Fourth quarter 2003 revenues were $10.8 million compared to $9.3 million in fourth quarter 2002. The average price received for crude oil from the Etame field during the fourth quarter 2003 was $29.02 per barrel compared to $24.81 in the fourth quarter of 2002. The Company sold 367,000 net barrels from the Etame field offshore Gabon during the fourth quarter and had inventory on board the FPSO (Floating Production Storage and Offloading facility) of 90,000 net barrels at December 31, 2003. The Etame field continues to produces at a rate of approximately 15,000 barrels of oil per day.
For the year ended December 31, 2003, revenues were $36.0 million compared to $10.0 million for the year ended December 31, 2002. Through December 31, 2003 the Company has sold 1.6 million net barrels from the Etame field at an average price per barrel of $27.69 per barrel.
Discretionary cash flow, a non-GAAP financial measure of the amount of cash generated that can be used for working capital, debt service or future investments was $5.6 million for the three months ended December 31, 2003. For the year ended December 31, 2003, discretionary cash flow was $18.5 million.
In addition to the financial results, the Company announced that its independent reserve engineers raised the total proved reserves for the Company from 5.5 million barrels to 9.0 million barrels, primarily due to the better than anticipated performance of the Etame field. Proved producing reserves were increased to 6.5 million barrels from 3.5 million barrels. The reserve figures are net of approximately 1.3 million barrels produced in 2003.
Robert L. Gerry, III, Chairman and CEO stated, "We are extremely pleased with our financial results for 2003 especially the 65% increase in proved reserves to 9.0 million barrels net to VAALCO. The increase is due to the continued strong performance of the Etame Field. The consortium has produced over 8.0 million barrels since coming onstream in September of 2002 and continues to produce at approximately 15,000 barrels per day.
"We expect to commence drilling an infield well in late April to add an additional 5,000 to 8,000 barrels (gross) of production in July. Immediately following the development well, we intend to drill our second exploration prospect. The first exploration well discovered the Ebouri Field and we are currently evaluating engineering studies to determine the best procedures to bring the field into production."
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