VAALCO Energy, Inc.

Good day, and welcome to the Valco Energy fourth quarter 2024 earnings conference call and webcast. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. And to withdraw your question, please press star and then two. Please note that this event is being recorded. I would now like to turn the conference over to Al Petrie, Investor Relations. Please go ahead.

Thank you, Operator. Welcome to Valco Energy's fourth quarter and full year 2024 conference call. After I cover the forward-looking statements, George Maxwell, our CEO, reviewed key highlights of 2024 and discussed our plans for 2025. Ron Bain, our CFO, will then provide a more in-depth financial review. George will then return for some closing comments before we take your questions. During our question and answer session, we ask you to limit your questions to one and a follow-up. You can always re-enter the queue with additional questions. I'd like to point out that we have posted a supplemental investor deck on our website that has additional financial analysis, comparisons, and guidance that should be helpful. With that, let me proceed with our forward-looking statement comments. During the course of this conference call, the company will be making forward-looking statements. Investors are cautioned that forward-looking statements are not guarantees of future performance, and those actual results or developments may differ materially from those projected in the forward-looking statements. VALCO disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Accordingly, you should not place undue reliance on forward-looking statements. These and other risks are described in our earnings release, the presentation posted on our website, and in the reports we file with the SEC, including our Form 10-K. Please note that this conference call is being recorded. Let me turn the call over to George.

George O' Thank you, Al. Good morning, everyone, and welcome to our fourth quarter and full year 2024 earnings call. Over the past two years, we have delivered record-breaking operational and financial results while meeting or exceeding our quarterly guidance targets. Maintaining operational excellence and consistent production across our portfolio is essential to expanding adjusted EBITDAX, which has allowed us to grow inorganically and also to fund organic growth initiatives, better positioning Valco for the future. Before I go into more details about the exciting opportunities that we have across our asset base, Let me first summarize some high-level financial and operational results that led to a record-breaking year and some key items that have occurred thus far in 2025. For full year 2024, we increased our adjusted EBITDAX to $303 million, a new company record. We also had record production of almost 25,000 working interest barrels equivalent per day and record sales of almost 20,000 net interest barrels per day. Our SEC proved reserves grew 57% year over year to 45 million BOE and our 2P CPR reserves grew to 96.1 million BOE. We sustained our commitment to returning cash to shareholders in 2024. And over the past two years, we have returned $83 million to our shareholders through our ongoing dividend program and share buybacks. We completed the Svenska acquisition in April 2024, and by year end 2024, we had already seen a 1.8 times payback on the initial investment. We have positive momentum as we enter 2025, both operationally and financially. We are building size, scale, and profitability to sustainably grow Valco. I would now like to go through and give an update on our diverse portfolio of high-quality assets, beginning with our newest assets in Côte d'Ivoire. I would like to remind you that a year ago we had no production or interest in Côte d'Ivoire, and then in April 2024, we swiftly and efficiently completed the Svenska acquisition, securing a valuable asset. Based on the results of our third-party reserve engineers, our year-end 2024 SEC net proved reserves of 16.5 million BOE was higher than our estimate at the time of closing, and the 2024 reserves were reduced by production of 1.2 million BOE. In alignment with the projected timeline, the FPSO ceased hydrocarbon operations as scheduled on January 31, 2025. with the final lifting of crude oil from the vessel occurring in early February. Our partners of the CI40 block have commenced mobilization efforts for the FPSO. The vessels plan to be towed to the shipyard in Dubai for refurbishment upon departure from the field in March 2025. Significant development drilling is expected to begin in 2026 after the FPSO returns to service with meaningful additions to production from the main Baobab field. The Council of Ministers recently approved a 10-year extension of the licence on CI40, extending it to 2038. In March 2025, we announced a farming agreement for the CI705 block offshore Côte d'Ivoire, where we will operate with a 70% working interest and a 100% paying interest under a commercial carrier arrangement through the seismic reprocessing and interpretation stages, and potentially growing up to two exploration wells. We are partnering with Ivory Coast Exploration Oil and Gas SAS and PETRC. We believe the CI705 block is favorably located in a proven hydrocarbon system near existing infrastructure with access to a strong growing domestic market and attractive upside potential. It is located in the prolific Tano Basin and is approximately 70 kilometers to the west of our CI40 block and 60 kilometers west of ENI's recent Callio discovery. We invested $3 million to acquire our interest in the new block, and their initial assessment is that there are both oil and natural gas prospects of a diverse place on the block. We plan to conduct a detailed integrated geological analysis to assess and mature our understanding of the block's overall prospectivity. We have demonstrated our ability to acquire, develop, and enhance value through accretive acquisitions, and we are excited about the prospects in Cote d'Ivoire. Turning to Canada, we successfully drilled four wells in the first quarter of 2024, completed those wells in March and April, and brought the wells online. As a reminder, we drilled longer laterals to improve the economics of the program, and all four wells were 2.75-mile laterals. We're very pleased with the production results from our drilling program, and as you can see, they're in the production mix in Canada. In Q1, our Canadian production was about 60% liquid, and in Q2 through Q4, our Canadian production was approximately 75% liquid from the new wells coming online with a lower GOR. This strong oil production has rebalanced production in Canada more in favor of liquids, which contributes to the strong production performance. As I mentioned in the last call, we drilled a well in the southern acreage in the fourth quarter. In our southern acreage, we have a minimal horizontal subsurface information, and this exploration well was drilled to help us better understand the acreage and potentially add proved undeveloped locations. We do not have 30-day initial production rates from the well yet, but the well has been completed and placed on pump. We are monitoring the well's results and will provide an update on it in the future. In Egypt, as we disclosed last quarter, our focus for most of 2024 was on the high rate of return capital work over projects that help mitigate decline. In the fourth quarter of 2024, we had two re-completions And for the full year 2024, we had 12 completed to help mitigate decline. Also in the fourth quarter, we contracted a rig and drilled two wells, starting a drilling campaign that will carry into the first half of 2025. We expect to drill an additional eight to 13 wells in 2025 as part of this drilling program in Egypt. By drilling these wells in late 2024 and in the first half of 2025, we are maximizing the positive impact of our Egyptian production throughout the year. In addition to the successful workovers and drilling we have seen over the past two years, I am very proud of a major milestone that we have accomplished in Egypt. We did not have a lost time incident in 2024, and thus far in 2025, we have not had a lost time incident, which means we have gone over 3.5 million man hours without an incident. This is a testament to our commitment to safety, training and dedication, which is of the utmost importance to all of our people in the operation. We continue to work with the Ministry and EGPC on our outstanding receivables. Our rate of collections has improved in the second half of 2024 and has continued to outpace revenues in early 2025. We fractured one of our wells in the South Gazalat in the Western Desert late in the fourth quarter, and we are evaluating the results. We are considering a follow-up exploration well in the nearby prospect on the block. Moving to Gabon, given that we haven't drilled a well in Gabon for over two years, we are pleased with the positive overall production results with strong production uptime and improved decline curves on the wells. The FSO and field reconfiguration projects in 2022 have allowed us to minimize downtime, capture efficiency, and reduce overall outputs. We secured a drilling rig in December 2024 for our 2025-2026 drilling program, which is planned to begin in Q3 2025. The rig has a firm commitment of five wells with an additional five-well option. We are targeting at least two wells to be drilled and completed in 2025, with the remainder of the program to occur in 2026. In total, we now anticipate drilling three infill development wells, one oil exploration well, a high GOR well to support the field fuel needs, and two workovers. We have option to drill additional wells if information gathered during the program results in the high grading and de-risking of already identified well locations. Since the last call, we have continued to review the well sequencing of the program and the testing of the Aburi shut-in wells. We are conducting an extended flow test on the Aburi 4H well to gather information on the H2S concentrations at this location to aid in equipment design and to evaluate our chemical crude sweetening process. I am pleased to say that the H2S concentration is within our modeling expectations. This well has now flowed for over two months, demonstrating our ability to treat the oil and has provided us some additional production in the process. This well will be worked over during the program and should provide a nice boost to oil production. Regarding our exploration blocks in Gabon, the Niozi Marine and the Gaduma Marine, we are working with our partners and the operator BW Energy on plans for the two blocks moving forward. A seismic survey to fulfill a work commitment on NIOSI is being planned for acquisition in the late 2025 or early 2026. Given the proximity of these blocks to the prolific producing fields of Itami and Disafu, as well as the recent BWE discovery at the board and prospect in the Disafu concession, we're excited about the future possibilities for this block. Turning to Equatorial Gary. In March 2024, we announced the finalization of documents related to the Venus Block P plan of development. In the second half of 2024, we began a front end engineering design or feed study. We anticipate the completion of the feed study will lead to an economic final investment decision or FID in 2025, which will enable the development of Venus. We are very excited to proceed with our plans to develop, operate, and begin producing from the discovery in Block P offshore Equatorial Guinea over the next few years. We look forward to discussing this new area of operations in more detail once the feed study is complete. Turning to reserves, we're very pleased with the growth of our SEC-approved reserve base despite a significant decline in pricing. Our acquisition in Cote d'Ivoire, coupled with our positive reserve revisions due to field performance in Gabon and drilling results in Egypt and Canada, more than offset production and slightly lower pricing. SEC proved reserves at year-end increased 57% to 45 million BOE, and our PV10 increased 11% from 342 million to 379 million. Our 2P CPR estimate, which includes proven and probable reserves, using Volco's management's assumption for future pricing and cost reported on a working interest basis prior to deductions for government royalties, saw a year-over-year increase of 24% to 96.1 million BOE. The 2P CPR NPV10 saw a 9% increase to 687 million at year-end 2024. The value of our Svenska acquisition, as well as our efforts across our asset base to improve production, manage costs, and expand our asset through drilling can be seen in the positive results from our reserve reports. We have a strong runway of opportunities that will continue to add value. And as you can see from our SEC-approved reserves, 2p CPR reserves and corresponding PV10 values compared to our current market cap, our stock is quite undervalued. In closing, we have an outstanding diversified portfolio of assets that have significant upside opportunities. We remain focused on growing production, reserves, and value for our shareholders. I would like to thank our hardworking team who continue to operate and execute our plans. Over the past two years, we have significantly diversified our portfolio, enhancing our capacity to generate operational cash flow and adjusted EBITDAX. return capital to shareholders, grow our cash reserves, while increasing our credit facility capacity. We are well positioned to execute the projects in our enhanced portfolio, and our proven track record of success in these past few years should instill confidence in our future. With that, I would like to turn the call over to Ron to share our financial results.