Vaalco Energy Q3 2026: Revenue Beat Swamped by Derivative Losses

Vaalco Energy posted Q3 2026 revenue of $146.97 million, beating expectations and rising 140.9% year over year. The restart of Côte d'Ivoire's Baobab FPSO after a dry-dock refurbishment drove much of the jump, delivering its first 2026 lifting in August. Working interest production climbed 21% sequentially across all three producing regions.

A $57.00 million net loss on commodity derivatives, split between unrealized losses tied to a rising futures curve and realized losses on matured contracts, overwhelmed the operating gains. Adjusted EPS came in at negative $0.10, missing expectations. GAAP diluted EPS was negative $0.38.

Despite the headline loss, adjusted EBITDAX rose 30% sequentially to $71.10 million. Gabon, Egypt and Côte d'Ivoire all contributed revenue, with Côte d'Ivoire returning after the Baobab restart. Realized pricing also improved versus Q2 2026.

CEO George Maxwell guided Q4 NRI sales to an 18% increase at the midpoint versus Q3, while trimming full-year capex guidance. Maxwell stated the company is forecasting free cash flow generation in the second half of 2027, assuming sustained strong commodity pricing.

Investors should keep an eye on the derivative book as a key risk. Long-term debt stood at $239.00 million, and revolving credit facility commitment reductions begin in March 2027. The company also declared a quarterly cash dividend of $0.0625 per share.