2024-03-07 05:21:25 ET
Summary
- Vaalco Energy acquired Svenska Petroleum Exploration AB, gaining a 27% interest in ongoing net production off the coast of Cote d'Ivoire.
- The acquisition is funded by Vaalco's substantial cash balance.
- Vaalco's diversification efforts aim to smooth out production growth.
- The acquisition is immediately accretive and very profitable, even though production will go offline in 2025 and return back to production in 2026.
- The company maintains a strong balance sheet to offset some of the risks of doing business in an inherently unstable part of the continent.
Vaalco Energy ( EGY ) recently announced a new deal to obtain Svenska Petroleum Exploration AB for cash. The immediate benefit of this acquisition is ongoing net production of 4500 BOED off the coast of Cote d'Ivoire. This represents a roughly 27% interest. That production is operated by Canadian Natural Resources ( CNQ ) a well-established producer. There is also an interest in an Exxon Mobil ( XOM ) discovery in Nigeria that is not expected to be developed at this time.
Like the deals in the past, management will use part of its substantial cash balance to fund the deal. Management also realizes that the production will go offline in 2025 and come back online in 2026....
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For further details see:
Vaalco Energy: Diversification One Deal At A Time