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Vaalco Energy's South East Etame 4H well begins production

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Oilfield Technology,

Vaalco Energy, Inc. has announced that the South East Etame 4H development well including approximately 750 ft of horizontal section in the Gamba reservoir has been successfully completed.

The well was brought onto production on 21 March 2020 at an initial flow rate of approximately 2200 gross bpd, with 600 bpd net revenue interest (NRI) to Vaalco. Workover of the South East Etame 2H well has also commenced to replace the electric submersible pumps (ESPs) and it is expected that production will be restored around the end of March. To date, operations have not been materially disrupted by the current worldwide Covid-19 crisis.

Cary Bounds, CEO, commented, “We are proud of the highly successful 2019/2020 drilling campaign in which we have drilled and brought online three development wells and drilled two successful appraisal wellbores that confirmed additional resources to exploit from this quality asset. The drilling campaign has been transformational for Vaalco and has added meaningful production and cash flow with minimal increase in operating costs. This has helped to improve our margins and drive our operational breakeven down to US$31/bbl of realised pricing. Following the completion of the South East Etame 4H well, we began the planned workover on the South East Etame 2H well to replace ESPs. We expect to bring the South East Etame 2H well back online around the end of March, which should restore production of approximately 2400 gross bpd.”

“Our lowered operational breakeven, strong hedge position and increased production has enabled us to establish a solid financial footing which puts us in a stronger position to navigate the current low price oil environment. With that said, the global pandemic and energy industry events that began in late February of 2020 have been unprecedented and caused significant uncertainty across the oil sector with regards to outlook and budgets. The world is battling Covid-19 which has disrupted our everyday lives and negatively impacted the worldwide economy. As of right now, Vaalco’s operations have not been disrupted, and we have managed through the logistical challenges that we have faced since the outbreak. Vaalco has contingency plans in place in the event that we are directly impacted, and we continue to put the safety of our workers and local stakeholders first. We remain committed to generating long-term value for our shareholders by focusing on capital efficiency, controlling costs and optimising production.”

With the drilling of the South East Etame 4H well, Vaalco has completed its 2019/2020 drilling campaign.

As previously announced, on 7 March 2020, the South East Etame 2H well stopped producing due to an ESP failure. The drilling rig on the South East Etame North Tchibala (SEENT) platform was already scheduled to replace the ESP on that well in a preemptive workover upon completion of the South East Etame 4H well. The workover on the South East Etame 2H well is currently underway and the well is expected to be returned to production around the end of March. The well was producing 2400 gross bpd, or 650 bpd NRI to Vaalco, when the ESP failed. Vaalco will not perform any additional workovers with the contracted drilling rig and the rig will be released after completion of operations on the South East Etame 2H well.

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