Q2 FY2026
Filed Aug 6, 2026VAALCO Energy Announces Second Quarter 2026 Results
Net income improved to $42.4 million from a net loss of $93.8 million in Q1 2026, Adjusted EBITDAX increased to $54.8 million from $11.6 million, sales rose 48% sequentially, and the Company affirmed its elevated full-year production and sales guidance while maintaining capital budget guidance.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net incomeGAAP | $42.4 million | – | – |
| Diluted earnings per shareGAAP | $0.39 per diluted share | – | – |
| Adjusted EBITDAXnon-GAAP | $54.8 million | a nearly five-fold increase | up 10% |
| Gross salesother | $189,699 | – | – |
| Net revenueother | $135,166 | – | – |
| Oil salesother | $189,699 | – | – |
| Productionother | 16,688 NRI BOEPD | 10 % | (2) % |
| Salesother | 1,621,000 NRI BOE | 48 % | (8) % |
| Realized commodity priceother | $80.77 | – | – |
| Average oil price receivedother | $89.50 | 37 % | – |
| Average Brent priceother | $102.63 | 27 % | – |
| Oil sales volumeother | 2,117 MMB (working interest) | – | – |
| Capital expendituresother | $103.6 million | – | – |
| Trade receivables in Egyptother | $12.9 million at June 30, 2026 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| GabonQ2 2026 included two liftings in Gabon. The Company drilled and completed the Ebouri-5H development well, with production commencing in June 2026. | $91,798 | – | – |
| EgyptIncreased sales in Egypt contributed to Q2 2026 results. The 2026 Egypt drilling program commenced in May 2026, and the HE-9 development well was brought on production in early June 2026. | $43,368 | – | – |
| CanadaThe Company sold all of its producing properties in Canada on February 19, 2026. | $— | – | – |
| Côte d’IvoireProduction resumed from all producing wells in June 2026 following the Baobab FPSO refurbishment. The first crude oil lifting is scheduled for August 2026. | $— | – | – |
Q3 2026 and full year 2026 outlook
- NoteQ3 2026 sales volumes: between 17,200 and 18,900 NRI BOPD
- NoteQ3 2026 production: between 19,600 and 21,600 NRI BOPD
- NoteQ3 2026 production guidance represents a 23% increase compared to Q2 2026 at the midpoint of guidance
- NoteFull year 2026 NRI production and sales volumes: affirmed elevated guidance that was raised in May by 8% and 12%, respectively at the midpoint
- Note2026 capital budget guidance: maintained unchanged
Capital returns
- Declared quarterly cash dividend of $0.0625 per share of common stock to be paid on September 22, 2026.
What drove it
- Q2 2026 included two liftings in Gabon and increased sales in Egypt.
- Higher realized commodity prices increased sales revenue.
- The Baobab field in offshore Côte d’Ivoire restarted production in June 2026 after a major FPSO refurbishment.
- The Company cited lower exploration expense and a non-cash gain on derivative instruments as contributors to net income compared with Q1 2026.
- Production expense, depletion and general and administrative expenses increased.
- The ETBNM-3 gas-supply well in Gabon is supplying gas for operational purposes and is expected to significantly reduce the cost of higher priced diesel transported to the field by vessel.
Concerns
- NRI production was 16,688 NRI BOEPD, down (2) % from Q2 2025.
- Sales were 1,621,000 NRI BOE, down (8) % from Q2 2025.
- The first Côte d’Ivoire crude oil lifting is scheduled for August 2026, despite production restarting in June 2026.
- The Company cited increases in production expense, depletion and general and administrative expenses.
- Final Investment Decision for the Venus field discovery on Block P is expected in Q4 2026.
What to watch
- The first 2026 lifting in Côte d’Ivoire expected in Q3 2026.
- Completion of the Gabon Phase Three Drilling Program and drilling of the ETSEM-3PH pilot hole and development well.
- Continued Egypt drilling program in the third quarter of 2026.
- Start of the Phase Five Drilling Program at Baobab expected in September 2026.
- Decision on whether to enter the second phase of the CI-705 exploration period by year-end 2026.
- Final Investment Decision for the Venus field discovery expected in Q4 2026.
- Completion of the Kossipo field development plan targeted in the first half of 2027.
Balance sheet and cash flow
- Invested $103.6 million in capital expenditures.
- Trade receivables in Egypt were reduced from $31.6 million at December 31, 2025 to $12.9 million at June 30, 2026.
- The Company divested all Canadian assets for approximately $25.5 million, with closing on February 19, 2026.
Analysis
VAALCO reported a substantial sequential earnings recovery in Q2 2026. Net income was $42.4 million, or $0.39 per diluted share, compared with a net loss of $93.8 million, or $0.90 per diluted share, in Q1 2026. Adjusted EBITDAX rose to $54.8 million from $11.6 million in Q1 2026 and was up 10% from $49.9 million in Q2 2025. The Company attributed the earnings improvement to hedging gains, higher realized pricing and lower exploration expense, partly offset by higher production expense, depletion and general and administrative expenses.
Sales and pricing were central to the quarter. NRI sales were 1,621,000 NRI BOE, up 48% from Q1 2026, while reported NRI production was 16,688 NRI BOEPD, up 10% sequentially but down (2) % from Q2 2025. Net revenue was $135,166, compared with $62,599 in Q1 2026, and gross sales were $189,699, compared with $93,640. The average oil price received was $89.50, compared with $65.33 in Q1 2026, while the reported average Brent price was $102.63 versus $80.72.
Gabon and Egypt generated all reported Q2 net revenue, at $91,798 and $43,368, respectively. Two Gabon liftings and increased Egyptian sales supported the sales increase. Operationally, Gabon added the Ebouri-5H well to production, while the ETBNM-3 gas-supply well began supplying field operations. Egypt added the HE-9 development well in early June and completed two further development wells in July. Côte d’Ivoire resumed production from all producing wells in June, but its first crude oil lifting is scheduled for August 2026, so no Côte d’Ivoire revenue was reported in the Q2 sales table.
Capital spending was $103.6 million, directed to the Gabon Phase Three Drilling Program, the Côte d’Ivoire FPSO dry dock refurbishment, and Côte d’Ivoire drilling materials and services. The Company also reduced Egypt trade receivables to $12.9 million at June 30, 2026 from $31.6 million at December 31, 2025. It declared a quarterly cash dividend of $0.0625 per share of common stock to be paid on September 22, 2026.
Management affirmed the elevated full-year 2026 NRI production and sales guidance raised in May, while maintaining 2026 capital budget guidance unchanged. For Q3 2026, it forecasts sales volumes between 17,200 and 18,900 NRI BOPD and production between 19,600 and 21,600 NRI BOPD. The expected Q3 mix includes two Gabon liftings, continued increased Egyptian sales and the first 2026 lifting in Côte d’Ivoire. Execution on Côte d’Ivoire liftings and drilling, the remaining Gabon program, and continued Egyptian drilling are the principal operational milestones for the second half.
Management, verbatim
The strong first half results and our expectation of continued operational execution have given us the confidence to affirm our increased full year production and sales guidance for 2026.
George Maxwell, Chief Executive Officer
Not in the filing
stated, not guessed- GAAP total revenue as presented in a consolidated income statement
- Gross profit or gross margin
- Operating income or operating margin
- Adjusted net income or adjusted earnings per share
- Operating cash flow
- Free cash flow
- Cash balance
- Debt balance
- Net debt
- Share repurchases
- Full-year 2026 numerical production guidance range
- Full-year 2026 numerical sales guidance range
- Full-year 2026 numerical capital budget guidance
- Q3 2026 revenue guidance
- Q3 2026 gross margin guidance
- Q3 2026 operating expense guidance
- Q3 2026 tax-rate guidance
- Prior outlook section or prior guidance required for guidance comparison
- Q2 2026 realized commodity price sequential comparison and percentage change
- Year-over-year percentage change for net income, diluted earnings per share, gross sales, net revenue, oil sales volume and average oil price received
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.