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Vaalco Energy Inc (EGY)
NYSE:EGY
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Vaalco Energy
(NYSE:EGY)
66Neutral
Positive Factors
Financial Performance
The debt facility gives flexibility and underpins the ability to maintain the dividend even at lower oil prices.
Resource Management
The depth of resource continues to deliver value for Vaalco Energy.
Negative Factors
Free Cash Flow
FY24 FCF was only $1.5M due to the significant working capital outflow of approximately $70M in the year.
Production
Production for 2Q25E is guided to be sequentially down at 20-22.1kboe/d.
Vaalco Energy (EGY) vs. S&P 500 (SPY)
Market Cap
$362.33M
Dividend Yield7.16%
Average Volume (3M)907.84K
Price to Earnings (P/E)6.3
Beta (1Y)0.79
Revenue Growth3.02%
EPS Growth-8.43%
CountryUS
Employees230
SectorEnergy
Sector Strength45
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.06
Shares Outstanding103,819,046
10 Day Avg. Volume914,633
30 Day Avg. Volume907,842
Financial Highlights & Ratios
PEG Ratio-0.17
Price to Book (P/B)0.71
Price to Sales (P/S)0.00
P/FCF Ratio4.99
Enterprise Value/Market Cap1.04
Enterprise Value/Revenue0.19
Enterprise Value/Gross Profit1.83
Enterprise Value/Ebitda0.33
Forecast
1Y Price Target
$8.63Price Target Upside147.28% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Vaalco Energy Business Overview & Revenue Model
Company DescriptionVaalco Energy, Inc. (EGY) is an independent energy company primarily engaged in the acquisition, exploration, development, and production of crude oil and natural gas. Headquartered in Houston, Texas, the company operates in the upstream segment of the oil and gas industry, with key operations in West Africa, particularly offshore Gabon. Vaalco Energy focuses on maximizing the economic recovery of hydrocarbons from its assets, leveraging its technical expertise and strategic partnerships to enhance production and reserves.
How the Company Makes MoneyVaalco Energy generates revenue primarily through the exploration, development, and production of oil and natural gas. The company's main revenue streams come from the sale of these hydrocarbons, particularly crude oil, in the global market. Vaalco sells its oil production to various customers, including refineries and commodity traders, under long-term and spot market contracts. Additionally, the company may engage in joint ventures and partnerships to share exploration and production costs and risks, which can also contribute to its earnings. The profitability of Vaalco Energy is significantly influenced by global oil prices, production levels, and operational efficiencies.
Vaalco Energy Financial Statement Overview
Summary
Vaalco Energy demonstrates a robust financial position with solid revenue growth and stable operational margins. The balance sheet is strong with a healthy equity position and manageable debt levels. Cash flow generation is positive but exhibits some volatility in free cash flow. Overall, the company is on a stable financial trajectory but could benefit from more consistent cash flow management.Income Statement
The company has shown a strong revenue growth over the years, with a notable increase from 2021 to 2023. Despite the revenue increase, recent profitability margins have fluctuated. The gross profit margin has significantly improved since 2020, indicating better cost management. However, the net profit margin has seen variability due to fluctuating net income. The EBIT and EBITDA margins have been relatively stable, showcasing consistent operational efficiency.65
Positive
Balance Sheet
Vaalco Energy's balance sheet exhibits a solid equity position, with stockholders' equity consistently growing over the years. The debt-to-equity ratio remains healthy, indicating prudent leverage management. The equity ratio shows a strong asset base supported by equity, which enhances financial stability. Overall, the company has maintained a robust balance sheet.70
Positive
Cash Flow
The cash flow statements reveal a consistent positive operating cash flow, which is a good sign of financial health. The free cash flow has fluctuated, with periods of negative growth, indicating potential reinvestment or expenditure needs. The operating cash flow to net income ratio is strong, suggesting good cash conversion efficiency. However, there are concerns with the consistency of free cash flow growth.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 478.99M | 455.07M | 354.33M | 199.07M | 67.18M | Gross Profit |
| 172.45M | 186.61M | 184.66M | 96.76M | 20.48M | EBIT |
| 136.50M | 158.66M | 171.28M | 79.10M | 29.74M | EBITDA |
| 286.56M | 276.54M | 183.41M | 77.33M | 14.09M | Net Income Common Stockholders |
| 58.49M | 60.35M | 51.89M | 81.84M | -48.08M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 82.65M | 121.00M | 37.20M | 48.67M | 47.85M | Total Assets |
| 954.95M | 823.22M | 855.64M | 263.09M | 141.23M | Total Debt |
| 98.17M | 90.80M | 89.06M | 10.23M | 22.56M | Net Debt |
| 15.53M | -30.20M | 51.85M | -38.45M | -25.29M | Total Liabilities |
| 453.37M | 344.43M | 389.54M | 118.79M | 79.77M | Stockholders Equity |
| 501.58M | 478.78M | 466.11M | 144.30M | 61.46M |
| Cash Flow | Free Cash Flow | |||
| 10.72M | 126.37M | -31.05M | 11.05M | 3.12M | Operating Cash Flow |
| 113.72M | 223.60M | 128.85M | 50.12M | 27.45M | Investing Cash Flow |
| -102.12M | -97.22M | -123.21M | -39.06M | -24.33M | Financing Cash Flow |
| -43.05M | -56.82M | -17.95M | -57.00K | -929.00K |
Vaalco Energy Technical Analysis
Negative
3.49
Price Trends
3.59
Negative
3.90
Negative
4.73
Negative
Market Momentum
<0.01
Negative
50.05
Neutral
47.26
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EGY, the sentiment is Negative. The current price of 3.49 is above the 20-day moving average (MA) of 3.43, below the 50-day MA of 3.59, and below the 200-day MA of 4.73, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 50.05 is Neutral, neither overbought nor oversold. The STOCH value of 47.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EGY.
Vaalco Energy Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $312.55M | 2.33 | 25.10% | ― | 38.46% | ― | |
66 Neutral | $362.33M | 6.27 | 11.83% | 7.16% | 3.02% | -8.43% | |
66 Neutral | $351.99M | 4.47 | 38.79% | 8.57% | -14.94% | -25.19% | |
65 Neutral | $310.26M | 8.43 | 30.45% | ― | 91.49% | 106.37% | |
61 Neutral | $376.04M | 5.87 | 14.68% | 4.29% | -15.94% | 2.90% | |
57 Neutral | $7.18B | 3.26 | -3.67% | 5.68% | 0.47% | -50.25% | |
56 Neutral | $446.38M | ― | -30.25% | ― | 6.50% | -151.25% |
* Energy Sector Average
Performance Comparison
EGY
Vaalco Energy
3.49
-2.60
-42.69%
CLNE
Clean Energy Fuels
2.02
-0.49
-19.52%
PNRG
Primeenergy
185.51
78.51
73.37%
SD
SandRidge Energy
10.25
-3.29
-24.30%
GPRK
GeoPark
6.86
-2.71
-28.32%
GFR
Greenfire Resources
4.47
-1.66
-27.08%
Vaalco Energy Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 1.45%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
VAALCO Energy's Q1 2025 earnings call highlighted strong financial and operational performance, including meeting or exceeding production guidance and maintaining shareholder returns through dividends. However, the company is facing challenges with commodity price volatility leading to budget cuts and production downtime due to project delays. The financial position remains strong with a new credit facility and safety milestones in Egypt standing out positively.Q1-2025 Updates
Positive Updates
Strong Production and Financial Performance
In Q1 2025, VAALCO delivered net income of $7.7 million and adjusted EBITDAX of $57 million. NRI production was 17,764 barrels of oil equivalent per day, above the high end of guidance.
New Credit Facility and Financial Position
VAALCO entered into a new reserves-based revolving credit facility with an initial commitment of $190 million, with the ability to grow to $300 million, to support growth initiatives.
Cote d'Ivoire Developments and License Extension
The Council of Ministers approved a 10-year extension of the license on CI-40, extending it to 2038. Significant development drilling is expected in 2026 after FPSO refurbishment.
Safety Milestone Achieved in Egypt
VAALCO achieved over 4.3 million man hours without a lost time incident in Egypt, demonstrating a strong safety commitment.
Dividend Payments and Shareholder Returns
VAALCO paid a quarterly cash dividend of $0.0625 per share and announced a second dividend payment for 2025, maintaining a commitment to a $0.25 per share annual dividend.
Negative Updates
Commodity Price Volatility and Budget Adjustments
Due to softer commodity pricing, VAALCO decided to cut about 10% from its capital budget in 2025, delaying some smaller projects.
Production Downtime and Project Delays
Production came offline in Q1 at Cote d'Ivoire for the FPSO project, and the drilling campaign in Gabon is not expected to kick off until Q3, with meaningful production uplift expected by late 2025 into 2026.
Working Capital Challenges
VAALCO experienced an outflow in working capital due to a state lifting in Gabon to settle in-time taxes of about $30 million, affecting cash flow.
Company Guidance
During VAALCO Energy's Q1 2025 conference call, the company provided several key metrics and guidance for the year. VAALCO reported a net income of $7.7 million, or $0.07 per share, and an adjusted EBITDAX of $57 million, driven by NRI production of 17,764 barrels of oil equivalent per day, which exceeded guidance expectations. The company announced a 10% reduction in the capital budget for 2025, adjusting it to a range of $250 million to $300 million, citing a decline in commodity prices. However, this reduction is not expected to impact the production or sales guidance for the year. VAALCO's full-year NRI production guidance remains unchanged, and a strong performance is anticipated in Gabon and Egypt. The company also highlighted its ongoing projects, such as the FPSO refurbishment in Cote d'Ivoire and the drilling campaign in Gabon set to begin in Q3 2025, which are expected to drive future production growth. Additionally, VAALCO continues to focus on maintaining financial discipline through operational efficiencies and strategic hedging to manage commodity price uncertainties.Vaalco Energy Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Vaalco Energy Cancels Credit Facility with Glencore
Neutral
Mar 20, 2025
On March 17, 2025, Vaalco Gabon, a subsidiary of Vaalco Energy, Inc., canceled its prior senior secured reserve-based revolving credit facility agreement with Glencore Energy UK Ltd., which was initially set up in 2022 and amended in 2023. The termination, effective March 18, 2025, involved no drawn amounts and released associated liens. Vaalco’s existing hedging agreements, including those with Glencore, were amended in connection with a new reserves-based facility agreement, while the company’s crude oil offtake arrangements with Glencore continue under the new facility’s security.
Private Placements and FinancingBusiness Operations and Strategy
Vaalco Energy Secures New $190M Credit Facility
Positive
Mar 10, 2025
On March 4, 2025, Vaalco Energy entered into a new reserves-based revolving credit facility agreement with an initial commitment of $190 million, which can increase to $300 million. This facility, led by The Standard Bank of South Africa Limited, is intended to provide short-term funding to support Vaalco’s investment programs across its diversified asset base. The agreement replaces an existing undrawn facility and is secured by Vaalco’s assets in Gabon, Egypt, and Côte d’Ivoire. The facility is expected to bolster Vaalco’s financial flexibility, enabling it to fund significant growth projects and potentially enhance its market position.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.