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

Good day, and welcome to the VAALCO Energy 2025 Capital Markets Day. [Operator Instructions] Please note this event is also being recorded. I would now like to turn the conference over to Mr. George Maxwell, Chief Executive Officer. Please go ahead, sir.

Good morning, ladies and gentlemen, and welcome to VAALCO Energy's Capital Markets Day. It's a pleasure to communicate with you this morning. What we're going to do today is give you an overview of the significant portfolio that the company has built over the last 4 years. We'll also give you a bit of background as to where we've come from, the strategy we outlined back in 2021, the execution of that strategy and what that strategy is going to develop for us and deliver for us through 2025 to 2030. So who are we? Well, when we look at where VAALCO has come in the last 4 to 5 years, you can see from our 2024 results, we've significantly grown the company. Record breaking production in 2024, just under 25,000 barrels a day and record-breaking EBITDAX of just north of $300 million. When we look at the position and the growth that we've both inorganically and organically developed. You can see there that the proved reserves increased up to 45 million barrels of SEC in 1P and positioned with the 2P working interest into the CPR just shy of 100 million barrels. So this company has been around a long time. It's been established since -- in 1985 and listed for over 25 years in the New York Stock Exchange. Our focus and key focus has always been in Africa. And in 2020 -- sorry, in 2021, we had a single producing asset in Gabon and that asset continues to be one of our flagship assets for the company underlying both the production and the cash flow opportunities for the company. When we look at the -- what we've been attempting to do with the portfolio for the last 4 years, the key message is sustainability. The key message is delivering back to our shareholders, and we'll talk some about that later in the presentation. And also with my colleagues here will go into a bit of a deeper dive into the key geological attributes that we have in our portfolio, the key projects and operational aspects that we've been delivering in the last 4 years and those that we are planning to deliver in the next 5 years, And some of the financial highlights to demonstrate both the strength that the company has delivered and liquidities and its balance sheet position and how we're going to fund our operations going forward. So today, you see the speakers that are going to introduce to you some of the key attributes within the VAALCO portfolio. This team that we worked together for some time, has over 130 years of combined experience. When you look at what we do in Africa, many of us, in fact, all the members you see on the screen today have spent many years in Africa. We understand how to develop assets there. We understand the workings with our host communities, we understand the workings with our host governments. And that's one of the key things. These developments that we do in Africa, the opportunities that we exploit in Africa are significant partnerships that we put in place with our communities and our host governments. Those partnerships have proven extremely successful. And as we go through the presentation today, you'll start to see how we've expanded those into other countries with exactly the same strategy and exactly the same opportunities that we're creating across West Africa, North Africa, and also we have assets producing in Canada as well. So what we can try and leave you with today as the key takeaways, we have a very clear strategy. We've been consistent in our message through all of our quarterly earnings calls that we delivered to market and talk to our shareholders and whenever we have the opportunity to do that, we are very clear on our strategy. Our strategy has always been to look how we can derisk and diversify our portfolio, increase and stabilize our cash flow and create a platform that generates significant free cash flow for distributions back to shareholders and to allow us to continue to invest in our portfolio. We've been doing that now for 4 years. And as I mentioned at the start, if you see some of the key attributes and benefits to that strategy. We've won material growth opportunities not just inorganically but we've had significant development projects inside Gabon. We've mentioned a number of times how successful. Our 2022 field reconfiguration project has been, the replacement of the FPSO with an FSO, and a central processing facility on Etame. That has significantly reduced the OpEx position in Etame. It has significantly increased the production opportunity, and we continue to see reservoir benefits from that reduced back pressure system that we put in place. And in addition to that, we've also been renewing a lot of the facilities in Gabon and the Etame field, has significant ESG benefits from that also. This field, and I will talk about the rest of our portfolio as well, but this field continues to give. We have produced over 145 million barrels from this field to date, and we continue to see a strong future in Gabon in the Etame field. We've done all this while maintaining a strict financial discipline. The company has remained debt-free throughout this period, throughout the acquisitions, throughout the increase in development as we go through our portfolio. So when we look at the financial position of the company. And through this growth period, and this was a period of growing oil prices in the last 4 years. And I think we've demonstrated our financial execution and keeping the company in a very strong position whilst delivering back to our shareholders. And that's an important message because we have done this and delivered on the position that we committed to back in 2021. Our Board in 2021, when we went through this redirection of strategy, made a commitment that we had to diversify, and we had to protect the cash flows and the production. But at the same time, we have to recognize that we have to offer something different, and we have to offer a return to the shareholders. So what was our strategy back in 2021? Well, we came in to the company in '21 and looking to redirect VAALCO. The previous team had done a great job in Etame, securing the license extension, and that gave us a runway field of play that we could work with. So without that, without having that field to play with, without having that license extension, this redirection of strategy wouldn't have been possible. So that gave us the opportunity to go and exploit not just the existing asset, but the opportunities from the team and the experience, the team have, of seeing how we can step out into other areas of Africa. I mentioned earlier on the 2022 redevelopment of the field, and that has unlocked meaningful potential in Etame. It has given longevity to the asset well beyond the first extension period of 2028 and into the 2030s. As I mentioned, again, we've got a highly efficient and focused position on the balance sheet. We've continued to demonstrate that. We've continue to deliver in each and every quarter when we produce and announce our guidance. We've been either at or excess of guidance from 2022-point forward. And we have delivered and achieved significant shareholder returns. It's worth -- and I'll talk about that later in the presentation. So we've had 4 years of executing this strategy, through 2021 to 2025. And in that, you can see how we've approached the development of the strategy. The first thing was to get everything we have in order and in a shape where we can get confidence in the delivery of the forecast. And that was really working and focused on the Etame field. Within that opportunity, one of our partners was selling out in 2021 and the company took the advantage of securing that position and increasing its working interest to just under 60% of the field. In 2022, we completed the second phase of drilling, focusing on Gamba and Dentale opportunities. And as I mentioned, completed the field reconfiguration. We also went in and secured the company's first significant debt position through a reserve-based lending facility. That wasn't because the company desperately needed that reserve-based facility. But as we've always said, having debt available to the company as and when it may need it, we took that as an insurance option. And as of today, we never required to draw that particular facility throughout this growth period. And in 2021, the company and the Board confirmed the initiation of a dividend program. We paid the first dividends in 2022. And in 2022, when we completed the acquisition of TransGlobe. We committed to our shareholders to double that dividend. And that dividend has remained in place at that level since that period through into the first half of 2025. 2023 became period of consolidation and a period where we had to basically deploy the significant skills that we have inside the company for operating efficiencies and technical excellence in the assets that we had acquired. So we moved into Egypt and we started to look at the opportunities that presented themselves for enhanced drilling opportunities, drilling efficiencies and the production base that really gave VAALCO a step change in working interest production. We also, at that period, recognized that because the company had used some of its stock in order to go through this merger with TransGlobe that we have the opportunity to initiate a buyback program. And that commenced in early 2024 -- sorry, 2023 and completed in 2024. That was a $30 million program. And through that period of the buyback, we continued with the dividend program. In 2024, having stabilized the positions of the consolidated entities, starting to see significant benefits from a stabilized production, significant benefits from the efficiencies that I'll talk a little bit about in the next slide. We completed an acquisition in Cote d'Ivoire, a company called Svenska, that gave us a nonoperating working interest in the Baobab field, which is operated by CNR. Again, this fitted directly into our strategy. This particular field provides exactly what we were looking for, albeit required a significant investment, and that investment is taking place in 2025 and 2026. But it provides the longevity that we were looking for through to 2028 and further gives the derisking of production and cash flows to allow the company to flourish during the next 5 to 10 years. So when we look at what we've achieved in these work programs, you can see through this period, the increase that we've delivered through working interest reserves, the interest that we've delivered through working interest production when you look at where we started this journey at the beginning of 2021. So we're sitting here with a fivefold increase in production and a tenfold increase in reserves. And it's important to take note of these numbers that the company have achieved in the last 4-year period. One of the reasons we're not spending too much time looking back is because this is all about looking forward. But the track record is there, it's demonstrated, and it's there to deliver confidence in the execution of the point forward position through 2025 to 2029. When we look at the portfolio, it's not just about the inorganic activity. It's also about looking at what we have in our existing portfolio and how we maximize that benefit. So when we look at the existing portfolio and we look at the opportunities that reside within Etame and obviously the opportunity at the time within Equatorial Guinea, we then deploy the skills that we have inside the company to see how can we deliver something from the existing portfolio where we've had issues or had to address issues in the past. So the first key issue that you can see there is the transformational change from contingent resource to reserves, particularly around the Ebouri field. And just to put that into context, the Ebouri field, 90% of it shut down in 2014 due to hydrogen sulfide issues and it remained there with a project, how do we solve for Ebouri for the last 10 years. In 2022, we started to address that, see how can we solve it. The simplest solution was mechanical. However, that mechanical solution came at a price of in excess of $250 million, making it subeconomic in a lower oil price environment. So we tried other solutions. What are the other solutions we could try to deploy to get access to this resource and again, further enhance the opportunities that we have inside the field. And as we've delivered and communicated previously, we went through a chemical solution. We've tested that solution. And I'm pleased to say, as you see in the conversion from resource to reserves that, that solution is now being developed through 2025 with the redevelopment of the Ebouri field, and you'll see some of that coming through when we talk about our drilling program later in the presentation. But a significant success when we deploy our in-house skills and expertise to solve a significant problem that's been on the books for 10 years. We've also looked at the inorganic opportunities. So we mentioned the Sasol transaction. It was a very simple transaction. It was one that was inside our portfolio already. And really, we were the only credible buyer that could exploit that. A couple of points with the Sasol transaction. You can see some of the metrics there. They look very, very encouraging. But the more encouraging thing about that Sasol transaction is that it doesn't include the contingent resource from Ebouri. So we're buying that and we got that coming in free because we come up with the solution to convert these. When we look at the TransGlobe merger, again, a step change for VAALCO. We have doubled our production position in 2022. We trebled our 1P reserve position. But more importantly, we focused primarily on the operations. And by focusing on the operations, we achieved some very significant synergies. And one of those -- 1 or 2 of those we'll touch on again in the presentation. And then we look at the TransGlobe transaction. in 2024, an all cash deal. I think net, we've ended up paying somewhere north of $40 million for that position. It's very important to point out that by the end of 2024, we had recovered all of that cash that we paid out from cargoes of production. And in fact, in excess of $40-odd million by the time the Baobab field shut in, in 2025, January '25. We always recognize this was an investing opportunity. We always recognize that it was a low-cost entry. But for us, this was a free cost option and a significant asset and a long runway for us to exploit in conjunction with our partners. So -- this -- none of this is a surprise to us when we look at the capital program that you're going to see outlined in some more detail later in the presentation for 2025. But it's important to recognize how we got there and how we evaluated it. And as you can see, the metrics are very significant for us. We certainly have a very strong balance sheet when we look at comparison to our peers and our debt to EV value. Part of that strength comes not just from how we've completed our accretive acquisitions, but it's also about what we've done once we've acquired these opportunities. So we've done a lot of things within particularly the acquired assets in Egypt and Canada, and we're working very closely with our partners in Baobab collaboratively to successfully deliver that project as it's ongoing at the moment. You can see, particularly through Egypt and Canada, applying our knowledge, applying our technical efficiencies, working closely on the ground, we saved 1.6 years of drilling days. And you can see what difference that makes to the economics of the well from $600,000 a well down to just over $200,000 a well. That's $400,000 of cash that's staying inside the company and increasing our free cash flow just through efficient drilling operations and [indiscernible] supply chain management issues as well. And with that, you can see scale. You see scale, you see the adjusted EBITDA position growing. Part of that obviously is coming from a commodity price enhancement, but the majority is coming from efficiencies and scale of acquisition. And when we look at how that compares, what have we done with that extra cash? We haven't just went out and continued to buy. We've had 3 very accretive transactions, and we're very selective on what we buy. We've also followed through in our commitments that the Board made back in 2021 to deliver a return to shareholders. You can see from that table there that through the second half of 2025, the company is returning over $100 million to shareholders. That's a significant number for a number of reasons. This strategy was agreed and put in place with the Board in 2021. At the time we were putting the strategy in place, the market cap of this company was $140 million. And in 4 years, to return 75% of our market capitalization back to shareholders through execution of the strategy is a significant achievement. And that's been done purely by the expertise that we have, not just in my colleagues who we will be seeing today, but the whole team that we formed around us and the Board that supports the company's operations. So I'll talk a little bit about what you're going to see today. So we're going to talk about 2025. We're going to look at the projects in some detail and tell you how we're going to execute '25 through 2029. We're going to tell you and demonstrate to you that the company and its current position and the forecast we have in place through 2029, the company is fully funded in order to achieve these projects. We're also going to tell you that the majority of the production -- vast majority of the production that you see forecast in today's presentation is coming from reserves and resources. We do have exploration opportunities to further expand this portfolio, to further expand the production opportunities. And you saw us earlier, again, demonstrating our strategy in Q1 with the farm-in to CD-705 (sic) [ CI-705 ] in Cote d'Ivoire, a massive exploration block that Casey will give you some details on. But it follows the exact strategy that we follow. We go in, we find production, we create a footprint and then we look to how can we expand that footprint with our host governments and our partners. You've seen us do it also in Gabon. In Gabon with our partners, we've entered into 2 exploration blocks that straddle between Etame and Dussafu, again, increasing our footprint. And you'll hear some of what we're doing also with increased exploration opportunities in the Western Desert in Egypt. The strategy is clear, it's demonstrable and you can see the benefits of how we execute it coming through in the financial performance of the company. When we look into '25, it is a big program here, but we're also spinning the drill bit. We're drilling in Gabon. We're drilling in Egypt. We recently reduced the drilling program in Canada just because of pricing, but that will continue to be under review. In '26, we see Cote d'Ivoire coming back on stream, and we see drilling beginning in Côte d'Ivoire in Baobab. We look at further Baobab -- sorry, further Cote d'Ivoire development with Kossipo. And then into 2027, you can see we continue with the same theme that I mentioned at the start of this, we have a runway, a freeway that we can exploit for a number of years and a production profile, we only see it going through to 2030, but that profile goes right the way through to 2038. And with that, I'll pass this over to Casey Donohue, our EVP of Subsurface and Business Development. Thank you. Please.

Good morning, good afternoon. I'm Casey Donohue, as George mentioned, EVP of Technical and Business Development. I've got the distinct pleasure this morning of being able to lead you through a bit more detail in our portfolio. This, of course, underpins a lot of the great performance that George just described over the past few years and provides the future of the company that we're very excited about. Over the past 4 or 5 years, VAALCO has built a diverse and African-based portfolio, building off of our legacy Gabon position where we currently produce about 8,700 barrels of oil working interest per day. We've got a large production base in Egypt, largely in the Eastern Desert, but with some Western Desert interest as well, where we're producing greater than 10,000 barrels of oil equivalent per day there, 100% oil. In Canada, we've got a small production base, as George mentioned, 2,800 barrels a day equivalent working interest there, 70% liquids. Cote d'Ivoire, where we see a lot of potential upside and true materiality. We're currently shutting on production while we're refurbishing the FPSO, but large resource base there that we're excited about bringing back online again later next year. And then in Equatorial Guinea, we hold a block there with a couple of discoveries on it and a lot of upside potential. Up to 23 million barrels of 2P reserves just in the Venus discovery alone. We are currently in a FEED process assessment right now with the planned FID later this year on the development for the Venus field, which could produce 20,000 barrels of oil per day. So I'm going to step through each of the assets here in a bit more detail. Starting in Gabon. VAALCO, of course, has been producing in Gabon in the Etame area for more than 22 years. Our current position is spread across 3 blocks. The key production block, of course, is the Etame Marin block. This is a single continuous block now after the 2021 renegotiation and combination of those PSCs into a single PSC. VAALCO is an operator of that combined block with a 58.8% interest. Additionally, we've recently added 2 large exploration blocks, the Niosi Marin, which surrounds the Etame block in the northern part of your map there as well as the Guduma Marin, which surrounds the Dussafu Marin operated by BWE. Both of these exploration blocks are operated by our partner, BWE and VAALCO has a 37.5% working interest in those blocks. Gabon has and continues to represent a strong production base for VAALCO with production from those 5 fields within the Etame Marin, largely from the Gamba formation. We've extracted 140 million plus, 145 million barrels to date there as well as continuing to produce around 15,000 barrels per day gross. We've got substantial near-term production growth plans for Gabon. Our upcoming Phase III development campaign, which will realize first oil at the end of this year is expected to target 10 million barrels of 2P with incremental IP increases of up to 16,000 barrels of oil equivalent per day. And then the upside opportunities that we see on both the Niosi and Guduma blocks are substantial from a trend exploration standpoint. I'll talk more about that in a few minutes as well as potential resource adds in the Etame fields through further development. Just to drill down a little deeper, so to speak, in the subsurface of Gabon. As George alluded to, we've put a lot of effort into building technical teams that are really first class. And I think this is a good example from the geoscience side of our technical folks getting into older areas and really building out new models. Just to kind of back up a little bit. In this part of the world, the main reservoir systems here are in the lower part of the Cretaceous, the Barremian Dentale formation and the Aptian Gamba. The Dentale shown in the lower right box model there, this is a newly reinterpreted depositional stratigraphic model for the Dentale, which involves north to south deposition within the rift fabric here of sands that [indiscernible] into a Lacustrine mud interfinger. The stratigraphy of Dentale has always been quite complex with a fair amount of sand shale cyclicity. And that variability within the Dentale has made it somewhat difficult to exploit. So a newly predictive model that we're putting in place now, we hope will unlock further productivity in that unit. Of course, the Dentale is usually the big kid on the block here from a reservoir standpoint. You can see a very different depositional model for the Gamba, which sits just above the Dentale in the upper right box, showing east to west deposition across that rift fabric and blanketing those underlying structures. The little diagram in the bottom left shows that geometry of the tilted Dentale underneath the unconformity overlaying by that more sheep-like Gamba deposition fall beneath the regional Ezanga salt. Specifically on the Phase II program, we expect to spud on this latest program in September of this year. We've got the rig booked for 5 firm and 5 contingent well slots on a largely Gamba-focused program. Currently, planned is an infill well in Ebouri to the north, followed by 2 workovers. I'll talk a little more about the concept there in just a minute. 2 workovers -- sorry, [ at Ebouri ] and Etame, also an infill well planned there in sort of the middle of your screen with 2 pilot holes, an infill well planned for Southeast Etame and a step-out exploration well planned for the West Etame potential pool there, which is just to the west of the main Etame producing field. The program carries 2P CPR reserves of around 8.3 million barrels with incremental unrisked IP of about 16,000 barrels of oil equivalent per day. George mentioned the crude sweetening project that we've piloted and have been beginning to use in Ebouri. Just to give a little bit of history on the Ebouri field here, discovered in the early 2000s, brought online in 2009. That initial oil production showed little or no H2S. By 2012, both the 3H and 4H wells started showing significant H2S and were shut in for over a decade. The 2H well continued to produce at treatable levels. As George mentioned, we now have a new low-cost approach to chemically sweeten and treat the sour crude, both downhole as well as uphole. As part of the Phase 3 drilling -- sorry, the Phase 5 drilling here -- Phase 3 drilling. We've got workovers planned in Ebouri on both the 2H and on the 4H well, which we would be able to install this robust downhole injection to more economically treat the H2S levels and unlock up to 4 million barrels of additional reserves at Ebouri. Looking a little further out to the right here, potential Phase 4 drilling campaign. This will be something in '28 or '29. We continue to see potential in drilling infill wells, both in Ebouri and Etame as well as pursuing other plays like the Dentale subcrop well, for example, shown in the upper right-hand diagram there, you see that again, that tilting dipping Dentale underneath the unconformity. There's also Dentale oil potentially in the North Tchibala D9 reservoir. Outside of Etame, as part of a potential Phase 4 drilling program, we also see targeting prospective resource on potentially the Niosi block. Will talk more about that exploration block in a second. We got a prospect there called Elili that we're very excited about as well as potential step-out exploration in Northeast Avouma, which is in the southern part of the main producing area in the Etame. Focused on the exploration blocks here just a little bit. As mentioned, the Niosi and Guduma blocks, are 2 very large blocks surrounding these highly productive fields, combined area of about 5,000 square kilometers. Again reservoirs here, still the Gamba and Dentale. I won't go through all the details of the licenses for the 2 blocks there shown in the table, but note that the commitments on the 2 blocks are fairly different. On the Niosi Marin, we've got a seismic acquisition commitment as well as one well in the first 5 years of exploration. On the Guduma block, we just have geologic and geophysical studies over the first 3 years. Note just from a trendology standpoint, we're quite excited about the locations of these 2 blocks. The Dussafu discoveries and fields to the south -- most recently, the Bourdon discovery that BWE made bode well for trend exploration north into the Niosi block as well as extending the Etame trend down into the Guduma block as well. One page here on the Elili prospect that I alluded to earlier. We see this as an example of potential prospect types that we expect to see more of once we've got more seismic data across the block, and we dig into some of the existing data, some more. The Elili prospect, we see is a very significant tilted faulted floorway in the Dentale, which has overlying Gamba floorway. If you look at the map at the bottom left, you can see there's a well, the GBO-2X well there that was drilled just slightly outward and down dip to this prospect. That well had 60 meters of good quality sands in it, had shows. So very encouraging. We're drilling up dip to pay potentially. The key risks here that we see could be around trap, but also reservoir continuity, and we wind up with an overall geologic chance of success of 44%. You can see a very large P10 area there indicated that generates quite large in-place volumes that you see in the chart in the upper right, 127 million barrels on a P50 basis with potential recoverable resource there in the high 30s, millions of barrels. Also note that the water depths here are quite shallow. This is only 120 meters of water, even though we're quite a ways further outboard from Etame. seismic line in the bottom is just a nice view through from the Southwest to the Northeast through that initial GBO-2X well, that you see there across the prospect with the arrow, you can see that a nice role in the Dentale marker bed there in red and the draping Gamba section above the top. Again, we think this is representative of play types and prospect types that we could exploit across these blocks. Okay. Pivoting to Côte d'Ivoire. This is a very exciting opportunity for VAALCO, where we see substantial growth potential, favorable investment terms. It's a very cash-generative material asset base. We'll step through the details in our position here, but essentially, VAALCO is in 2 blocks. Currently, Cote d'Ivoire, we're in the CI-40 block as a non-op partner operated by CNR, as George mentioned earlier, as well as the block off to the left there on that map, a large empty block on this map, which is the block 705, more on those individual blocks shortly. History here is of continued development and optimization in Baobab. It's become a very efficient, high uptime producing facility. As mentioned, the FPSO is currently offline and being refurbished. But we've got exciting plans about when that comes back online just coming soon. In fact, our near-term production growth there is being driven largely by a Phase 5 drilling program. We're fairly mature in the development of that program at this point with the rig contract award plans imminently and all other major contracts are already in hand. The Phase 5 drilling program, which will commence next year, targets reserves of 33 million barrels with production peaking around 27,000 barrels of oil per day. Additional growth beyond that. Also on block, there's another discovery, Kossipo. Again, I'll dig into that in a little more detail in a few moments, which also carries a very large contingent resource of 90 million barrels. This could be a potential tieback to Baobab. All in all, this really represents a fairly rapid expansion for VAALCO into Cote d'Ivoire. Note that we entered the country in Cote d'Ivoire in the second quarter of '24 through the Svenska acquisition in Block CI-40. And a few months later, earlier this year in '25, we acquired the 70% operating interest in Block 705. And we're continuing to evaluate other opportunities within country. As promised, a little deeper dive on each of these 2 blocks in the CI-40, the producing asset here is the Baobab field discovered in 2001, operated by CNR. VAALCO holds a 27.4% interest non-op in that field along with Petroci. PSC license extends out to 2038. This is a very low OpEx, high cash generative asset with material reserves, which we've started to allude to already. An interesting aspect of the field so far is that we see a pretty low recovery factor. So far, only maybe 14%, given that this is about 1 billion barrel discovery in place. We see substantial potential over time to increase this recovery to as high as potentially 30% with increased development. Also on block, you can see in the map there, just to the right of the Baobab field is the Kossipo discovery. I have another quick slide on that in just a few minutes. But again, very large contingent resource base there, about 90 million barrels. On the production history of Baobab. CNR in their fine operatorship of this field has done a great job of developing through the first 4 development phases here, a lot of resource in the field with 145 million barrels produced to date. You can see on the production chart at the bottom from 2005 on the left out to 2038 on the right, the effect of each of these development programs, Phase 1 through to where we are today, which is the FPSO refurbishment. But you can see the response that we expect with the next year's Phase 5 drilling program with IPs 27,000 barrel range and then the potential Phase 6 program as well into 2030 and 2031, where you can see IPs as high as 37,000 barrels a day. Specifically on the Phase 5 program here, Phase 5 drilling is targeting 2P reserves of 33 million barrels oil equivalent gross or about 9 million working interest barrels. It consists of 4 producers, 3 water injectors. The pads are shown on the map on the right there. We're utilizing 4D seismic that was acquired in 2023 to help land and optimize well locations here. As mentioned, the contracting for this phase of development is in a very advanced stage at this point, and we're expecting first oil here by the fourth quarter of 2026 from this program. On Kossipo, as mentioned, this was discovered in the early 2000s with the 1X well and then later appraised and confirmed with the 2019 2A well, found high-quality 35 API oil here. Imaging -- seismic imaging has always been a bit of a struggle around Kossipo and to try to mitigate that, there was reprocessing done in 2014 on some of the 3D seismic, which did improve imaging substantially, but in preparation for future production, an OBN survey was acquired in 2024, which will serve as a 4D baseline as well as improved imaging for field development planning. Plan here is for the development to be a subsea tieback to the Baobab FPSO with first oil for this Phase 1 planned for 2030. Again, looking a little bit further forward yet to a potential Baobab Phase 6. This would target 2C resources of 71.5 million barrels. This is what would allow us to increase that recovery factor here from the current 14% up as high as we think potentially 30%. Scope for this program would be 3 production wells, 1 water injection well, subject to modification after our Phase 5 drilling, of course. First oil on this program would be expected in 2031. And then finally, as promised, our new exploration block in country, CI -705. It's an exciting opportunity for VAALCO. This is an operated block that we farmed into with ICE and our other partner, Petroci, very large block, 2,300 square kilometers, water depth essentially from the beach out to 2,500 meters of water depth. Only 3 wells to date have been drilled on this block. And it sits in a very proven hydrocarbon system within the Tano Cote d'Ivoire Basin for both oil and gas. We see in our earliest works here, we see a substantial number of leads and prospects we've identified and a high level of play diversity. And I'd say all 3 of the big play types across the Tano Cote d'Ivoire Basin that have been making big news headlines over the past few years have the potential on this block. That's plays like the Albian sandstone in the [indiscernible] section, like seen at Baoba/Kossipo and Foxtrot, potential for the late Albian carbonate buildups like what's been developed in the Baleine field a little further east as well as upper Cretaceous deepwater turbidite sands proven in fields like Paon and Calao quite close by to the east. Our work plan currently in '25 and '26 is seismic and geologic studies, essentially prospecting with potential exploration drilling if we see substantial prospectivity in '27 or '28. Okay. Going onshore in North Africa. Egypt is a very strong production base where we see a growth for VAALCO. The name of the game in Egypt has been production optimization and facilities, CapEx minimalization. For example, since our entry in 2022 here, VAALCO has consistently grown production through these low-cost drilling programs and recompletion campaigns. Current production is at about 11,000 barrels of oil per day right now. We're pursuing all behind pipe opportunities, looking at deeper targets, optimizing and enhancing secondary and tertiary recovery. The name of the game is operational excellence here. Thor will go into a little bit more around the incredible operational work that's been done by the asset in reducing drilling times and hookup pace. We're also applying new technology to enhance our operational efficiencies there with things like well surveillance and diagnostics, all while improving our ESG metrics and maintaining a strong safety culture. We see upside opportunities here. George mentioned some of the Western Desert assets that we have in the Abu Gharadig Basin, South Ghazalat as well as exploration potential in Northwest Gharib, the northern part of the Eastern Desert that you see on the map just here. In the Eastern Desert, a lot of our work here is field -- brownfield development. We're really trying to enhance performance and unlock additional potential. The tactics are largely utilizing improved well designs, newer technology to drill these multi-targeted deviated wells, more on that in a second. We're, of course, evaluating any other deep targets that are in or around existing fields to expand that production base and utilizing new interpretation and new techniques and technology to discover some of these new reservoirs. A good example here is from the K-Field. There's a cross-section on the right there shown from the Southwest to Northeast through part of the K-Field. Essentially here, a series of vertical wells help to prove up some of the deeper targets like the ASL-G and pay in the deeper Bakr sand. This led to drilling the K-88 well in 2025. You can see in green kind of the middle of your diagram. This is a deviated multi-target well, kind of a fault chaser geometry, which penetrates 7 individual reservoirs. This well reinforced that the ASL-G has a promising horizon and had excellent IP rates testing over 400 barrels per day in February. With regard to upside, in the Eastern Desert and Northwest Gharib, as mentioned, new structural mapping here, new techniques in seismic mapping have yielded some newly mapped fault segments here. You see the blue, the green and the red compartments there. These are new undrilled compartments that each will get an exploration well to test and potential appraisal programs and success. In the Western Desert on the left, South Ghazalat, Abu Gharadig Basin, we're employing not only just new seismic reinterpretation, but using some novel seismic tools like spectral decomposition to really nail down reservoir presence, quality and geometries. Here, we see identified upside of the SGZ-7B structure on the right-hand side of your map there. And the plan is to drill an appraisal well there to test that. Pivoting back to West Africa. Equatorial Guinea of VAALCO's position there is a block called Block P, which is about 30 kilometers from the City of Bata. You can see your inside map there. This block is firmly in the Rio Muni Basin, a proven and highly productive basin, but fairly under-explored. Those of you may know the Ceiba and Okume fields of Kosmos, Trident and others. They're just to the south of this Block P here. VAALCO is the operator of this block, holds a 60% interest with a 96% economic interest from first oil until carry is repaid. There are 2 discoveries on the block, the Venus and Europa discoveries shown there in green and a number of other prospects shown in the gray blobs there on the map. More on the discoveries in just a minute. From a prospectivity standpoint, note that we've got prospects in a variety of different play types here post-rift through the pre-rift section as well. We currently have approval for a plan of development for the Venus field, and we're working on our FEED studies now to hopefully get to FID by year-end with a first oil planned by end 2028. Just to dig in a little deeper on Venus. It's a very interesting field here discovered in 2005. It's since been appraised with 2 other wells. You can see in the well cross-section at the bottom, a very useful appraisal program. If you look on the right of that diagram, you'll see the initial discovery well, which drilled in the oil leg of the green sand. The first appraisal well then drilled down dip, the sidetrack 2 and found the oil water contact. The third well drilled into the water leg. So we've got a very well-constrained fluid system here. Great rock properties, high porosity and permeability, expected high recovery factors of 40% to 50% and very good quality oils. The development plan here would be 2 producing wells, 10,000 barrels per day per well, so 20,000 barrel a day type IP with water injection plan to commence at start-up, mid-case ultimate recoverable of as much as 27 million barrels of oil. Just to take one more second to look at the subsurface a little more here. If you look at the map in the upper right of the top green sand, this is extracted from our geocellular model. You see a very nice kind of consistent and simple fan-shaped geometry. Within that, you see a few small faults, but largely, this is a very continuous geobody. So again, we expect good sweep and good connectivity. On the seismic line you see there, you see the vertical discovery well as well as the sidetrack 2 appraisal well. You can kind of see an amplitude change just with the dip changes there. We think that's actually an AVO response to the oil water contact. So again, very good constraint on the geometries at the in-place volumes here. Pivoting onshore and quite a ways way over to Canada. VAALCO's production position in Canada is in the proven Cardium formation here in Alberta, in the Western Canadian Sedimentary Basin. What we're doing a little differently here is using newer completions techniques to exploit faces of the Cardium in this case, the upper shore face, which was largely underdeveloped as opposed to the deeper bars, which is sort of the classical Cardium. This provides for VAALCO production -- a stable production base of around 2,800 barrels of oil equivalent per day working interest, which can be maintained with a pretty limited CapEx. We see significant drilling inventory here of 48 gross long reach lateral wells, most of those drillable from existing pad sites. And our position is a combination of crown and freehold lands, most of which are 100% working interest to VAALCO. Little bit here, most significantly is on this concept of pooling together freehold and crown land. There's a substantial economic benefit to drilling longer lateral wells like we see in a lot of basins around the world targeting tight reservoirs these days. One restriction in Canada has been if you've got checkerboarded crown and freehold land, it's hard to drill these longer lateral wells. So we've been one of the earliest companies to adopt the concept of implementing pooling of freehold, crown and freehold land here. So we can drill these almost 3-mile lateral wells across this checkerboarded land position and really get the benefit of those longer laterals. And with that, also, thank you, and I hand off to Thor.

Thanks, Casey. Good morning, good afternoon, and welcome. My name is Thor Pruckl. I look after the [ HSAC ] drilling, production, operations, supply chain for VAALCO Energy on a global basis. Extremely proud to see where we've come in the last 4 years. And I think when I finish, you'll understand the movement and the transformational growth that we're seeing going forward. It truly is a great program. A couple of points here. The projects that I'm going to show you are not projects that are hypothetical. They're not speculative. They're actually projects that are in process as we speak. People are working on them, money is being spent on them. Resources are being expended. Equipment is being purchased and moved. So these projects are in the queue. So I guess with that, let me just walk you through where we're going here. Just a quick summation of our significant projects. And there is a lot of smaller projects that I'm not going to talk about here that fall underneath all of these. But these are sort of our significant projects that we see happening over the next years. A significant amount of CapEx that's going into these. And what I can tell you is that we have the people, the skill sets, the knowledge and the track record to execute these projects. These aren't something different or something new to the projects that we've worked on in the past. We have an excellent technical team, excellent drilling team that is able to execute these projects. This slide is just a bit of a snapshot, and it gives you a bit of an overview of what these projects look like in the queue going forward. You can see there's a significant CapEx component to these. And the way they're staged is to ensure that we maintain fiscal discipline throughout the whole process. And I'll get into a bit more on each one project. So the first project off the queue here in 2025 is the Baobab MV-10 refurbishment. So this is the FPSO that was on station. It went off station on January 31, 2025. It's going -- it was under tow until a couple of days ago. It's now actually in Dubai, birthed at dry dock and will be there until January. Extensive fabrication and fabric maintenance on that, replacement of the swivel, the turret assembly, there's accommodation upgrades, control system updating, process piping replacements, and we expect that vessel to roll back to the field for Q2, Q3, May startup essentially of oil. This is a time line with a bit more detail. The dry dock is executed under an EPC with MODEC. We actually have VAALCO staff embedded in this project. The shipyard that's doing the work is Dubai Drydocks, well known to us. Significant -- 3 significant pieces of scope is the turret bearing that I mentioned, hull steel, which is fabric maintenance and tank coating, obviously. So the milestones this far, production shutdown happened on time, disconnect happened on time, the FPSO tow commenced a couple of days ahead of schedule and the FPSO arrived roughly 10 days ahead of schedule as well. The next sort of departure date or the next key date is the departure date, which is happening in January 2026. It will then commence tow back to the field, reconnect in early May with production in May as well. So this project is well underway. The vessel currently is sitting where it sits, births 7 and 8 in Dubai. It will sit there for probably 2 or 3 weeks, and then it will go into dry dock after that. Just a quick snapshot of the trip the vessel took. So it covered over 8,000 miles round the Cape up to the West -- down the West Coast up the east side of Africa until it got to Dubai. So a significant achievement there on time, actually slightly ahead of time. So well done. And that's why I was saying these projects are not something that's happening down the road. These are underway as we speak. We get into the Phase 5 drilling project. So this is a project that takes 4 producers and 3 water injectors. So the wells are tying back to existing manifolds and pipelines. The infrastructure plan looks at the drill centers north and south. It's a very similar tie-in process and production process to the previous campaign. So no real deviations to that. Long lead items, Christmas trees, subsea hardware, wellheads, jumpers, all that stuff is either on order or in the queue already or in some cases, it's actually on its way. What we're also doing is that the subsea risers for these new wells going into the FPSO are being installed at the completion of the MV-10 project. So there's a segment of work that's starting in February of 2026, where we start pulling new risers in and getting ready for the vessel arrival. At that point, we will also pull in the risers for these new wells. Drilling contract, we expect to be awarded shortly. Rig mobilization we expect in Q2 2026, first oil in late '26, and we expect completion in second quarter '27. Moving to the Gabon drilling campaigns. So this is Phase 3, 5 firm wells, 5 options. I think Casey mentioned that already. And it's really a further development of Ebouri. We're completing 2 existing wells there. Both those wells, Ebouri 2H and 4H are online as we speak. The way the chemical program works is that you have 2 types of chemical and 2 types -- or 2 areas of injection, one is surface injection and one is downhole injection. We prefer the downhole injection because you have more time that the chemical is bonding with the oil on the way up. So you inject less chemical, which becomes more effective and more efficient. If you inject at the top side, you have less resonance time, so you have to inject more chemical. So at the same time, we're doing the workovers, we'll be putting a downhole injection line in for 4H, which doesn't have one now and replacing the one on 2H. It's important to note that the 4H ESPs were essentially put in, in 2009, I believe, or 2011. They were not in operation for over 10 years, and we were able to restart those, and they're running as we speak. So that's great news. In addition to that, we've got wells planned at Etame and potentially a gas supply well that we're still reviewing is what's in that contract as well. The rig we're using here is the Borr Norve, same rig we used the last time and the same rig that was used by BW in their last program. That rig is now in Equatorial Guinea drilling for Marathon, Conacco and will return to us. We expect it right around the beginning of September. So the contract has been signed. The mobilization we expect in Q3, sort of mid-August. We expect to commence drilling in September with first oil on the first well hitting us in Q4 of 2025. And then we expect to be completed, the drilling campaign in Q3 2026. So that's about a 300-day drilling window is what we're planning for there. You can actually see in that picture to the side a platform, which are not small platforms and then the rig sitting over top of that platform. So you can get an idea of the scale of the hardware we're dealing with here. Equatorial Guinea is an interesting project. And I think as the industry moves forward, there will be more and more of these types of somewhat stranded resources out there, where they're not a 500 million or 1 billion barrel oil field, but there's value to unlock these and produce them. And I think our technical team through our sort of diverse backgrounds and experience is ideally positioned to take advantage of these types of opportunities. If you were to take this and say we're going to put an FPSO in place, it would never work. It's just -- there's just not enough there. But there is enough there to make money. And I think with our FEED and how we're approaching this and the people we have working on it, there's a definite economic opportunity in front of us. We have a POD that was approved by the government. We're going through the FEED now, and we expect that FED to be successful later this year. And hopefully, we'll have this underway. Production is approximately 10,000 barrels a day. We expect to peak. There's 2 wells, so 20,000 barrels a day with water injection. So the project looks for 3 wells in total. So yes, pretty excited about this one. Egypt is an interesting one in the sense that this is a field that's been around a long time, has had numerous operators move through it. And I think what happens is a lot of times, people don't see the forest for the trees in front of them. They don't see the entire picture. They look at their little box, their little window, and they don't see the potential some of these assets have. When we moved in, in 2022, we brought in a fresh look, a fresh set of people. They've looked at that. And within a couple of years, we've done some amazing things there. We've moved from 38 days down to 13 days. That's a 66% reduction in drilling days. I mean that's a huge amount, right? And all it takes is people looking at it, scrutinizing it and following through with what's needed. If you look at the hookup, so the hookup is essentially the time it takes from a rig departure and the completions departure to when you can actually bring that well on. That's a 70% reduction. It's a huge impact to the business. It's a huge impact to the cost because you're paying most of these contractors on day rates. So significant value there. Our reliability has increased significantly. The folks over there have done an amazing job in power generation, water handling, pipeline replacements. We've gone through a huge changeover in solid steel lines that we're quoting to plastic lines, reducing the environmental issues that we saw there. So excellent results here. And what they've also done is they've done all this and they're at -- I'm going to say, 4.3 million man hours today without an LTI. In 2022, our LTIs there were 1 a month. So significant improvements here. Too bit of a chat about ESG. We come from, I guess, a point or a standpoint where we look at ESG is something we try and engineer out. It's not something that we sort of do separately. Every time we build a project, every time we look at a project, we look at how we could engineer the emissions and environmental footprint, whether that's clustering gensets, whether that's installing [ lank ] units. In Canada, for instance, there was a big push on in the last year, 2023 to 2024, converting venting and using air compressors or gas-driven compressors to electric compressors, all reducing emissions. The other thing that we've done is we've really tightened up over the entire company, how we measure, and we continue to do that on a daily, monthly basis now. And we see more and more opportunity as we get better and better at measuring as to how we can achieve those lower emissions. Will we ever get to net zero? We're an oil company? Probably not, but we will make continuous reductions as we go forward. We launched an HSEC handbook that covers off our entire company's operations, both in English, Spanish, French and Arabic. It really sets the baseline and the standard for how we expect our operations to be managed on environmental agency side of the business. It sets the basement, I guess. And each area then layers on its additional criteria over top of that. So obviously, you'll see if you're offshore, there's a whole different set of risks versus onshore Egypt versus onshore Canada. So it sets the baseline, everything else goes above that. So it allows each area to actually do that independently. We've updated our observation system. So safety observation system is something that we use as a predictor of issues. So we look at that and go if you have a concern, if there's a concern raised or you see something, you report it, we look at it and hopefully doing that and it's a proven method. And we see that in Egypt, for instance, where the joint venture there has embraced that and has gone on with that and the results are there, right? We went from once a month to 4 million man hours this year. So that's happened. Code of conduct likewise on the supply chain side, delivering our commitment to equality inclusion, done a lot of work on that as well. So yes, it's an exciting time. It's been busy, and it will continue to stay busy. Thank you.

Thank you, Thor good morning, good afternoon, everyone. My name is Ron Bain, I'm the Chief Financial Officer of VAALCO. And I'll step through the finance highlights of this Capital Markets Day presentation. So as you heard from the team, our team have shown you already that we've got a weighted portfolio of production assets that should throw off considerable cash over the next coming years, certainly through 2030 and way beyond. And I'm going to look at that in a couple of slides' time, and I'm going to concentrate in a very small period from 2026 through to 2030. What I'm going to demonstrate in that time period in that 4-year period is that we can return through free cash flow to equity holders our market cap at very modest commodity prices. And we'll do that with a fully funded development campaign, all of those projects, all of those developments of the guys I spoke about today. We can do that from internally generated cash flows and from the facilities that we have in place today, maintaining a peer-leading balance sheet strength. And I'll go through and show that we have a capital allocation optionality all the way through. And we've done that from 2021 through 2024, and we'll touch on some of those parts, too. And finally, I'll go through our hedging philosophy. This chart basically addresses our valuation. So if we look at the end of 2024, this is a third party or competent persons valuation of our reserves as at the end of the last fiscal year. And what it demonstrates and shows to you is when we value these assets at PV-10 basis, with the long-term Brent pricing at $7 per barrel, if you look at even just our proved reserves, our proved developed reserves and our cash on the balance sheet as at that point in time, it was higher than our current market capital. So just at a 1P net asset value position, we're actually -- our balance sheet had more strength than that. As we move to the right and we add in our probable reserves, you can see that, that takes up to $7.38 a share. And at present pricing, effectively, that's a 50% discount to our 2P reserves position. Again, moving further to the right, if we add in or possible and get to 3P net asset value position, it's $10.50 a share. That's 1/3 of what we're currently trading at. And that's without any reserves upgrades, any exploration success or indeed any accretive M&A. So we feel that we are, at this point in time, trading at a material discount to our valuation. Before I get into the numbers, let me talk around how we get to the free cash flow numbers that you'll see and how we went through this. So first of all, let's look at our capital investments and how we rank them. And I will maybe step back a little bit between 2021 to 2024. We've done this both with organic and nonorganic growth. Part of the margin improvement that George showed earlier where our EBITDA margins have improved considerably over that time period, it comes from the very highly generative PSCs in Africa. Our West African PSCs have got great contractual terms. So for instance, both our Equatorial Guinea or Gabon and even our CDI PSCs all have cost ups available to us, typically 70% to 80% cost ups. And that allows us to recover through cost oil our OpEx or our capital invested up into that point. And indeed, in lower commodity prices, we can carry forward those balances into the next period. And that generally gives you extremely good and low breakeven's valuations for those assets in each of those locations. And that helps on our margins, obviously. We've got PSC stabilization clauses to protect us to in each of these areas. As you can see from the development projects that we're looking at with that growth not only in production, but in reserves, that continues to drive down the overall breakeven cost and operating cost of each of these areas. But we've been successful in the past, 2021 to 2022, we changed out the FPSO in Gabon. That reduced costs. That was a conscious decision to take cost out of the business and reduce our production costs, and we continue to focus on that. In our capital investment ranking here, you will see that we have got a significant cash outflow in CDI in 2025 and 2026. I'd like to point out in that PSC for every $1 that we spend on capital, we get $1.25 back in cost. So when we're back in production. That's a 25% return on every dollar we spend in this investment project. So as I say, each of the projects that we've looked at in the past today for 2026 through to 2030 are either internally generating the funds to be able to do that or we're looking at utilizing the facilities that we have in place. And at the end of 2024, we exited the year with over $84 million in cash. Now we had a pristine balance sheet at the end of 2024, but we still went out there and we quickly closed our reserve-based lending facility with our group of South African bank lenders. And that facility has a commitment and borrowing base of $190 million and can expand up to $300 million. Now as we know, CDI is going to take investment in 2025 and 2026 when it's out of production. And that's what that facility underpins. And it underpins not only this project, but the projects going forward that we have within our Capital Markets Day presentation. All doing this, as we'll come to it in a couple of slides with peer-leading debt ratios. Now even in bear market commodity pricing, you've seen us take action on capital allocation. We've taken capital. And we'll continue to do that, obviously reacting to the environment. We're not again pushing projects to the right and waiting for commodity prices to pick back up if it makes sense, and we've shown and we've demonstrated and we've done that. Now each of these projects will throw off cash and we'll come to that. What do we then do with the cash? As George has mentioned before, we implemented our dividend at the end of 2021, paid the first dividend out in 2022. But when we acquired TransGlobe in October '22 effectively scaled up, double the size of the business, we made sure that shareholders were taken care of at that point in time by doubling the dividend. And that's a philosophy that we continue to see going forward that we will have our underpin our sustainable dividend. And as George quite rightly mentioned, at times when we see a material discount to our valuation and that we have free cash flow availability, we've gone into the market to buy back. And we had a buyback program that commenced in '23 and finished in '24, which purchased over 30 million of stock back into treasury. So as you can see, our cash flow priorities are always at the front line to deliver cash back wherever possible to shareholders or indeed for an optionality to grow the business to invest back into more exploration and appraisal or if an attractive merger and acquisition comes along that's accretive to the overall business. And again, that's something that we can look at with that free cash flow availability. This is a very important slide. This demonstrates what free cash flow is available to equity holders at various different commodity prices. So just be clear, this is operating cash flow less all of the capital investment for the projects and developments that the guys have spoke about beforehand and servicing that debt. We've assumed that we draw down to the full $190 million borrowing capacity at this point in time, and it services that particular debt. But as you can see, even at modest commodity prices, so we got to $65 Brent, we return the full market value of the company in that very short 4-year time period with significant runway beyond 2030. So again, very healthy position for the company and gives us optionality as to what we do with that cash going forward. Again, looking in the past, we've delivered both dividends and we've delivered buybacks. There's certainly nothing to suggest that we will not do that in this period going forward. This just underpins the dividend that we have in place, currently a peer-leading dividend in the energy sector in the New York Stock Exchange at over 7%. And even though we've got a heavy investment year in 2025, the one thing that we did when we negotiated and put in place the reserve-based lending facility with our partner banks was that we guaranteed that dividend within that cash flow period. So that dividend is there in 2025, and we'll continue to support that dividend for the future. And we could augment it with other forms of share buyback. As I said earlier, even utilizing that facility, we still end up with peer-leading debt ratios. So if you look at the graph from left to right, obviously, further to the left is the best position to be in. We've got less than half a turn debt to EV. And if you look at net debt to EBITDA in 2026, we're at 0.6x. So again, we were looking at $300 million in 2024. When you look at '26 through '27, we've got significantly higher EBITDAs kicked off from these assets. Finally, I'd just like to touch a little bit on hedging. The first thing to see on hedges is that they're locked in at the corporate level to optimize for the physical regimes that are there in the assets at the asset level themselves. And our past approach has been very much opportunistic and tactical. We've generally protected the floor. When we put the dividend in place, that sensitized to $65 floor. And that generally has been our sort of philosophy that we've guaranteed to that $65 through various derivatives. Generally, lately, it's been 0 cost collars. And we've looked at that over just a short time period, a 6-month window. And why that? Because really outside of that 6-month window, the market volatility and the current visibility is just not there. So that's generally the period that we've looked at. And we've done that to basically maintain flexibility to get the upside on commodity prices. And that's not the only thing we've done. In 2021, when we had the upcoming drilling campaign in Gabon and we had the FPSO change-out, we tied cash flows. We use swaps to tie in that cash flow we were a one asset company and we use swaps heavily in 2021 to lock in that cash flow. So as I say, in the past, we've had a very much an opportunistic or tactical approach. Post utilizing the facility, which will happen in 2025, what I will say is we'll pivot and we'll move to a more programmatic hedging program, really aligned with the reserve-based lending requirements that our lenders imposed within the covenant and we've agreed to. But not only does this meet the RBL covenant requirements, it also protects the downside risk to our shareholders. So you'll see us maintain a consistent hedging over a rolling time horizon, locking in cash flows. And that will begin really in the second half of 2025. And you'll see that the company starts to take that approach as we go through the year. With that, I'll turn the call back over to George, who will give you the takeaways from the Capital Markets Day presentation. Thank you.

Well, thank you, Ron. I'll try and keep us on time. We've got lots that we've talked about. We've got lots we've presented. Two of the key things before I go into some of the last few slides. One is looking backwards, 2021 to 2025 and look at the growth that the company has just experienced and how that growth has been managed and executed and it's been managed and executed by this team -- managed and created by this team. The technical ingenuity to exploit some of the resources that the company already had on hand but had the opportunity to resource has been done by this team. And that for me makes the opportunity to say with considerable confidence that the 2025 to 2028 period with this team is more than just executable. It's being delivered. It's been demonstrated to you that the vast majority of this opportunity is coming from proven resource. The projects in order to -- the deliverability of the production profiles you're about to see through the execution of these projects is being done by a team that have delivered already on projects of similar scale. The financial discipline that we've demonstrated through 2021 to 2024 continues. And as Ron pointed out, we've got a great starting point in our balance sheet and our capability to deliver back to our shareholders, proving that we've done it before. But then with these projects and with this portfolio, it can be done in a much greater scale. So very, very confident that what we're showing here is not overly promotional, it's demonstrable and very much deliverable. So what does it give us? We said before that we went 5x on production profile from 2021 to the end of 2024, up to 25,000 barrel working interest. Our guidance for 2025 is 20,000 barrels per day working interest. And as of the Q1, we were slightly ahead of guidance. And we were looking at the production profile for '25, there's nothing to indicate that we won't be meeting or exceeding guidance in that -- from that forecast. So when we look at these projects and some of these wedges here you see in the production profile, you can see that through to 2030, from that 20,000 barrel per day base at the end of '25, we got 250%. We hit 50,000 barrels a day working interest from these projects, all the projects that you've just heard the team talk about today. And again, I'll continue to emphasize our capability that we have inside the company to find and exploit and deliver these assets. That big yellow wedge you see there is Equatorial Guinea. That asset has been on the books of this company for well over 10 to 12 years. It's only through the creativity and the technical capability of the company that, that development plan has been able to be put in place. I'm as confident, as Thor mentioned, that we will get successfully through the FEED, and we will get to FID by the end of this year on the Venus project. And like everything, I fully believe I'm an optimist when I look at reserve production is always moving to the right. So there's always more in the tank to find. That's delivered by revisions, that's delivered by technical improvements and enhancements as you go through these developments. So we always see a curve to the right. But it's important for me to emphasize that you look at this chart and you look at this opportunity that this is coming from an existing base. There's nothing speculative out there. Even when we look at the exploration well that we're planning in this Phase 3 drilling campaign in Gabon, it has a POST of 57%. So it's nowhere near wildcat numbers. When we look at our acquisition criteria and you look at the 3 acquisitions we've completed in the last 4 years, are we going to continue to look at opportunities for inorganic growth? Well, you've heard the team say today, of course, we are. We have the capabilities technically, we have the experience, particularly in Africa to take advantage of that. We understand the playing field that we're in. You've heard the team mention the robustness of the production sharing contracts that we enjoy and how they benefit. There's 2 key elements. One, they protect you and they benefit the company, to recover its investment and its profit oil in a low-cost commodity price environment. But in addition to that, that's not the reason -- the only reason they're there. They're there in those particular terms with the cost stops 80% and the investment uplift to promote continued investment. And we can see how successful these production sharing contracts are purely just by looking at the Etame field, a field that was put in production in 2002 was forecasted to last 5 years when the initial contracts were put in place, and it's been in production for 23 years, and we see it continuing into production at least for another 10 years. Those contracts facilitate those levels of investment to guarantee returns to the investor. And the investor being VAALCO, when we get the guaranteed returns, we can deliver those returns to our investors, our shareholders. That's why it's very important you look at the production sharing contract methodology and what it can deliver for the investment companies. You can see the criteria there that we look at. We've demonstrated that criteria. We look for near-term or brownfield production opportunities that we can deploy our expertise to fully exploit the opportunity. Once we have a footprint in the country, we then look at the opportunities to expand that footprint. And you've seen us do it in Gabon, you've seen us do it in Cote d'Ivoire, where we work closely with our partners and our host governments to make -- have a meaningful footprint, a meaningful investment position in the countries we choose to invest in. That's the methodology we will continue. When we're looking at inorganic opportunities, we're looking at positions where they meet the criteria that we've followed since 2021 that's been successful for us. That doesn't mean that we're looking at any and all opportunities. As I mentioned at the start of this presentation, we've completed 3. We've looked at dozens of opportunities and many don't meet the criteria that we look for, for sustained and continued growth. So last slide before we get to questions. So the key takeaways we've done it before. We've delivered and we've proven the delivery in both the value creation to shareholders and the expertise we've created and developed inside the company. There's nothing that you saw today that fears us from the development that we're not capable either financially, technically or from a subsurface position or from a regulatory position prevents our ability to deliver it. We've done this with very strong financial disciplines, very conscious of not overleveraging the company, not getting the company in a position where it is at risk in any way, bearing in mind that we started this process with a single asset position and the key issues of risk for the company back in 2021 was cash flow risk and production risk. It required a degree of diversification to protect that position going forward to give us the opportunity to deliver to you today with the levels of confidence that we have the runway going through to 2030. That's been. The underlying position is already there. And that's the key message from this presentation is there's nothing else has to happen for us except execution. There are commitments out there sure that was mentioned through the paid back project with the Phase 3 drilling project. But as we've talked about, the contracts that we engage in order to execute these projects protect us from a downside environment. There's no risk to that cash not coming back. There's no risk to that production not being in that field. We've demonstrated the production and the reserves are there. We just got to execute the projects and get the oil flowing. Once again, we've demonstrated our capability that we can execute projects successfully. We've executed projects of a similar scale with reduced cost and reduced OpEx, and we continue to enjoy the benefits of some of those projects even today beyond our wildest dreams when we were forecasting what we thought the Etame field could do with the reconfiguration. It continues to develop and deliver even in 2025 and into 2026 at a higher production level than we had initially anticipated. We've also done all this and maintain our capital discipline and our communication and commitment back to our shareholders. We understand the reason you would invest in VAALCO is not just you believe that there's a capital growth opportunity because we're undervalued. You believe that this company is well managed and can execute the projects within its portfolio. You believe that the company has a capability of inorganic growth and tell you a wider story. But we've already said, we're delivering a return. So there's a dividend yield there, but you also have the ability to take comfort that we've delivered in the last 3.5 years, as I mentioned over $100 million delivered back to shareholders in 3.5 years. So with that, I thank everyone for their attention today. I'm trying to more or less keep us on time. And I'll hand this over to Al Petrie, our investment relations coordinator, to handle the questions. Thank you very much.

Thank you, George, and thanks to everybody for the great questions they've been submitting. What we're going to try to do is group some of them together in order to try to address as many as we can. So our first one, how would you rate the individual well risk on the Gabon planned drilling program?

Well, I'll give a brief and I'll pass over to Casey. But for me, I think as the team already highlighted, these are infill wells. So we're going into proven oil positions. We're de-risking some of that by drilling pilots. So in the previous campaign, we had some I guess, imagery interpretation risk, we're de-risking that by doing the pilot. So in the Etame side, I personally will put it at a low risk, that's Casey's discipline, but that pilot's de-risked it. In the brewery side, I'll let Casey answer, but I'm very optimistic about the brewery. I think there's a lot more for us there than we're currently forecasting. Casey, do you want to...

Yes, just to maybe build a bit on George's comments. I think he's spot on there. The infill wells from a subsurface standpoint are pretty low risk and where we see a little bit more risk, we do have a pilot. Well planned, 2 of them in Etame so that we can really constrain our depths properly. I'd say that the exploration well, George mentioned earlier, carries about 57% chance of success. Of course, from a subsurface standpoint, that's the highest risk of this well program, but has a much higher upside potential. In Ebouri, again, infill wells, so low risk. The risk around the workovers is going to be more of a mechanical type risk rather than something that's subsurface or geologic.

Okay. Great. Next one, does Côte d'Ivoire require further appraisal drilling and testing?

Yes, I'm happy to take that one again. This is Casey. Currently, the plan from our operator, CNR and the work that we're doing in conjunction with them suggests that we don't need to continue to appraise there in order to move into development. I think as we continue to look at the new seismic data that's coming in over the next couple of months, we'll have a better idea whether or not the models that we have in place there are fit for purpose and that we're ready to go with the development plan as it stands, but that's the default case right now is that there's no further appraisal needed.

That further emphasizes how key that acquisition was to get [indiscernible] and Cote d'Ivoire that we can develop in the future. This one is a little bit more general, that there was an extended economic downturn in crude prices drop further for a prolonged period. How would that impact the execution of your strategy? And would VAALCO be able to ride that volatility given the strong balance sheet? Or would we face some significant operational issues because of that?

Well, I mean, as I tried to emphasize during the presentation, in the vast majority of our portfolio, the downside position is protected through the contracting structure. So there's always a return coming back on the investment. As you saw in our Q1 earnings call, we do react to softening commodity prices. We reduced our capital guidance for 2025 by over 10%, just over $30 million. Where we have the opportunity to make discretionary CapEx reductions in an extended low oil price environment, we will do that. But the reason that we went into the reserve-based lending facility was in order to ensure that where we have a firm CapEx commitment such as the Cote d'Ivoire project. We can meet that commitment all the way through without having any kind of emergency funding requirements. So we always plan well in advance. If we look at the Phase 3 drilling program in Gabon, as I mentioned, we were protected in lower oil price environment because whilst that looks on paper, a $260 million program, and that's sometimes when we're giving CapEx guidance, the headline number captures the attention rather than the mechanics of how that headline number is going to be spent. For instance, when we start spending in Gabon, we're recovering that cost oil in the next lifting. So you're never going to that level of cash sink that's indicated in the CapEx number. The money is coming back as you're investing in. Again, a great protection mechanism in a low commodity price environment. So I don't particularly see the 2 biggest projects we talked about in Cote d'Ivoire and in Gabon us having to do anything significant in a lower oil price environment other than the normal efficiencies that we will be approaching anyway.

Okay. Great. Thank you, George. The next one is regarding Gabon as well. You said previously that you have well options on the rig for the '25, '26 drilling program. Where would those prospects be? And what would need to happen for you to drill those in this campaign versus a future one?

Well, I don't -- there's some interdependency on the existing campaign. So for instance, we mentioned already that we're going to have 2 pilots. If both of those pilots are successful, one that will be an additional well into the campaign that's not currently there. We have obviously as well workover opportunities within the field. And for reasons, not just of enhanced production, but in some cases, for mechanical reasons, and we see issues around the ESPs or some kind of lack of confidence that the ESP or its backup may fail, we may select the option to go in and do an additional workover. The fact that we have that optionality as we're going through an extensive campaign such as this is just something that all operators do. And you've seen it also with the previous campaign that BW was running, exercising options as they find additional oil. And we've reserved that position for us. For instance, if West Etame comes in and it comes in more significant than we expect, we may want to have a well on that also.

Okay. Good. We have with us in our meeting today, Jeff Robertson with Water Tower. Jeff, did you have a question you want to ask?

Question when you're talking about PSC terms, George or Ron, you talked, I think, about $1 of capital in CI as you get $1.25 capital back. Is effectively the way to think about that, that the barrels that are produced from those capital dollars are then higher margin than your existing production because of the recovery mechanisms?

I'm not sure if it's -- I would put it that way. What I would say is it's guaranteed, obviously, on return on production that you're going to get your money back. You're going to get your money back plus a 25% return. Like everything else, George will talk about the fact that some barrels are worth more than other barrels. What I would say in Gabon and [indiscernible] they're very, very similar. Obviously, the capital investment in [indiscernible] with this PSC term is like a PSC I've never seen before. It's fantastic. Whoever negotiated that way back in the day deserves a medal. It's something that I would love to see in other PSCs and we generally -- we were surprised when we came cross.

I'd add to that, that the reason we see contracting terms that is to draw investment. And as we draw -- as each of our host governments put the PSCs in place and attract that investment, you've seen a lot. You see it in Nigeria, you see it in Gabon. You see it in Cote d'Ivoire. You see it in Angola. That itself creates value, creates jobs. And coupled with that is another part of our philosophy where we look at how do we maximize the local content component of that, and we make commitments to our host governments and local content. So it's not all about the government giving us a great deal. We're giving something back at the same time through our CSR projects, through an employment projects, through education projects and partnerships with the national oil companies that reside in these countries. So there's a 2-way street, there's a technology transfer happens in our office today. We have 3 or 4 of individuals from the national oil companies in Equatorial Guinea and Gabon who come here and get the subsurface and technical training from us.

With a project like Venus, which has been stranded essentially since it was discovered by Devon, are you seeing host governments' willingness to work with companies like VAALCO to try to move those projects ahead and structure the terms or get the terms right so it justifies an investment on your part?

I would definitely say that. The discussions we've had with the minister in EG in the last few years. Without those discussions, without that encouragement and that flexibility, particularly in the terms, we couldn't be able to do this. It's all about demonstrating a win-win position. The first thing we looked at, particularly in EG is can we technically solve for this because a pure vertical solution was just wouldn't work with those levels of accumulations that Casey showed. So our technical team something a bit more innovative, and it's well within our capabilities to do. We then have to demonstrate that to the government. You've heard a couple of times today that the government has approved our plan of development. That was approved at a time where we went through not just the technical plan and how we would execute, but what the commercial requirements were for us to make that level of commitment because at the end of the day, it's another $250 million of CapEx that we're currently trying to reduce, but it's still well over $100 million to execute that project. So yes, it is important to have the relationship with your host government and your ministers that's very open. So you're telling them this is what I can do, but it's also very important to be honest and tell them what you can't do. And that's the kind of -- we're very direct. We have good government relations in each of our operating countries. But we're also very open with we can do this. We'd like to do more. How can you help us do more. And if we can do more and you saw it in CDI, you saw it in Gabon, where we get an opportunity to increase our footprint. That happens because we're there. That happens because of the relationships we have.

George, maybe just to that point, during this downturn that we're somewhat in at present, where do you see the greatest opportunity for expansion within the areas that you're already in today?

Well, from a relationship -- one of the easier transactions are always bilateral and the easiest one for bilateral are governments. government because you can get into a discussion, they hold the assets. So when I look at the opportunities that are clearly existing in all aspects of West Africa, we look at particularly CBI into Nigeria, into Gabon, down in Equatorial Guinea and even into Angola. Angola is now getting very investable. There's also areas where it's nice to look at, but not touch. I mean there's areas such as deepwater in Namibia. That's for someone with a much bigger balance sheet than us, right. So we look at these opportunities, particularly with the government. And then we look at the also as you get to lower oil price environment, some companies may be more challenged than others. And is there an opportunity to get into discussions there. The difficulty, and this has been our philosophy, we always try to move forward with a kind of open basis on a bilateral opportunity because processes, there's always someone who loses in a process. Bilateral there's always everyone wins, right? And that's kind of a position we try to get ourselves into so that everyone walks away as a winner. That being said, we are also looking at processes as well where we feel we can be competitive. And we always take those along to a point where we -- by the time we get through these processes, whether it's with an IOC divestiture or another company, we know long before near the end of that process where we need to be. We communicate where we need to be in order to shorten that process to a point where we can complete or shorten the process we don't waste any more money evaluating an exit.

I have a couple of questions on Cote d'Ivoire. Can you expand a little on the FPSO project at Baobob? Did we purchase the FPSO? And will the refurbished FPSO be able to handle all of the Baobob and Côte d'Ivoire future production that you showed in the presentation?

That's definitely one for Thor.

Yes. No. So we did purchase the FPSO. So it's owned by the joint venture now. And yes, it can handle the production.

Short and sweet. In EG, can you give us more details around expected peak production rates gross for the Venus development? And do you have CapEx expectations today? Or will that information come following FID later this year?

Well, we've demonstrated and presented what the peak production. So the IP on the 2 producing wells in a range from 16,000 to 20,000 barrels per day. So 8,000 to 10,000 per well with the water injection. On the CapEx, we communicated the CapEx a number of years ago -- 2 years ago when we got the POD. And at that point, it was in the high $200 million. The reason we went to FEED was to say that doesn't work. And given the accumulation and the short tenure of production, so this is going to be in production at the current forecast for about 60 months. That level of CapEx is too large for that tenure. So the reason we went to FEED was how do we reduce the CapEx, move more to OpEx, reduce the cash sink and fit within the production window. And that's what the FEED study has been looking at. I mean we've challenged the team where we want the CapEx to be. And yes, when we get to FID, we'll fully communicate that position. But again, where we expect to be -- and I wouldn't have shown that in the production curve, if I didn't have the confidence that I made earlier that, that execution of that project is still within our current facilities. So what you saw today and our current balance sheet and the timing of that project can all be executed with existing resources.

Great. Going back to Gabon, the 2025, '26 program that you have planned, is it just about developing existing 2P or could the program de-risk on 2C that could be classified to proved or 2P?

That one for Casey.

Yes. So we've got built into that program a fair amount of forward-looking as well to try to convert contingent to proven -- I mentioned earlier, the production here largely Gamba based. We still see lots of potential in the Gamba. But of course, there's always been the potential upside of the deeper Dentale, specifically within the pilot wells that we're going to be drilling in Etame. There's a plan there to determine what the pressures look like in the Dentale, whether or not there's resource to be had. Likewise, in Tchibala, there's also the potential there for a dental resource. In Ebouri to the north, we've got new FWI data, which has further constrained the geometries of the field better than we had in the past. And there are potential unrecognized pools to the north there now that are in slightly different fault geometries that maybe was recognized earlier. So there is a fair amount that should be learned in this drilling program that could feed on either a later part of this phase of drilling and some of those options we have or maybe gets pushed to the next phase.

Okay. Great. This is more general question. With all the organic growth opportunities you've discussed, how are you thinking about M&A?

Well, hopefully, I covered that in the wrap-up. I mean we're very predictable when it comes to what our M&A focus is. As I mentioned, we focus on a value model that we can demonstrate that with our skill set is exceedingly accretive. So we look at the valuation of an opportunity in its current form and we look how much of the upside we think we can generate in that particular opportunity, and that has to be substantial. So we're not going to enter into a $200 million acquisition that we only see $250 million of value. That's just not going to work. And so we look for multiple upside to the investment point and how that upside can be developed either in some cases, we'll look at inventory that perhaps we have a different interpretation over and that certainly was the case in 705 from the existing operator, they had a particular focus on a particular hydrocarbon set, and we saw something else. And that enticed us into making that move quickly or we have an operational skill set where we can see a lot of low-hanging fruit and efficiencies that can generate significant cash flow, again, multiples over above our investment. So our model is fairly predictable. And what's not predictable is finding those opportunities. It takes a lot of searching to find them. The geography that we look at is a [indiscernible] geography. It's a very competitive area, particularly when you see some of the exits happening in other parts of the world where the fiscal regimes are more challenging for investment than they are in Africa. So we're seeing more competition. But I'm comfortable with the expertise we have in country -- in the company and also the expertise we have in country. And that's a key part actually. You find out lots more opportunities once you establish yourself in country. And that's again one of our philosophies. When we entered into Baobob with CNR, we are nonoperator. But our philosophy is regardless of being a nonoperator, we're going to have an office and we're going to have people in country, and we're going to have independent relationships with our host governments even though we're not the operator. By doing that, as Thor and Casey have mentioned, it opens up all kinds of opportunities in country that you would never see from the headquarter base.

Okay. Here's one on Egypt. When do you plan to develop the deeper sands? And will you be looking to drill vertical wells across multiple sands or look to do horizontal drilling into a single zone?

I'll pass that to Thor and Casey.

Vertical versus horizontal, obviously, it's going to be dependent on the reservoirs that we're talking about, in particular, whether or not they're geometrically something that can be exploited if it's a single reservoir, you might think about doing lateral wells into those. As I mentioned, some of these deviated well geometries that were shown on there have the ability to target in a more or less vertical sense, multiple different pay zones in a single well. As far as the timing goes, Thor, maybe you have more information on the program.

Well, I guess on a deviated well, we've drilled one, we'll drill others as the opportunity arises. I mean it's most certainly advantageous to drill the deviated wells. The horizontal well in a single formation, we've done one of those back in 2022, I believe. It wasn't as successful as we had hoped. And the reason for that was mainly technology and equipment availability in Egypt. So to give you an idea in Canada, we run 120 fracs on a well. We run 15 tonnes of frac material. That technology is not readily available there. The skill sets, the equipment is just not there. So when you start that process, the first wells become a science experiment. And at this point, we're not ready to build science experiments. That's not ruling it out that we wouldn't do that. We have the people. We have the experience to do horizontal wells and are successful at it. But it's more than just saying you're going to drill a well. There's a whole bunch of equipment and hardware and technology that goes with that. And there's additional cost in doing that.

Okay. We're getting closer to our end time, so we don't want to go left out. So we have one question specifically. You mentioned you're looking to initiate buybacks in periods of discounted market value. Would now be a good time to initiate a buyback considering the low valuation?

Yes, it would be. But what we did with the buyback and have done with the buyback in the past is when we've got free cash flow availability. And as we said in 2025, we've got a heavy investment year and that heavy investment year is putting those dollars into the ground at this point in time for even larger future returns. Where free cash flow is available, that comes back on the table certainly not. And indeed, if commodity prices pick up again, of course, that will be something that we can consider.

Okay. Great. And so we're going to go to our last question. But anyone who sent in questions and you gave us your e-mail address, we're going to reach back out to you and try to get those answered. So everybody that did submit a question will be able to hear back from us. So our last one is kind of general for pretty much anyone in the team. Have you seen any weakness in service costs as oil prices have fallen and E&Ps have reduced their budgets that could help with your upcoming drilling campaign?

So there's two sides to these big projects. One is you've got contracts that have been signed 6 months ago, 8 months ago, even a year ago for rigs, for instance. So obviously, those contracts are in place, and they won't change pricing until the next wave of contracts come, right? What we are seeing is we are seeing softening on the services that haven't been signed up yet. So for instance, boats, helicopters, all those services, we're seeing some softening on. And we would expect that your price is up here, your rates are here, over time, your oil prices dropped, there's going to be a bit of a lag between that drop in oil price to the drop in supplier price. And likewise, when it goes the other way, oil prices go up, it takes a while for the supplier profile -- cost profiles to climb again as well, usually not nearly as long.

Okay. Well, let me turn it back over to George, any closing comments, please.

Yes. Well, I'd like to -- hopefully, we've managed to demonstrate to the audience today, not just the opportunity, the investment opportunity that is in, particularly at the price point the stock is at the moment. The deliverability of the projects. And with that deliverability, the free cash flow, particularly that Ron highlighted at the commodity prices indicated a company with its ability and free cash flow after CapEx to deliver its market cap in less than 4 years is a fairly bold statement to make. But I think as demonstrated in this presentation, it's not such a bold statement because we've made it through each segment of this presentation, we've emphasized our capability to execute, and we've emphasized from the geology that the oil is there to be extracted and then also demonstrated through our past track record that we have been delivering exactly on the strategy for the past 4 years, and that strategy has enabled the portfolio opportunities that we showed to you for the next 4 to 5 years. So at that, I'd like to thank everyone for their attendance. We're just about slightly over time, but hopefully, you find the presentation and meeting the team very insightful. Thank you very much.

Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.