Houston-based oil company Vaalco Energy has informed that its 2017 year-end proved oil reserves increased by 15 percent compared to the prior-year.
Namely, according to Vaalco’s update on Thursday, the company’s year-end 2017 proved reserves rose to 3 million barrels of oil equivalent (MMboe), up 15% from 2.6 MMboe at year-end 2016.
The company’s 2017 proved reserve additions of 1.9 MMboe resulted in a reserve replacement ratio of 127%. Vaalco’s reserves were fully engineered by its third-party independent reserve consultant, Netherland, Sewell & Associates, Inc., who has provided annual independent estimates of Vaalco’s year-end reserves for over 15 years.
Vaalco’s proved reserves of 3 MMboe at December 31, 2017, consisted of 100% oil. In 2017, the company added 1.3 MMboe of reserves through reservoir performance additions and 0.6 MMboe through positive pricing revisions. Preliminary 2017 estimated production totaled 1.5 MMboe. All of Vaalco’s proved reserves are proved developed and are located offshore Gabon in the Etame Marin Permit area.
The present value of the proved reserves discounted at 10% (PV-10 Value) at year-end 2017, utilizing SEC pricing of $54.42 per barrel of oil (average of monthly prices on the first of each month for calendar year 2017), more than doubled to $22.5 million from $9.4 million at December 31, 2016.
Utilizing forward strip pricing at year-end 2017 of $65.38 for 2018, $61.65 for 2019, $59.10 for 2020, and $57.96 for 2021, per barrel of oil, the PV-10 value would have been $39.3 million. Vaalco receives pricing for its crude that is correlated to Brent oil prices.
Cary Bounds, Chief Executive Officer commented, “We are very optimistic as we enter 2018 with increasing oil pricing, in particular Brent, and our strong commitment to operational excellence. In this improving environment we are confident in our development prospects on our offshore Gabon asset and will look for opportunities to further grow our assets and reserves.”
In related news, Vaalco is still working to repair an electrical submersible pump at its production operations offshore Gabon. The latest fail occurred in the South Tchibala 1-HB well in late December prompting the company to shut the well down. The well was producing approximately 930 barrels of oil per day gross, or 250 net to the company, prior to being shut-in.