Houston’s Vaalco Energy exited the Angolan market, discontinuing all operations, as the company picked up stake in Etame off Gabon during the third quarter of 2016, narrowing its focus and reducing costs, Offshore Engineer reported. Accordingly, the company withdrew from offshore Block 5 as it reported a quarterly loss.
Vaalco had already written off almost all its investment in Angola and does not believe that a $15m penalty for not drilling three commitment wells will have to be fully paid up. The company believes that a substantial portion of the penalty amount has been reduced due to exploration expenditures already made, informed Upstream Online. Vaalco notified joint venture partner Sonangol P&P of the Angola exit late September, with the decision taking effect late October. The company confirmed that it has taken actions to begin closing its office in Angola and does not intend to conduct future activities in Angola.
Vaalco’s COO and interim CEO, Cary Bounds, said: “We have recently taken several strategic steps to narrow our operational focus, reduce costs and enhance shareholder value. We intend to concentrate on our production activities in Gabon and continue to seek low risk, discovered resource opportunities in West Africa or other similar areas internationally.”