for cash as opposed to shares considering how undervalued our shares are. As you look at the buyback program, we're coming up on the near end of $30 million. Would you expect to reauthorize an additional sum for the buyback, given the creativeness of the acquisition and how good the operations have been over the past year and the future outlook? I mean, that's a good question.

Operations have been over the past year and the future outlook.

I mean, that's a good question as I said earlier the capital allocation is a key consideration that we're going to address the upcoming meetings. Once we've completed and fully understand the program inside the fence Kerr acquisition.

George Walter: As I said earlier, the capital allocation is a key consideration that we're going to address at the upcoming meetings once we've completed and fully understand the program inside the Svenska acquisition. As I said, we haven't had direct discussions with the operators. So until we have that opportunity to sit down and fully understand those plans, then it allows us to give them a longer-term cash management plan as to how we allocate that and make sure we, despite our very strong balance sheet, avoid going into a debt position. Not that debt is a bad thing when you're looking at the kind of growth opportunities we have, but we'll be planning to steer away from that. Excellent. As you talk about the closing of the acquisition in the second quarter, are you looking at the end of the second quarter, or is that a 90-day period? Where would you forecast it to be? In the middle?

As I've said.

We haven't had direct discussions with the operators so until we have that opportunity to sit down and fully understand those plans. Then it allows us to give them longer term cash management plan as to how we allocate that and make sure. We despite our very strong balance sheet to make sure we avoid going into a debt position not that.

As a bad thing when you're looking at the kind of growth opportunities, we have but we will be planning to steal away from them.

Excellent as you talk about the closing of the acquisition in the second quarter or are you looking at the end of the second quarter or that's a 90 day period.

Where would you are forecasted to be middle.

James R. Wilen: Beginning or end of the quarter? Thor and I are traveling to Côte d'Ivoire in two weeks' time, and based on the reception we get from the Minister, I'll be able to answer that, but so far, the ministerial comments have been very positive about VAALCO entering the country. Okay, excellent. Great job, fellas. Thank you. Thank you, Jimmy. The next question is a follow-up from Jeff Robertson of Water Tower Research. Please go ahead. Thanks, George. Just a geopolitical question.

Beginning or end of the quarter.

Four and I are traveling to court of law in two weeks time based.

Based on the reception, we get from the Minister I'll be able to answer that but so far the ministerial comments have been very positive on VAALCO entering the country.

Okay excellent great job fellows. Thank you. Thank.

Thank you Jamie.

The next question is a follow up from Jeff Robertson of water Tower Research. Please go ahead.

Thanks, George just geopolitical question can you comment on any impacts that you're Egypt operations are having moving export cargos.

What's going on in the Red Sea and then you operated with the new government of Gabon now for <unk>.

Jeffrey Woolf Robertson: Can you comment on any impacts that your Egypt operations are having on moving export cargoes, given what's going on in the Red Sea and then you've operated with the new government of Gabon now for five or six months? Please comment on how things are going. In the first instance, with regard to cargoes in the Red Sea, we're seeing no impact on that, primarily because we're still working with the EGPC to plan our 2024 cargoes, and we're hopeful to get that discussion resolved in the very near future. So I guess from the shipping incidents that are taking place in the Red Sea, the answer to that is absolutely no impact on us whatsoever.

Five or six months.

A comment on how things are going with them.

On the first instance, with regard to cargoes on the on the Red Sea, we're seeing no impact primarily because we're still working with the <unk> to deploy on our 2024 cargoes and we're hopeful to get that discussions resolved in the very near future.

So I guess from from the the shipping incidences are taking place in the Red Sea.

No impact to us whatsoever.

George Walter: But the impact is we still have discussions right now with EGPC regarding our 2024 cargoes, and as we have our Q1 call in May, hopefully, we'll be in a position to give a resolution to that with some timings for these cargoes. With regard to Gabon, I had a very good meeting with the President back in November and the Minister when I traveled down to Libreville. I had a really good private dinner with the President and understood his aspirations for the country and how we can work with them to achieve that. We have seen some changes in the regulatory framework in Gabon, which we're going to have to work with, and in particular the new finance act, which is, We've added 5% to the withholding tax, and we need to work out with the government how best and efficiently our investment is not impacted by that when we look at the drilling program.

But the impact is we still have have discussions right now with the <unk> regarding our 2024 cargoes and as we have our Q1 call in May you know hopefully we've in a position to to give a resolution to that with some timings for these cargos.

With regard to Gabon.

I had a very good meeting with the president back in November and the Minister.

When I traveled down to to Liberal.

I had a really good private dinner with the with the president and understand.

Understood his aspirations for the country and how we can work with them to achieve that we.

We have seen some changes in regulatory framework and in Gabon, which you know well.

We're going to have to work with them and particularly new finance that which is.

Added 5% to the withholding tax and we need to work working with the government, how best and efficiently. Our investment is not impacted by that when we look at the drilling program, but overall I think we have seen as I mentioned last year. During the announcement of the <unk>, we have seen no impact to our operations and I can.

George Walter: But overall, I think we have seen, as I mentioned last year during the announcement of the coup, we have seen no impact to our operations, and I can attest to the meeting we had in November with the President, we have seen no impact to our future investing opportunities in Gabon. We have seen, as I mentioned earlier, that where we've had stalled discussions around blocks G&H, where with our partners BWE and Panoro, we've seen an acceleration of those discussions in Q4 and Q1, and hopefully, by the end of Q2, we've got some more exciting news on those opportunities. Thank you. This concludes our question and answer session. I would like to turn the conference back over to George Maxwell for any closing remarks. Thank you very much.

Attests to the meeting we had in November with the President.

We see no impact to our future investing.

Opportunities in Gabon.

We have seen as I mentioned earlier that are where we've had stalled discussions around blocks, Janet and where with our partners BW and Pineiro, we've seen an acceleration of those discussions in Q4 and Q1 and hopefully.

At the end of Q2, we've got some more exciting news on on those opportunities.

Thank you.

Yeah.

This concludes our question and answer session I would like to turn the conference back over to George Maxwell for any closing remarks.

Thank you very much I think it's a it's always a pleasure to have had such a monumental achievement in 2023.

George Walter: I think it's always a pleasure to have had such monumental achievements in 2023. When we look at all the reorganization and integration work that had to happen post Transglobe, post the reconfiguration in Gabon, and we're starting to see and reap the benefits of both of these transactions in 2023. To then couple that with an opportunity to add more exciting asset bases to our company and start another journey in another jurisdiction with a long degree of longevity, you know, at least another 14, 15 years of production, is also very exciting. So I think we should enjoy the moment. We've got a lot of hard work ahead of us, and a lot of opportunities to develop more oil in the near term with capital investment.

And when we look at older reorganization and integration work that had to happen post Transco post the reconfiguration in Gabon, and we're starting to see and reap the benefits of both of these transactions in 2023 today and couple that with an opportunity to add more.

Exciting asset basis to our company and start another journey in another jurisdiction with the without long degree of longevity at least another 14 15 years of production is also very exciting so I think.

We should enjoy the moment, we've got a lot of hard work ahead of US a lot of opportunities to develop more oil in the near term.

With the with the capital investment, we have a strong balance sheet and.

As you as I've already pointed out we've got a very strong team here in Houston and in other places of the world to make sure. We can execute in every jurisdiction that we operate in.

George Walter: We have a strong balance sheet, and as you've, as I've already pointed out, we've got a very strong team here in Houston and in other places around the world to make sure we can execute in every jurisdiction that we operate in. And I'd like to thank everyone. Thank you very much for the call. The conference is now concluded. Thank you for attending today's presentation. www.vaalco.va.gov

And I'd like to thank everyone. Thank you very much for the call.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

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Yeah.

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