US-based Vaalco Energy has initiated a six-well drilling programme in Egypt in the second quarter of 2026 — a campaign not included in the company’s original capital budget — confirming it will proceed without increasing total capital expenditure guidance, demonstrating confidence in the returns from its Egyptian operations.
The campaign follows a highly productive 22-well drilling programme that ran from December 2024 through January 2026, with every well reaching its target. The most recently completed well, in the H-Field in the Eastern Desert, opened a new development area with an initial flow rate of approximately 450 barrels of oil equivalent per day.
Vaalco’s Egyptian production rose to 11,264 boe/d in Q1 2026 from 10,225 boe/d in Q1 2025, and the company expects output of 10,400–11,500 boe/d in Q2 2026. The company also improved its liquidity position in Egypt, reducing outstanding trade receivables from $31.6 million at end-December 2025 to $24.2 million by March 31, 2026.
However, despite the strong operational performance, Vaalco reported a Q1 2026 net loss of $93.8 million — compared to a net loss of $58.6 million in the prior quarter — largely reflecting hedging losses, lower sales volumes, and higher exploration spending. Adjusted EBITDAX fell to $11.6 million from $57 million in Q1 2025. The company said it expects financial performance to recover in coming quarters, supported by additional crude cargo sales, higher pricing, and increased annual production guidance.
Beyond Egypt, Vaalco reported progress in Gabon and Côte d’Ivoire, where the company was confirmed as operator with a 60% working interest in the Kossipo field following the divestment of all Canadian assets at the start of 2026.
Source: egyptoil-gas.com