Analysts at Roth/MKM reiterated their Buy rating on Vaalco Energy (NYSE: NYSE:EGY) shares, maintaining the $8.00 price target. The firm's updated production estimates for the third quarter of 2024 have been raised from 20,589 barrels of oil equivalent (BOE) per day to 22,461 BOE per day, aligning with the company's recent guidance.
Consequently, the earnings per share (EPS), cash flow per share (CFPS), and earnings before interest, taxes, depreciation, and amortization (EBITDA) projections for the same quarter have been improved from $0.12/$0.76/$76.6 million to $0.18/$0.93/$93.3 million.
The fourth quarter of 2024 is also expected to see a production increase to 23,584 BOE per day, attributed to additional drilling activities in Egypt. However, the production estimate for 2025 is projected to decrease to 19,736 BOE per day.
This anticipated decline is due to a scheduled dry docking project for the Floating Production Storage and Offloading (FPSO) unit in Côte d'Ivoire, which is expected to render the facility offline that year.
Despite the forecasted drop in production for 2025, the potential impact might be mitigated by new drilling plans. Vaalco Energy is in the process of finalizing locations and planning for its next drilling campaign at Etame, located in Gabon, which is slated to begin early in 2025. The company's strategic efforts in exploration and production are aimed at sustaining and enhancing its output levels in the coming years.
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