VAALCO Initiates Phase Three Drilling Program Offshore Gabon
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 09 2025
0mins
Should l Buy EGY?
Source: Newsfilter
- Drilling Program Launch: VAALCO has successfully spudded the ET-15 well at the Etame platform, marking the commencement of its Phase Three Drilling Program, which is expected to generate near-term value for the company.
- Rig Availability: The drilling rig was secured in December 2024, ensuring smooth operations and enhancing production capacity while lowering operational costs.
- Future Growth Potential: Following the Etame platform, the company plans to move to the SEENT and Ebouri platforms, which are expected to add reserves and further boost production.
- Strategic Vision: With major projects underway in Gabon and Côte d'Ivoire, VAALCO anticipates significant growth over the coming years, thereby creating long-term value for shareholders.
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Analyst Views on EGY
Wall Street analysts forecast EGY stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for EGY is 7.39 USD with a low forecast of 7.39 USD and a high forecast of 7.39 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
1 Analyst Rating
1 Buy
0 Hold
0 Sell
Moderate Buy
Current: 4.630
Low
7.39
Averages
7.39
High
7.39
Current: 4.630
Low
7.39
Averages
7.39
High
7.39
About EGY
VAALCO Energy, Inc. is an independent energy company with a diverse portfolio of production, development and exploration assets across Gabon, Egypt, Cote d’Ivoire, Equatorial Guinea, Nigeria and Canada. It is engaged in the acquisition, exploration, development and production of crude oil, natural gas and natural gas liquids. It owns a working interest in, and is the operator of, the Etame PSC related to the Etame Marin block located offshore Gabon in West Africa. The Etame Marin block covers an area of about 46,200 gross acres. The Company owns an interest in an undeveloped block offshore Equatorial Guinea, West Africa. In Egypt, its interests are spread across two regions: the Eastern Desert and the Western Desert. In Harmattan, Canada, it owns production and working interests in Cardium light oil and Mannville liquids-rich gas assets. It also owns a working interest in the Block CI-40 and CI-705 block offshore Cote d’Ivoire in West Africa.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
VAALCO Energy Sells Non-Core Canadian Assets for $35 Million
- Asset Sale Agreement: VAALCO Energy has announced the sale of all its non-core producing properties in Canada for approximately CAD 35 million (USD 25.6 million), expected to close within 30 days, marking a strategic shift towards focusing on core assets.
- Production Capacity Overview: The Canadian properties being sold have a current working interest production of approximately 1,850 barrels of oil equivalent per day (BOEPD), with the sale price reflecting 2.7 times the trailing 12 months' operational cash flow, indicating strong market valuation.
- Cash Flow Performance: Since acquisition, VAALCO has generated CAD 82 million (USD 64 million) in operational cash flow from its Canadian assets, demonstrating significant improvements in liquid production and drilling efficiencies, thereby strengthening its financial position.
- Future Development Strategy: The CEO of VAALCO stated that the sale of non-core assets will allow the company to concentrate on major drilling campaigns in core areas, which is expected to create long-term value for shareholders, reflecting confidence in future growth opportunities.
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- VAALCO Energy Analysis: On January 16, Freedom Capital Markets analyst Sergey Pigarev initiated coverage on VAALCO Energy with a Buy rating and a price target of $7.3, as the stock surged approximately 42% over the past month, currently showing an RSI of 89.4, indicating overbought conditions that may lead to a price correction, urging caution among investors.
- Suncor Energy Rating Upgrade: On January 23, Goldman Sachs analyst Neil Mehta maintained a Buy rating on Suncor Energy and raised the price target from $48 to $54, with the stock gaining around 21% in the past month and an RSI of 81.7, suggesting it is also in overbought territory, prompting investors to watch for potential price fluctuations.
- Market Momentum Indicators: The RSI serves as a momentum indicator that compares a stock's strength on up days versus down days; the elevated RSI values for both VAALCO and Suncor signal potential short-term pullback risks, which investors should factor into their trading decisions.
- Investor Caution: With both stocks exhibiting overbought momentum indicators, investors should remain vigilant in pursuit of short-term gains to avoid losses due to market volatility, particularly in the context of increasing fluctuations within the energy sector.
See More
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- Pressure Data Confirmation: Pressure data from the first well confirmed 'strong communication' with nearby producing wells, suggesting the presence of a connected and productive reservoir system, which enhances the company's confidence in further development in the region.
- Second Well Progress: The second well was drilled to a depth of 2,175 meters, also targeting the Gamba formation and intercepting multiple high-quality sand intervals, showcasing the resource richness of the area and potentially laying the groundwork for future commercial development.
- Production Plans: Vaalco is drilling a horizontal production sidetrack off the first well, expected to commence production in the current quarter, which will further enhance the company's cash flow and market competitiveness.
See More
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- Healthy Cash Flow: As of December 31, 2025, VAALCO increased its cash at bank by nearly $35 million to $58.8 million, reflecting the company's financial health and flexibility in capital expenditures.
- Successful Drilling Program: The Phase Three Drilling Program in Gabon commenced successfully, with the ET-15 well encountering high-quality reservoirs, estimated to hold between 2.4 and 3.2 million barrels of oil, enhancing the development potential of the Etame asset.
- Effective Receivables Management: VAALCO successfully reduced its accounts receivable in Egypt from $113 million to $31 million in 2025, demonstrating effective receivables management that strengthens future cash flow and financial stability.
See More
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- Improved Earnings Expectations: CrossAmerica Partners LP (CAPL) and Delek US Holdings (DK) also achieved an A+ rating, reflecting analysts' upward revisions of their earnings forecasts, suggesting that their fundamentals are improving and could drive stock price increases.
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Industry Challenges: The Zacks Oil and Gas - International E&P industry is facing significant challenges due to volatile commodity prices, geopolitical risks, and declining earnings expectations, resulting in a low industry rank and underperformance compared to the broader energy sector.
Capital Discipline: Many international E&P operators are focusing on cash flow stability and disciplined capital spending, which enhances resilience against market volatility and improves financial health, despite delayed project timelines affecting growth.
Stock Recommendations: Investors may consider Vermilion Energy, VAALCO Energy, and Genel Energy for their focused strategies and improving fundamentals, even as the industry outlook remains cautious.
Valuation Metrics: The industry is currently trading at a lower EV/EBITDA ratio compared to the S&P 500, indicating modest valuations, but risks remain high due to the debt-laden nature of these companies and the uncertain macroeconomic environment.
See More
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- Asset Sale Agreement: VAALCO Energy has announced the sale of all its non-core producing properties in Canada for approximately CAD 35 million (USD 25.6 million), expected to close within 30 days, marking a strategic shift towards focusing on core assets.
- Production Capacity Overview: The Canadian properties being sold have a current working interest production of approximately 1,850 barrels of oil equivalent per day (BOEPD), with the sale price reflecting 2.7 times the trailing 12 months' operational cash flow, indicating strong market valuation.
- Cash Flow Performance: Since acquisition, VAALCO has generated CAD 82 million (USD 64 million) in operational cash flow from its Canadian assets, demonstrating significant improvements in liquid production and drilling efficiencies, thereby strengthening its financial position.
- Future Development Strategy: The CEO of VAALCO stated that the sale of non-core assets will allow the company to concentrate on major drilling campaigns in core areas, which is expected to create long-term value for shareholders, reflecting confidence in future growth opportunities.
See More
Momentum Warning for Energy Stocks: VAALCO and Suncor
- VAALCO Energy Analysis: On January 16, Freedom Capital Markets analyst Sergey Pigarev initiated coverage on VAALCO Energy with a Buy rating and a price target of $7.3, as the stock surged approximately 42% over the past month, currently showing an RSI of 89.4, indicating overbought conditions that may lead to a price correction, urging caution among investors.
- Suncor Energy Rating Upgrade: On January 23, Goldman Sachs analyst Neil Mehta maintained a Buy rating on Suncor Energy and raised the price target from $48 to $54, with the stock gaining around 21% in the past month and an RSI of 81.7, suggesting it is also in overbought territory, prompting investors to watch for potential price fluctuations.
- Market Momentum Indicators: The RSI serves as a momentum indicator that compares a stock's strength on up days versus down days; the elevated RSI values for both VAALCO and Suncor signal potential short-term pullback risks, which investors should factor into their trading decisions.
- Investor Caution: With both stocks exhibiting overbought momentum indicators, investors should remain vigilant in pursuit of short-term gains to avoid losses due to market volatility, particularly in the context of increasing fluctuations within the energy sector.
See More
Vaalco Energy (EGY) Drills Two Successful Wells at Etame, Initial Estimates of 3.2M Barrels
- Successful Drilling: Vaalco Energy successfully drilled two wells at its Etame complex in Gabon, with the first well encountering high-quality reservoir sands in the Gamba formation at a depth of 2,397 meters, leading to initial estimates of 2.4M to 3.2M barrels, indicating strong production potential.
- Pressure Data Confirmation: Pressure data from the first well confirmed 'strong communication' with nearby producing wells, suggesting the presence of a connected and productive reservoir system, which enhances the company's confidence in further development in the region.
- Second Well Progress: The second well was drilled to a depth of 2,175 meters, also targeting the Gamba formation and intercepting multiple high-quality sand intervals, showcasing the resource richness of the area and potentially laying the groundwork for future commercial development.
- Production Plans: Vaalco is drilling a horizontal production sidetrack off the first well, expected to commence production in the current quarter, which will further enhance the company's cash flow and market competitiveness.
See More
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- Strong Sales Performance: VAALCO achieved sales volumes of approximately 22,100 barrels of oil equivalent per day in 2025, reaching the upper limit of its guidance range, indicating robust performance in the oil and gas market and sustained demand.
- Healthy Cash Flow: As of December 31, 2025, VAALCO increased its cash at bank by nearly $35 million to $58.8 million, reflecting the company's financial health and flexibility in capital expenditures.
- Successful Drilling Program: The Phase Three Drilling Program in Gabon commenced successfully, with the ET-15 well encountering high-quality reservoirs, estimated to hold between 2.4 and 3.2 million barrels of oil, enhancing the development potential of the Etame asset.
- Effective Receivables Management: VAALCO successfully reduced its accounts receivable in Egypt from $113 million to $31 million in 2025, demonstrating effective receivables management that strengthens future cash flow and financial stability.
See More
Mid-to-Low Cap Energy Stocks Earn A+ EPS Revision Ratings
- Analyst Rating Upgrades: Several mid-to-low cap energy stocks, including American Resources (AREC) and Black Stone Minerals (BSM), have received an A+ EPS Revision rating from analysts, indicating a significant increase in market confidence regarding their profitability outlook, which may attract more investor attention.
- Improved Earnings Expectations: CrossAmerica Partners LP (CAPL) and Delek US Holdings (DK) also achieved an A+ rating, reflecting analysts' upward revisions of their earnings forecasts, suggesting that their fundamentals are improving and could drive stock price increases.
- Industry Trend Analysis: VAALCO Energy (EGY) and KNOT Offshore Partners LP (KNOP) have also earned A+ ratings, indicating strong earnings momentum among low-cap energy stocks as the earnings season approaches, potentially eliciting positive investor reactions.
- Market Focus: Liberty Energy (LBRT) and Nordic American Tankers (NAT) receiving A+ ratings further demonstrate analysts' optimism about their earnings prospects, which could lead to increased capital inflows into these stocks and enhance market activity.
See More
Zacks Industry Forecast for Vermilion, VAALCO, and Genel Energy
Industry Challenges: The Zacks Oil and Gas - International E&P industry is facing significant challenges due to volatile commodity prices, geopolitical risks, and declining earnings expectations, resulting in a low industry rank and underperformance compared to the broader energy sector.
Capital Discipline: Many international E&P operators are focusing on cash flow stability and disciplined capital spending, which enhances resilience against market volatility and improves financial health, despite delayed project timelines affecting growth.
Stock Recommendations: Investors may consider Vermilion Energy, VAALCO Energy, and Genel Energy for their focused strategies and improving fundamentals, even as the industry outlook remains cautious.
Valuation Metrics: The industry is currently trading at a lower EV/EBITDA ratio compared to the S&P 500, indicating modest valuations, but risks remain high due to the debt-laden nature of these companies and the uncertain macroeconomic environment.
See More
