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EGY: Phase Three Gabon Drilling Program Will Drive Bullish Repricing

Energy Shifts And West Africa Risks Will Test Oil Resilience

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EGY
AnalystLowTarget
Not Invested
Published 17 May 2025

Update shared on 10 Jan 2026

Fair value Increased 12%
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AnalystLowTarget's Fair Value
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1Y
18.0%
7D
-5.8%

Analysts have lifted their price target on VAALCO Energy from US$6.50 to US$7.25 as they factor in updated assumptions around revenue growth, profit margins and a lower future P/E multiple in their valuation work.

What's in the News

  • VAALCO Energy, Inc. started its Phase Three Drilling Program offshore Gabon, which includes new drilling activity aimed at developing existing assets. (Key Developments)
  • The program kicked off with the spud of the ET-15 infill well on the Etame platform, indicating continued investment in the Etame field. (Key Developments)

Valuation Changes

  • Fair Value Estimate: Updated from US$6.50 to US$7.25 per share, reflecting revised inputs to the valuation model.
  • Discount Rate: Adjusted from 6.64% to 6.96%, which affects how future cash flows are translated into today's value.
  • Revenue Growth Assumption: Reset from 1.76% to 13.92%, indicating higher expected top line growth in the model.
  • Net Profit Margin Assumption: Revised from 6.91% to 8.57%, implying a higher share of revenue flowing through to earnings in the estimates.
  • Future P/E Multiple: Moved from 23.0x to 18.8x, pointing to a lower valuation multiple being applied to projected earnings.

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