Vaalco Energy, Inc. — Second Quarter 2026 Earnings Summary

Financial Performance

• Reported net income of $42.4 million ($0.39 per diluted share) for Q2 2026, compared to a net loss of $93.8 million ($0.90 per diluted share) in Q1 2026 and net income of $8.4 million ($0.08 per diluted share) in Q2 2025.
• Generated Adjusted EBITDAX of $54.8 million in Q2 2026, an increase of nearly five times from $11.6 million in Q1 2026 and up 10% from $49.9 million in Q2 2025.
• Total commodity sales reached $135.2 million in Q2 2026, a 116% increase from $62.6 million in Q1 2026 and a 39% increase from $96.9 million in Q2 2025.
• Average realized commodity price was $80.77 per BOE in Q2 2026, up 41% from $57.21 in Q1 2026 and 47% from $54.87 in Q2 2025.
• Net revenue increased $72.6 million (116%) in Q2 2026 compared to Q1 2026, driven by higher sales volumes and realized pricing.
• Production expense (excluding offshore workovers and stock comp) was $45.5 million ($28.06/BOE) in Q2 2026, up from $28.3 million ($25.89/BOE) in Q1 2026 and $40.3 million ($22.87/BOE) in Q2 2025.
• Exploration expense decreased to $0.1 million in Q2 2026 from $22.4 million in Q1 2026 and $2.5 million in Q2 2025.
• General and administrative expense (excluding stock-based compensation) was $9.6 million in Q2 2026, up from $6.9 million in Q1 2026 and $7.1 million in Q2 2025.
• Reported a net gain on derivative instruments of $18.7 million in Q2 2026, including an unrealized gain of $43.7 million and a realized loss of $25.0 million.
• Net capital expenditures totaled $103.6 million on a cash basis in Q2 2026.
• Long-term debt stood at $177.0 million as of June 30, 2026, compared to $60.0 million as of December 31, 2025.
• Trade receivables in Egypt reduced from $31.6 million at December 31, 2025, to $12.9 million at June 30, 2026.

Guidance and Future Outlook

• Affirmed full-year 2026 NRI production guidance raised by 8% to a midpoint of 17,500–19,400 BOEPD and NRI sales volumes raised by 12% to a midpoint of 17,100–20,050 BOEPD.
• Maintained 2026 capital budget guidance unchanged at $290–$360 million despite additional drilling in Egypt.
• Forecast Q3 2026 sales volumes to range between 17,200 and 18,900 NRI BOPD.
• Projected Q3 2026 production to be between 19,600 and 21,600 NRI BOPD, representing a 23% increase compared to Q2 2026 at the midpoint.
• Expects significant production increases and strong sales in the second half of 2026, coupled with attractive pricing, to generate solid operational cash flow and Adjusted EBITDAX.
• Anticipates material production uplift in 2027 from the Phase Five Drilling Program at Baobab.

Business Segments and Product Lines

• Gabon: Successfully drilled and completed the Ebouri-5H development well with production commencing in June 2026; spudded the ETBNM-3 gas-supply well; mobilized rig to SEENT platform to drill ETSEM-3PH pilot hole; BWE Consortium completed 3D seismic campaign across Niosi and Guduma blocks.
• Egypt: Drilling program commenced in May 2026 with completion of HE-9 development well; initiated and completed two additional development wells in June; continued drilling in Q3 2026; executed workovers and production optimization activities.
• Côte d'Ivoire: Restarted production at the Baobab field in June 2026 following FPSO dry dock refurbishment; first crude oil lifting scheduled for August 2026; drilling program expected to start in September 2026; became operator with 60% WI in the Kossipo field with development plan progressing toward completion in H1 2027.
• Equatorial Guinea: Completed initial Front End Engineering and Design study for the Venus field discovery; evaluating alternative technical solutions; Final Investment Decision expected in Q4 2026.
• Canada: Sold all producing properties in Canada for approximately $25.5 million with closing on February 19, 2026; properties produced approximately 1,850 BOEPD at time of sale.

Market and Competitive Landscape

• Average Brent price was $102.63 in Q2 2026, up 27% from $80.72 in Q1 2026.
• Average realized oil price received was $89.50 per BOE (WI basis) and $80.77 per BOE (NRI basis) in Q2 2026.
• Sales volumes in Q2 2026 were 1,621,000 BOE, up 48% from Q1 2026 but down 8% from Q2 2025, primarily due to the timing of Gabon liftings and the sale of Canadian assets.

Risks and Challenges

• Forward-looking statements are subject to risks including unforeseen liabilities, ability to generate sufficient cash flows, and factors described in the Company's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q.
• Actual results may differ materially from forward-looking statements due to risks and uncertainties.
• Future dividends beyond Q3 2026 have not been approved and remain at the discretion of the Board based on financial results, balance sheet strength, and market conditions.

Management Commentary and Tone

• CEO George Maxwell stated the first half of 2026 saw material changes to the portfolio, including increased growth potential in Côte d'Ivoire, divestment of Canadian assets, and successful drilling campaigns in Gabon and Egypt.
• Management expressed confidence in the strategic vision, citing operational success and the ability to deliver material organic production growth without increasing 2026 capital guidance.
• The tone emphasized strong first-half results meeting or exceeding expectations driven by successful drilling programs and capital investments.

Other Key Points

• Declared a quarterly cash dividend of $0.0625 per share for Q3 2026, to be paid on September 22, 2026.
• Arranged an increase in the 2025 RBL Facility commitments to $300.0 million in April 2026, the maximum permitted under the facility.
• Hedges remaining in place as of June 30, 2026, include crude oil collars for 2026 and 2027 with weighted average floor prices ranging from $63.85 to $70.99 and ceiling prices from $68.33 to $93.50.
• Entered into additional commodity swaps subsequent to June 30, 2026, for 2027 periods including collars and puts with various floor and ceiling prices.
• Conference call scheduled for August 7, 2026, at 8:00 a.m. Central Time.