VAALCO Energy Announces New Five-Year $50 Million Reserve-Based Loan Facility Providing Additional Financial Flexibility

VAALCO Energy, Inc.

HOUSTON, May 18, 2022 (GLOBE NEWSWIRE) — VAALCO Energy Inc. (NYSE: EGY; LSE: EGY) (“VAALCO“or the”Company“) announced today that it has entered into a new credit agreement, effective May 16, 2022, for a new five-year reserve-based credit facility (“RBL”) with Glencore Energy UK Ltd. (” Glencore”) which includes an initial commitment of USD 50 million and is expandable up to USD 100 million.

Strong points

  • Significantly improves financial flexibility by providing the opportunity to achieve accretive growth;

    • Provides access to cash if needed for possible future development programs;

    • Improves financial optionality for financing inorganic acquisition opportunities;

    • Further strengthens the financial situation;

      • The planned capital program for 2022 remains fully funded;

      • Offers the possibility of accelerating development opportunities at Etame; and

      • Under the agreement, Glencore will market the crude oil.

  • Strengthens VAALCO’s strong, debt-free balance sheet and growing cash position with low-cost facility;

    • Facility size is $50 million with capacity to expand up to $100 million at LIBOR plus 6%;

    • The facility is due in 2027;

    • Key terms and covenants of the new facility include less than three times net debt to EBITDAX and require VAALCO to maintain a minimum cash balance of $10 million; and

    • Secured by Etame assets, demonstrating the strength and quality of VAALCO’s flagship asset.

George Maxwell, President and CEO of VAALCO, said, “We took the opportunity to improve our financial flexibility at a favorable time, with higher prices, strong cash flow generation and no imminent need for use the new installation. By negotiating the facility at a time of strength, it provided us with a low-cost debt option relative to our peer group. We continue to expect all current 2022 capital commitments related to the drilling, FSO and field reconfiguration will be covered by available cash and cash from operations. This new credit facility provides dry powder for future opportunities and could reduce our overall cost of capital by providing immediate access to funds at a low rate, if needed. It enhances our opportunity set and allows us to continue to focus on our strategy to create significant size and scale to ensure future accretive growth. We are excited about the future of VAALCO with the continued development of our interests in Gabon’s offshore, upside opportunities in Equatorial Guinea and the potential to integrate accretive acquisitions to further strengthen VAALCO and increase the shareholder value.”

About VAALCO

VAALCO, founded in 1985, is an independent energy company based in Houston, USA, with production, development and exploration assets in the West African region.

The Company is an established operator in the region, holding a 63.6% interest in the Etame Marin block, located offshore Gabon, which to date has produced more than 126 million barrels of crude oil and of which the Company is the operator.

For more information

VAALCO Energy, Inc. (General and Investor Inquiries)

+00 1 713 623 0801

Website:

www.vaalco.com

Al Petrie Advisors (US Investor Relations)

+00 1 713 543 3422

Al Petrie/Chris Delange

Buchanan (UK Financial PR)

+44 (0) 207 466 5000

Ben Romney / Jon Krinks / James’ husband

[email protected]

Forward-looking statements

This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein that address activities, events, plans, expectations, objectives or developments that VAALCO expects, believes or anticipates will occur. will or may occur in the future are forward-looking statements. These statements may include statements related to the impact of the COVID-19 pandemic, including the recent sharp decline in global demand and the resulting global oversupply of crude oil and the sharp drop in oil prices that results, production quotas imposed by Gabon, disruptions in global supply chains, quarantines of our workforce or workforce reductions and other pandemic-related matters, well results, wells expected to be drilled and brought into production, future levels of drilling and operating activity and associated expectations, implementation of the Company’s business plans and strategy, prospect assessments, potential resources and the growth of reserves, its activities in Equatorial Guinea, the expected sources and potential difficulties in obtaining future capital funding and future liquidity, its ability to restore production in non-producing wells, our ability to find a replacement for the FPSO or to renew the charter of the FPSO, future operating losses, c evolution of crude oil and natural gas prices, future strategic alternatives, acquisitions current and future capital expenditures, future drilling plans, acquisition and interpretation of seismic data and their costs, negotiations with governments and third parties, timing of Gabon income tax settlement, and expectations regarding facilities processing, production, sales and financial projections. These statements are based on assumptions made by VAALCO based on its experience and perception of historical trends, current conditions, expected future developments and other factors it deems appropriate in the circumstances. These statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond VAALCO’s control. These risks include, but are not limited to, volatility in crude oil and natural gas prices, the impact of production quotas imposed by Gabon in response to agreed production cuts as a member of OPEC, inflation, general economic conditions, the outbreak of COVID-19. 19, the Company’s success in finding, developing and producing reserves, differences in production and sales due to the timing of offtakes, decisions of future lenders, risks associated with liquidity, lack of availability of goods, services and capital, environmental risks, drilling risks, foreign regulatory and operational risks and regulatory developments.

Investors are cautioned that forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. VAALCO disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Inside information

This announcement contains inside information as defined in the Market Abuse Regulation (EU) No. 596/2014 (“MAR”) and is made pursuant to the Company’s obligations under Article 17 of MAR.

About Meredith Campagna

Check Also

The Federal Reserve raises interest rates by 0.75 points

The Federal Reserve took another aggressive step in its campaign to cut inflation on Wednesday, …