Sustainability Report 2023
- global approach to Sustainability
About this report
Reporting boundaries
This Sustainability Report provides an overview of VAALCO Energy, Inc.'s ("VAALCO" or "the Group") 2023 sustainability performance, from 1 January 2023 to 31 December 2023, unless otherwise stated. The disclosure includes all assets where we have operational control, unless otherwise specified. Operational control comprises our assets in Canada, Equatorial Guinea, and Gabon. In Egypt, we are a partner in an incorporated joint venture, we therefore report our influence over sustainability- related matters individually, as well as specific data sets separately. Furthermore, our emissions reporting relates to the pro rata share of the productions from these fields.
Where we make reference to future assessments that may influence and/or impact our business, the time horizons we apply are defined as follows: short term is the reported year; medium term is 2-5 years; and long term is 5+ years, unless otherwise stated.
Reporting standards
The report discloses materially relevant metrics and analysis as defined by the Sustainability Accounting Standards Board (SASB) Oil & Gas Exploration and Production Standard (Version
2018-10). The business has continued to develop its disclosure on climate-related risks and opportunities, in line with the requirements of the Task Force on Climate-related Financial Disclosures (TCFD). The global ISSB standards, IFRS S1 and IFRS S2, require companies listed in equity markets in compliance (or aligned) with these standards to disclose non-financial reporting on sustainability matters that are financially material to the business. Due to its dual listing on the New York Stock Exchange and the London Stock Exchange, VAALCO has used these standards to inform its reporting.
In 2023, VAALCO received a rating of A (on a scale of AAA-CCC) in the MSCI ESG Ratings assessment.
Sustainability Report 2023 / | 03 |
Contents
Overview
02 About this report
04 A letter from our Chairman
06 About us
08 Our vision, strategy and values
10 A letter from our CEO
12 Stakeholder engagement
17 Managing sustainability
22 Risk management
23 Materiality register
Climate risk and resilience
26 Climate change
27 Strategy
35 Metrics and targets
Safe and sustainable operations
42 Overview
43 Workforce health and safety
46 Process safety
59 Resource management
61 Biodiversity
62 Decommissioning
64 Supply chain management
People and communities
70 Overview
71 Training and development
73 Engagement and wellbeing
76 Diversity and inclusion
78 Community engagement
Governing our operations
82 Business ethics and transparency
84 Legal and regulatory environment
85 Data and IT security
Indexation
90 Data tables
- Cover image: VAALCO's Etame Central Processing Facility, Etame Marin Permit, offshore Gabon.
- Sweet oil processing battery at 12-18-31-2W5 in Canada. This site produces a volume of c. 2,000 BBL of oil per day.
Overview
Climate risk and resilience
Safe and sustainable operations
People and communities
Governing our operations
Indexation
VAALCO Energy, Inc.
04 A global approach to Sustainability / Overview
A letter from our Chairman
Dear
Stakeholders,
This year marked a significant milestone for our business as we successfully merged TransGlobe's operations and personnel into our Group. We extend our gratitude to both the leadership and colleagues for their dedicated efforts in uniting the business and aligning sustainability objectives across the organization.
Our employees propel our success."
VAALCO Energy, Inc.
Sustainability Report 2023 / | 05 |
Overview
Climate risk and resilience
Throughout the year, our focus on sustainability management matured, with a key emphasis on standardization and harmonization to accommodate the diverse nature of our expanded Group. This approach was essential as we navigated the complexities of operating across multiple jurisdictions.
We currently operate in three countries, and our contributions to taxation and social welfare in each location are substantial. In 2022, we paid $27 million in income taxes as a corporate entity. In 2023, we paid $93 million, further contributing to the economic wellbeing of the countries in which we operate. We deeply value the strong relationships we have cultivated within the communities we operate in. Engaging with local stakeholders and actively seeking input from community groups enables
us to better understand their needs and provide meaningful support. Our commitment to open and transparent communication with all stakeholders remains unwavering, facilitating effective operations in these jurisdictions.
The Group is increasingly transcending mere compliance and embracing a strategic approach to sustainability. Substantial investments have been made in our leadership teams both at the country level and within the corporate structure. The appointment of heads of departments at the Group level allows for centralized oversight, while experienced in-country teams manage day-to-day operations.
As we establish standards and targets at the Group level, ongoing review of our progress against objectives is essential. Collaboration with country management is imperative to foster understanding and ensure consistent progress across VAALCO. Moreover, aligning sustainability performance with executive remuneration in the short and medium term will further solidify our Group-wide commitment to sustainable business practices.
As VAALCO advances its decarbonization agenda, we remain cognizant of the need to address climate risks and opportunities. We are actively aligning with the recommendations of the Task Force on Climate-related Financial Disclosures, particularly by strengthening governance at both the Board and management levels and advancing strategies for carbon emissions reduction across the Group.
Andrew L. Fawthrop
Chairman
Safe and sustainable operations
People and communities
Governing our operations
Indexation
VAALCO Energy, Inc.
06 A global approach to Sustainability / Overview
About us
VAALCO, founded in 1985 and incorporated under the laws of Delaware, is a Houston, USA-based, independent energy company with production, development and exploration assets in Africa and Canada.
VAALCO owns a diverse portfolio of operated production, development and exploration assets across Gabon, Egypt, Equatorial Guinea and Canada.
- growing, diversified footprint in Africa
Operated
Operated
Operated
Full-cycle portfolio with material production and cash flows
Critical mass of operations with running room for growth
Highly capable subsurface/technical, operational and business development teams supporting growth
VAALCO Energy, Inc.
Operated
Supported
by High quality Canadian acreage
Majority operated assets
Significant near term growth potential through large drilling inventory
Highly cash generative in current price environment
Sustainability Report 2023 / | 07 |
2023
Corporate Highlights
Returned $50.3 million or 42% of Free Cash Flow to shareholders through dividends and share buybacks;
Grew production by 83% year-over- year to 23,946 working interest "WI" BOEPD for 2023;
Increased year-end 2023 proved reserves by 3% to 28.6 MMBOE;
Reported net income of $60.4 million ($0.56 per diluted share) and net cash from operating activities of $223.6 million;
Generated record Adjusted EBITDAX of $280.4 million and $119.7 million of Free Cash Flow;
Integrated a major acquisition and invested over $70 million in a capital program focused on Egypt and Canada.
Overview
Climate risk and resilience
Safe and sustainable operations
People and communities
Governing our operations
Indexation
VAALCO Energy, Inc.
08 A global approach to Sustainability / Overview
Our vision, strategy and values
Our vision
A leading diversified independent African- focused E&P business creating shareholder value and furthering stakeholder engagement through responsible operations across our portfolio. We deliver value by maximizing our production performance and by leveraging our in-house talent, operational infrastructure, and technical expertise to achieve scale by organic and inorganic means.
Our strategy
Our strategy is to utilize our technical expertise and operational infrastructure, with a focus on developing our resources and expanding into new development opportunities in Africa. Our growth will come from a mixture of organic and inorganic opportunities.
- The Teli FSO serves as the central storage and offloading facility for all VAALCO production offshore Gabon.
VAALCO Energy, Inc.
Sustainability Report 2023 / | 09 |
Our values
Overview
Climate risk and resilience
Safe and
Corporate Transparency: We operate at the highest standards of corporate governance and act in a transparent and open way across our operations, and throughout our corporate structure.
Stakeholder Engagement: We believe in constantly communicating with all our stakeholders, maintaining trust and respect. As part of this, we aim to communicate, collaborate, and drive effective change whenever possible.
Efficient and Effective Performance: We will, as an operator, continue to work in an effective, efficient, and safe manner, providing training and guidance throughout our organization. We seek to empower our workforce to better ourselves every day.
Local Integration: We believe in engaging and integrating with the local communities in which we work. We seek to operate in a manner that creates economic and social opportunities that last beyond our operational lifetime and to maximize local employment opportunities.
Responsible Operations: We have created a global business that is responsible not only for the environment, but also for the local stakeholders who we work with every day and which allows us to create a positive impact in the communities in which we work.
Commercial Integrity: We seek to act with integrity and in an open manner, allocating contracts through a fair and transparent process in accordance with our business principles. We are committed to maintaining effective systems across our business to ensure integrity.
sustainable operations
People and communities
Governing our operations
Indexation
VAALCO Energy, Inc.
10 A global approach to Sustainability / Overview
A letter from our CEO
Dear
Stakeholders,
Following the completion of the strategically significant merger last year, our focus in 2023 has been on the integration of these businesses, leveraging the combined value and harmonizing our operational management approach.
As we transition from a single operating entity to a Group with assets across multiple jurisdictions, we are implementing global operating procedures and performance standards, conducting thorough audits, completing gap assessments, and developing bridging strategies to enhance our approach to safe and sustainable operations management.
Operating in Gabon continues to be a privilege."
VAALCO Energy, Inc.
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Disclaimer
VAALCO Energy Inc. published this content on 29 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 April 2024 21:03:59 UTC.