• Wednesday, 16 May, 2012

Vaalco profits shrink

Mixed quarter: Instability marred balance sheets

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Kathrine Schmidt , Kathrine Schmidt , Kathrine Schmidt , Kathrine Schmidt , Kathrine Schmidt

 07 November 2011 23:58 GMT

Woes in Africa, including high taxes and a write-down from a partner’s default, shrunk profits at Houston player Vaalco, the company said Monday.

The company brought in net income of $3.4 million in the three months ending in September on $37.3 million of revenue.

In the year-ago quarter, net income was $13.9 million on $32.6 million of revenue.

Diluted earnings per share were $0.04, compared with $0.22 in the year-ago quarter.

"We remain confident that ongoing negotiations with Angola will result in a favorable renewal of our concession agreement,” chief executive Robert Gerry said in the company’s statement.

“Following the renewal, we expect to purchase additional 3-D seismic in the deeper waters on the block in advance of a drilling campaign.”

The company sold 324,000 net barrels of oil equivalent in the quarter, a drop compared with 429,000 boe in the year-ago quarter.

Meanwhile, a Hemphill County, Texas well was drilled into the Granite Wash formation and has come online. In September, the company also bought a working interest into 22,000 net acres in Montana's Bakken play.

In Gabon, platform modifications are preceding single and multiple well-drilling campaigns.

In Angola, the company saw a partner walk out with a cost to the company of $4.1 million.

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