VAALCO and its joint venture owners have said that they are evaluating the timing and budgeting for development and exploration activities on Block P offshore Equatorial Guinea. This latest information was disclosed in company’

The Block P production sharing contract provides for a term of 25 years from the date of approval of a development and production plan. The non-binding memorandum of understanding with a third party to cover all or substantially all of the Company’s cost to drill an exploratory well on Block P has expired; however, the Company continues to evaluate alternatives to funding the cost to drill an exploratory well in Block P.

There can be no certainty any such transaction will be completed or that VAALCO will be able to commence drilling operations on Block P. As of December 31, 2020, the Company had $10.0 million recorded for the book value of the undeveloped leasehold costs associated with the Block P license.

Block P covers an area of 1,253 square kilometers in the Rio Muni basin, in close proximity to Equatorial Guinea’s mainland. The Venus discovery was made in 2005 by Devon Energy. The PDA also contains a number of exploration prospects, chiefly the SW Grande Prospect and the Marte Prospect, each of which has the potential to substantially add to the area’s reserves. GEPetrol purchased Devon’s Equatoguinean assets in 2008 and became operator of Block P. In November 2012, block partner Petronas Carigali sold its 31 percent share in Block P to Vaalco Energy. Vaalco is in the process of being approved as technical operator and preparing a plan of development for the Venus PDA. The POD will have a minimum of two-well exploration campaign. Drilling targets will be the SW Grande and Marte prospects.