VAALCO Energy, Inc. (EGY) Earnings Call Transcript & Summary

Good morning. My name is George Maxwell, I'm the Chief Executive Officer of VAALCO Energy, Inc. We are a company listed in New York and based in Houston, Texas, with a focus on emerging markets, particularly focused on Africa. I'll give you an overview of the company in this presentation in the next 20 minutes, and then we'll go to a Q&A session with -- after that. So here are some of the key metrics from our Q1 2024 results that we published in April of this year, and then the comparisons to the previous quarter. You can see that we're producing just under 22,000 barrels a day with an EBITDAX of around about $62 million for the quarter. Income per share is $0.06 and diluted net income per share is $0.07 and we have shareholder returns, which is a mixture of buyback and dividends in the quarter of $12 million. So this is our global portfolio. Recently, in Q1, we just acquired a nonoperating position in Cote d’'Ivoire, and I'll talk more about that later. But currently, we have production operations in Egypt and Gabon and Canada, where we're the operator, and we have a development operation just initiated in Equatorial Guinea. So you can see our diversified portfolio for Africa. With the new acquisition in Cote d'Ivoire, we are now in Cote d'Ivoire as well as also in Nigeria, where we have another nonoperated position, a deepwater position with Exxon as the operator. In Cote d'Ivoire, the operator is CNRL, who we know very well. You can see the production operations currently, we're producing around about 10,500 to 11,000 barrels a day in Egypt, about -- that's a working interest position, working interest position of about 9,500 barrels a day in Gabon and about 3,500 barrels a day in Canada. Focusing on the recent acquisition in Cote d'Ivoire. It adds immediate production of just over 5,000 barrels a day on a working interest basis, it's due for refurbishment in 2025, the FPSO, you can see there on the screen is going offline for refurbishment. That's something we're very experienced in because we just did an FPSO/FSO change out in Gabon in 2022. So we've got a lot of project management experience in that type of operation. We've got the diversification of Cote d'Ivoire into further diversification in West Africa. And this adds material production, a material long-term upside, we see the potential of this investment production through to 2038. So it's a significant opportunity for us. We acquired it for all cash at a very attractive price. So there was no debt or equity involved in this acquisition. So if you look on the key highlights of the acquisition, you can see that as at February VAALCO on a flowing barrel basis valuation was about $19,100 on a working interest basis. And you can see the net consideration that we actually paid for Svenska was down at $8,900 barrels on a working interest basis. So that's a very accretive acquisition. Similarly, when we look at our 2P position, our existing portfolio is at 3$ -- just on $3 for 2P and we're acquiring these 2P reserves at $1.84. So again, extremely accretive. It's coming in at -- in production and with the estimated production through '24 and in the first part of '25, we plan to fully recover our acquisition cost in cash during this period. You can see what it does for our production. We moved from just on 22,100 a day working interest up to over 25,000. In fact, we're higher than that at the moment, but this is where we're giving guidance to, the guidance for '24 is up over 25,000 barrels a day. The reserves, again, will be updating the market on reserves in the coming weeks for this particular acquisition. But at the moment, the published numbers take our 1P working interest reserves up to almost 22 million barrels. And you can just see on that diagram there the subsea configuration of CI-40, where it's tied back to the FPSO and export via Espoir are going to be for gas. So we are now at just under 28% working interest. The operator is CNR. The Baobab field was discovered in 2001. It's been an attractive asset for CNR, it's been very attractive for Svenska in the time that they've worked on it. We see a lot of activity now happening around CDI with a big discovery made by ENI recently and also some blocks to the west of us -- sorry, the east of us coming in with Murphy. So you can see the attractiveness of this particular play. And if we carry on moving to the west, you're going to Ghana, where you see Total's Jubilee field. Moving to our traditional production area, which is in Gabon. And Q1, we were just on 9,000 barrels a day just slightly above our forecast. You can see our production uptime pre-reconfiguration was around 85% in 2022, post the reconfiguration with the new subsea lines and the coming into the FSO and a central processing facility on one of the platform, our uptime is now at 97%, which historically is very, very high. So we set up this production -- a strong production base, we've reduced the decline curve with this reconfiguration, and we set ourselves up well for the 2025 drilling program. This drilling program, we're just still working on to finalize, but we will be talking about that in our Q2 results in August. One of the key things in the drilling program is looking at how we can rehabilitate the Ebouri field, looking at a couple of solutions to gain access to those stranded reserves. Egypt, as we acquired Egypt through TransGlobe back in 2022. We spent 6 months really working on operational efficiency, and we really had a very strong position in 2023, the second half of 2023, in particular. We had strong drilling results in '23. We had hugely reduced cycle times in drilling, where we took the average time to drill and complete in some cases, down to 15 days from a historical high of over 40 days. As a result of that we are going to have to drill -- we're in a position where we can drill more wells at lower cost and we actually managed to add an additional 3 wells into the 2023 program. Looking at 2024, the first half of '24, we've mainly been operating with a workover rig to arrest decline. In addition to that, we've now just contracted a second workover rig so we can accelerate the workover and perhaps, again, accelerate the arrest of decline. And we're still looking to commence a drilling program in the second half of '24. One of the key achievements we've -- we're proud of in Egypt is, we did have a fairly poor health and safety record when we acquired it. There were a lot of LTI incidents. But now we've -- in the first half of this year, we're well through 1 million man hours and beyond 1 million now without any lost time incidents. And this is very key to us to make sure that people come to work and go home safe. Canada, we've been drilling in Canada in Q1. Strategically, last year, we looked at how we could make Canada more efficient, how we could make it contributive to the corporate structure, both in terms of profitability and cash flow, with that strategy of moving to 2.5 and 3-mile lateral wells only and making sure we could acquire the land if we were limited to 1 mile laterals. We'd acquired the land so we can extend those 2, to 2 and 3 mile laterals. So that's been very successful for us. We've completed 2 wells and came online in May. The other 2 wells are now online. So we've now all 4 wells online and in production and we gave the update to the market a few weeks ago with the initial rates of the wells coming on particularly strong for the first 3, you can see the type curve analysis we use there to predict it. But one of the key things about the investment in Canada, you can see there that in Q1, we were at 2,400 barrels a day. We're now up over 3,600 barrels a day with the extra wells on. And it's key to have the liquid ratio as high as possible. Equatorial Guinea is an asset that's been in the company's portfolio for some time. There are some quite exciting deepwater exploration prospects. But what we're focused on at the moment is a shallow water extended reach development into a deepwater subsurface target. We've talked about this for some time now. It's been delayed due to partner issues, but these are now all resolved, and we'll be moving forward and we have moved forward actually with the commitment of the FEED study. The FEED study has 2 key objectives. One is to make sure that the seabed survey is carried out so that we can actually place the equipment in a condition where the mud line is suitable and in a condition where -- a location where we can drill the extended reach to reservoir. And secondly, to look at how we can optimize and reduce the capital cost for the project, perhaps slopping CapEx for lease opportunities due to the short tenure of the project and reduce the cash. So we're looking for FEED -- the FEED study will go through 2024 towards FID either at the end of '24 or early '25. And you can see with the change in the economics around the agreements with partners, you can see that we've -- actually, with -- that deal enhanced our entitlement to 1P by about 200,000 barrels. So currently a good deal for the company. If you look at what's happening in the company over the last few years, you can see where we were in 2020, we come in, that's just around the time I started, with a mandate to grow the company, grow production, grow reserves and create longevity and diversification. And you can see in that chart that we've been accomplishing that year-on-year, this is a full year '24 estimate for working interest production up over 25,000 barrels a day. And with the assets we've now got in our portfolio, though we've got some key catalysts going through 2025, '26 and '27 to increase that production. Again, when we look at our SEC position year-on-year, we've improved that despite some big adjustments because of the oil pricing that's been taking place through the way the SEC calculations is. But another benchmark is to look at our 2P position and working interest. And you can see we've added substantial longevity to the company in '22 and again increasing in '23. These positions do include some of the Svenska but as I said in the last -- earlier in the presentation, we'll give you an update to market in the coming weeks with regard to the adjusted reserve now that we've done the analysis and a new competitive person report on Cote d'Ivoire. We don't look at country-specific netbacks because tax and fiscal regimes are completely different. But we do look at blended netbacks at various prices for the year. So you can see our blended netbacks for the corporation and how those are made up at $70 to $80 and $90 oil. And you can see even at the lower level of $70 oil, that we still have a healthy contributive position of $24, obviously increases a lot a lot more when we get to $90. So that allows the investor and the reader to make an assessment of our potential -- for our earnings potential within the guidance frame that we've given, which is we gave a guidance frame on production, and we obviously give these indicative netback positions. When we look at the company's liquidity, again, we made a couple of key decisions back in -- when we came in. One was we needed to have a debt line to ensure that we safely perform some of our investing operations with no -- little or no risk to the equity position. So we have a debt line in place. We currently -- and this is pre the acquisition of Svenska but as at Q1, over $100 million of cash in the balance sheet. We also had a position where we initiated a share dividend, the first time that VAALCO has done that. We kick-started that in the end of '21. And then when we acquired TransGlobe, made a commitment to double the dividend. And you can see we've been delivering that consistently through Q2 as well, up at $0.06 a share. In addition to that, we made a commitment in 2022 to do a $30 million buyback program. That program is now completed. It completed in Q1 '24. And we've made that commitment and we spent $30 million and we were buying our stock back at an average of around just somewhere north of [ $5 ]. So this is the guidance we can give for 2024. This now does include some of -- sorry, it does not include Cote d'Ivoire because this is before we have the position in. But we've added it in -- at the bottom there you can see. So we're now looking at a range for working interest positions of around 25,000, 27,000 barrels a day. Our NRI, we also give both working just on NRI, the NRI can move obviously because of the way the PSCs operate. And we give guidance on production -- sorry, CapEx and G&A. So you can see our guidance ranges there where we see the CapEx from about $115 million to $140 million. So for us, a relatively light CapEx year. Next year will be a little bit heavier. I'm not going to go through this in detail, but you can see here, what we're trying to provide is there's been a lot of discussion in our previous presentations about how the effective tax rate can move. And this is just giving you an example about where -- if with higher oil prices, we recover the cost pool in full, then you could be in scenario 2 with a reasonably high or normal CapEx spend you'd be in scenario 2. If we have a very light CapEx spend as we do this year in Gabon, then the effective tax rate increases because the profit oil is higher because there's less cost oil to be deducted and the ratio split between us and the government changes. So you can see through these scenarios how you affect the effective tax rate through investments so a good invest -- a high investment year as we will have next year in Gabon, where we won't have a fully recovered cost pool. You can see that would be scenario 1. And this year, 2024 is both of the scenarios. But it's just to give you an indicative example to try and give you an indication of how the PSC and royalty structure works for these products. And there are some big movements because we have what's called in-kind taxes. So we continue to store the barrels for the government for their tax take until such times as the offtake. And they're always mark-to-market. So you can see what happens to, again, our effective rate when oil prices go up and when oil prices go down. Again, this is just more of educational stuff. This is purely a one for the finance guys. It's for all the things we've talked about before. This is just a reconciliation to non-GAAP measures so that we can talk with a degree of knowledge as to what into U.S. GAAP and what we talk about and things like adjusted EBITDAX. And that's a brief summary of where we are and what we're doing. One thing I'd like to add is now with the acquisition of Cote d'Ivoire, we have a number of organic catalysts over the next 3 years to cause me to [indiscernible]. We have a drilling program that's planned for Gabon for '25 and '26. We have a drilling and development program plan for Equatorial Guinea, which is taking place the end of '26 and early '27. We have a drilling program taking place in Egypt this year and looking to further put our plan in place for the Western Desert acreage that we're trying to put in place for this year. We continue with our strategic plan in Canada, which is just 4 wells a year to continue to make a positive contribution to the corporation. And in Cote d'Ivoire, we've got a very accretive asset at the moment. It was off-line for about 12 months. And then when it comes back, we have a -- we will have a Base 5 drilling campaign, it is currently planned, and we'll be talking more about that once that's confirmed. So over the next 3 years, just within the portfolio, we have significant growth opportunities, significant figures happening at different times. And the company is well positioned with an exceptionally strong balance sheet with no debt to be able to fund these positions through 2027. So thank you very much.

So George, thank you for being here today. Could you tell us about yourself, who are you? And could you walk us through your career?

I've been in the oil business my whole career, started in the North Sea in Aberdeen with Texaco. I was there for some time doing petroleum economics and -- in the fiscal side of the business. I then went and worked for ABB in their Oil and Gas division, and I was based initially in Aberdeen, then Houston, then Singapore, then the Middle East, Africa and finally back in the U.K. After that, which was about 2003, I left and I joined a small oil company called Addax Petroleum which was based in Geneva. I spent 2 to 3 years in Nigeria working for them and then moved to Geneva to form the business development side and the planning side. And we worked on acquisitions in Gabon. So the position that VAALCO is now the operator, I was part of the team buying into that and back in the pan-ocean days in 2006. So I knew the asset pretty well by the time I came to VAALCO in '21. We built the -- Addax was built up. We've got assets in Kurdistan, in Cameroon, Nigeria and in Gabon, and the company was sold in 2009 to Sinopec for over $9.5 billion. At that point, I decided to set up my own oil company. So in 2010, I formed a company called Eland Oil & Gas with my partner, and we basically looked to acquire assets in Africa and raise capital for acquisition and development. To acquire an asset in Nigeria in '14, we raised about $180 million in London. We listed the company in London in 2012, and we brought that asset back on production 2014 and then subsequently, we had up to close to over 32,000 barrels a day, and the company was acquired in 2020 by Seplat for about $500 million including the acquisition of debt. So that was a very successful position for everyone involved. And then I was asked to come in and take over VAALCO. So I mean with a mandate on VAALCO to utilize the experience we have in Africa to derisk and grow the company on a portfolio basis and on a financial basis. And I think when we look at where we've been in the capital market space in New York, we have certainly improved. We've had multiples of our stock price in the last 3 years, we've taken the stock liquidity from relatively modest volumes of under 200,000 shares a day to over 1.3 million shares a day, and we have now got the company indexed in the Russell 3000. So it has that indexation volume as well. So that's my background.

Excellent. And how many shares of VAALCO do you hold?

I currently hold about 370,000, something in that region.

What would you consider to be your greatest achievements at VAALCO so far?

I think they're still to come. I think we're on year 3 of 5, considering a 5-, 6-year plan to take this company way beyond -- on a valuation basis, we're looking to be well north of $1 billion. So we're not there yet. We're valuing somewhere around about $650 million, $700 million. So we're -- the full achievement is, first of all, stabilization and making sure you have the right team around you because this is not one man's achievement. It's a team's achievement, the support from the Board and the shareholders. So getting the right team around you to make it happen. That's the first key achiever, I would say, because nothing can happen if we don't have the right people around you. Once you've got the right people around you in the right locations, then you start to hear about the opportunity. And then it's just about the idea of how do you -- which opportunities do you want to spend time pursuing or which ones are interesting but maybe not for us. So if you wait for the bank to tell you what the opportunities are, you're already behind. You got to have people on the ground that can get where these opportunities are. So building the team is probably the greatest achievement to date, but it's only on the platform to realistically grow further.

So you speak about team, how have you built the management team at VAALCO, both the top level and also on more country level?

Two ways. Obviously, we've been in the business a long time. So you build up a reasonably strong Rolodex of people who have the like-minded experience on what it takes to motivate and move and build a small E&P company. You can't be everywhere. So you have to be the expert in the areas you choose to be in. So where we -- what we do, do is make sure that the people we've worked with in the past, the people that we've admired in the past because we're in the same space, those are the people we try to bring into your team. And people who are -- I mean, I spend probably every second week on an airplane. So there has to be a commitment that you're going to be away from home doing things in Africa or over in Houston or up in wherever we need you to be. So having the ability to work on your own because you don't always have access to the team, different time jurisdictions. So nearly everyone in the team are self-starters. They have the capability to come forward, not with I have a problem, but here's a problem and here's the solutions I've already deployed. And that's key because with the time differences, it's not always possible to wait for someone else to give you the answer.

If we speak about the ownership of VAALCO, how is it divided between retail and institutional and from one of your larger shareholders?

So we're probably about 60% institutional there. We were about 35% institutional 3 years ago. So we've changed that balance slightly, about 2% is owned by management and the balance is retail. So about 38% retail or something like that. Our major holders are because of where we are now with the indexation would be the normal guys that are on the indexation side, the Vanguard, SFG, BlackRock, our 3 or 4 largest biggest shareholders. And the larger shareholders probably around 7% so we don't have any overly dominant shareholders.

How would you say -- would you say a VAALCO stands out compared to other E&Ps?

I think we never -- it's always difficult to give a comparison to someone else in the sector because every oil company faces different challenges based on the geographical positions they're in and the size of the company. We are pretty strong on financial stewardship. We are very strong on operational efficiency. That's where I think our 2 key strengths are, we're quite cautious with the money. And we're -- once we get into an operation and you saw that from the presentation to bring Etame up to 97% efficiency from downtime is just as an example of what we do and how our operational excellence can produce more oil. And that, again, was testament to our capability when we did in Egypt, the cutting cycle times by over 100% from 40 days down to 15 days is -- tells you how we can do things efficiently and with monitoring our Health and Safety record, we do think safely as well. So those are our 3 key strengths.

So you recently bought the Svenska Petroleum exploration for $40 million, a Swedish company or at least, yes, incorporated in Sweden. Could you give us the rationale for the acquisition?

Yes, it was a Swedish headquartered company. That wasn't the key driver. The key driver is always for us is what's in the rocks. So the rocks and the opportunity in say Cote d’'Ivoire was key. We saw an attractive opportunity that would be very complementary to our existing portfolio with the objective of getting all of our asset bases right into the mid-2030s from our production life. This one already had indications that had production life through 2038. So that was attractive. We recognized that it required investment. So -- and the opportunity for that investment dovetailed quite nicely with our other assets. So we weren't over straining the company in any one period if we went after this particular asset and the oxide potential later in life through in 2027, 2028, we found very excited. When you couple that with the assets being up for sale for some time, we had looked at it previously and we put a position towards the seller previously. And we have -- we're quite easy to deal with. We look at the opportunity. We put forward what we think is a fair offer that's accretive to the seller or the seller shareholders that is also accretive to our shareholders and what we're trying to do. We don't -- we do obviously negotiate. But we always have a cut-off line. So there are many positions that the market's never heard about that we do go after and it gets to the cutoff line and we just walk away because the value is just -- now we're not trying to do something or grow just for growth's sake. It has to be able to be complementary to the strategy and contributive and this particular opportunity fitted that very, very nicely and particularly at the price we finally negotiated, I think, was a very attractive position for our shareholders.

How is your relationship with the operator, Canadian Natural Resources?

Well, as what we'd have it CNR also they are based in Calgary, but their operation for Cote d'Ivoire is actually running out of Aberdeen. So Aberdeen being an oil center, but also being a small time, you find out that the people running CNR here, we've known them for a long time as we've all grown up together in the oil business. So I think the personal relationships are very strong. The corporate relationships are developing. And our focus on making this project a success is absolutely aligned. There's no disconnect there whatsoever. So it's actually quite an easy one for us to flow into, to be as contributable as we can with the experience we've already had without being courteous, we're not the operator, but we're here to help, and we're here to make sure our investment provides a great return.

How will the acquisition impact your G&A, which currently sits at about the $22 million to $25 million per annum?

Yes. I mean, G&A is a big focus. I mean, yes, it will impact. I think we've got [indiscernible] $2 million or $3 million of additional G&A to add to this. But that's it. There's no other significant costs in acquiring this operation. There were some synergistic costs that we managed to take out of the business because I think -- we think we're adding $2 million to $3 million a year on G&A. I think they were running closer to $12 million or $15 million. So when you look at consolidating G&A, as we looked in many of our acquisitions, I think my CFO is not here, but he would be telling you we've probably taken $15 million out of G&A through these acquisitions in the last 2 years when you couple them together. So it is an efficient acquisition that we've brought onboard. The only other thing we've done as we do in every part of our operation, as I mentioned to you earlier, that we've opened an office in Cote d’'Ivoire, we have a country manager India because whatever we are, whether we're operator or nonoperator, we want to have representation in the country. So that -- but that's a small additional cost also.

Yes, it's good that you point out that not all is -- far from all is cash, other than G&A. And so the production, you will be doing some FPSO maintenance and upgrades in 2025, 2026, drilling will resume at the Baobab field. What production should we expect in 2024 and in 2025 working interest to you?

Okay. So working interest, we provided guidance in that presentation. We're currently producing just around 5,000 barrels a day. We expect that to decline throughout this year. But so I think we're still guiding to around about 4,500 in that region for 2024. We haven't given guidance for 2025, and we won't do that until the end of the year. But it's well acknowledged that the FPSO goes off station in Q1 to be refurbished. So there's likely to be much contribution in production.

What's operating netback at $80 Brent ballpark?

Yes. Again, that's why we provide the presentation. The netbacks in Cote d’'Ivoire are better than many of our positions. So they're very strong. But -- and they do for a part of that blended netback that we presented earlier, and that's kind of where we keep it. It is a strong netback because the PSC terms are particularly attractive. But yes, we won't be quoting individual netbacks for the countries. We look at how they contribute and we look at what they can blended position for the company at these prices.

Could you give some overview or some color to the taxation and royalties that are paid in Cote d’'Ivoire?

Yes. It's very similar to Gabon really. I mean the tax and the royalties aren't worth mentioning they're very small. The tax system is paid through the profit oil. So when you get to the profit oil split, the barrels that are attributed to the government take care of your tax position. So similarly, you were looking at the example we provided for Etame, you can see how the PSCs work. The difference, I think, in this PSC, we have a much higher return on the invested capital because there's an uplift on invested capital. So when you look at a heavy CapEx year that we're going to have next year and building up that cost pool, not only are you building up a cost pool for the dollar you've invested, you've got that cost pool growing by that uplift as well. So by the time we come back in production in 2026, we've got substantial cost pool to recover. So there'll be a much higher cost oil positions awarded to the operator and the contractor group throughout '26 and into '27.

Excellent. And what could you -- what color could you add to the drilling program in 2026 in terms of the scope and the potential costs?

No, not very much. I mean, we know there's a drilling program planned. We know that's been -- the operator has been discussing that with the regulator and Cote d’'Ivoire have been mentioning it to us. But the detail of the plan is still well over a year away. So until we are ready to contract, the operator is ready to go and contract a rig, there's really a little -- not much we can say about that in terms of scope, how many wells in terms of production, in terms of cost. Obviously, we have our own estimates, but we'll wait to see when the plans of the operator are ready to communicate.

And you are now 21% of OML 145 and offshore field operated by Exxon in Nigeria, that's not in production. What's your plans with that? And do you know also what Exxon plan, if they plan on executing any development in the next couple of years?

Yes. We had a -- obviously we had a look at that when we were doing due diligence. It's a very deepwater block, Exxon are the operators, I think Chevron and Oando are our other partners in there. At the moment, the discoveries that are on the block, I don't think the partnership sees them as economic for development. So there's 2 key elements. One is the time frame that's left on that particular PSC and the cost of developing the limited resources that have been discovered. So for us, we don't see a lot of value or a lot of opportunity in that at the moment. But we're there. We're looking at it. I mean, times change, values change, cost position change. So you never see never when you have acreage. So this one does like it will be a challenging one to develop economically.

Could you just give us a quick overview of the Etame field oil quality, production, et cetera?

Yes. Currently, we're producing between 16,000 and 17,000 barrels a day gross, so about 9.5% working interest to us. It's really improved. We invested some $250 million in the field through drilling and reconfiguration back in 2022. And again, the recovery of those costs, that's fully recovered in just over a year with the cost pool. So that shows you how attractive the investment can be to get the production up. We've got 4 platforms there. And the main platform, Etame, we modified to also be a central processing facility. And I think as I've highlighted before, we're looking at the development program in 2025 and 2026 to take account of our opportunity to rehabilitate the Ebouri field, get that going. That's been shut in now for over 10 years, partly shut in for 10 years and also look at some other opportunities in step-out for Etame and also see if we can explore some exploration opportunities that we've identified on the block as well. So the block itself, the company has been in production since 2002. With this field, we've extracted more than 130 million barrels of oil. So it's been a great field, and we're looking to see with this drilling program can we take the longevity of that asset. It's currently at 2032, can we take it to the mid-2030s or beyond. And that's the objective of the drilling program.

The figure will prove up more reserves with a drilling program or will it more be drilling existing reserves? If you could add some color there.

Yes. Definitely, the plan is to prove up more reserves. Obviously, we've got some exploration prospects in the portfolio of the campaign. So should they be successful, that will all be new reserves. The rehabilitation of Ebouri. I mean, currently, those barrels are contingent resource. So again, if we can successfully export these, that will be anything from 7 million to 12 million or 14 million barrels coming into reserves. So the step-outs or exploitation of 2P or existing reserves, but there are a couple of triggers in the program to add substantial reserves into the Etame.

Will be in similar scope as the drilling program, we had 2021 and 2022?

It's a different scope. In '21 and '22, we were targeting the -- we were targeting different reservoirs. So we're looking at deeper targets in the Dentale or 2 of the wells, which were not as successful as we hoped they would be. So in this campaign, we've left Dentale alone. We're still looking at studies in the Dentale to see how best we can exploit those in the future, and we're focused on the main reservoirs that we know are very prolific. So that's where we're looking at for this campaign. So that's the only change. This campaign is also going to be probably a bit larger than the previous one. So we're looking potentially 5 to possibly 7 or 8 wells. And with that, we're giving the asset the best shot of the opportunities to get us to that mid-2030 target then.