Vaalco Energy, Inc. announced that it will shortly begin a planned upgrade to the Floating Production, Storage and Offloading (FPSO) facility serving its Etame and Avouma fields in offshore Gabon, West Africa. The upgrade is intended to improve the water processing capacity at the facility, which would enable VAALCO to increase production by 10% to 25,000 barrels of oil per day by year-end. In addition, modifications to the gas flare system will be undertaken, improving safety and reducing the likelihood of unplanned downtime.
"This upgrade is part of our efforts to ensure that we are fully capitalizing on VAALCO's E&P portfolio and driving value for our shareholders," said Robert L. Gerry, III, Chairman and CEO. "With seven planned exploration wells in Gabon, Angola and the North Sea, we are entering a period that will see the highest levels of exploration and development in VAALCO's history. This program offers exciting opportunities to drive significant increases in both production and reserves, and represents compelling future upside for VAALCO and our shareholders."
VAALCO noted that the upgrade to the FPSO facility is expected to commence June 12, 2008 and be completed within seven to ten days during which time production will be temporarily shut-in. VAALCO expects to more than make up the lost production as a result of the capacity expansion and does not expect the shut-in to have a material effect on the Company's revenues or earnings for the quarter or for the year.
VAALCO said that Shell has nominated 650,000 barrels to be lifted for the month of June, which will occur prior to commencing the upgrade.
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