Vaalco Energy, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported a net loss of $39.8 million ($0.38 per diluted share) for Q3 2026, compared to net income of $42.4 million ($0.39 per share) in Q2 2026 and net income of $1.1 million ($0.01 per share) in Q3 2025.
• The Q3 2026 net loss included a non-cash unrealized loss on derivative instruments of $34.7 million and a realized loss of $22.3 million on matured contracts, totaling a net loss on derivatives of $57.0 million.
• Adjusted EBITDAX increased 30% to $71.1 million in Q3 2026, up from $54.8 million in Q2 2026 and $23.7 million in Q3 2025.
• Total commodity sales were $147.0 million in Q3 2026, a 141% increase from $61.0 million in Q3 2025 and a 9% increase from $135.2 million in Q2 2026.
• Net revenue increased 9% to $146.975 million in Q3 2026 compared to $135.166 million in Q2 2026.
• Average realized commodity price was $83.64 per BOE in Q3 2026, up from $80.77 in Q2 2026 and $51.26 in Q3 2025.
• Production expense (excluding offshore workovers and stock comp) was $44.9 million in Q3 2026 ($26.43 per BOE), compared to $45.5 million ($28.06 per BOE) in Q2 2026 and $29.8 million ($25.24 per BOE) in Q3 2025.
• Depreciation, depletion, and amortization (DD&A) was $43.4 million ($25.54 per BOE) in Q3 2026, up from $34.3 million ($21.14 per BOE) in Q2 2026 and $20.6 million ($17.41 per BOE) in Q3 2025.
• General and administrative expense (excluding stock comp) was $7.4 million in Q3 2026, down from $9.6 million in Q2 2026 and $7.2 million in Q3 2025.
• Exploration expense was $4.8 million in Q3 2026, significantly higher than $0.4 million in Q3 2025 and $0.1 million in Q2 2026.
• Current income tax expense was $25.5 million in Q3 2026, compared to $8.6 million in Q3 2025 and $15.8 million in Q2 2026.
• For the nine months ended September 30, 2026, the Company reported a net loss of $91.2 million compared to net income of $17.2 million in the same period in 2025.
• Net capital expenditures were $86.9 million on a cash basis and $83.9 million on an accrual basis for Q3 2026.
• Long-term debt stood at $239.0 million as of September 30, 2026, compared to $60.0 million as of December 31, 2025.
• Cash and cash equivalents were $51.3 million at the end of Q3 2026.
• The Company had approximately $61.0 million of liquidity remaining on its 2025 RBL Facility as of September 30, 2026.
• Free Cash Flow for the nine months ended September 30, 2026, was $12.452 million.

Guidance and Future Outlook:

• Q4 2026 sales volume guidance is 20,800 to 22,600 NRI BOPD (an 18% increase at the midpoint compared to Q3).
• Q4 2026 production guidance is 18,800 to 20,900 NRI BOPD.
• Q4 2026 capital guidance is reduced to $55 million to $75 million.
• Full Year 2026 production (WI) is guided to 22,350–23,800 BOEPD; NRI production is guided to 17,400–18,550 BOEPD.
• Full Year 2026 sales volume (WI) is guided to 22,050–23,300 BOEPD; NRI sales volume is guided to 17,000–18,050 BOEPD.
• Full Year 2026 production expense is guided to $166.0–$180.0 million.
• Full Year 2026 exploration expense is guided to $29–$31 million.
• Full Year 2026 cash G&A is guided to $32.0–$36.0 million.
• Full Year 2026 CAPEX (excluding acquisitions) is guided to $300–$330 million.
• Management projects significant production increases and strong sales in 2027, with an active drilling program in Côte d'Ivoire and Egypt.
• Management forecasts free cash flow generation in the second half of 2027, assuming sustained strong commodity pricing.
• Major programs at Venus in Equatorial Guinea and Kossipo in Côte d'Ivoire are expected to organically double the Company's production.

Business Segments and Product Lines:

• Gabon: Completed the Phase Three Drilling Program; brought online the ETSEM-3H development well and the ETBNM-3 gas-supply well. Year-over-year working interest production at Etame is up almost 2,500 BOPD.
• Côte d'Ivoire: Resumed production at the Baobab field in June 2026; completed first crude oil lifting in August 2026. Phase Five drilling campaign commenced in September 2026, with the first production well planned to come online near the end of 2026.
• Egypt: Drilling campaign continued with five development wells drilled and completed in Q3 2026; two additional wells completed in October 2026. Ongoing workovers and production optimization activities are contributing to organic growth.
• Equatorial Guinea: Operator of a 60% working interest in the undeveloped Venus field on Block P. Front End Engineering and Design study completed; Final Investment Decision expected in Q4 2026.
• Canada: Assets were divested in 2026, resulting in zero production and sales in Q3 2026.

Market and Competitive Landscape:

• The Company operates in West and North Africa (Gabon, Côte d'Ivoire, Egypt, Equatorial Guinea) with a diversified portfolio of production, development, and exploration assets.
• Management cites a "strong commodity price environment" as a driver for increased realized pricing and Adjusted EBITDAX.
• The Company continues to hedge a portion of expected future production to protect cash flow generation.
• As of September 30, 2026, the Company had hedges in place for crude oil (Dated Brent) collars for Q4 2026 and various quarters in 2027, with weighted average floor prices ranging from $64.70 to $71.88 and ceiling prices from $75.09 to $98.46.
• A put option for 60,000 barrels in Q3 2027 was also in place with a strike price of $65.00.

Risks and Challenges:

• The net loss was primarily driven by non-cash losses on derivative instruments.
• Income tax expense included a $4.1 million unfavorable oil price adjustment related to the Government of Gabon's allocation of Profit Oil.
• Production expenses increased due to higher chemical and fuel costs across all operating areas.
• Exploration expenses increased significantly due to the purchase of seismic data for Block 705 in Côte d'Ivoire.
• Forward-looking statements are subject to risks including unforeseen liabilities, ability to generate sufficient cash flows, and factors described in the Company's Form 10-K and 10-Q.
• Future dividend declarations are subject to Board approval and may be revised or terminated based on financial results, balance sheet strength, and commodity prices.

Management Commentary and Tone:

• CEO George Maxwell stated that Q3 results demonstrate the ability to successfully execute on the strategy, delivering forecasts and growing production.
• Management highlighted that all three producing areas (Egypt, Côte d'Ivoire, and Gabon) saw production increases.
• The tone is confident regarding the strategic vision, citing a "visible, self-funded pathway to significantly increase production."
• Management expressed confidence in organic growth in 2027 and beyond, driven by active drilling programs and major upcoming programs at Venus and Kossipo.

Other Key Points:

• Declared a quarterly cash dividend of $0.0625 per share for Q4 2026, payable on December 22, 2026.
• Paid a quarterly cash dividend of $0.0625 per share for Q3 2026 on September 22, 2026.
• Completed the sale of Canadian assets, contributing to the decrease in year-to-date sales volumes compared to 2025.
• The 2025 RBL Facility commitments will reduce semi-annually starting March 31, 2027, with reductions of $15.8 million and $35.5 million in subsequent periods.
• In September 2026, partners agreed to proceed with the second exploration phase for license CI-705 in Côte d'Ivoire, requiring the relinquishment of approximately 25% of the Phase 1 area.
• The Company is the operator with a 60% working interest in the Kossipo field on the CI-40 Block, with a field development plan progressing toward completion in the first half of 2027.