VAALCO Acquires Interest in Block P, Offshore E. Guinea

VAALCO Buys Interest in Block P, Offshore E. Guinea

VAALCO Energy, Inc. has acquired a 31% non-operating working interest in a production and development area (“PDA”) in Block P, offshore Equatorial Guinea from Malaysia’s Petronas.

In a press release published yesterday, November 1, VAALCO said it paid $10 million for the working interest.

The PDA, which is operated by GEPetrol, the national oil company of Equatorial Guinea, contains the Venus field discovered in 2005. The Venus field is estimated to contain between 15 and 30 million gross recoverable barrels of oil. The PDA also contains a number of exploration prospects that VAALCO believes are highly attractive, primarily the SW Grande Prospect and the Marte Prospect, each of which has the potential to add substantial reserves to VAALCO.

VAALCO expects the near-term plans for the PDA will be the drilling of exploration wells on both the SW Grande and Marte prospects in 2013 followed by completing a plan of development, including the Venus discovery.

Robert Gerry, Chairman and CEO, commented: “With this acquisition, we believe we will expose our shareholders to significant upside potential from the offshore prospects in Block P. Oil is present, as proved by the Venus discovery, and we are of the opinion that additional accumulations are potentially present on Block P in the untested prospects, which are expected to be drilled in 2013.”

Additional partners in the PDA include GEPetrol (38.4%), Atlas Petroleum International Limited (5.6%), and Crown Energy Ventures Corporation (5.0%). In addition, the government of Equatorial Guinea has a 20% carried working interest.

Press Release, November 2, 2012