VAALCO Energy Receives New Five Year, $50 Million Reserve Based Lending Facility

VAALCO Energy has announced entry into a new credit agreement, effective May 16, 2022, for a new five-year Reserve Based Lending facility with Glencore Energy UK Ltd.  that includes an initial commitment of $50 million and is expandable up to $100 million.


  • Significantly improves financial flexibility providing optionality to achieve accretive growth;
    • Provides access to cash if required for potential future development programs;
    • Enhances financial optionality for funding inorganic acquisition opportunities;
    • Further strengthens financial position;
      • Forecasted 2022 capital program remains fully funded;
      • Affords the optionality to accelerate development opportunities at Etame; and
      • As part of the agreement, Glencore will provide crude oil marketing.
  • Bolsters VAALCO’s strong, debt-free balance sheet and growing cash position with a low-cost facility;
    • Facility size is $50 million with ability to expand up to $100 million at LIBOR plus 6%;
    • Facility matures in 2027;
    • Key terms and covenants under the new facility include net debt to EBITDAX of less than three times and requires VAALCO to maintain a minimum cash balance of $10 million; and
    • Secured by Etame assets, demonstrating the strength and quality of VAALCO’s flagship asset.

George Maxwell, VAALCO’s Chief Executive Officer, commented, “We have taken the opportunity to enhance our financial flexibility at a favorable time, with sustained higher pricing, strong cash flow generation and no imminent need to use the new facility. By negotiating the facility at a time of strength, it allowed us the opportunity to obtain a low-cost debt option as compared to our peer group. We continue to forecast all current capital commitments for 2022 related to the drilling program, FSO and field reconfiguration will be covered by cash on hand and cash from operations. This new credit facility provides dry powder for future opportunities and could reduce our overall cost of capital by providing immediate access to funds at a low rate, if required. It enhances our opportunity set and allows us to continue to focus on our strategy to build meaningful size and scale to deliver future accretive growth. We are excited about the future for VAALCO with the continued development of our interests in offshore Gabon, upside opportunities in Equatorial Guinea and the potential to integrate accretive acquisitions aimed at further strengthening VAALCO and growing shareholder value.”

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