VAALCO Energy ends $50M credit facility, transitions to new loan

HOUSTON, TX - VAALCO Energy Inc. (NYSE:EGY), a Houston-based energy company with a market capitalization of $410 million and strong financial health according to InvestingPro metrics, announced the termination of its existing $50 million credit agreement as it transitions to a new financing arrangement. The company, currently trading near its 52-week low and showing signs of being undervalued based on comprehensive analysis, maintains a healthy 6.2% dividend yield. VAALCO Gabon (Etame) Inc., a wholly-owned subsidiary of VAALCO Energy, voluntarily delivered a notice of cancellation for the previous credit facility, which was initially established on May 16, 2022, and subsequently amended on October 3, 2023. InvestingPro data reveals the company operates with a moderate debt-to-equity ratio of 0.2, while its cash flows sufficiently cover interest payments, suggesting a prudent approach to financial management.

The original facility agreement, which provided for a senior secured reserve-based revolving credit facility, was scheduled to fully amortize by its final maturity date. As of Monday, no amounts were drawn from this facility. The termination of the agreement and the release of associated liens became effective on Tuesday.

This strategic financial move comes after VAALCO Gabon secured a new reserves-based facility agreement, details of which were disclosed in a prior SEC filing on March 10, 2025. The new facility is expected to provide the company with a more tailored financing structure to support its operations.

VAALCO Energy’s existing hedging agreements, including those with Glencore (OTC:GLNCY) Energy UK Ltd., have been amended in conjunction with the new financing. These amendments took effect concurrently with the termination of the prior credit agreement. Additionally, VAALCO Gabon S.A.’s crude oil production off-take arrangements with Glencore remain in effect, with lenders under the new facility securing benefits from this ongoing agreement.

The company’s transition to the new facility is part of its broader financial strategy to optimize its capital structure and support its growth initiatives. VAALCO Energy operates primarily in the crude petroleum and natural gas sector, with key activities focused on exploration and production. The company maintains strong operational efficiency with a gross profit margin of 66% and has demonstrated resilience with a return on equity of 12%. For deeper insights into VAALCO’s financial health and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US equities with detailed analysis and actionable intelligence.

The information presented in this article is based on a press release statement filed with the Securities and Exchange Commission.

In other recent news, VAALCO Energy reported its Q4 2024 financial results, revealing earnings per share (EPS) of $0.07, which missed the forecasted $0.12. The company’s revenue also fell short of expectations, coming in at $121.72 million compared to the anticipated $129.55 million. Despite these misses, VAALCO Energy achieved a record adjusted EBITDAX of $76 million for the quarter and $3 billion for the full year, marking a company milestone. The company completed the strategic acquisition of Svenska and executed successful drilling campaigns, enhancing its competitive position. Looking ahead, VAALCO plans to invest between $270 million and $330 million in 2025, focusing on drilling campaigns and FPSO refurbishment projects in Cote D’Ivoire. Analyst firms did not provide any upgrades or downgrades, but the company remains optimistic about its future production targets and operational achievements. VAALCO Energy’s CEO, George Maxwell, expressed a positive outlook, emphasizing the company’s strategic initiatives and growth potential.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.