VAALCO Energy (EGY) Roars Back With A Blowout Quarter

On August 6, VAALCO Energy (NYSE: EGY ) reported second-quarter 2026 results that mark a sharp reversal from the quarter before. Net income landed at $42.4 million, or $0.39 per diluted share, compared with a $93.76 million loss in the first quarter. Adjusted EBITDAX nearly quintupled to $54.8 million. Behind those numbers is a company juggling drilling programs across four countries, and this quarter is the clearest sign yet that several of them are starting to pay off.

Sales volumes reached 17,812 net revenue interest barrels of oil equivalent per day, above the midpoint of the company's own guidance and up 47% from the first quarter. Much of that increase traces back to the Baobab field offshore Côte d'Ivoire, where production resumed in June following a yearlong refurbishment of the floating production, storage and offloading vessel. VAALCO expects the momentum to continue, forecasting third-quarter production between 19,600 and 21,600 NRI barrels per day, a 23% increase at the midpoint once a full quarter of Côte d'Ivoire output is included. Realized pricing moved in the same direction. The average commodity price per barrel of oil equivalent climbed to $80.77 in the second quarter, up from $57.21 in the first quarter and $54.87 a year earlier, pushing total commodity sales to $135.2 million from $62.6 million.

Management affirmed the increased full-year 2026 production and sales guidance it raised in May, an 8% and 12% lift at the midpoint, without changing the capital budget even though additional Egypt drilling was added to the plan. Trade receivables in Egypt fell to $12.9 million at the end of June from $31.6 million at the end of December, freeing up cash that had been tied up for months. VAALCO also kept its quarterly dividend at $0.0625 per share, with the third quarter payment due to shareholders of record on September 22.

That second quarter turnaround does not erase the first half's bottom line. VAALCO reported a net loss of $51.3 million for the six months ended June 30, compared with net income of $16.1 million over the same stretch in 2025, weighed down by losses on commodity derivative contracts, lower sales volumes and higher exploration and administrative costs. Even the second quarter's own earnings carried a derivative swing inside them: an $18.7 million net gain that combined a $43.7 million unrealized gain on hedges with a $25 million realized loss on contracts that had already matured.