VAALCO Energy Announced the Closing of the Strategic Combination with TransGlobe Energy Corporation

The combined Company is a leading African-focused operator with a strong production and reserve base, a diverse portfolio of assets in Gabon, Egypt, Equatorial Guinea and Canada, and significant future growth potential.

KEY HIGHLIGHTS

·    Enhanced stockholder returns with increased dividend, announced share buyback and potential for special distributions; 

o Targeted annualized dividend of US$0.25 per share, or approximately US$27.3 million⁽¹⁾, for calendar 2023, nearly double VAALCO’s targeted annualized dividend of US$0.13 per share prior to the combination;

o Planned share buyback program of up to US$30 million, the equivalent of US$0.27 per share⁽¹⁾, to be implemented following yesterday’s closing;

o Potential to further enhance stockholder distributions through returning excess cash via special distributions;

·    Boosts size and scale through material growth in proved reserves and production volumes;

·    Further enhances VAALCO’s balance sheet with an increased, robust cash position and no net debt;

·    Reduces VAALCO’s overall risk profile through geographic diversification and multiple sources of production;

·    Increases optionality with expanded inventory of high-quality, multi-year investment options;

·    Potential to capture US$30 to US$50 million in synergistic cost savings over the next seven years as a result of the combination that can meaningfully improve margins and enhance future cash flow generation;

·    Immediately accretive to key metrics and significantly increases future Adjusted EBITDAX⁽²⁾ generation potential;

·    Allows for improved public market valuation multiples based on VAALCO’s significantly enhanced scale and profile post-closing; and

·    Expands the Board of Directors to seven members with the addition of David Cook, Edward LaFehr and Timothy Marchant.

George Maxwell, VAALCO’s Chief Executive Officer commented, “We are excited to complete this transformational transaction and appreciate the strong support we received from our now unified set of stockholders.  The combination is meaningful because it builds a business of scale with a stronger balance sheet and a more diversified baseline of production that will underpin the combined Company’s opportunities for success.  There is significant inherent value within the combined portfolio, which should allow us to generate meaningful cash flow to fund increased stockholder dividends, share buybacks and potential supplemental stockholder returns at a rate that would not have been achievable by either VAALCO or TransGlobe on a standalone basis.

We are eager to begin this new chapter in VAALCO’s journey, with three new Board members to help guide our strategy in the future. On behalf of the Board, I would like to welcome David, Edward and Timothy. We believe that their significant experience in the energy industry will help guide VAALCO and we look forward to their unique perspectives on our expanded Board. We plan to report third quarter results for VAALCO separately, and will provide additional insight into our plans for 2023 as we better assess and evaluate the attractive inventory of opportunities we have across our diversified portfolio of assets.”