Roth MKM analyst John White, in a research report published on July 16, 2024, provided an update on Vaalco Energy Inc. (EGY:NYSE) following the company's announcement of additional reserves disclosures related to its acquisition of Svenska Petroleum Exploration AB. The analyst maintained a Buy rating and a 12-month price target of US$8.00 on the stock.
Vaalco Energy reported several positive developments in its reserves estimates:
1. Updated SEC net proved reserves as of December 31, 2023, of 16.9 million BOE (93% oil), significantly higher than previous 1P working interest CPR reserves of 13.0 million BOE (99% oil) as of October 1, 2023.
2. Increased 2P WI CPR reserves as of December 31, 2023, to 22.5 million BOE (93% oil) from 21.7 million BOE (97% oil) estimate.
3. Significant further upside identified from contingent resources at the Baobab field with Best Estimate Working Interest Contingent Resources of 20.4 million BOE.
White views these developments positively, as indicated by the report title "EGY: Higher Reserves Estimate at Svenska: Positive."
The analyst also highlighted Vaalco's annual dividend of US$0.25 per share, which produces a yield of 4.1% at current share prices.
With a Buy rating and a price target of US$8.00, representing a potential return of approximately 17% from the price at the time of the report of US$6.85, Roth MKM sees upside potential for Vaalco Energy.
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Disclosures for Roth MKM, Vaalco Energy Inc., July 16, 2024
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Disclosures: ROTH makes a market in shares of Vaalco Energy Inc. and as such, buys and sells from customers on a principal basis. Within the last twelve months, ROTH has received compensation for non-investment banking securities-related services from Vaalco Energy Inc..
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months. The material, information and facts discussed in this report other than the information regarding ROTH Capital Partners, LLC and its affiliates, are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used as a complete analysis of the company, industry or security discussed in the report. Additional information is available upon request. This is not, however, an offer or solicitation of the securities discussed. Any opinions or estimates in this report are subject to change without notice. An investment in the stock may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additionally, an investment in the stock may involve a high degree of risk and may not be suitable for all investors. No part of this report may be reproduced in any form without the express written permission of ROTH. Copyright 2024. Member: FINRA/SIPC.
