On April 30, 2024, VAALCO Energy, Inc., an independent energy company headquartered in Houston, Texas, announced the successful closure of its acquisition of Svenska Petroleum Exploration AB, an E&P firm based in Sweden. This transaction, valued at $40.2 million, was entirely financed through VAALCO’s existing cash reserves without resorting to debt or equity issuance. The acquisition is immediately accretive to shareholders, exemplified by key performance metrics such as VAALCO’s enhanced production rates—now exceeding 5,000 barrels of oil equivalent per day—and increased reserves, with 1P WI CPR reserves at 13.0 million MMBOE and 2P WI CPR reserves at 21.7 million MMBOE as of October 1, 2023.

The strategic move boosts VAALCO’s presence in West Africa by adding the significant asset of the Baobab field in Block CI-40, offshore Cote d’Ivoire, in which Svenska holds a 27.39% non-operated working interest. VAALCO’s CEO, George Maxwell, highlighted the acquisition’s alignment with the company’s objectives of diversification, size, scale, and shareholder value through strong free cash flow and strategic growth without incurring bank debt.

Advisory roles for the transaction were covered by Stifel and Mayer Brown International LLP for VAALCO, with Evercore Partners International LLP, GKA Advisors LLP, and Fieldfisher LLP advising Svenska. VAALCO’s diversified portfolio spans several countries, including Gabon, Egypt, Cote d’Ivoire, Equatorial Guinea, and Canada, as the company has stated in the announcement.

The acquisition reflects forward-looking statements that reveal VAALCO’s expectations for future drilling, production, and sales. These include efficient asset integration, maintaining a robust balance sheet, and executive insights into future strategies. Although optimistic, these statements do involve risks such as unpredictable liabilities from Svenska, governmental cost audits, the impact of weather on operations, and fluctuations in commodity prices, amongst others. The oil and natural gas reserves mentioned in the announcement follow the reporting guidelines of the 2018 Petroleum Resources Management Systems and may differ from those under SEC requirements. VAALCO’s forthcoming first-quarter earnings release and conference call in early May are expected to discuss revised production and financial guidance reflecting the acquisition’s impact.

Oil & Gas Exploration and Production, Financial Advisory Services, Legal Advisory Services,United States, Sweden, Cote d’Ivoire