Vaalco Eyes Equatorial Guinea Block

Houston-based Vaalco Energy (EGY) said that it is in talks to serve as operator for three Equatorial Guinea (EG) oil blocks recently awarded to Levene Hydrocarbon.

Vaalco Energy Mauritius (Vaalco EG), the subsidiary of the company, is in preliminary talks to become a contract operator for offshore block 19 and two onshore concessions but would not own any interest in the blocks.

Mauritius subsidiary currently holds a 31% participating interest in Block P, located offshore Equatorial Guinea.

On November 26, 2019, the Equatorial Guinea Ministry of Mines and Hydrocarbons announced the results of the EGRONDA 2019 bid round.  

Vaalco EG is in preliminary commercial discussions with Levene Hydrocarbon Limited regarding Vaalco EG serving as a contract operator for recently awarded onshore Blocks 3 and 4 and offshore Block 19 in Equatorial Guinea.  Vaalco EG would not possess a participating interest in Blocks 3, 4 and 19.

Vaalco EG potentially serving as contract operator on Blocks 3, 4 and 19 is subject to further commercial arrangements and to Levene acquiring a portion of Vaalco EG’s existing 31% working interest in Block P.  

Vaalco EG and Levene have executed a Memorandum of Understanding and are engaging in preliminary discussions regarding a potential commercial relationship in Equatorial Guinea.  However, the parties have not executed any binding agreements, and there can be no certainty that a transaction will be forthcoming.