VAALCO ENERGY INC /DE/ (EGY)·Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 revenue was $61.0M with GAAP diluted EPS of $0.01; non-GAAP Adjusted Net Loss was $(0.10) per share, and Adjusted EBITDAX was $23.7M .
• Revenue was slightly below S&P Global consensus ($62.5M*) and EPS consensus was not available for Q3; prior quarters: Q1 EPS met (0.06* vs 0.06 actual) and Q2 missed (0.03* vs 0.02 actual). Values retrieved from S&P Global.
• Management raised full-year production and sales guidance midpoints and further reduced full-year capital spending midpoint (total reduction of ~$58M vs original plan) while declaring a $0.0625 quarterly dividend for Q4 2025 .
• Near-term catalysts: Gabon drilling campaign scheduled to begin in late November; Baobab FPSO refurbishment on track for re-hookup by late March/early April 2026, with production restart by late April/early May; RBL commitments expected to increase to $240M in January 2026 .

What Went Well and What Went Wrong

What Went Well

• Guidance execution credibility: “We continue to deliver consistent quarterly results that either meet or exceed our guidance… we have kept absolute production expense in line… our track record of success… should provide our investors with assurance” — George Maxwell, CEO .
• Cost discipline and portfolio optimization: Q3 production expense fell 26% QoQ to $29.8M and 29% YoY; DD&A down 27% QoQ and 56% YoY; cash G&A at guidance midpoint .
• Operational readiness and liquidity: Rig arriving for Gabon campaign late November; FPSO refurbishment “progressing well” in Côte d’Ivoire; semi-annual RBL review completed with commitments to rise to $240M, enhancing liquidity .

What Went Wrong

• Lower volumes/prices drove revenue decline: Net revenue down 37% QoQ to $61.0M owing to 33% lower NRI sales volumes (1,180 MBOE) and ~7% lower realized price ($51.26/BOE) driven by the planned Gabon maintenance shutdown .
• Margin pressure from per-BOE costs: Production expense per BOE rose to $25.24 vs $22.87 in Q2 and $19.80 in Q3 2024; G&A per BOE rose to $6.07 vs $4.04 in Q2 and $2.80 YoY .
• Adjusted profitability deteriorated: Adjusted EBITDAX declined to $23.7M (from $49.9M in Q2 and $92.8M YoY), and Adjusted Net Loss was $(10.3)M .

Financial Results

Income and Profitability by Quarter

Segment Net Revenue Comparison (Quarterly)

KPIs and Cost Metrics

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We continue to deliver consistent quarterly results that either meet or exceed our guidance… we have decreased the midpoint of our full year capital guidance twice this year, for a total of $58 million, all while raising full year production expectations” — George Maxwell, CEO .
• “We are well positioned to deliver growth as we prepare for multiple production enhancing drilling campaigns… rig is completing its final well commitment and we expect it to arrive at Etame… late November” — George Maxwell .
• “Unrestricted cash at the end of the third quarter was $24 million… collections from EGPC since Jan 1 total over $103.6 million” — Ron Bain, CFO .
• “We are targeting around 40% of H1 2026 oil production to be hedged by year-end” — Ron Bain .

Q&A Highlights

• Capex mix and reduction: ~$20M permanent reduction from discretionary and Canada deferral; shift of Gabon drilling into 2026; Egypt delivers more wells for same capex .
• South Gazala (Egypt) exploration: mixed gas/oil zones with low pressures; additional technical and PSC work pending before FDP .
• Côte d’Ivoire schedule: FPSO re-hookup late Mar/early Apr 2026; production restart ~6–8 weeks later; drilling swing factor is rig arrival .
• Gabon wells: pilot holes then drill-and-complete (not batch); Eburi 4H flowing ~1,000 bopd gross with manageable H2S; 5H redrill seen as high-potential .

Estimates Context

Values retrieved from S&P Global.
Actuals cited from company-reported results: revenue ; GAAP diluted EPS: Q1 $0.07 , Q2 $0.08 , Q3 $0.01 ; Adjusted per-share: Q1 $0.06 , Q2 $0.02 , Q3 $(0.10) .

Implications:

• Q1 beat on EPS; Q2 slight EPS miss; Q3 revenue slightly below consensus; EPS coverage for Q3 appears limited (no consensus), which may temper immediate estimate-driven reactions.

Key Takeaways for Investors

• Q3 softness was driven by planned Gabon maintenance and lower realized prices; operational cadence should recover in Q4 with more Gabon liftings and drilling start, supporting higher sales volumes .
• Portfolio execution remains the core narrative: raised FY production/sales guidance, lowered capex midpoint, and stable dividend signal disciplined growth and shareholder returns .
• 2026–2027 are the step-up years: Gabon campaign and Baobab restart (plus subsequent CDI drilling) are positioned to lift production and reserves materially; watch rig timing .
• Cost control and hedging underpin cash flow visibility amid price volatility; ~500 Mbbl 2025 and ~800 Mbbl H1’26 hedged floors at ~$61–$62 .
• Liquidity improving with RBL commitments rising to $240M, enabling capital program flexibility across geographies without equity issuance overhang .
• Egypt continues to deliver efficiency gains (more wells for same capex) and strong operations; ongoing technical work at South Gazala could add optionality .
• Near-term trading: monitor Q4 execution on liftings and drilling start in Gabon, EGPC receivable collections, and commodity price trajectory; medium-term thesis hinges on successful 2026 ramp and disciplined capex allocation .

Notes:
- All document-derived figures include citations by section/cell.
- S&P Global consensus figures marked with * and noted as “Values retrieved from S&P Global.”