<PAGE>
________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number 0-20928
_______________________
VAALCO Energy, Inc.
(Exact name of small business issuer as specified in its charter)
Delaware 76-0274813
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4600 Post Oak Place
Suite 309
Houston, Texas 77027
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (713) 623-0801
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X
---
No___.
As of November 1, 2000 there were outstanding 20,744,569 shares of Common
Stock, $.10 par value per share, of the registrant.
<PAGE>
VAALCO ENERGY, INC. AND SUBSIDIARIES
Table of Contents
PART I. FINANCIAL INFORMATION
<TABLE>
<S> <C>
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets (Unaudited)
September 30, 2000 and December 31, 1999.......................................... 3
Statements of Consolidated Operations (Unaudited)
Three months and nine months ended September 30, 2000 and 1999.................... 4
Statements of Consolidated Cash Flows (Unaudited)
Nine months ended September 30, 2000 and 1999..................................... 5
Notes to Consolidated Financial Statements........................................... 6
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS............................................... 9
PART II. OTHER INFORMATION.......................................................... 13
</TABLE>
2
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VAALCO ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of dollars, except par value amounts)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
-------- ---------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 12,106 $ 2,925
Funds in escrow 31 108
Receivables:
Trade 357 411
Other 139 131
Materials and supplies, net of allowance for inventory obsolescence of $9 334 332
Prepaid expenses and other 90 24
--------- --------
Total current assets 13,057 3,931
--------- --------
PROPERTY AND EQUIPMENT-SUCCESSFUL EFFORTS METHOD
Wells, platforms and other production facilities 1,037 1,331
Undeveloped acreage 639 703
Work in progress 2,266 2,331
Equipment and other 67 64
--------- --------
4,009 4,429
Accumulated depreciation, depletion and amortization (850) (840)
--------- --------
Net property and equipment 3,159 3,589
--------- --------
OTHER ASSETS:
Funds in escrow -- 9,966
Investment in unconsolidated entities 1,601 4,197
Deferred tax asset 370 370
Other long-term assets 59 35
--------- --------
TOTAL $ 18,246 $ 22,088
========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 469 $ 609
Accounts with partners 866 403
--------- --------
Total current liabilities 1,335 1,012
--------- --------
MINORITY INTEREST 13 12
FUTURE ABANDONMENT COSTS 3,294 3,297
--------- --------
Total liabilities 4,642 4,321
--------- --------
STOCKHOLDERS' EQUITY:
Preferred stock, $25 par value, 500,000 shares authorized;
10,000 shares issued and outstanding in 2000 and 1999 250 250
Common stock, $.10 par value, 100,000,000 authorized shares
20,749,964 shares issued of which 5,395 are in the treasury in 2000 and 1999 2,075 2,075
Additional paid-in capital 41,215 41,215
Accumulated deficit (29,924) (25,761)
Less treasury stock, at cost (12) (12)
--------- --------
Total stockholders' equity 13,604 17,767
--------- --------
TOTAL $ 18,246 $ 22,088
========= ========
</TABLE>
See notes to consolidated financial statements.
3
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VAALCO ENERGY, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS
(Unaudited)
(in thousands of dollars, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine months Ended September 30,
---------------------------------- -------------------------------
2000 1999 2000 1999
-------- --------- -------- -------
<S> <C> <C> <C> <C>
REVENUES:
Oil and gas sales $ 229 $ 165 $ 1,004 $ 437
Gain on sale of assets -- 70 -- 70
-------- ------- -------- --------
229 235 1,004 507
-------- ------- -------- --------
OPERATING COSTS AND EXPENSES:
Production expenses 123 168 350 390
Depreciation, depletion and amortization 2 3 10 8
Exploration costs 320 402 910 683
General and administrative expenses 470 275 1,330 1,277
-------- ------- -------- --------
Total operating costs and expenses 915 848 2,600 2,358
-------- ------- -------- --------
OPERATING LOSS (686) (613) (1,596) (1,851)
OTHER INCOME (EXPENSE):
Interest income 159 165 449 622
Equity loss in unconsolidated entities (47) (142) (3,002) (904)
Other, net 9 (6) (11) 19
-------- ------- -------- --------
Total other income (expense) 121 17 (2,564) (263)
-------- ------- -------- --------
LOSS BEFORE INCOME TAXES (565) (596) (4,160) (2,114)
INCOME TAXES -- -- 3 --
LOSS ATTRIBUTABLE
TO COMMON SHAREHOLDERS $ (565) $ (596) $ (4,163) $ (2,114)
======== ======= ======== ========
LOSS PER COMMON SHARE:
BASIC AND DILUTED $ (0.03) $ (0.03) $ (0.20) $ (0.10)
======== ======= ======== ========
WEIGHTED AVERAGE COMMON SHARES:
BASIC 20,745 20,755 20,745 20,755
======== ======= ======== ========
DILUTED 20,745 48,350 20,834 48,365
======== ======= ======== ========
</TABLE>
See notes to consolidated financial statements.
4
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VAALCO ENERGY, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(Unaudited)
(in thousands of dollars)
<TABLE>
<CAPTION>
Nine months Ended September 30,
----------------------------------------------
2000 1999
------------------ ----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (4,163) $ (2,114)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation, depletion and amortization 10 8
Equity loss in unconsolidated entities 3,002 904
Exploration expense 905 683
Change in assets and liabilities that provided (used) cash:
Funds in escrow 10,043 5,806
Trade receivables 54 125
Accounts with partners 463 (4,020)
Other receivables (8) 40
Materials and supplies (2) (17)
Prepaid expenses and other (66) (34)
Accounts payable and accrued liabilities (140) (1,470)
-------- ---------
Net cash provided by (used in) operating activities 10,098 (89)
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Disposals of property and equipment 55 --
Additions to property and equipment (209) (800)
Exploration Expense (331) (683)
Investment in unconsolidated entities (406) (1,007)
Other - net (26) (221)
-------- ---------
Net cash used in investing activities (917) (2,711)
-------- ---------
NET CHANGE IN CASH AND CASH EQUIVALENTS 9,181 (2,800)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 2,925 6,671
-------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 12,106 $ 3,871
======== =========
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
VAALCO ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(Unaudited)
1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of VAALCO Energy, Inc. and
Subsidiaries (collectively, "VAALCO" or the "Company"), included herein are
unaudited, but include all adjustments consisting of normal recurring
accruals which the Company deems necessary for a fair presentation of its
financial position, results of operations and cash flows for the interim
period. Such results are not necessarily indicative of results to be
expected for the full year. These financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's Form 10-KSB for the year ended December 31, 1999.
VAALCO Energy, Inc., a Delaware corporation, is a Houston-based independent
energy company principally engaged in the acquisition, exploration,
development and production of crude oil and natural gas. VAALCO owns
producing properties and conducts exploration activities as operator of
consortiums internationally in the Philippines and Gabon. Domestically, the
Company has interests in the Texas Gulf Coast area.
VAALCO's Philippine subsidiaries include Alcorn (Philippines) Inc., Alcorn
(Production) Philippines Inc. and Altisima Energy, Inc. VAALCO's Gabon
subsidiaries are VAALCO Gabon (Etame), Inc., VAALCO Production (Gabon),
Inc. and VAALCO Energy (Gabon), Inc. VAALCO Energy (USA), Inc. holds
interests in certain properties in the United States.
2. RECENT DEVELOPMENTS
Effective October 1, 2000 the Company entered into a letter of intent to
acquire a 65% interest in the Etame Block offshore Gabon, West Africa from
Western Atlas Afrique, Ltd. a subsidiary of Baker Hughes. Consideration for
the acquisition, which is expected to close during the fourth quarter of
2000, is $1 million in cash and a future net profits interest in the event
the existing discoveries on the block are developed. The Company is the
operator of the 3,073 square kilometer concession. The Block has one
remaining exploration well commitment to satisfy the obligations to the
Gabon government under the terms of the concession. With the acquisition,
the Company will have a working interest ownership of 82.9%; however, the
Company intends to sell approximately 50% of this interest to third
parties. The Company has an agreement to sell 20% of the interest to an
existing partner in the concession, which is pending the approval of their
board of directors. The Company is actively marketing the remaining 30%
interest.
The Company made a Gamba sandstone discovery on the Etame concession in
1998, which tested approximately 3,700 barrels of oil per day on a 32/64's
inch choke. In January 1999, the Company completed the drilling of the
Etame 2V well, which delineated the oil water contact for the discovery.
Because the Gamba reservoir lies below a layer of salt and is structurally
complex, during 1999 and the first half of 2000, a seismic reprocessing
effort was performed to better map the Gamba reservoir. Based on
6
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VAALCO ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(Unaudited)
the seismic reprocessing effort, the Company has determined a location that
it deems suitable for drilling. In October 2000, the Company entered into a
letter of intent with a drilling rig contractor to drill the Etame 3 well
on the discovery during the first quarter of 2001.
Effective June 30, 2000 the Company elected to withdraw from Hunt Overseas
Exploration Company L.P. ("Hunt"). The Company formerly held a 7.5% limited
partnership interest in Hunt. The Company's obligations under the
partnership were to contribute up to $22.5 million for its share of the
exploration phase of the partnership, $22.3 million of which had been
funded as of June 30, 2000. In addition, if Hunt discovered oil, the
Company may have been required to contribute an additional $7.5 million to
fund the appraisal of the discovery. As a result of withdrawing from the
Hunt venture, Hunt released certain funds in escrow totaling $8.2 million
and reimbursed the Company $1.3 million for its share of net working
capital in the partnership as of June 30, 2000.
The Company has elected to terminate its joint venture with Paramount
Petroleum, Inc., which focused on domestic onshore prospects in
Mississippi, Alabama and Louisiana. The Company will receive its
proportionate 93.75% interest in kind in all remaining prospects within the
joint venture on December 1, 2000, unless the prospects are sold to
industry for drilling prior to that time.
3. EARNINGS PER SHARE
The weighted average common shares outstanding represent those of
historical VAALCO for the applicable periods.
The Company accounts for earnings per share in accordance with the
Statement of Financial Accounting Standards ("SFAS") No. 128 - "Earnings
per Share" which establishes the requirements for presenting earnings per
share ("EPS"). SFAS No. 128 requires the presentation of "basic" and
"diluted" EPS on the face of the income statement. Basic earnings per
common share amounts are calculated using the average number of common
shares outstanding during each period. Diluted earnings per share assumes
the conversion of preferred stock to common stock and the exercise of all
stock options having exercise prices less than the average market price of
the common stock using the treasury stock method.
4. RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133 - "Accounting for
Derivative Instruments and Hedging Activities." SFAS No. 133, as amended,
is effective for derivative instruments and hedging activities that require
an entity to recognize all derivatives as an asset or liability measured at
its fair value. Depending on the intended use of the derivative,
7
<PAGE>
VAALCO ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(Unaudited)
changes in its fair value will be reported in the period of change as
either a component of earnings or a component of comprehensive income.
Retroactive application to periods prior to adoption is not allowed. The
Company is not affected by adoption of SFAS No. 133, as amended, in this
reporting period as it has no current hedging activities.
In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in
Financial Statements." SAB 101 summarizes certain of the SEC's views in
applying generally accepted accounting principles to revenue recognition in
financial statements. The Company is required to adopt SAB 101, as amended,
in the fourth quarter of fiscal 2000. The Company does not expect the
adoption of SAB 101 to have a material effect on its financial position or
results of operation.
8
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VAALCO ENERGY, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This report includes "forward looking statements" within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended ("Exchange Act"). All statements other than
statements of historical fact included in this Report (and the exhibits hereto),
including without limitation, statements regarding the Company's financial
position and estimated quantities and net present values of reserves, are
forward looking statements. The Company can give no assurances that the
assumptions upon which such statements are based will prove to have been
correct. Important factors that could cause actual results to differ materially
from the Company's expectations ("Cautionary Statements") are disclosed in the
section "Risk Factors" included in the Company's Forms 10-KSB and other periodic
reports filed under the Exchange Act, which are herein incorporated by
reference. All subsequent written and oral forward looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified by the Cautionary Statements.
INTRODUCTION
------------
The Company's results of operations are dependent upon the difference between
prices received for its oil and gas production and the costs to find and produce
such oil and gas. Oil and gas prices have been and are expected in the future to
be volatile and subject to fluctuations based on a number of factors beyond the
control of the Company. The Company's production in the Philippines
(representing substantially all of the Company's oil production since 1994) is
from mature offshore fields with high production costs. Since 1996, the Company
has produced into barges, which transport the oil to market. Due to weather and
other factors, the Company's production is generally highest during the first
and fourth quarters of the year. The Company's margin on sales from these fields
(the price received for oil less the production costs for the oil) is lower than
the margin on oil production from many other areas. As a result, the
profitability of the Company's production in the Philippines is affected more by
changes in oil prices than production located in other areas.
The Company uses the successful efforts method to account for its investment in
oil and gas properties, whereby costs of productive wells, developmental dry
holes and productive leases are capitalized and amortized using the units-of-
production method based on estimated net proved reserves. The costs of
development wells are capitalized but charged to expense if and when the well is
determined to be unsuccessful. Geological and geophysical costs and the costs of
carrying and retaining undeveloped properties are expensed as incurred.
CAPITAL RESOURCES AND LIQUIDITY
-------------------------------
The Company's primary source of capital resources is derived predominantly from
the private placement of Common Stock, Preferred Stock and debt financing to
fund its exploration operations.
9
<PAGE>
VAALCO ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(Unaudited)
The Company produces oil from the Matinloc and Nido fields in the South China
Sea, located in the Philippines. During the year ended December 31, 1999, total
production from the fields was approximately 313,000 gross barrels of oil.
Production for the nine months ending September 30, 2000 was approximately
295,000 gross barrels of oil. Substantially all of the Company's crude oil and
natural gas is sold at the well head at posted or index prices under short-term
contracts, as is customary in the industry. The Company markets its share of
crude oil under agreements with Caltex and Seaoil, both local Philippines
refiners. While the loss of either buyer might have a material effect on the
Company in the near term, management believes that the Company would be able to
obtain other customers for its crude oil.
Effective October 1, 2000, the Company entered into a letter of intent with
Western Atlas Afrique, Ltd. to acquire a 65% interest in the Etame Block
offshore Gabon for $1 million in cash and a future net profits interest. With
this acquisition, the Company will have an 82.9% interest in the block. The
Block has one remaining exploration well commitment to satisfy the obligations
to the Gabon government under the terms of the concession. The Company plans to
obtain partners for at least 50% of the interest, thereby reducing its interest
in the block to approximately 33%. The Company has an agreement to sell 20% of
the interest to an existing partner in the concession, which is pending the
approval of their board of directors. If the Company is successful in finding
partners for the interest, the Company's share of the cost for the well will be
approximately $2.0 million. While the Company anticipates it will be successful
in finding partners to reduce its share in the well to approximately 33%, there
are no assurances that partners will be found. If partners cannot be found, the
Company will be liable for 82.9% of the cost of the well, in the amount of
approximately $5.0 million. In either event, the Company has sufficient cash on
hand to fund the cost of the obligation well. The Company has entered into a
letter of intent with a drilling rig contractor to drill a well at Etame during
the first quarter of 2001.
The Company participates in a joint venture with Paramount Petroleum, Inc. to
conduct exploration activities primarily in the onshore Gulf Coast area,
including Alabama, Mississippi and Louisiana, wherein the Company receives one
half of all interests earned by the joint venture. The Company invested $3.0
million in the Paramount joint venture, $1.4 million of which has been impaired
to date. The Company has agreed with Paramount Petroleum to wind up the joint
venture by year-end 2000. There can be no assurance that the Company will
realize a return on this investment or that the Company's investment in the
Paramount joint venture will be successful.
Effective June 30, 2000 the Company elected to withdraw from Hunt Overseas
Exploration Company L.P. ("Hunt"). The Company formerly held a 7.5% limited
partnership interest in Hunt. The Company's obligations under the partnership
were to contribute up to $22.5 million for its share of the exploration phase of
the partnership, $22.3 million of which had been funded as of June 30, 2000. In
addition, if Hunt discovered oil, the Company may have been required to
contribute an additional $7.5 million to fund the appraisal of the discovery. As
a result of withdrawing from the Hunt venture, Hunt released certain funds in
escrow totaling $8.2 million and reimbursed the Company $1.3 million for its
share of net working capital in the partnership as of June 30, 2000.
10
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VAALCO ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(Unaudited)
The Company will rely on cash on hand, the issuance of equity and debt
securities, asset sales and cash flow from operations to provide the required
capital for funding future operations. During 2000, the Company anticipates that
it will make capital expenditures on oil and gas properties of approximately
$1.5 million, of which approximately $0.9 million has been funded to date. This
reduction from previous estimates is due to the Company's decision to withdraw
from the Hunt partnership effective June 30, 2000 as well as the deferral of the
Etame 3 well to 2001. Additionally, in September 2000, the Hunt partnership
returned approximately $1.3 million that had been funded by the Company during
2000, which had previously been restricted for capital expenditures.
RESULTS OF OPERATIONS
---------------------
Three months ended September 30, 2000 compared to three months ended September
30, 1999
Revenues
--------
Total revenues were $229 thousand for the three months ended September 30, 2000
compared to $235 thousand for the comparable period in 1999. Crude oil revenues
increased from $165 thousand to $229 thousand due primarily to higher crude
prices received in 2000. The quarter ending September 30, 1999 included revenues
of $70 thousand from an asset sale.
Operating Costs and Expenses
----------------------------
Total production expenses for the three months ended September 30, 2000 were
$123 thousand compared to $168 thousand in 1999. Exploration expense was $320
thousand for the three months ended September 30, 2000, compared to $402
thousand in 1999. The 2000 and 1999 exploration costs included dry hole costs
associated with onshore domestic wells in which the Company participated.
General and administrative expenses for the three months ended September 30,
2000 and 1999 were $470 thousand and $275 thousand, respectively. General and
administrative expenses in 1999 benefited from overhead reimbursements
associated with drilling activity in Gabon.
Other Income (Expense)
----------------------
Interest income of $159 thousand was received from amounts on deposit in 2000
compared to $165 thousand in the quarter ended September 30, 1999. Smaller
balances on deposit, including funds held in escrow, in 2000 compared to 1999
caused the difference. The equity loss in unconsolidated entities in the quarter
ended September 30, 2000 of $47 thousand included remaining partnership expenses
of $8 thousand associated with the Hunt partnership. As stated previously, the
Company has withdrawn from the partnership effective June 30, 2000. In addition,
$39 thousand of equity loss was realized in association with the Paramount joint
venture during the third quarter 2000. Equity losses in unconsolidated entities
of $142 thousand
11
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VAALCO ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(Unaudited)
in the third quarter of 1999 consisted of $35 thousand associated with Hunt
partnership exploration expenses and $107 thousand associated with the Paramount
joint venture.
Net Loss
--------
Net loss attributable to common stockholders for the three months ended
September 30, 2000 was $565 thousand, compared to a net loss attributable to
common stockholders of $596 thousand for the same period in 1999. The net losses
were primarily due to exploration costs and losses from the Paramount joint
venture.
Nine months ended September 30, 2000 compared to nine months ended September 30,
1999
Revenues
--------
Total revenues were $1,004 thousand for the nine months ended September 30, 2000
compared to $507 thousand for the comparable period in 1999. Higher crude prices
and production volumes in 2000 accounted for the increase in revenues.
Operating Costs and Expenses
----------------------------
Total production expenses for the nine months ended September 30, 2000 were $350
thousand compared to $390 thousand in 1999. Exploration expense of $910 thousand
included $428 thousand for dry hole expense associated with a well drilled in
Demmit County, Texas, $198 thousand for costs associated with lease expirations
in Brazos County, Texas and $279 thousand associated with a dry hole in Goliad
County, Texas. The remaining $5 thousand in exploration expense represents
geological and geophysical costs associated with the Etame concession. The 1999
exploration costs were $683 thousand. General and administrative expenses for
the nine months ended September 30, 2000 and 1999 were $1,330 thousand and
$1,277 thousand, respectively.
Other Income (Expense)
----------------------
Interest income of $449 thousand was received from amounts on deposit in 2000
compared to $622 thousand in the nine months ended September 30, 1999. Smaller
balances on deposit, including funds held in escrow, in 2000 compared to 1999
caused the difference. The equity loss in unconsolidated entities in the quarter
ended September 30, 2000 of $3,002 thousand included partnership expenses of
$2,845 thousand associated with the Hunt partnership consisting of exploration
expenses incurred for dry holes in Ghana and Niger, as well as expenses for
partnership general and administrative costs. In addition, $157 thousand of net
equity loss was incurred associated with the Paramount joint venture during the
nine months ending September 30, 2000. The 1999 period losses consisted of $904
thousand associated with Hunt partnership exploration expenses and the Paramount
joint venture.
12
<PAGE>
VAALCO ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(Unaudited)
Net Loss
--------
Net loss attributable to common stockholders for the nine months ended September
30, 2000 was $4,163 thousand, compared to a net loss attributable to common
stockholders of $2,114 thousand for the same period in 1999. The net loss for
both periods was primarily due to exploration costs and losses from the Hunt
Partnership and the Paramount joint venture.
13
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
-------
The Company is not presently a party to any material legal proceedings.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3. Articles of Incorporation and Bylaws
3.1(b) Restated Certificate of Incorporation
3.2(b) Certificate of Amendment to Restated Certificate of Incorporation
3.3(b) Bylaws
3.4(b) Amendment to Bylaws
3.5(c) Designation of Convertible Preferred Stock, Series A
27. Financial Data Schedule
____________
(a) Filed as an exhibit to the Company's report on Form 8-K filed with the
Commission on March 4, 1998 (file no. 000-20928) and hereby incorporated by
reference herein.
(b) Filed as an exhibit to the Company's Registration Statement on Form S-3
filed with the Commission on July 15, 1998 and hereby incorporated by
reference herein.
(c) Filed as an exhibit to the Company's Report on Form 8-K filed with the
Commission on May 6, 1998 and hereby incorporated by reference herein.
(b) Reports on Form 8-K.
None
14
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
VAALCO ENERGY, INC.
(Registrant)
By /s/W. RUSSELL SCHEIRMAN
-----------------------------------------
W. Russell Scheirman, President,
Chief Financial Officer and Director
(on behalf of the Registrant and as the
principal financial officer)
Dated November 1, 2000
15
