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.
• 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 reached $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 $11.8 million (9%) to $146.975 million in Q3 2026 compared to Q2 2026.
• Average realized commodity price was $83.64 per BOE in Q3 2026, up 63% from $51.26 in Q3 2025 and 4% from $80.77 in Q2 2026.
• Production expense (excluding offshore workovers and stock comp) was $44.9 million in Q3 2026, down 1% from $45.5 million in Q2 2026 but up 51% from $29.8 million in Q3 2025.
• Depreciation, depletion, and amortization (DD&A) was $43.4 million in Q3 2026, up 110% from $20.6 million in Q3 2025.
• Exploration expense was $4.8 million in Q3 2026, a 1,103% increase from $0.4 million in Q3 2025.
• General and administrative expense (excluding stock comp) was $7.4 million in Q3 2026, down 23% from $9.6 million in Q2 2026.
• Net loss for the first nine months of 2026 was $91.2 million, compared to net income of $17.2 million for the same period in 2025.
• Net cash provided by operating activities for the nine months ended September 30, 2026, was $89.8 million.
• Net capital expenditures totaled $86.9 million on a cash basis for Q3 2026.
• Long-term debt was $239.0 million as of September 30, 2026, up from $60.0 million as of December 31, 2025.
• Cash and cash equivalents were $51.3 million at September 30, 2026.
• Net debt was $187.7 million as of September 30, 2026, compared to $1.1 million as of December 31, 2025.

Guidance and Future Outlook

• Q4 2026 sales volume guidance is 20,800 to 22,600 NRI BOPD, representing an 18% increase at the midpoint compared to Q3 2026.
• Q4 2026 production guidance is 18,800 to 20,900 NRI BOPD.
• Q4 2026 capital expenditure guidance is reduced to $55 million to $75 million.
• Full year 2026 production guidance is 17,400 to 18,550 NRI BOEPD.
• Full year 2026 sales volume guidance is 17,000 to 18,050 NRI BOEPD.
• Full year 2026 production expense guidance is $166.0 million to $180.0 million.
• Full year 2026 exploration expense guidance is $29 million to $31 million.
• Full year 2026 CAPEX guidance is $300 million to $330 million.
• Management projects significant production increases and strong sales in 2027, forecasting free cash flow generation in the second half of 2027 assuming sustained strong commodity pricing.
• Active drilling programs are planned for Côte d'Ivoire and Egypt in 2027 to continue production growth.
• 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 with the ETSEM-3H development well brought online in early October; five wells drilled and brought online at Etame; production up almost 2,500 BOPD year-over-year; completed ETBNM-3 gas-supply well to reduce diesel reliance; 3D seismic campaign on Niosi and Guduma blocks completed in January 2026.
• Côte d'Ivoire: Resumed production at Baobab field in June 2026 after FPSO refurbishment; first sales lifting in August 2026; Phase Five drilling campaign commenced in September 2026 with first well expected online by year-end 2026; additional wells coming online in H1 2027; operator of exploration license CI-705 (70% WI) with second exploration phase pending approval; operator of Kossipo field (60% WI) with development plan progressing toward completion in H1 2027.
• Egypt: Drilling campaign continued in Q3 2026 with five development wells drilled and completed; two additional wells completed in October 2026; ongoing drilling program planned into 2027; continued workovers and well interventions contributing to organic growth.
• Equatorial Guinea: Holds 60% WI in undeveloped portion of Block P; Front End Engineering and Design study for Venus field completed; Final Investment Decision expected in Q4 2026.
• Canada: Assets divested; no sales or production reported in Q3 2026.

Market and Competitive Landscape

• Operates in investor-friendly countries in West and North Africa (Gabon, Côte d'Ivoire, Egypt, Equatorial Guinea).
• Realized commodity prices increased significantly due to higher benchmark crude oil prices.
• Average Brent price was $96.30 in Q3 2026 compared to $102.63 in Q2 2026.

Risks and Challenges

• Net loss driven primarily by non-cash losses on derivative instruments ($34.7 million unrealized loss and $22.3 million realized loss in Q3 2026).
• Higher production expenses attributed to increased chemical and fuel costs across all operating areas.
• Increased income tax expense ($20.3 million in Q3 2026) including a $4.1 million unfavorable oil price adjustment related to Gabon's Profit Oil allocation.
• Forward-looking statements are subject to risks including unforeseen liabilities, ability to generate sufficient cash flows, and commodity price fluctuations.

Management Commentary and Tone

• CEO George Maxwell stated results demonstrate successful execution of strategy with production growth in a strong commodity price environment.
• Management expressed confidence in strategic vision, citing operational success and preparation for next major programs.
• Management highlighted a diversified portfolio with significant future organic growth opportunities.
• Tone is confident regarding 2027 projections for production doubling and free cash flow generation.

Other Key Points

• Declared a quarterly cash dividend of $0.0625 per share for Q4 2026, payable December 22, 2026.
• Paid a quarterly cash dividend of $0.0625 per share for Q3 2026 on September 22, 2026.
• Sold Canadian assets, contributing to a decrease in year-to-date sales volumes compared to 2025.
• Arranged a 2025 Revolving Credit Facility (RBL) with $61.0 million liquidity remaining as of September 30, 2026; aggregate commitments reduce semi-annually starting March 31, 2027.
• Hedging program includes collars for 2026 and 2027 production and put options for H3 2027.
• Conference call scheduled for November 6, 2026, at 8:00 a.m. Central Time.