VAALCO Begins Production from Etame Field

VAALCO Energy, Inc. has commenced oil production from the Etame Field offshore southern Gabon. The field is currently producing in excess of 14,500 barrels per day of 36 degree gravity, sweet crude oil.

Robert Gerry, Chairman of VAALCO said, "We are pleased to have brought the Etame field on production on schedule. For the next several months, we will be monitoring the field performance to determine optimum production rates and if additional development drilling is warranted. We also are planning to acquire 3-D seismic in the vicinity of the field early next year to investigate the potential for a northern extension of the field as well as other exploration targets."

Phase I of the Etame field development consisted of the subsea completion of two horizontal wells and one vertical well. The wells were connected using flexible flowlines to an FPSO with total storage capacity of 1.1 million barrels of oil. Crude oil will be offloaded from the FPSO via shuttle tankers for delivery of the oil to refineries.

VAALCO's subsidiary VAALCO Gabon Etame, Inc. owns a 30.35% interest in the Etame Field. Other field partners are PanAfrican Energy Gabon Corp. (33.9%), Sasol Petroleum West Africa (Ltd.) (30%), Energy Resources Japan Etame (Gabon) Limited (3.225%) and PetroEnergy Resources Corp. (2.525%). The Gabonese Government has the right to acquire an interest of 7.5% from all partners proportionately.