INTERVIEW: Vaalco's 50,000 b/d goal in reach after Ivory Coast deals

Africa-focused Vaalco Energy is confident it can double oil production to 50,000 b/d through organic growth at existing assets after striking two major Ivory Coast deals, CEO George Maxwell told Platts.

In a wide-ranging interview, Maxwell said the Houston-based company had nudged up its working interest production to 25,000 b/d, with output from its new Baobab field off Ivory Coast and infill drilling in Egypt making up for natural declines at its Gabon assets.

Back in 2022, Vaalco, which has long operated Gabon's Etame Marin permit, was a single-asset company. Following a merger with TransGlobe Energy, a string of deals, and de-risking efforts, it today boasts a presence in Gabon, Canada, Ivory Coast, Egypt and Equatorial Guinea. And its oft-repeated production target is now within reach, Maxwell said.

"We've always said we're looking to get production closer to 50,000 b/d. I think we're at the point now where we've got an asset base that organically can deliver that."

As a result, Vaalco is now looking to maximize investments in its host countries. "Rather than going to bag another half dozen countries, how do we bag another half dozen licenses within the countries where we already operate and get a bigger footprint," Maxwell said.

But he is not "completely excluding new country opportunities... that are accretive and where our skillsets can be deployed efficiently."

Maxwell previously ran Eland Oil & Gas in Nigeria, before selling it to Seplat Energy -- now one of Nigeria's biggest domestic players -- in 2019. He took over London- and New York-listed Vaalco in 2021.

Growth projects

Vaalco focuses primarily on unloved assets in established oil provinces, merging technical expertise and a higher risk appetite to eke out additional barrels. It favors infrastructure-led exploration, Maxwell said, but is not immune to "blue water" exploration.

In the medium-term, production growth is expected to come from its new assets in Ivory Coast and tried-and-tested Gabon projects, Maxwell said.

In February 2024 Vaalco acquired Sweden's Svenska Petroleum Exploration, handing it a 27.39% interest in Block CI-40 offshore Ivory Coast, containing the producing deepwater Baobab field and Kossipo discovery. Vaalco's working interest from Baobab is currently 4,500 b/d, Maxwell said. The block is operated by Canadian Natural Resources.

This year the partners are carrying out FPSO maintenance and upgrades, which will pave the way for future drilling to ramp up production, although Maxwell did not provide additional details.

In March, Vaalco farmed in to oil exploration block CI-705 off Ivory Coast, not far from Eni's Calao discovery. Maxwell said the company is in the seismic acquisition and interpretation phase on the 2,000 sq km block, which has seen three wells drilled in the past and has a "proven petroleum system."

Eni's discoveries, particularly Baleine, have put Ivory Coast on the oil exploration map and turned it into a sizable West African oil producer.

In Gabon, Vaalco is working on a five well drilling campaign -- with a potential five additional wells beyond that -- in and around its Etame development. The program, which should bring the Ebouri field back into meaningful production, was delayed to 2025 to allow for studies on enhancing "organic uplift opportunities," Maxwell said, whereupon it was expanded from four wells.

The program includes an exploration well off the Etame field, close to existing infrastructure, which brings a 60% chance of success, Maxwell said.

Beyond its legacy Etame asset, Vaalco in October 2024 signed agreements with Gabon's government for the offshore Niosi Marin and Guduma Marin exploration blocks, alongside Norwegian operator BW Energy and Panoro.

The fields sit near both Etame and BW's Dussafu Marin permit, and boast "great opportunities for tie-back, [meaning] smaller accumulations of oil can become economic," Maxwell said.

A military coup in 2023 and recent pre-emptions by state-run Gabon Oil Company prompted concerns within the industry about the Gabonese investment climate, but Maxwell said it still "ranks up pretty high" in the region.

"There's a change in government strategy and that's absolutely fine. They are looking to enhance the position that GOC plays... in what they see as a key industry. It's aspirational for them," he said, adding that Vaalco is the biggest US investor in Gabon. "We have a strong relationship with GOC."

Equatorial Guinea update

While Gabon and Ivory Coast should drive oil output growth, Vaalco is also evaluating its projects in Egypt and progressing towards FID on its key Venus project in Block P off Equatorial Guinea, after overcoming some issues with its partner, Nigeria-based Atlas Petroleum, and signing a joint operating agreement last March.

In Q4, Vaalco commissioned a FEED study to optimize the project's investment structure, Maxwell said, with results expected next quarter. That will allow it to take FID on the project, which has reserves of about 25 million barrels and should produce as much as 15,000 b/d of oil.

Like many of its peers, the US company has examined Zafiro, Equatorial Guinea's flagship crude asset divested by ExxonMobil last June and now operated by the relatively inexperienced national oil company GEPetrol.

Maxwell described the asset, which produced 57,000 b/d in 2018 but has since declined significantly, as "an opportunity" but said Vaalco is focused on starting up production in the tiny West African country before looking at expanding its footprint.

On Nigeria, Maxwell said that while it remains "the most prolific hydrocarbon area in the region by far," indigenization of the sector and growth of local technical expertise has reduced Vaalco's competitiveness. "All we're really bringing is capital," he said.

The Svenska acquisition gave Vaalco a 21.05% stake in OML 145, a non-producing discovery off Nigeria operated by ExxonMobil, but there are not believed to be any plans to develop it.

Volatility

Much like its peers, Vaalco's share price has slumped in recent weeks as US President Donald Trump's blanket tariffs -- including on key oil importer China -- and plans by OPEC+ to accelerate production increases from May have hit oil prices, fueling volatility.

Platts-assessed Dated Brent fell almost $15/b in the first nine days of April amid the dual shock, before slowly recovering some of its losses.

However, Maxwell struck a sanguine tone, noting Vaalco's zero-debt balance sheet. As a result, he said, the company is in a "very strong place" to tolerate oil price dips.

"We run our whole business based on a commodity, which is based on sentiment not fact," he said. "We can control cost and production, but we can't control commodity prices."