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VAALCO Energy Inc

VAALCO Energy makes new oil discovery within a month of London entry

“The successful Etame 9P is the first of many appraisal opportunities that we have identified that have the potential to create substantial organic value for our shareholders."

VAALCO Energy Inc - VAALCO Energy makes new oil discovery within a month of London entry
A pilot well confirmed a new discovery beneath the Etame field

VAALCO Energy Inc (LON:EGY, NYSE:EGY) has made a positive start to its time in London, announcing a new oil discovery offshore Gabon.

The recently listed oil and gas firm, in a statement, revealed that Etame-9P appraisal well has confirmed the Dentale reservoir, beneath the known Etame field.

Dentale was previously identified in a 2001 well at Etame and in this hole the company has cut an oil column measuring 35 feet. VAALCO noted that the reservoir is estimated to host some 2.5 to 10.5mln barrels of recoverable resources.

READ: Vaalco gets the cookie cutter out as it aims five-fold growth

Cary Bounds, VAALCO chief executive, highlighted the company was assessing the viability of drilling Dentale development wells in the future to extend Etame’s lifespan through additional reserves and production.

Additionally, the company said that the well also encountered a thicker-than-expected reservoir in the Gamba zone, the producing reservoir at Etame, and, as such it now anticipates higher recoveries from the Etame-9H well.

Etame-9P is a vertical pilot well, from which a horizontal well (Etame-9H) will be drilled.

The company noted that equipment became stuck in the hole and retrieval operations are underway. It is now expected that horizontal drilling will be delayed, with the well completion now due in December.

"We are excited that our first appraisal wellbore in the 2019/2020 drilling campaign has confirmed our estimates of meaningful recoverable resources in the subcropping Dentale, which we currently have classified as prospective,” Bounds said.

“The successful Etame 9P is the first of many appraisal opportunities that we have identified that have the potential to create substantial organic value for our shareholders.

“The result reaffirms the upside potential yet to be exploited from the Etame field.”

New entrant to London’s oil sector

VAALCO listed in London last month with the Texas headquartered, Africa focussed firm adding to its existing listing in New York.

At that time, Bounds described the move as a ‘significant milestone’. “Our listing on the LSE will complement our existing listing on the NYSE and provide another strategic platform to support our goals for growth,” he said.

“We look forward to continuing to build on our track record of operational excellence and value creation as we carry out our active work programme and seek inorganic opportunities in line with our strategic focus."

VAALCO’s core asset is a 31% interest in the Etame field offshore Gabon where, in the second quarter of 2019, it was producing some 3,664 barrels of net oil production per day. The field has produced a total of 110mln barrels of crude in its operating life to date.

As it came to London the company was also working on a new five well programme of drilling at Etame, comprising three appraisals and two pure development wells.

Etame presently has some 123mln barrels of reserves and resources, and, VAALCO believes significant development opportunities remain in the area, supported by the existing infrastructure which can allow new production to come online quickly.

Quick facts: VAALCO Energy Inc

Price: 1.9 USD

Market: NYSE
Market Cap: $110.94 m
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