VAALCO Energy EGY, a U.S.-based independent exploration and production firm, has announced that it has entered an agreement to acquire a 70% stake in the CI-705 block off the coast of Côte d’Ivoire. The company has assumed operatorship of the block alongside its partners Ivory Coast Exploration Oil & Gas and PETROCI, the national oil company of Côte d’Ivoire.
VAALCO has also mentioned that it will hold 100% paying interest in the block outlined via a commercial carry agreement. This implies that EGY would be responsible for taking over the costs related to exploration and production activities on the block. Block CI-705 is located near Eni’s Calao discovery in Côte d’Ivoire, which is deemed to be the second largest hydrocarbon discovery in the country.
The CI-705 block is located in the Tano Basin, approximately 70 kilometers west of VAALCO’s CI-40 block. The block spans an area of approximately 2,300 sq. km. The water depth at the site varies between zero and 2,500 metres.
Per the terms of the farm-in agreement mentioned before, EGY will become the operator of the block while holding a 100% paying interest. The company elaborates that it will cover the funding on behalf of its partners at commercial terms. This includes the costs associated with seismic reprocessing and interpretation phases of the project and the drilling of up to two exploratory wells.
Despite significant oil and gas discoveries in nearby blocks, the block CI-705 is one of the less explored ones with only three wells drilled in by far. EGY has spent approximately $3 million to acquire its stake in the block. The company believes that the block holds great potential for oil and gas discoveries and has a favourable location.
VAALCO mentions that block CI-705 is situated in an area where oil and gas reserves have been proven to exist previously. The company plans to leverage the already existing infrastructure in the region for developing any new oil and gas find. Furthermore, being the operator of this block allows it to gain access to a regional market having strong demand and significant upside potential. The company’s initial exploratory efforts have confirmed the oil and gas prospects in the block. VAALCO also plans to conduct an intricate and detailed geological analysis to enhance its understanding of the block’s full potential.
The company has several major exploration projects lined up for 2025 and 2026, which are anticipated to boost organic growth within its diversified portfolio of assets.
EGY currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the energy sector are Archrock Inc. AROC, Matador Resources Corporation MTDR and Cheniere Energy LNG. Archrock currently sports a Zacks Rank #1 (Strong Buy), while Matador Resources and Cheniere Energy carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Archrock is an energy infrastructure company based in the United States with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
Matador Resources is a leading US-based exploration and production firm. The company has consistently exceeded production expectations, demonstrating operational efficiency and robust growth. MTDR’s production efficiency, combined with the favorable oil price environment, is expected to positively impact its bottom line.
Cheniere Energy is involved in LNG-related businesses, which include LNG terminals and natural gas marketing. The company has achieved a milestone with the first production from the first LNG train of its Corpus Christi Stage 3 Liquefaction Project. The project, which includes seven midscale LNG trains, aims to expand the production capacity of the Corpus Christi Liquefaction facility. This expansion is expected to enhance Cheniere's position in the rapidly growing global LNG market, enabling it to meet the rising demand for LNG, both in the United States and internationally.
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