VAALCO's 2nd Quarter Net Income Doubles

VAALCO Energy, Inc. announced that for the second quarter of 2006 its net income was $10.5 million or $0.17 per diluted share, more than double its net income of $5.0 million or $0.09 per diluted share for the comparable period in 2005. Second-quarter revenues increased 54% to $25.6 million.

VAALCO sold 374,000 net barrels of crude oil equivalent at an average price of $68.47 per barrel during the second quarter of 2006, up 10% and 42%, respectively, from 339,000 barrels of crude oil equivalent and an average price of $48.31 per barrel in the second quarter of 2005.

For the first half of 2006, the Company earned $21.5 million, or $0.36 per diluted share, an increase of 75% from VAALCO's earnings of $12.3 million or $0.21 per diluted share in the first half of 2005.

Crude oil sales for the first half of 2006 were 886,000 barrels of oil equivalent, up 3%. Crude oil prices increased 39% to an average $64.15 per barrel of oil equivalent for the first half.

Robert L. Gerry, III, Chairman and CEO, stated, "We continue to make excellent progress in every phase of our business -- exploration, development and production. Our second-quarter revenues and earnings reflect higher commodity prices and lifting volumes from our Etame field offshore Gabon, West Africa. We are preparing to begin drilling in October using the new platform now being installed at the Avouma field near Etame. And finally, we were successful in bidding for a 40% interest in the 1.4 million-acre Block 5 concession offshore Angola, where new seismic processing techniques make exploration for sub-salt targets more feasible. We are very well positioned to take advantage of the dramatic changes reshaping global energy markets, and are investing strategically to seize the opportunities before us."