Houston-based Vaalco Energy has received the seal of approval from the government of Equatorial Guinea for the joint operating agreement (JOA) related to the previously approved Venus-Block P plan of development (POD).
According to the company, the Block P production sharing contract (PSC) provides for a development and production period of 25 years from the date of approval of the POD. Covering an area of 1,253 square kilometers in the Rio Muni Basin , Block P consists of the Venus production and development area (PDA) and the Block P exploration area.
George Maxwell , Vaalco’s Chief Executive Officer, commented: “With final documents for Block P signed, we are very excited to proceed with our plans to develop, operate, and begin producing from the discovery in Block P offshore Equatorial Guinea over the next few years. We will now proceed with our Front-End Engineering Design (FEED) study. We anticipate the completion of the FEED study will lead to an economic Final Investment Decision or ‘FID’ which will enable the development of the Venus POD.
“Over the past two years, we have greatly diversified our portfolio, which has expanded our ability to generate operational cash flow, all while growing our cash position and remaining bank-debt free. The Block P development will further enhance our portfolio by adding yet another strong producing asset to Vaalco’s global portfolio. Vaalco is well placed to execute our projects in our enhanced portfolio, and has a proven operating track record for a development of this type.”
The Venus discovery was made in 2005 and the reserves of the Venus field are estimated to contain between 15 and 30 million gross recoverable barrels of oil. After Vaalco in partnership with GEPetrol, submitted a POD for the Venus development in July 2022, the POD was approved in September 2022.
Vaalco has a 60% working interest in the Venus development in Block P and operates it. The first oil is targeted in mid to late 2026. The company previously disclosed its plans to drill the first development well in early 2024.
In addition, the U.S. firm, which intends to acquire, convert, and install production facilities, will also spud an additional development and a water injection well in 2025/2026. Vaalco’s estimates of the preliminary project cost for drilling two development wells, an injection well, and a related production facility were previously anticipated to be in the vicinity of $310 million gross . No changes have been disclosed to these project costs.
Vaalco is currently in the process of expanding its portfolio. After engaging in discussions with the owner of Svenska Petroleum Exploration regarding a possible debt-free corporate transaction, Vaalco entered into a sales and purchase agreement with Petroswede to acquire the Swedish player whose primary asset is a 27.39% interest in the deepwater producing Baobab field in Block CI-40 offshore Côte d’Ivoire.