Vaalco Energy has reported lower profits and revenues for the third quarter, primarily due to reduced production and lower commodity prices. The company's profit was $1.1 million, a significant decrease from the $11 million profit reported in the same quarter of the previous year. Revenues also fell sharply to $61 million, compared to $140.3 million a year earlier.

Drilling Campaign Delays

The start of Vaalco's planned multi-well drilling campaign offshore Gabon has been postponed again. The campaign, which will utilize the Norve jackup rig chartered from Borr Drilling, was initially scheduled to begin in mid-2025. An update in August indicated a start at the end of the third quarter, but the programme is now set to commence in the fourth quarter, pending the rig's completion of its current commitments for ConocoPhillips in Equatorial Guinea.

Planned Drilling Activities

Once operational, the Norve rig is scheduled to conduct a variety of activities for Vaalco, including drilling development wells, appraisal or exploration wells, and workovers, with options for additional wells. Specific plans include drilling at the Etame and Seent platforms, as well as a re-drill and several workovers in the Ebouri field. These Ebouri activities aim to access production and reserves that were previously removed from proved reserves due to the presence of hydrogen sulphide.

Impact of Gabon Facility Shutdown

A significant factor affecting the quarter's performance was the first full-field maintenance shutdown conducted on Vaalco's Gabon facilities since the new floating storage and offloading vessel was commissioned in 2022. This shutdown impacted quarterly production volumes. The company reported that the turnaround was completed successfully on budget, with no safety or environmental incidents, and all fields were brought back online.

Financial and Operational Performance Analysis

The decline in financial results was driven by lower production, which averaged 15,405 barrels of oil equivalent per day (boepd) compared to 21,779 boepd a year earlier, and lower realized commodity prices of $50.96 per boe versus $65.39 per boe. Despite the planned shutdown, the company's Chief Executive, George Maxwell, noted that production exceeded the midpoint of guidance, resulting in what he described as "solid" financial results. He also highlighted operational efficiencies, including a reduction in the full-year capital expenditure guidance by a total of $58 million, raised full-year production expectations, and a reduction in per-barrel costs against original guidance while keeping absolute production expenses in line with previous forecasts.

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