false--12-31Q120210000894627YesYesP1DP10YP1YP5YP3Y0.33330.33330.33330P5YP0YP0Y0000894627egy:StockRepurchaseProgram2019Member2019-06-012020-04-130000894627us-gaap:TreasuryStockMember2020-01-012020-03-310000894627egy:StockRepurchaseProgram2019Member2019-06-012020-04-300000894627egy:StockRepurchaseProgram2019Member2021-01-012021-03-310000894627egy:StockRepurchaseProgram2019Member2019-06-200000894627us-gaap:TreasuryStockMember2021-01-012021-03-310000894627us-gaap:CommonStockMember2021-01-012021-03-310000894627us-gaap:CommonStockMember2020-01-012020-03-310000894627us-gaap:TreasuryStockMember2021-03-310000894627us-gaap:RetainedEarningsMember2021-03-310000894627us-gaap:AdditionalPaidInCapitalMember2021-03-310000894627us-gaap:TreasuryStockMember2020-12-310000894627us-gaap:RetainedEarningsMember2020-12-310000894627us-gaap:AdditionalPaidInCapitalMember2020-12-310000894627us-gaap:TreasuryStockMember2020-03-310000894627us-gaap:RetainedEarningsMember2020-03-310000894627us-gaap:AdditionalPaidInCapitalMember2020-03-310000894627us-gaap:TreasuryStockMember2019-12-310000894627us-gaap:RetainedEarningsMember2019-12-310000894627us-gaap:AdditionalPaidInCapitalMember2019-12-310000894627us-gaap:RestrictedStockMember2020-01-012020-03-310000894627us-gaap:EmployeeStockOptionMember2020-01-012020-03-310000894627us-gaap:CommonStockMember2021-03-310000894627us-gaap:CommonStockMember2020-12-310000894627us-gaap:CommonStockMember2020-03-310000894627us-gaap:CommonStockMember2019-12-310000894627egy:StockOptionsMonteCarloMember2020-12-310000894627egy:StockOptionsBlackScholesMember2020-12-310000894627egy:StockOptionsMonteCarloMember2021-03-3100008946272021-03-012021-03-310000894627egy:StockOptionsMonteCarloMember2021-01-012021-03-310000894627egy:StockOptionsBlackScholesMember2021-01-012021-03-310000894627egy:StockOptionsBlackScholesMember2021-03-310000894627egy:LongTermIncentivePlan2020Member2021-03-310000894627egy:LongTermIncentivePlan2020Member2020-06-250000894627us-gaap:EmployeeStockOptionMember2021-03-012021-03-310000894627srt:MinimumMemberus-gaap:EmployeeStockOptionMember2021-01-012021-03-310000894627srt:MaximumMemberus-gaap:EmployeeStockOptionMember2021-01-012021-03-310000894627us-gaap:RestrictedStockMember2021-03-310000894627us-gaap:StockAppreciationRightsSARSMember2020-12-310000894627us-gaap:RestrictedStockMember2020-12-310000894627us-gaap:PerformanceSharesMemberegy:LongTermIncentivePlan2020Member2021-01-012021-03-310000894627egy:EmployeesMemberus-gaap:RestrictedStockMember2021-01-012021-03-310000894627us-gaap:StockAppreciationRightsSARSMember2020-01-012020-03-310000894627us-gaap:RestrictedStockMember2021-01-012021-03-310000894627us-gaap:EmployeeStockOptionMember2021-01-012021-03-310000894627srt:MinimumMemberus-gaap:LeaseholdImprovementsMember2021-01-012021-03-310000894627srt:MaximumMemberus-gaap:LeaseholdImprovementsMember2021-01-012021-03-310000894627us-gaap:OfficeEquipmentMember2021-01-012021-03-310000894627us-gaap:WellsAndRelatedEquipmentAndFacilitiesMember2021-03-310000894627us-gaap:OtherCapitalizedPropertyPlantAndEquipmentMember2021-03-310000894627us-gaap:ConstructionInProgressMember2021-03-310000894627egy:UndevelopedAcreageMember2021-03-310000894627us-gaap:WellsAndRelatedEquipmentAndFacilitiesMember2020-12-310000894627us-gaap:OtherCapitalizedPropertyPlantAndEquipmentMember2020-12-310000894627us-gaap:ConstructionInProgressMember2020-12-310000894627egy:UndevelopedAcreageMember2020-12-310000894627egy:SasolGabonS.a.Memberus-gaap:AcquisitionRelatedCostsMember2021-01-012021-03-310000894627egy:SasolGabonS.a.Memberegy:BargainPurchaseGainMember2021-01-012021-03-310000894627egy:SasolGabonS.a.Memberus-gaap:AcquisitionRelatedCostsMember2020-01-012020-03-310000894627egy:SasolGabonS.a.Memberegy:BargainPurchaseGainMember2020-01-012020-03-3100008946272020-09-300000894627egy:StockRepurchaseProgram2019Member2020-04-130000894627egy:SigningBonusMemberegy:VaalcoEnergyInc.AndOtherEtameMarinBlockOwnersMemberegy:ProductionSharingContractSeptember172018ThroughSeptember162028Member2018-09-260000894627egy:SigningBonusMemberegy:ProductionSharingContractSeptember172018ThroughSeptember162028Member2018-09-260000894627us-gaap:OperatingSegmentsMemberegy:EquatorialGuineaSegmentMember2020-01-012020-03-310000894627us-gaap:RetainedEarningsMember2021-01-012021-03-310000894627us-gaap:RetainedEarningsMember2020-01-012020-03-310000894627egy:EtameMarineBlockMember2019-07-310000894627srt:MinimumMember2021-03-310000894627srt:MaximumMember2021-03-310000894627us-gaap:OperatingSegmentsMemberegy:EquatorialGuineaSegmentMember2021-01-012021-03-310000894627egy:EtameMarineBlockMember2020-01-012020-03-310000894627egy:FpsoCharterMemberegy:VaalcoEnergyInc.AndOtherEtameMarinBlockOwnersMember2021-03-310000894627egy:FpsoCharterMember2021-03-310000894627egy:FpsoCharterMember2020-12-310000894627egy:AuthoritiesOtherThanUnitedStatesAndGabonMember2021-01-012021-03-310000894627egy:CommodityContractMay2021ThroughOctober2021Memberus-gaap:SubsequentEventMember2021-05-060000894627egy:CommodityContractApril2021ThroughJanuary2022Member2021-03-310000894627egy:CommodityContractFebruary2021ThroughJanuary2022Member2021-01-220000894627egy:CommodityContractJuly19ThroughJune2020Member2019-05-060000894627egy:CommodityContractMay2021ThroughOctober2021Memberus-gaap:SubsequentEventMember2021-05-062021-05-060000894627egy:CommodityContractFebruary2021ThroughJanuary2022Member2021-01-222021-01-220000894627egy:CommodityContractApril2021ThroughJanuary2022Member2021-01-012021-03-310000894627egy:CommodityContractJuly19ThroughJune2020Member2019-05-062019-05-060000894627egy:CrudeOilSwapsMemberegy:UnrealizedGainLossMember2021-01-012021-03-310000894627egy:CrudeOilSwapsMemberegy:RealizedGainLossContractSettlementsMember2021-01-012021-03-310000894627egy:CrudeOilSwapsMember2021-01-012021-03-310000894627egy:CrudeOilSwapsMemberegy:UnrealizedGainLossMember2020-01-012020-03-310000894627egy:CrudeOilSwapsMemberegy:RealizedGainLossContractSettlementsMember2020-01-012020-03-310000894627egy:CrudeOilSwapsMember2020-01-012020-03-310000894627us-gaap:OperatingSegmentsMemberegy:GabonSegmentMember2021-01-012021-03-310000894627us-gaap:CorporateNonSegmentMember2021-01-012021-03-310000894627us-gaap:OperatingSegmentsMemberegy:GabonSegmentMember2020-01-012020-03-310000894627us-gaap:CorporateNonSegmentMember2020-01-012020-03-310000894627egy:ProductionSharingContractSeptember172018ThroughSeptember162028Member2021-03-310000894627us-gaap:FairValueInputsLevel2Member2020-12-310000894627egy:SigningBonusMemberegy:VaalcoEnergyInc.AndOtherEtameMarinBlockOwnersMemberegy:ProductionSharingContractSeptember172018ThroughSeptember162028Member2018-09-170000894627egy:SigningBonusMemberegy:ProductionSharingContractSeptember172018ThroughSeptember162028Member2018-09-170000894627us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-03-310000894627egy:TaxImpactMemberegy:ProductionSharingContractSeptember172018ThroughSeptember162028Member2021-03-310000894627egy:SigningBonusMemberegy:ProductionSharingContractSeptember172018ThroughSeptember162028Member2021-03-310000894627us-gaap:FairValueInputsLevel2Member2021-03-310000894627egy:SasolGabonS.a.Member2021-03-310000894627us-gaap:OperatingSegmentsMemberegy:GabonSegmentMemberus-gaap:SegmentContinuingOperationsMember2021-03-310000894627us-gaap:OperatingSegmentsMemberegy:EquatorialGuineaSegmentMemberus-gaap:SegmentContinuingOperationsMember2021-03-310000894627us-gaap:CorporateNonSegmentMemberus-gaap:SegmentContinuingOperationsMember2021-03-310000894627us-gaap:SegmentContinuingOperationsMember2021-03-310000894627us-gaap:OperatingSegmentsMemberegy:GabonSegmentMemberus-gaap:SegmentContinuingOperationsMember2020-12-310000894627us-gaap:OperatingSegmentsMemberegy:EquatorialGuineaSegmentMemberus-gaap:SegmentContinuingOperationsMember2020-12-310000894627us-gaap:CorporateNonSegmentMemberus-gaap:SegmentContinuingOperationsMember2020-12-310000894627us-gaap:SegmentContinuingOperationsMember2020-12-3100008946272020-01-012020-12-3100008946272019-12-310000894627egy:LiabilityAwardMember2021-01-012021-03-310000894627egy:EquityAwardMember2021-01-012021-03-310000894627egy:LiabilityAwardMember2020-01-012020-03-310000894627egy:EquityAwardMember2020-01-012020-03-310000894627us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310000894627us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-310000894627egy:VaalcoEnergyInc.AndOtherEtameMarinBlockOwnersMember2021-03-310000894627egy:EtameMarineBlockMembersrt:ScenarioForecastMemberegy:GovernmentOfGabonMemberegy:ProductionSharingContractSeptember172018ThroughSeptember162028Member2026-06-200000894627egy:EtameMarineBlockMemberegy:VaalcoEnergyInc.AndOtherEtameMarinBlockOwnersMemberegy:PriorProductionSharingContractThroughSeptember172018Member2021-03-310000894627egy:EtameMarineBlockMemberegy:GovernmentOfGabonMemberegy:ProductionSharingContractSeptember172018ThroughSeptember162028Member2021-03-310000894627egy:VaalcoGabonS.a.Memberegy:EtameMarineBlockMember2021-03-310000894627egy:BlockPOffshoreEquatorialGuineaMember2021-03-310000894627egy:EtameMarineBlockMember2021-02-250000894627egy:EtameMarineBlockMember2021-02-240000894627egy:BlockPOffshoreEquatorialGuineaMember2012-12-310000894627egy:EtameMarineBlockMemberegy:SasolGabonS.a.Member2021-03-310000894627egy:EtameMarineBlockMember2020-03-310000894627us-gaap:EmployeeStockOptionMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2021-03-012021-03-310000894627us-gaap:EmployeeStockOptionMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMember2021-03-012021-03-310000894627us-gaap:EmployeeStockOptionMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2021-03-012021-03-310000894627us-gaap:StockAppreciationRightsSARSMember2021-03-310000894627egy:EtameMarineBlockMemberegy:ProductionSharingContractSeptember172018ThroughSeptember162028Member2021-01-012021-03-310000894627egy:EtameMarineBlockMember2020-06-012020-06-300000894627egy:EtameMarineBlockMember2019-10-012019-10-310000894627us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-03-310000894627egy:ProductionExpenseMember2021-01-012021-03-310000894627egy:LeaseCostsBilledToJointVentureOwnersMember2021-01-012021-03-310000894627us-gaap:GeneralAndAdministrativeExpenseMember2020-01-012020-03-310000894627egy:ProductionExpenseMember2020-01-012020-03-310000894627egy:LeaseCostsBilledToJointVentureOwnersMember2020-01-012020-03-310000894627egy:FpsoCharterMember2021-01-012021-03-310000894627egy:EtameMarineBlockMemberegy:ProductionSharingContractSeptember172018ThroughSeptember162028Member2018-09-172018-09-170000894627egy:GovernmentOfGabonMemberegy:ProductionSharingContractSeptember172018ThroughSeptember162028Member2021-01-012021-03-310000894627egy:GovernmentOfGabonMemberegy:PriorProductionSharingContractThroughSeptember172018Member2021-01-012021-03-310000894627srt:MinimumMember2021-01-012021-03-310000894627srt:MaximumMember2021-01-012021-03-310000894627egy:EtameMarineBlockMembersrt:ScenarioForecastMemberegy:GovernmentOfGabonMemberegy:ProductionSharingContractSeptember172018ThroughSeptember162028Member2026-06-202026-06-200000894627egy:EtameMarineBlockMembersrt:ScenarioForecastMemberegy:ProductionSharingContractSeptember172018ThroughSeptember162028Member2026-06-202026-06-200000894627egy:BlockPOffshoreEquatorialGuineaMemberus-gaap:SubsequentEventMember2021-04-122021-04-120000894627egy:EtameMarineBlockMemberegy:SasolGabonS.a.Member2021-02-252021-02-250000894627egy:BlockPOffshoreEquatorialGuineaMember2021-01-012021-03-310000894627egy:SigningBonusMemberegy:VaalcoEnergyInc.AndOtherEtameMarinBlockOwnersMemberegy:ProductionSharingContractSeptember172018ThroughSeptember162028Member2018-09-262018-09-260000894627egy:SigningBonusMemberegy:ProductionSharingContractSeptember172018ThroughSeptember162028Member2018-09-262018-09-260000894627srt:MinimumMemberegy:EtameMarineBlockMember2020-08-310000894627srt:MaximumMemberegy:EtameMarineBlockMember2020-08-310000894627egy:ProductionSharingContractSeptember172018ThroughSeptember162028Member2021-01-012021-03-310000894627egy:VaalcoEnergyInc.AndOtherEtameMarinBlockOwnersMemberegy:ProductionSharingContractSeptember172018ThroughSeptember162028Member2021-01-012021-03-310000894627egy:VaalcoEnergyInc.AndOtherEtameMarinBlockOwnersMemberegy:ProductionSharingContractAfterSeptember162028Member2021-01-012021-03-310000894627egy:SasolGabonS.a.Member2021-02-250000894627egy:SasolGabonS.a.Member2021-02-252021-02-250000894627egy:SasolGabonS.a.Member2021-01-012021-03-310000894627egy:SasolGabonS.a.Member2020-01-012020-03-310000894627us-gaap:StockAppreciationRightsSARSMember2021-01-012021-03-310000894627egy:EtameMarineBlockMember2020-08-012020-08-3100008946272020-01-012020-03-310000894627us-gaap:SegmentDiscontinuedOperationsMemberegy:JointOperatingWithRepublicOfAngolaMember2006-11-012006-11-300000894627us-gaap:SegmentDiscontinuedOperationsMemberegy:JointOperatingWithRepublicOfAngolaMember2006-11-300000894627egy:EtameMarineBlockMemberegy:VaalcoEnergyInc.AndOtherEtameMarinBlockOwnersMember2021-03-310000894627egy:EtameMarineBlockMember2021-03-3100008946272021-03-3100008946272020-12-3100008946272020-03-3100008946272021-04-3000008946272021-01-012021-03-31egy:segmentiso4217:XAFiso4217:USDutr:bblegy:itemiso4217:USDutr:bbliso4217:USDxbrli:sharesutr:sqkmxbrli:pureiso4217:USDxbrli:shares

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________

FORM 10-Q

________________________________

(Mark One)

x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

¨  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission file number 1-32167

________________________________

VAALCO Energy, Inc.

(Exact name of registrant as specified in its charter)

________________________________

Delaware

 

76-0274813

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

9800 Richmond Avenue

Suite 700

Houston, Texas

 

77042

(Address of principal executive offices)

 

(Zip code)

(713) 623-0801

(Registrant’s telephone number, including area code)

________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock

EGY

New York Stock Exchange

Common Stock

EGY

London Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

x

Smaller reporting company

Emerging growth company

x

¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).        Yes  ¨    No   x

As of April 30, 2021, there were outstanding 57,930,563 shares of common stock, $0.10 par value per share, of the registrant.  

 


Table of Contents

VAALCO ENERGY, INC. AND SUBSIDIARIES

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Condensed Consolidated Balance Sheets

March 31, 2021 and December 31, 2020

2

Condensed Consolidated Statements of Operations

Three Months Ended March 31, 2021 and 2020

3

Condensed Consolidated Statements of Shareholders’ Equity

Three Months Ended March 31, 2021 and 2020

4

Condensed Consolidated Statements of Cash Flows

Three Months Ended March 31, 2021 and 2020

5

Notes to Condensed Consolidated Financial Statements

7

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

27

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

34

ITEM 4. CONTROLS AND PROCEDURES

35

PART II. OTHER INFORMATION

35

ITEM 1. LEGAL PROCEEDINGS

35

ITEM 1A. RISK FACTORS

35

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES

36

ITEM 6. EXHIBITS

36

Unless the context otherwise indicates, references to “VAALCO,” “the Company”, “we,” “our,” or “us” in this Quarterly Report on Form 10-Q are references to VAALCO Energy, Inc., including its wholly-owned subsidiaries.


1


Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

VAALCO ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

As of March 31, 2021

As of December 31, 2020

ASSETS

(in thousands)

Current assets:

Cash and cash equivalents

$

19,251

$

47,853

Restricted cash

82

86

Receivables:

Trade

23,803

Accounts with joint venture owners, net of allowance of $0.0 million in both periods presented

152

3,587

Other

29

4,331

Crude oil inventory

820

3,906

Prepayments and other

5,175

4,215

Total current assets

49,312

63,978

Crude oil and natural gas properties, equipment and other - successful efforts method, net

78,192

37,036

Other noncurrent assets:

Restricted cash

1,752

925

Value added tax and other receivables, net of allowance of $5.1 million and $2.3 million, respectively

5,565

4,271

Right of use operating lease assets

19,454

22,569

Abandonment funding

22,862

12,453

Total assets

$

177,137

$

141,232

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

10,121

$

16,690

Accounts with joint venture owners

1,721

4,945

Accrued liabilities and other

33,777

17,184

Operating lease liabilities - current portion

13,088

12,890

Foreign income taxes payable

6,384

860

Current liabilities - discontinued operations

13

7

Total current liabilities

65,104

52,576

Asset retirement obligations

32,196

17,334

Operating lease liabilities - net of current portion

6,361

9,671

Deferred tax liabilities

1,809

Other long-term liabilities

73

193

Total liabilities

105,543

79,774

Commitments and contingencies (Note 10)

 

 

Shareholders’ equity:

Preferred stock, $25 par value; 500,000 shares authorized, none issued

Common stock, $0.10 par value; 100,000,000 shares authorized, 68,328,224 and 67,897,530 shares issued, 57,806,504 and 57,531,154 shares outstanding, respectively

6,833

6,790

Additional paid-in capital

75,064

74,437

Less treasury stock, 10,521,720 and 10,366,376 shares, respectively, at cost

(42,824)

(42,421)

Retained earnings

32,521

22,652

Total shareholders' equity

71,594

61,458

Total liabilities and shareholders' equity

$

177,137

$

141,232

See notes to condensed consolidated financial statements.

2


Table of Contents

VAALCO ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Three Months Ended March 31,

2021

2020

(in thousands, except per share amounts)

Revenues:

Crude oil and natural gas sales

$

39,774

$

18,389

Operating costs and expenses:

Production expense

16,133

9,749

Exploration expense

142

Depreciation, depletion and amortization

4,148

3,103

Impairment of proved crude oil and natural gas properties

30,625

General and administrative expense

4,547

754

Bad debt expense and other

101

810

Total operating costs and expenses

25,071

45,041

Other operating expense, net

(360)

(31)

Operating income (loss)

14,343

(26,683)

Other income (expense):

Derivative instruments gain (loss), net

(5,954)

7,339

Interest income, net

5

116

Other, net

4,580

(31)

Total other income (expense), net

(1,369)

7,424

Income (loss) from continuing operations before income taxes

12,974

(19,259)

Income tax expense

3,086

33,478

Income (loss) from continuing operations

9,888

(52,737)

Loss from discontinued operations, net of tax

(19)

(63)

Net income (loss)

$

9,869

$

(52,800)

Basic net income (loss) per share:

Income (loss) from continuing operations

$

0.17

$

(0.91)

Loss from discontinued operations, net of tax

0.00

0.00

Net income (loss) per share

$

0.17

$

(0.91)

Basic weighted average shares outstanding

57,636

57,975

Diluted net income (loss) per share:

Income (loss) from continuing operations

$

0.17

$

(0.91)

Loss from discontinued operations, net of tax

0.00

0.00

Net income (loss) per share

$

0.17

$

(0.91)

Diluted weighted average shares outstanding

58,461

57,975

See notes to condensed consolidated financial statements.

3


Table of Contents

VAALCO ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)

Common Shares Issued

Treasury Shares

Common Stock

Additional Paid-In Capital

Treasury Stock

Retained Earnings

Total

(in thousands)

Balance at January 1, 2021

67,897

(10,366)

$

6,790

$

74,437

$

(42,421)

$

22,652

$

61,458

Shares issued - stock-based compensation

431

(155)

43

304

347

Stock-based compensation expense

323

323

Treasury stock

(403)

(403)

Net income

9,869

9,869

Balance at March 31, 2021

68,328

(10,521)

$

6,833

$

75,064

$

(42,824)

$

32,521

$

71,594

Common Shares Issued

Treasury Shares

Common Stock

Additional Paid-In Capital

Treasury Stock

Retained Earnings

Total

(in thousands)

Balance at January 1, 2020

67,674

(9,649)

$

6,767

$

73,549

$

(41,429)

$

70,833

$

109,720

Shares issued - stock-based compensation

125

13

(13)

Stock-based compensation expense

145

145

Treasury stock

(517)

(652)

(652)

Net loss

(52,800)

(52,800)

Balance at March 31, 2020

67,799

(10,166)

$

6,780

$

73,681

$

(42,081)

$

18,033

$

56,413

See notes to condensed consolidated financial statements.

4


Table of Contents

VAALCO ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Three Months Ended March 31,

2021

2020

(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$

9,869

$

(52,800)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Loss from discontinued operations

19

63

Depreciation, depletion and amortization

4,148

3,103

Bargain purchase gain

(7,651)

Impairment of proved crude oil and natural gas properties

30,625

Other amortization

60

Deferred taxes

1,809

35,638

Unrealized foreign exchange gain

(400)

(22)

Stock-based compensation

1,559

(2,569)

Cash settlements paid on exercised stock appreciation rights

(852)

Derivative instruments (gain) loss, net

5,954

(7,339)

Cash settlements received (paid) on matured derivative contracts, net

(1,710)

718

Bad debt expense and other

101

810

Other operating loss, net

360

31

Operational expenses associated with equipment and other

247

578

Change in operating assets and liabilities:

Trade receivables

(12,647)

14,335

Accounts with joint venture owners

275

13,812

Other receivables

(53)

(755)

Crude oil inventory

5,795

(2,793)

Prepayments and other

(3,240)

(993)

Value added tax and other receivables

(149)

(370)

Accounts payable

(6,627)

(1,130)

Foreign income taxes receivable/payable

5,524

(1,284)

Accrued liabilities and other

(576)

(2,073)

Net cash provided by continuing operating activities

1,755

27,645

Net cash used in discontinued operating activities

(13)

(18)

Net cash provided by operating activities

1,742

27,627

CASH FLOWS FROM INVESTING ACTIVITIES:

Property and equipment expenditures

(1,198)

(11,980)

Acquisition of crude oil and natural gas properties

(17,858)

Net cash used in continuing investing activities

(19,056)

(11,980)

Net cash used in discontinued investing activities

Net cash used in investing activities

(19,056)

(11,980)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from the issuances of common stock

347

Treasury shares

(403)

(652)

Net cash used in continuing financing activities

(56)

(652)

Net cash used in discontinued financing activities

Net cash used in financing activities

(56)

(652)

NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

(17,370)

14,995

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD

61,317

59,124

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD

$

43,947

$

74,119

See notes to condensed consolidated financial statements.

5


Table of Contents

VAALCO ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS SUPPLEMENTAL DISCLOSURES (Unaudited)

Three Months Ended March 31,

2021

2020

(in thousands)

Supplemental disclosure of non-cash investing and financing activities:

Property and equipment additions incurred but not paid at end of period

$

3,137

$

10,991

Asset retirement obligations

$

$

359

See notes to condensed consolidated financial statements.


6


Table of Contents

VAALCO ENERGY, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDEN