VAALCO Energy Inc. (NYSE: EGY; LSE: EGY) (“VAALCO” or the “Company”) today announced that the Company contracted with DOF Subsea to perform subsea construction and installation services to support the subsea reconfiguration associated with the replacement of the existing Floating Production, Storage and Offloading unit (“FPSO”) with a Floating Storage and Offloading vessel (“FSO”) at the Etame field, offshore Gabon. DOF Subsea will provide all personnel, crew and equipment necessary to assist with reconfiguring the Etame field subsea infrastructure to flow field production to the replacement FSO. Engineering and design work in relation to the field infrastructure upgrade has been completed with subsea work planned to commence in July and be completed before the FSO is operational in September 2022, as previously disclosed.
Key Highlights:
- Utilizing a DOF Subsea offshore construction vessel to perform the work;
- Transporting over 5,000 meters of new flexible pipelines from the UK to install in the Etame field;
- Performing the retrieval and relocation of existing in-field flowlines and umbilicals; and
- Assisting in the connection of new risers to the FSO.
George Maxwell, VAALCO’s Chief Executive Officer, commented, “We continue to progress forward with our field reconfiguration and FSO conversion at Etame, on time and within the capital guidance we previously provided. The FSO increases effective storage capacity by over 50% and reduces costs by almost 50% compared to the current FPSO. We continue to estimate total capital conversion costs of $40 to $50 million gross ($26 to $32 million net to VAALCO), with annual projected operational cost savings of approximately $20 to $25 million gross per year ($13 to $16 million net to VAALCO) through 2030, giving the project a very attractive payback period of less than two and a half years. This project will significantly improve our margins, enhance our cash flow generation and sustain our operational excellence and robust financial performance at Etame through 2030. We are delivering on our strategic plan with the FSO conversion, our drilling campaign at Etame and continued evaluation of organic and inorganic opportunities.”
