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Vaalco Energy Inc (EGY)
NYSE:EGY
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Vaalco Energy
(NYSE:EGY)
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Rating:72Outperform
Price Target:
$4.00
▼(-0.25% Downside)
Vaalco Energy's overall stock score reflects strong financial performance and attractive valuation, supported by a solid dividend yield. The company's consistent production guidance and new credit facility are positive, but challenges like FPSO project delays and commodity price volatility pose risks. Technical indicators suggest stability, contributing to a balanced outlook.
Positive Factors
Operational Efficiency
Strong operational efficiency, as indicated by solid EBIT and EBITDA margins, suggests effective management and cost control, supporting long-term profitability.
Consistent Production Guidance
Meeting or exceeding production guidance consistently enhances credibility and indicates robust operational planning, which is crucial for sustained growth.
New Credit Facility
The new credit facility provides financial flexibility to support organic growth initiatives, enabling strategic investments and operational expansion.
Negative Factors
Revenue Growth Decline
Declining revenue growth and net profit margin can hinder long-term profitability and may indicate challenges in maintaining competitive market positioning.
FPSO Project Delays
Delays in the FPSO project impact production timelines, potentially affecting revenue and delaying expected production increases until 2026.
Commodity Price Volatility
Commodity price volatility poses a risk to revenue stability, as fluctuating prices can affect sales and profitability, impacting financial planning.
Vaalco Energy (EGY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$418.08M
Dividend Yield6.23%
Average Volume (3M)727.97K
Price to Earnings (P/E)10.9
Beta (1Y)0.86
Revenue Growth-2.71%
EPS Growth-54.82%
CountryUS
Employees230
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.02
Shares Outstanding104,258,255
10 Day Avg. Volume710,937
30 Day Avg. Volume727,966
Financial Highlights & Ratios
PEG Ratio0.00
Price to Book (P/B)0.90
Price to Sales (P/S)0.95
P/FCF Ratio42.25
Enterprise Value/Market Cap1.10
Enterprise Value/Revenue0.98
Enterprise Value/Gross Profit2.87
Enterprise Value/Ebitda1.77
Forecast
1Y Price Target
$7.60Price Target Upside89.53% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Vaalco Energy Business Overview & Revenue Model
Company DescriptionVAALCO Energy, Inc., an independent energy company, acquires, explores for, develops, and produces crude oil and natural gas. The company holds Etame production sharing contract related to the Etame Marin block located offshore in the Republic of Gabon in West Africa. It also owns interests in an undeveloped block offshore Equatorial Guinea, West Africa. VAALCO Energy, Inc. was incorporated in 1985 and is headquartered in Houston, Texas.
How the Company Makes MoneyVaalco Energy generates revenue primarily through the sale of crude oil produced from its offshore oil fields in Gabon. The company employs a revenue model based on the production and sale of hydrocarbons, where it sells its crude oil to various buyers at market prices. Key revenue streams include the production from its operated fields, where it has significant ownership stakes, and the potential for future production increases through exploration and development activities. Additionally, Vaalco may benefit from strategic partnerships with other energy companies, which can provide capital, technology, and expertise to enhance its operational efficiency and expand its production capabilities. The company's earnings are also influenced by global oil prices, operational efficiency, and regulatory factors in the regions where it operates.
Vaalco Energy Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Positive
VAALCO Energy demonstrated strong operational and financial performance in Q2 2025, maintaining consistent production guidance and returning capital to shareholders. However, challenges such as the temporary production impact from the FPSO project in Côte d'Ivoire and commodity price volatility were noted.Q2-2025 Updates
Positive Updates
Consistent Production Guidance Achievement
For the past 2 years, VAALCO Energy has met or exceeded its quarterly production guidance, leading to strong operational and financial results.
Strong Financial Performance in Q2 2025
Net income of $8.4 million or $0.08 per share and adjusted EBITDAX of $49.9 million, driven by NRI production of 16,956 BOE per day.
New Reserve-Based Credit Facility
Entered into a new reserve-based revolving credit facility with an initial commitment of $119 million, with potential to grow to $300 million.
Return of Capital to Shareholders
Returned over $100 million to shareholders through dividends and share buybacks since 2022, with a current dividend yield of around 7%.
Successful Drilling Program in Egypt
Drilled and completed multiple wells in the first half of 2025 with no lost time incidents, contributing to increased production and economic performance.
Negative Updates
Impact of FPSO Project on Côte d'Ivoire Production
Production came offline in Q1 at Côte d'Ivoire due to the FPSO project, delaying meaningful production uplift until 2026.
Commodity Price Volatility
Pricing was lower by about 15% quarter-over-quarter, affecting sales despite a 3% increase in sales volume.
Reduced Canadian Drilling Program
Postponed Canadian drilling program in 2025 due to the current commodity price environment.
Company Guidance
During VAALCO Energy's second quarter 2025 earnings call, the company provided detailed guidance and financial metrics. VAALCO reported a net income of $8.4 million, or $0.08 per share, and an adjusted EBITDAX of $49.9 million. Production metrics included NRI production of 16,956 BOE per day and working interest production of 21,654 BOE per day, both reaching or surpassing the high end of guidance. The company also discussed a new reserve-based revolving credit facility with an initial commitment of $119 million, potentially expandable to $300 million, to support organic growth initiatives. Capital expenditures for the third quarter are forecasted between $70 million and $90 million, with Q3 2025 production expected between 18,900 and 20,800 working interest BOE per day. The company highlighted ongoing projects, including FPSO refurbishment in Côte d'Ivoire, drilling programs in Gabon and Egypt, and exploration efforts in Equatorial Guinea and Canada, while maintaining its commitment to shareholder returns through dividends, with over $13 million returned in the first half of 2025.Vaalco Energy Financial Statement Overview
Summary
Vaalco Energy shows strong operational efficiency with a solid EBIT and EBITDA margin. However, recent declines in revenue growth and net profit margin, along with a need for improved cash flow efficiency, highlight areas for improvement. The balance sheet is healthy with manageable debt levels.Income Statement
Vaalco Energy's income statement shows a solid performance with a strong EBIT and EBITDA margin, indicating efficient operations. However, the recent decline in revenue growth rate and net profit margin suggests some challenges in maintaining profitability.75
Positive
Balance Sheet
The balance sheet reflects a healthy debt-to-equity ratio, indicating manageable leverage. However, the return on equity has decreased over time, suggesting a need for improved profitability to enhance shareholder returns.70
Positive
Cash Flow
The cash flow statement reveals a positive free cash flow growth rate, but the operating cash flow to net income ratio indicates potential inefficiencies in converting income into cash. The free cash flow to net income ratio is moderate, suggesting room for improvement in cash generation.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 469.28M | 478.99M | 455.07M | 354.33M | 199.07M | 67.18M |
| Gross Profit | 159.94M | 172.45M | 186.61M | 193.52M | 95.18M | 16.89M |
| EBITDA | 259.80M | 286.56M | 276.54M | 173.49M | 80.84M | 19.50M |
| Net Income | 38.76M | 58.49M | 60.35M | 51.89M | 81.84M | -48.08M |
Balance Sheet | ||||||
| Total Assets | 964.92M | 954.95M | 823.22M | 855.64M | 263.09M | 141.23M |
| Cash, Cash Equivalents and Short-Term Investments | 67.87M | 82.65M | 121.00M | 37.20M | 48.67M | 47.85M |
| Total Debt | 152.14M | 98.17M | 90.80M | 89.06M | 10.23M | 22.56M |
| Total Liabilities | 453.36M | 453.37M | 344.43M | 389.54M | 118.79M | 79.77M |
| Stockholders Equity | 511.56M | 501.58M | 478.78M | 466.11M | 144.30M | 61.46M |
Cash Flow | ||||||
| Free Cash Flow | 41.51M | 10.72M | 126.37M | -31.05M | 11.05M | 3.12M |
| Operating Cash Flow | 143.37M | 113.72M | 223.60M | 128.85M | 50.12M | 27.45M |
| Investing Cash Flow | -160.89M | -102.12M | -97.22M | -123.21M | -39.06M | -24.33M |
| Financing Cash Flow | 13.44M | -43.05M | -56.82M | -17.95M | -57.00K | -929.00K |
Vaalco Energy Technical Analysis
Positive
4.01
Price Trends
3.88
Positive
3.71
Positive
3.75
Positive
Market Momentum
0.04
Positive
49.38
Neutral
17.07
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EGY, the sentiment is Positive. The current price of 4.01 is below the 20-day moving average (MA) of 4.09, above the 50-day MA of 3.88, and above the 200-day MA of 3.75, indicating a neutral trend. The MACD of 0.04 indicates Positive momentum. The RSI at 49.38 is Neutral, neither overbought nor oversold. The STOCH value of 17.07 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EGY.
Vaalco Energy Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $436.98M | 5.82 | 16.72% | 3.78% | 13.75% | 87.48% | |
72 Outperform | $418.08M | 10.90 | 7.60% | 6.23% | -2.71% | -54.82% | |
66 Neutral | $334.54M | 7.72 | 22.94% | 9.02% | -25.23% | -56.59% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
65 Neutral | $332.89M | 2.26 | 25.41% | ― | -11.62% | ― | |
61 Neutral | $301.56M | 251.97 | -6.27% | 0.40% | -99.72% | -101.28% | |
45 Neutral | $327.72M | ― | -65.43% | ― | ― | -935.70% |
* Energy Sector Average
EGY
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-33.06%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.