VAALCO Energy, Inc. (PRNewsFoto) HOUSTON, TX USA

    HOUSTON, May 3 /PRNewswire-FirstCall/ -- VAALCO Energy, Inc. (Amex: EGY),
(the "Company") announced it has received approval from the Government of
Gabon to proceed with the development of the Avouma field, which was
discovered last July 2004.  The EAVOM-1 well tested 6,600 barrels per day on a
40/64's inch choke from the Gamba sandstone.  The Avouma field is adjacent to
the previously discovered South Tchibala field found by Gulf Oil in 1978.
With the additional reserves discovered by the EAVOM-1 well, the combined
accumulations are deemed commercial.
    Plans call for the installation of a platform and drilling of two
development wells to produce the South Tchibala/Avouma accumulations.  The
platform will be tied back via a pipeline to the floating production, storage
and offloading facility ("FPSO"), which is currently servicing the Etame
field.  The estimated cost of the development is approximately $65 million for
the platform, wells and pipeline ($19.5 million net to VAALCO).  Production
from the development is expected to commence in the second quarter of 2006.
    To ensure the availability of the FPSO to produce Etame, South Tchibala
and Avouma, the Company signed a contract extension as operator with the FPSO
owners.  The extension allows the consortium to keep the FPSO through 2012,
and gives the consortium the option to purchase the FPSO at the end of the
contract on favorable terms.  The Company's independent reserve engineers
report has the fields producing until at least 2015.  The contract extension
provides for annual reductions in the day rate for the FPSO in each year of
the term.  As a result of signing the extension, VAALCO has commenced certain
modifications of the tanker to allow for gas lifting of the Etame wells, and
will perform future activities to expand the capacity of the tanker to handle
additional production.
    Separately, and as previously announced, VAALCO has spudded the EAVSM-1
wildcat well on a prospect south of the Avouma field.  The well will test a
separate Gamba sandstone structure adjacent to the existing Avouma discovery.
Total depth of the well is anticipated to be approximately 8,800 feet, and
should take 30 days to drill.
    Mr. Robert Gerry, Chairman and CEO of the Company stated, "VAALCO and its
partners continue to aggressively pursue maximizing the potential of the Etame
Marin permit.  Upon completion of our exploration well, we will move the rig
to the Etame field to drill and complete the Etame 6H well.  Production from
that well should commence in July 2005."
    The Company's subsidiary VAALCO Gabon Etame, Inc. operates and owns a
28.07% interest in the Etame Field.  Other field partners are Pan-Ocean Energy
Corporation Limited (31.36%), Sasol Petroleum West Africa (Ltd.) (27.75%),
Sojitz Etame Limited (2.98%), PetroEnergy Resources Corp. (2.34%) and Tullow
Oil plc (7.5%).
    VAALCO Energy, Inc. will hold an investor conference call Wednesday,
May 4, 2005 at 10:00 a.m. (Central time).  Interested parties may participate
by dialing 1 (888) 545-0687.  International parties may dial 1 (630) 691-2764.
Please be prepared to provide the following information to gain access to the
conference call:

     Confirmation Number:     11611552
     Host Name:               Russell Scheirman
     Company:                 VAALCO Energy, Inc.

    Conference call replay will be available beginning 1 hour after the
conference is over and will run through June 5, 2005 by dialing 1-877-213-9653
and entering the pass code 11611552#. International parties may dial
1 (630) 652-3041 and entering the pass code 11611552#.

    This press release includes "forward-looking statements" as defined by the
U.S. securities laws.  Forward-looking statements are those concerning
VAALCO's plans, expectations, and objectives for future drilling, completion
and other operations and activities.  All statements included in this press
release that address activities, events or developments that VAALCO expects,
believes or anticipates will or may occur in the future are forward-looking
statements.  These statements include future production rates, completion and
production timetables and costs to complete wells.  These statements are based
on assumptions made by VAALCO based on its experience, perception of
historical trends, current conditions, expected future developments and other
factors it believes are appropriate in the circumstances.  Such statements are
subject to a number of assumptions, risks and uncertainties, many of which are
beyond VAALCO's control.  These risks include, but are not limited to,
inflation, lack of availability goods, services and capital, environmental
risks, drilling risks, foreign operational risks and regulatory changes.
Investors are cautioned that forward-looking statements are not guarantees of
future performance and that actual results or developments may differ
materially from those projected in the forward-looking statements.  These
risks are further described in VAALCO's annual report on form 10K/SB for the
year ended December 31, 2004 and other reports filed with the SEC which can be
reviewed at http://www.sec.gov , or which can be received by contacting VAALCO
at 4600 Post Oak Place, Suite 309, Houston, Texas 77027, (713) 623-0801.

Link to this page: