VAALCO Energy, Inc. announced that for the second quarter of 2008, net income was $13.0 million or $0.22 per diluted share compared to net income of $3.7 million or $0.06 per diluted share for the comparable period in 2007. For the six months ended June 30, 2008, net income was $14.8 million or $0.25 per diluted share compared to $8.3 million or $0.14 per diluted share in the six months ended June 30, 2007. Discretionary cash flow was up 72% to $35.0 million for the six months ended June 30, 2008, compared to $25.4 million in the first half of 2007.
"We are pleased with our second quarter results,” said Robert L. Gerry, III, Chairman and CEO. “The growth largely reflects the increased pricing environment and additional barrels sold during the quarter compared to the same period last year.
"With rigs arranged and properties identified, VAALCO's exploration program provides a number of exciting opportunities for continued growth and value creation,” said Gerry. “We are poised to increase reserves with additional exploration and development wells expected over the next three to eighteen months."
VAALCO currently has six producing wells in offshore Gabon, West Africa: four in its Etame field and two in the Avouma / Tchibala fields. To support continued growth, the Company is planning seven development and exploration wells over the next three to eighteen months, exposing the Company to over 50 million net barrels, or an 8-fold potential increase to VAALCO’s current 6.2 million barrels of proved reserves. These seven wells include:
In addition, VAALCO has a 25% interest in a gas prospect on Block 48/25c in the British North Sea. The Company is participating with Century Exploration on the well, which is an offset to a former Shell gas discovery made in 1987. 3D seismic data indicates the ability to get higher on the structure than the earlier well, increasing the potential reserves to 60 Bcf. Drilling is anticipated to begin in the fourth quarter of 2008.
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