Financial Analysis

ACQUISITIONS Acquisition of Interest in CI-705 Block In March 2025, the Company farmed into the CI-705 block offshore Cote dIvoire. The Company is the operator of the CI-705 block with a 70% working interest and a 100% paying interest through a commercial carry arrangement and is partnering with two other parties. The CI-705 block is located in the Tano basin, west of the Company's CI-40 Block, where the Baobab and Kossipo oil fields are located. The total amount of acquisition costs for this transaction is approximately $3.0 million. FPSO Acquisition In February 2025, the Company, through the joint operating agreement operator, completed the acquisition of the Baobab floating, production, storage and offloading vessel (the Baobab FPSO) in Cote d'Ivoire for a total purchase price of $20.0 million, or approximately $5.5 million net cost to the Company. Svenska Acquisition On April 30, 2024, the Company completed the acquisition of all of the issued shares in the capital of Svenska Petroleum Exploration Aktiebolag, a company incorporated in Sweden (the Svenska Acquisition). The total purchase price consideration was $40.2 million and was funded with Vaalcos cash-on-hand. Cash acquired in the business combination included $31.8 million of cash and cash equivalents as well as restricted cash of $8.8 million which nets to $0.4 million cash received on the business combination within the purchase price allocation. As a result of comparing the purchase price to the fair value of the …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

COMMITMENTS AND CONTINGENCIES Abandonment funding Under the terms of the Etame PSC, the Company has a cash funding arrangement for the eventual abandonment of all offshore wells, platforms and facilities on the Etame Marin block. At September 30, 2025, $10.7 million ($6.3 million, net to Vaalco) of the abandonment fund has been funded on an undiscounted basis. The annual payments will be adjusted based on revisions in the abandonment estimate. This cash funding is reflected under Other noncurrent assets in the Abandonment funding line item of the unaudited condensed consolidated balance sheets. Future changes to the anticipated abandonment cost estimate could change the asset retirement obligation and the amount of future abandonment funding payments. Share Buyback Program On November 1, 2022, the Company announced that the Companys board of directors formally ratified and approved a share buyback program. The board of directors also directed management to implement a Rule 10b5-1 trading plan (the 10b5-1 Plan) to facilitate share purchases through open market purchases, privately negotiated transactions, or otherwise in compliance with Rule 10b-18 under the Securities Exchange Act of 1934. The 10b5-1 Plan provided for an aggregate purchase of currently outstanding common stock up to $30 million over a maximum period of 20 months. Payment for shares repurchased under the share buyback program were funded using the Company's cash on hand and cash flow from operations. The share …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

DEBT In April 2025, the Company drew down $60.0 million under the 2025 RBL Facility. The borrowing accrues interest at a rate of 10.8% per annum which is based on the Term SOFR plus the applicable margin of 6.5% per annum. In addition, the borrowing is due to be repaid within three months from the drawdown date with, subject to certain conditions, the option to rollover the debt upon maturity. As of September 30, 2025, there were $60.0 million of outstanding borrowings under the 2025 RBL Facility. There were no outstanding borrowings as of December 31, 2024. In addition, as of September 30, 2025 and December 31, 2024, we were in compliance with all of our debt covenants. 2025 RBL Facility On March 4, 2025, the Company and certain of its subsidiaries (the Vaalco Energy Group), entered into a reserves-based facility agreement (the 2025 Facility Agreement) providing for a senior secured reserve-based revolving credit facility (the 2025 RBL Facility) with The Standard Bank of South Africa Limited (acting through its Corporate and Investment Banking Division) as agent and security agent, The Standard Bank of South Africa Limited, Isle of Man Branch and the other financial institutions named in the 2025 Facility Agreement (the Lenders), providing for the 2025 RBL Facility. The 2025 RBL Facility had initial aggregate commitments of $190.0 million (the Initial Total Commitments) as of March 4, 2025, with an initial borrowing base of $182.0 million. In accordance with the conditions t …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following table presents revenues from contracts with customers as well as revenues associated with the obligations under the Etame PSC. Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenues from customer contracts: (in thousands) Sales under the COSPA or COSMA (1) $ 24,287 $ 54,933 $ 121,722 $ 182,048 Gabonese government share of Profit Oil taken in-kind 30,394 Carried interest recoupment 495 652 561 1,826 Royalties (3,511) (7,977) (20,651) (25,088) Net revenues $ 21,271 $ 47,608 $ 132,026 $ 158,786 (1) Crude oil sales and purchase agreements (COSPAs) or crude oil sales and marketing agreements (COSMA or COSMAs). The following table presents revenues in Egypt from contracts with customers: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenues from customer contracts: (in thousands) Gross sales $ 58,271 $ 63,432 $ 171,115 $ 191,938 Royalties (22,392) (28,714) (67,731) (84,550) Selling costs (183) (174) (511) (402) Net revenues $ 35,696 $ 34,544 $ 102,873 $ 106,986 The following table presents revenues in Canada from contracts with customers: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenues from customer contracts: (in thousands) Oil revenue $ 3,278 $ 8,039 $ 12,354 $ 21,739 Gas revenue 196 224 1,404 1,429 NGL revenue 1,386 1,984 4,405 5,835 Other revenue 32 24 119 70 Royalties (666) (1,533) (2,688) (3,801) Selling costs (186) (351) (659) (812) Net r …

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INCOME TAXES Vaalco and its domestic subsidiaries file a consolidated U.S. federal income tax return. Certain foreign subsidiaries also file tax returns in their respective local jurisdictions including Canada, Egypt, Equatorial Guinea, Gabon, Cote d'Ivoire and Nigeria. The foreign taxes payable are attributable to Gabon and Cote d'Ivoire as of September 30, 2025 and 2024 . The Companys effective tax rate for the three months ended September 30, 2025, and 2024 , excluding the impact of discrete items, was (81.21)% and 64.85%, respectively. The Companys effective tax rate for the nine months ended September 30, 2025 and 2024 , excluding the impact of discrete items, was 59.48% and 59.10%, respectively. For the three and nine months ended September 30, 2025 and 2024 , the Companys overall effective tax rate was primarily impacted by tax rates in foreign jurisdictions higher than the US statutory rate and by non-deductible items associated with operations. For the three months ended September 30, 2025, the income tax benefit of $3.6 million includes a $3.9 million favorable oil price adjustment as a result of the change in value of the government of Gabon's allocation of Profit Oil between the time it was produced and the time it was taken in-kind. After excluding this impact, income taxes were $0.3 million for the period. For the nine months ended September 30, 2025, the income tax expense of $19.5 million includes a $6.4 million favorable oil price adjustment as a result of th …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Not Yet Adopted In December 2023 , the Financial Accounting Standards Board (FASB) issued new guidance to improve income tax disclosures to provide information to assess how an entitys operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. The rules became effective for annual periods beginning after December 15, 2024. The standard modifies required income tax disclosures. This ASU is not expected to have a material impact on our consolidated financial statements other than increased disclosure requirements. In November 2024, the FASB issued ASU 2024-03, Accounting Standards Update 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU to our notes to the consolidated financial statements and processes. In July 2025, the FASB issued ASU 2025-05, Financial InstrumentsCredit Losses (Topic 326): Measurement of Credit Losses for Accounts Receiv …

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RELATED PARTY TRANSACTIONS The Company has entered into various agreements with related parties. The Company paid approximately $0.1 million and $0.2 million to these related parties for the three and nine months ended September 30, 2025, respectively. The amounts were primarily for contract engineering services paid to an entity owned and controlled by a related party of an officer of the Company.

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REVENUE Production Sharing Contracts Exploration and production activities of our assets in Gabon, Egypt, Cote d'Ivoire, and Equatorial Guinea are generally governed by PSCs. Our oil entitlement under the PSCs is generally the sum of cost oil, profit oil and excess cost oil, if applicable. Under the terms of the PSCs, the Company is typically the contractor partner (Contractor) and bears the risk and cost of exploration, development, and production activities. In return, if exploration is successful, the Contractor receives entitlement to variable physical volumes of hydrocarbons, representing recovery of the costs incurred (Cost Oil) and a stipulated share of production after cost recovery (Profit Oil). The Contractor may be obligated to make royalty payments to the host government of each country using a variable percentage based on gross daily production levels. The remaining oil production, after deducting the gross royalty, if any, is split between Cost Oil and Profit Oil. Cost Oil is up to a maximum percentage and is allocated to recover approved operating and capital costs spent on specific projects. Excess Cost Oil, which is Cost Oil less the actual cost recovery, is further shared between the host government and the Contractor. Except as otherwise disclosed, all crude oil sales are priced at current market rates at the time of sale. Our share of royalties are paid out of the government's share of production. Additionally, the income tax to which the Contractor is sub …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

SEGMENT INFORMATION The Companys operations are based in Gabon, Egypt, Cote d'Ivoire, Canada, Nigeria and Equatorial Guinea. Each of the reportable operating segments are organized and managed based upon geographic location. The Companys Chief Executive Officer, who is the chief operating decision maker (CODM), evaluates segment performance based on the operation of each geographic segment separately primarily based on Operating income (loss) and allocates financial and capital resources for each segment predominantly in the annual budget and forecasting process. The CODM also considers budget-to-actual variances on a quarterly basis for the performance measure when making decisions about allocating capital and personnel to the segments. The operations of all segments include exploration for and production of hydrocarbons where commercial reserves have been found and developed. Revenues are based on the location of hydrocarbon production. Corporate and other is primarily corporate and operations support costs that are not allocated to the reportable operating segments and are shown in the tables to reconcile the business segments to consolidated totals. No transactions occurred between operating segments. Other operating income (expense) below are those items that are included in Net income (loss) but are not regularly provided to the CODM, or are reported to the CODM but are not considered to be significant segment expenses. Segment activity of continuing operations for the …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing