Vaalco Energy, Inc. Water Tower Research Virtual Insights Conference

Thanks, Jeff. It's always a pleasure to get to talk to you.

Yeah. No bother, Jeff. I think first and foremost is, before we go into each country, is why Africa? Africa itself is a continent, and it's vast, and it has under-invested basins right across the continent. It's been in oil production for close to 100 years in certain countries, so the infrastructure has improved over that time period. For us, we look at it's investment-friendly PSCs that get both the government and the contractor aligned with one another. Those infrastructures that I talked about and export routes are very much in place, and it makes capital efficient for us if we look to do any sort of tie-backs, tie into any pipelines that are there. You've got a growing domestic population and a growing energy requirement.

Ultimately you've got the majors who have started divesting non-core African positions over the years providing a sort of sustained pipeline of accretive entry points. We see that continuing with certainly some of the majors going to more ultra-deep water, Jeff, and letting some of their more shallow water assets come up for sale. I think if you look at the countries specifically we're in, Gabon, you're quite right to say it preceded us joining the company in 2021. It's a core operated asset in Gabon offshore. We've had that asset since 2002, and I think it's been in production since 2004, and it's been an absolutely prolific asset to us. It's still doing 17,000 barrels a day, each day, and cumulatively, we've now lifted about 150 million barrels of oil from that development. It was one of the first things we did when we came in.

Sasol was a partner in the Etame license in 2021, and it decided to divest its working interest. It was an obvious solution to us, an opportunity for us to double down and take that, being the operator too of the license. Therefore, we doubled our position very quickly when we came into the company. Second asset we've got is Egypt. Egypt was an attractive asset to us. We got it when we acquired TransGlobe in 2022. That Egyptian asset provides scale. That was one of the key things when we looked at combining these two public companies, between TransGlobe and VAALCO, both small companies. You're combining them into a larger company, which obviously meant that we scaled up in production, on reserves, on cash flow. We had synergistic savings opportunities from taking that PLC boards from two down to one.

You've got your operational efficiencies from being a much larger company at that point in time. So Egypt provides us a, I would say, a stable baseline cash flow that is very economic for us in that we can accelerate or decelerate depending on the economic environment. It's onshore, so the lifting costs are low. Indeed, our F&D costs are low. So we can scale up and scale back very quickly in Egypt, which is a great bow to our arrows there in Africa. Côte d'Ivoire is our latest acquisition. We got that in 2024, when we acquired Svenska's interest in the Baobab field. We're partnered with a great operator in Canadian Natural Resources. We did that acquisition for all cash.

The net cash that we paid for it, which was about $42 million, represented about $9,000 per fluid barrel back at the time, Jeff. That acquisition fully paid itself back before we saw the FPSO go out, to get its refurbishment in 2025. It's now back on station now and back on production, and back to giving us 4,500 barrels a day production. So that's our producing assets, Jeff, but we've also got some great opportunities and development assets that I'm sure we'll speak about later.

I think you're dead right there, Jeff. I think a number of parts there to go on. I think from a security of supply situation, obviously it's well away from where we are in West Africa, and indeed where we are even in North Africa, in Egypt. We are away from the conflict areas, which does mean that we've got more security around our barrels. As a continent, right across Africa, there are security issues in some of the countries. We're generally in some of the more developed countries. I'd say the more benign countries from that. There are challenges in certain countries in Africa that we wouldn't necessarily maybe go and take an opportunity to go and look at. But certainly the countries that we're in, we're very happy to be in, and indeed, we've expanded in each one of those areas.

I think from a competition point of view, we can see a lot of consolidation in the marketplace. I think right across the globe, worldwide, you see that consolidation kicking into play. So we can see that continuing. We also think it will give us opportunities, too. We've been a little bit of a consolidator in that time period. As I say, as the majors go hunting ultra-deep water, I think that will give us some more opportunities, too, as they go to divest some of their more mature assets, which is really the area that we play in, Jeff.

I think so, Jeff. I think there's two parts to that. First of all, not only are we in Gabon, we're offshore, so we've developed quite a skill set over the years there for being an offshore E&P company. We are the largest U.S. investor in Gabon, and that, again, gives us some opportunities to help shine the attractiveness of Gabon to the wider U.S. We've introduced the president to the commerce on a couple occasions in the U.S. We'll see that continue. I think what it has done is over the years, we've developed a wonderful skill set, Jeff, in Gabon from our staff. Today, our percentage of national staff employees surpasses even the state-owned E&P companies that are there, which is great, and we've had some fantastic engineering developments, improvements over the years. All our processing is now handled on the platforms themselves.

We've had multiple successful drilling campaigns in that area, and that area is primarily hidden under a salt dome. It's a challenging geology, but we've done very well over the years. The company covers a whole suite of disciplines. We've got subsurface geology, reservoir management through to engineering development, and then operational practices and support. I think all of that skill set that we've now got is great because we've built up that base to be able to then take that and take that model and multiply that model across each of the areas that we're now in.