The combined Company is a leading African-focused operator with a strong production and reserve base, a diverse portfolio of assets in\u00a0Gabon,\u00a0Egypt,\u00a0Equatorial Guinea\u00a0and Canada, and significant future growth potential.<\/p>\n
KEY HIGHLIGHTS<\/span><\/p>\n \u00b7\u00a0\u00a0\u00a0<\/span>\u00a0Enhanced stockholder returns with increased dividend, announced share buyback and potential for special distributions;\u00a0<\/span><\/p>\n o<\/span>\u00a0Targeted annualized dividend of\u00a0US$0.25\u00a0per share, or approximately\u00a0US$27.3 million(1)<\/sup>, for calendar 2023, nearly double VAALCO’s targeted annualized dividend of\u00a0US$0.13\u00a0per share prior to the combination;<\/span><\/p>\n o<\/span>\u00a0Planned share buyback program of up to\u00a0US$30 million, the equivalent of\u00a0US$0.27\u00a0per share(1)<\/sup>, to be implemented following yesterday’s closing;<\/span><\/p>\n o<\/span>\u00a0Potential to further enhance stockholder distributions through returning excess cash via special distributions;<\/span><\/p>\n \u00b7\u00a0\u00a0\u00a0<\/span>\u00a0Boosts size and scale through material growth in proved reserves and production volumes;<\/span><\/p>\n \u00b7\u00a0\u00a0\u00a0<\/span>\u00a0Further enhances VAALCO’s balance sheet with an increased, robust cash position and no net debt;<\/span><\/p>\n \u00b7\u00a0\u00a0\u00a0<\/span>\u00a0Reduces VAALCO’s overall risk profile through geographic diversification and multiple sources of production;<\/span><\/p>\n \u00b7\u00a0\u00a0\u00a0<\/span>\u00a0Increases optionality with expanded inventory of high-quality, multi-year investment options;<\/span><\/p>\n \u00b7\u00a0\u00a0\u00a0<\/span>\u00a0Potential to capture\u00a0US$30\u00a0to\u00a0US$50 million\u00a0in 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;<\/span><\/p>\n \u00b7\u00a0\u00a0\u00a0<\/span>\u00a0Immediately accretive to key metrics and significantly increases future Adjusted EBITDAX(2)<\/sup>\u00a0generation potential;<\/span><\/p>\n \u00b7\u00a0\u00a0\u00a0<\/span>\u00a0Allows for improved public market valuation multiples based on VAALCO’s significantly enhanced scale and profile post-closing; and<\/span><\/p>\n \u00b7\u00a0\u00a0\u00a0<\/span>\u00a0Expands the Board of Directors to seven members with the addition of\u00a0David Cook,\u00a0Edward LaFehr\u00a0and\u00a0Timothy Marchant.<\/span><\/p>\n George Maxwell, VAALCO’s Chief Executive Officer commented,<\/span>\u00a0“We are excited to complete this transformational transaction and appreciate the strong support we received from our now unified set of stockholders.\u00a0 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. \u00a0There 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.<\/span><\/span><\/p>\n