At the Etame field, the Company has begun drilling the Etame 9H horizontal
development well targeting the Gamba formation, as planned. If successful, the Etame 9H well is expected to result in additional production coming online in December. As previously disclosed, the Etame 9P appraisal wellbore was successfully drilled and encountered both the Gamba and Dentale reservoirs at targeted depths as anticipated. After reaching total depth in the Etame 9P appraisal wellbore, the drillpipe and tools became stuck. VAALCO was able to cut and pull the majority of the drillpipe but was unable to recover a portion of the drillpipe and tools at the bottom of the
wellbore. The Etame 9P appraisal wellbore was successfully plugged back to a shallower depth, and the Company is currently drilling the Etame 9H
development well as expected. The Etame 9P appraisal wellbore fulfills the commitment for one of the two appraisal wellbores agreed to under
the Company’s PSC Extension and the Etame 9H development well will
fulfill the Company’s commitment for one of the two development wells
agreed to under the Company’s PSC Extension. Based on further analysis,
the Company now has additional positive information regarding the
previously-announced results from the reservoir analysis. The Company now estimates that there is at least a 45 foot oil column in the Gamba reservoir with no oil-water contact. This oil column is thicker than predrill
expectations and may result in higher ultimate oil recovery from the planned Etame 9H and Etame 11H development wells versus predrill
expectations.
In addition, preliminary analysis now indicates that VAALCO encountered
at least 45 feet of good-quality Dentale oil sands with estimated gross recoverable oil resources of 3.9 to 14.9 million barrels of oil present in subcropping Dentale reservoirs. Cary Bounds, Chief Executive Officer,
commented, “We are pleased to have begun drilling the Etame 9H, our first development well in our 2019/2020 program which should add additional
production in December. Furthermore, we are encouraged by the updated analysis of the data we obtained on the Gamba and Dentale reservoirs from the Etame 9P appraisal wellbore which should positively impact the estimated ultimate recoverable reserves and resources from the field. We are in the midst of an active work program drilling the Etame 9H development well which will be followed by the Etame 11H development well in the same Gamba reservoir. We look forward to providing further details on our 2019/2020 drilling program during our upcoming third quarter conference call scheduled for November 7.”