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Item 1A. Risk Factors,” identifies additional factors that could cause our results or performance to differ materially from those we express in forward-looking statements. Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions and therefore also the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. In light of the significant uncertainties inherent in the forward-looking statements that are included in this Annual Report, our inclusion of this information is not a representation by us or any other person that our objectives and plans will be achieved. When you consider our forward-looking statements, you should keep in mind these risk factors and the other cautionary statements in this Annual Report.
We have implemented and maintain various information security processes designed to identify, assess and manage material risks from cybersecurity threats to our critical computer networks, third-party hosted services, communications systems, hardware and software, and our critical data, including confidential information that is proprietary, strategic or competitive in nature (“Information Systems and Data”). Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards, and/or policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including risk assessments, incident detection and response, vulnerability management, disaster recovery and business continuity plans, internal controls within our accounting and financial reporting functions, encryption of data, network security controls, access controls, physical security, asset management, systems monitoring, vendor risk management program, infrastructure protection technologies, disaster recovery plans, employee training, and penetration testing. We work with third parties from time to time that assist us in identifying, assessing, and managing cybersecurity risks, including professional services firms, consulting firms, threat intelligence service providers and penetration testing firms. To operate our business, we utilize certain third-party service providers to perform a variety of functions. We seek to engage reliable, reputable service providers that maintain cybersecurity programs. Depending on the nature of the services
provided, the sensitivity and quantity of information processed, and the identity of the service provider, our vendor management process may include reviewing the cybersecurity practices of such provider, contractually imposing obligations on the provider, conducting security assessments, and conducting periodic reassessments during their engagement. We are not aware of any risks from cybersecurity threats, including as a result of any cybersecurity incidents, which have materially affected or are reasonably likely to materially affect our Company, including our business strategy, results of operations, or financial condition. Refer to “Item 1A. Risk factors” in this Annual Report on Form 10-K, including “Our business could be materially and adversely affected by security threats, including cybersecurity threats, and other disruptions”, for additional discussion about cybersecurity-related risks.
Our Board of Directors holds oversight responsibility over the Company’s strategy and risk management, including the management of systemic risks and material risks related to cybersecurity threats. This oversight is performed by the Board of Directors and its committees. The Board of Directors engages in discussions with management when management identifies any significant financial risk exposures that may result from material cybersecurity threats and the measures implemented to monitor and control these risks. Our management, represented by our Chief Financial Officer, Ron Bain, and our Information Technology Director (the “IT Director”), Ryan Fernandez , leads our cybersecurity risk assessment and management processes and oversees their implementation and maintenance. Our IT Director is an experienced information technology professional in our information technology department and has served as IT Director since November 2025. He works with the Company’s internal information technology department and external partners to monitor and improve our cybersecurity capabilities. Our IT Director possesses extensive experience in technology and cybersecurity, gained over his career spanning more than 25 years. Our previous IT Director, Perry Pasloski, led our IT department since 2024 prior to transitioning out of his role in November 2025 and leaving the Company in February 2026. Our cybersecurity incident response and vulnerability management processes are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances. Management, including the IT Director and the Chief Financial Officer, serves on the Company’s incident response team to help the Company mitigate and remediate cybersecurity incidents of which they are notified. In addition, the Company’s incident response processes include reporting to the Board of Directors for certain cybersecurity incidents. The Board of Directors holds regular meetings throughout the year and receives periodic reports from management, including our Chief Financial Officer , concerning the Company’s significant cybersecurity threats and risk and the processes the Company has implemented to address them.
Our forward-looking statements speak only as of the date the statements are made and reflect our best judgment about future events and trends based on the information currently available to us. Our results of operations can be affected by inaccurate assumptions we make or by risks and uncertainties known or unknown to us. Therefore, we cannot guarantee the accuracy of the forward-looking statements. Actual events and results of operations may vary materially from our current expectations and assumptions. Our forward-looking statements, express or implied, are expressly qualified by this
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“Cautionary Statement Regarding Forward-Looking Statements,” which constitute cautionary statements. These cautionary statements should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.
Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances occurring after the date of this Annual Report.
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Risk Factor Summary
Below is a summary of our risk factors. The risks below are those that we believe are the material risks that we currently face but are not the only risks facing us and our business. If any of these risks actually occur, our business, financial condition and results of operations could be materially adversely affected. See “Item 1A.Risk Factors” beginning on page 29 and the other information included elsewhere or incorporated by reference in this annual report for a discussion of factors you should carefully consider before deciding to invest in our common stock.
•Our business requires significant capital expenditures, and we may not be able to obtain needed capital or financing to fund our exploration and development activities or potential acquisitions on satisfactory terms or at all.
•Provisions of our agreements could discourage an acquisition of us by a third-party.
•Unless we are able to replace the proved reserve quantities that we have produced through acquiring or developing additional reserves, our cash flows and production will decrease over time.
•The Company does not always control decisions made under joint operating agreements, and the parties under such agreements may fail to meet their obligations. In addition, we have limited control over the assets we do not operate.
•Our offshore operations involve special risks that could adversely affect our results of operations.
•Acquisitions and divestitures of properties and businesses may subject us to additional risks and uncertainties, including that acquired assets may not produce as projected, may subject us to additional liabilities and may not be successfully integrated with our business. In addition, any sales or divestments of properties we make may result in certain liabilities that we are required to retain under the terms of such sales or divestments.
•Our reserve information represents estimates that may turn out to be incorrect if the assumptions on which these estimates are based are inaccurate. Any material inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present values of our reserves.
•If our assumptions underlying accruals for abandonment and decommissioning costs are too low, we could be required to expend greater amounts than expected.
•We could lose our interest in Block P in Equatorial Guinea if we do not meet our commitments under the production sharing contract.We could lose our interest in Block P if we do not meet our commitments under the production sharing contract.
•The FPSO in Côte d'Ivoire ceased hydrocarbon production on January 31, 2025 for scheduled maintenance. Our results will be adversely affected until the FPSO is returned to service which may be a time later than we expect.
•Commodity derivative transactions that we enter into may fail to protect us from declines in commodity prices and could result in financial losses or reduce our income.Commodity derivative transactions we enter into may fail to protect us from declines in commodity prices and could result in financial losses or reduce our income.
•We are exposed to the credit risks of the third parties with whom we contract.
•Our business could be materially and adversely affected by security threats, including cybersecurity threats, and other disruptions.
•Current and future geopolitical events outside of our control could adversely impact our business, results of operations, cash flows, financial condition and liquidity.
•Production cuts mandated by the government of Gabon, a member of OPEC, could adversely affect our revenues, cash flow and results of operations.
•We have less control over our investments in foreign properties than we would have over our domestic investments.
•Our operations may be adversely affected by political and economic circumstances in the countries in which we operate.
•Inflation could adversely impact our ability to control costs, including operating expenses and capital costs.
•Our results of operations, financial condition and cash flows could be adversely affected by changes in currency exchange rates.
•We operate in international jurisdictions, and we could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-corruption laws.
•Our business could suffer if we lose the services of, or fail to attract, key personnel.
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•Our results of operations, financial condition and cash flows could be adversely affected by changes in currency regulations.
•Our results of operations, financial condition and cash flows could be adversely affected by changes to interest rates.
•The development of our estimated proved undeveloped reserves may take longer and may require higher levels of capital expenditures than we currently anticipate. Therefore, our estimated proved undeveloped reserves may not be ultimately developed or produced.
•Crude oil, natural gas and NGLs prices are highly volatile and a depressed price regime, if prolonged, may negatively affect our financial results.
•Exploring for, developing, or acquiring reserves is capital intensive and uncertain.
•Competitive industry conditions may negatively affect our ability to conduct operations.
•Weather, unexpected subsurface conditions and other unforeseen operating hazards may adversely impact our crude oil, natural gas and NGLs activities.
•An increased societal and governmental focus on Environmental, Social, and Governance (“ESG”) matters, including climate change issues may adversely impact our business, hinder our access to investors and financing, and decrease demand for our product.
•We face various risks associated with increased opposition to and activism against crude oil, natural gas and NGLs exploration and development activities.We face various risks associated with increased activism against crude oil and natural gas exploration and development activities.
•Our operations are subject to risks associated with climate change and potential regulatory programs meant to address climate change; these programs may impact or limit our business plans, result in significant expenditures or reduce demand for our product.
•Compliance with applicable environmental laws and other government regulations could be costly and could negatively impact production.
•A significant level of indebtedness incurred under the 2025 Facility may limit our ability to borrow additional funds or capitalize on acquisition or other business opportunities in the future. In addition, the covenants in the 2025 Facility impose, and any successor debt agreement may impose, restrictions that may limit our ability and the ability of our subsidiaries to take certain actions. Our failure to comply with these covenants could result in the acceleration of any future outstanding indebtedness under the 2025 Facility or such successor debt agreement.
•The borrowing base under the 2025 Facility may be reduced pursuant to the terms of the 2025 Facility Agreement (defined below), which may limit our available funding for exploration and development. We may have difficulty obtaining additional credit, which could adversely affect our operations and financial position.
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PART I
Item 1. Business
OVERVIEW AND STRATEGY
We are an independent energy company headquartered in Houston, Texas engaged in the acquisition, exploration, development and production of crude oil, natural gas and NGLs. We have a diversified, African-focused portfolio of production, development and exploration assets located in Gabon, Egypt, Cote d'Ivoire, Equatorial Guinea, Nigeria, as well as, prior to the Canada Asset Divestment (defined below), producing properties in Canada.
Our overall business strategy is to maximize the value of our current resources and expand into new development opportunities across our strategically complementary asset base. We intend to accelerate shareholder returns and increase shareholder value by controlling operating costs and capital expenditures, maximizing reserve recoveries and making disciplined strategic accretive acquisitions that meet our strategic and financial objectives. Specifically, we seek to:
•Focus on maintaining production and lowering costs to increase margins and preserve optionality to capitalize on an increase in crude oil, natural gas and NGLs prices;
•Manage capital expenditures related to our drilling programs so that expenditures can be funded by cash on hand and cash from operations;
•Continue our focus on operating safely and complying with internationally accepted environmental operating standards;
•Optimize production through careful management of wells and infrastructure;
•Maximize our cash flow and income generation;
•Continue planning for additional development of our properties;
•Preserve a strong balance sheet by maintaining conservative leverage ratios and exhibiting financial discipline;
•Opportunistically hedge against exposures to changes in crude oil, natural gas or NGLs prices; and
•Actively pursue strategic, value-accretive mergers and acquisitions of similar properties to diversify our portfolio of producing assets.
We believe that our quality portfolio, strong management and technical expertise specific to the markets in which we operate, and our ongoing focus on maintaining a competitive cost structure and disciplined capital allocation framework, position us to achieve our business strategy and navigate a variety of commodity price environments. Over the past years, we have delivered on our focused strategy and believe we will continue to do so with the organic growth programs across our diversified portfolio over the coming years.
Divestment of Non-Core Assets
On February 4, 2026, the Company entered into an asset purchase agreement (the “Canada APA”) to sell all the operating assets in Canada (the “Canada Asset Divestment”) to a third party purchaser for a purchase price of approximately $24.4 million (C$33.4 million), subject to customary adjustments. The Canada Asset Divestment closed on February 19, 2026 with an effective date of February 1, 2026 for an adjusted purchase price of $25.5 million (C$34.9 million), subject to additional customary post-closing adjustments. The Canada Asset Divestment represents the Company’s complete exit of its Canadian oil and gas operations. Please see Part IV, Item 15., Note 4. Acquisitions and Divestiture and Note 20. Subsequent Events, to the Consolidated Financial Statements for further discussion on the Canada Asset Divestment.
SEGMENT AND GEOGRAPHIC INFORMATION
For additional operating segment and geographic financial information, see Part IV, Item 15., Note 19. Segment Information to the Consolidated Financial Statements. Our reportable operating segments are Gabon, Egypt, Cote d'Ivoire, Equatorial Guinea and, prior to the Canada Asset Divestment, Canada.
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The following table sets out a brief comparative summary of certain key data for each of the Company’s operating segments. Additional data and discussion are provided in Part II, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report on Form 10-K.
(1) Production volumes are reported on NRI basis.
(2) Undeveloped properties.
Gabon Segment
For the year ended December 31, 2025, our producing properties in Gabon produced approximately 2,535 MBoe or 42% of our total 2025 production. Our Gabon production for the period was 100% crude oil.
We own a 58.8% working interest in the Etame Marin block and we are the designated operator on behalf of the Etame Consortium. The Etame Marin block is located offshore Gabon in West Africa and covers an area of approximately 46,200 gross acres located 20 miles offshore in water depths of approximately 250 feet. The block is subject to a 7.5% back-in carried interest by the government of Gabon, which they have assigned to a third party. Our working interest will decrease to 57.2% beginning June 20, 2026 when the back-in carried interest increases to 10%. Our working interest will decrease to 57.2% in June 2026 when the back-in carried interest increases to 10%.
The terms of the Etame PSC include provisions for payments to the government of Gabon for: royalties based on 13% of production at the published price and a shared portion of Profit Oil determined based on daily production rates, as well as a gross carried working interest of 7.5% (increasing to 10% beginning June 20, 2026) for all costs. The term of the Etame PSC extends through 2028 with two five-year options to extend the PSC (the “PSC Extension”). The PSC Extension provides us with the extended time horizon necessary to pursue developing the resources we have identified at Etame. The government of Gabon has elected to take its Profit Oil in-kind in all years presented.
We are a member of the BWE Consortium that was awarded the licenses for the Niosi Marin and the Guduma Marin exploration blocks in Gabon. These licenses are covered by PSCs entered into with the Gabonese Government (the “BWE Consortium PSC”). The PSC covering the Niosi block has an initial exploration period of five years ending in 2029 with a work commitment to acquire new 3D seismic data and drill one well, while the PSC covering the Guduma block has an initial exploration period of three years ending in 2027 with a work commitment to carry out geological and geophysical studies. The Niosi and Guduma blocks cover an area of 2,989 square kilometers and 1,929 square kilometers, respectively, and are adjacent to our Etame PSC. The Company holds a 37.5% non-operating working interest in these licenses.
Egypt Segment
For the year ended December 31, 2025, our Egypt Segment properties contributed approximately 2,730 MBoe or 45% of our total 2025 production. Our Egyptian production for the period was 100% crude oil.
In Egypt, our interests are spread across two regions: the Eastern Desert, which contains the Merged Concession, and the Western Desert, which contains the South Ghazalat concession. The Merged Concession is approximately 45,067 acres and the South Ghazalat concession is approximately 7,340 acres. Both of our Egyptian blocks are subject to PSCs with EGPC, the Egyptian government and VAALCO. We have an equal ownership interest, with EGPC owning the other portion, in the
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joint venture that has a 100% working interest in both PSCs. The PSC for the Merged Concession has a term ending in 2035. The term of the South Ghazalat PSC is scheduled to expire in 2039, subject to periodic evaluations and contingent upon continued successful drilling activities. Following the latest assessment and agreed-upon commitments, the South Ghazalat license is currently set to expire in 2027.
Cote d'Ivoire Segment
For the year ended December 31, 2025, the properties in Cote d'Ivoire produced approximately 111 MBoe or 2% of our total 2025 production. Our Cote d'Ivoire production for the period was 100% crude oil.
The Company holds a 27.4% non-operated working interest (30.4% paying interest) in CI-40 in the deepwater producing Baobab field in Block CI-40, offshore Cote d’Ivoire in West Africa. Crude oil from the Baobab field is produced to a dedicated FPSO with the associated natural gas delivered onshore via a subsea pipeline. The PSC license in Cote d’Ivoire has a term expiring in April 2038. The field has been developed with 24 subsea production wells and five water injector wells tied back to the FPSO. At year end, all production wells were shut in as the FPSO was off station in dry dock. Prior to shut in of the field, seven of these wells were in production, two were injecting and the other 20 were shut in. We also own a 21.05% non-operated working interest in OML 145, a non-producing discovery located offshore of Nigeria that is not expected to be developed at this time.
In connection with the planned dry dock refurbishment, the Baobab FPSO ceased hydrocarbon production on January 31, 2025, with the final crude oil lifting in February 2025. The vessel departed the field in late March 2025 for Dubai for the refurbishment work, which was completed in February 2026. The Baobab FPSO has commenced mobilization back to Cote d’Ivoire and is expected to return to offshore Cote d’Ivoire by late March 2026, with field production expected to restart in the second quarter of 2026. A rig has been secured for the planned development drilling program, which is expected to begin during the fourth quarter of 2026 following the FPSO’s return to service. The drilling campaign is anticipated to bring meaningful additions to production from the main Baobab field in CI-40.
In February 2026, the Company became the operator with a 60% working interest in the Kossipo field on the CI-40 Block with a field development plan to be completed in the second half of 2026.
In March 2025, the Company farmed into the CI-705 block offshore Côte d’Ivoire as the operator with a 70% working interest and a 100% paying interest though a commercial carry arrangement with two other parties. The CI-705 block is located in the Ivorian Basin, west of the Company’s CI-40 Block, where the Baobab and Kossipo oil fields are located. The block’s first exploration period ends in May 2026. Entering into the block’s second exploration period will require the commitment to reprocess seismic data and drill a well.
Canada Segment
For the year ended December 31, 2025, the properties in Canada produced approximately 667 MBoe or 11% of our total 2025 production. Our Canadian production for the period was 32% crude oil, 36% natural gas and 32% NGLs.
Prior to the Canada Asset Divestment, we owned production and working interests in Cardium light oil and Mannville liquids-rich gas assets in Harmattan, which is a core play in the Western Canadian Sedimentary Basis, and is located approximately 80 kilometers north of Calgary, Alberta. Prior to the Canada Asset Divestment, we also owned a 100% working interest in a large oil battery and a compressor station where a majority of oil volumes was processed. All gas was delivered to a third party non-operated gas plant for processing.
Following the Canada Asset Divestment, the Company plans to wind down its subsidiary in Canada.
Equatorial Guinea Segment
We currently own a 60% working interest in an undeveloped portion of Block P offshore Equatorial Guinea where we are the designated operator. In the event that there is commercial production from Block P, the Company is obligated to make a one-time potential future payment of $6.8 million to the national oil company of Equatorial Guinea, who is a party to the Block P PSC. The Block P PSC provides for a development and production period of 25 years, commencing from the first oil production from Block P. We have completed a feasibility study of a standalone production development opportunity of the Venus field discovery on Block P and submitted a plan of development (“Venus Plan of Development”) to the Equatorial Guinea Ministry of Mines and Hydrocarbons (“EG MMH”), which was approved in September 2022.
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After further negotiations and the agreement on certain terms relating to the joint operations were reached, the EG MMH directed that activities relating to the Venus Plan of Development resume in August 2023. These developments required a Third Amendment to the Joint Operating Agreement (“JOA”), which was approved by all parties to the JOA, and the EG MMH in February 2024. In late 2024, work commenced on the Front End Engineering and Design (“FEED”) to enable a Final Investment Decision (“FID”) on the Venus Plan of Development. In the second quarter of 2025, the Company completed the initial FEED study that confirmed the viability of the development concept and is currently evaluating alternative technical solutions which may deliver enhanced economic value. We currently have an existing plan of development of the Venus field discovery on Block P, which focuses on key areas of drilling evaluations, facilities design, market inquiries and metocean review.
Production Sharing Contracts
Exploration and production activities of our assets in Gabon, Egypt, Cote d'Ivoire, Nigeria and Equatorial Guinea are generally governed by PSCs.
Our oil entitlement under the PSCs is generally the sum of cost oil, profit oil and excess cost oil, if applicable. Under the terms of the PSCs, the Company is typically the contractor partner (“Contractor”) and bears the risk and cost of exploration, development, and production activities. In return, if exploration is successful, the Contractor receives entitlement to variable physical volumes of hydrocarbons, representing recovery of the costs incurred (“Cost Oil”) and a stipulated share of production after cost recovery (“Profit Oil”).
The Contractor may be obligated to make royalty payments to the host government of each country using a variable percentage based on gross daily production levels. The remaining oil production, after deducting the gross royalty, if any, is split between Cost Oil and Profit Oil. Cost Oil is up to a maximum percentage and is allocated to recover approved operating and capital costs spent on specific projects. Excess Cost Oil, which is Cost Oil less the actual cost recovery, is further shared between the host government and the Contractor. Except as otherwise disclosed, all crude oil sales are priced at current market rates at the time of sale.
In Egypt, our share of royalties is paid out of the government's share of production, while in Gabon, the government receives a fixed royalty rate of 13%. Additionally, the income tax to which the Contractor is subject to (“Profit Oil Tax”), is deemed to have been paid to the host government as part of the payment of Profit Oil or is captured in the entitled share of Profit Oil production paid in-kind to the host government, and therefore no additional tax burden is due. Under this arrangement taxation is based on a set percentage of average daily production volume.
DRILLING ACTIVITY
The drilling campaign in Egypt, which started in late 2024 and continued into 2025, contributed to consistent production growth. In the fourth quarter of 2025, the Company commenced its Phase Three Drilling Program in Gabon with the drilling of one well in the Etame field. After completing our drillings at the Etame platform, we expect to move the drilling rig to the SEENT and Ebouri platforms where we have several wells and workovers planned to enhance production and potentially add reserves. Significant development drilling is also expected to begin in Cote d’Ivoire in the fourth quarter of 2026 after the FPSO returns to service following the completion of the rig refurbishment.
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The following table sets forth the number of net exploratory and development wells drilled in the last three years:
See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations, Recent Operational Updates,” for additional description of Vaalco’s drilling and completion activities during the year ended December 31, 2025.
PRODUCTIVE WELLS
The following table sets forth information at December 31, 2025 relating to the productive wells in which we owned a working interest as of that date. Gross wells are the total number of producing wells in which we have an interest, and net wells are the sum of our fractional working interests owned in gross wells.
ACREAGE
The following table sets forth information as of December 31, 2025 relating to our leasehold acreage.
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Summary of Acreage Terms
The expiration dates of the term of our concessions associated with each operating area are as follows:
For Canada, a significant portion of undeveloped acres is generally held by production by areas that are producing reserves. At December 31, 2025, approximately 67% of Canada’s net undeveloped acreage (15,102 acres) has no expiration risk within the next five years (2026 through 2030).
RESERVE INFORMATION
Estimated Reserves and Estimated Future Net Revenues
Reserve Data
The tables below set forth our estimated net proved reserve quantities for the year ended December 31, 2025. Our reserves information was evaluated by the independent petroleum engineering firm, Netherland, Sewell & Associates, Inc. (“NSAI”). Prior to 2025, reserves information for Canada was independently evaluated by GLJ Ltd. (“GLJ”). The proved reserve quantities are calculated based on our NRI.
(1)To convert Natural Gas to MBoe, MMcf is divided by 6 for Canada reserves, and MMcf is divided by 5.8 for Cote d'Ivoire reserves.
(2)Proved developed and proved undeveloped reserves in Canada attributed to assets held for sale as of December 31, 2025.
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In accordance with the current SEC guidelines, estimates of future net cash flows from our properties and the present value thereof are made using the average of the first-day-of-the-month price for each of the twelve months of the year adjusted for quality, transportation fees and market differentials. Such prices are held constant throughout the life of the properties except where such guidelines permit alternate treatment, including the use of fixed and determinable contractual price escalations.
For 2025 and 2024, the adjusted average prices used for our reserves estimates were as follows:
Standardized Measure
The following table sets forth the standardized measure of discounted future net cash flows:
(1) Discounted future net cash flows in Canada attributed to assets held for sale as of December 31, 2025.
The information set forth in the tables includes revisions for certain reserve estimates attributable to proved properties included in preceding years’ estimates. Such revisions are the result of additional information from subsequent completions and production history from the properties involved or the result of an increase or decrease in the projected economic life of such properties resulting from changes in product prices, estimated operating costs and other factors. Crude oil amounts shown for Gabon, Egypt and Cote d’Ivoire are recoverable under the respective PSCs, and the reserves in place at the end of the contract remain the property of each host government. Crude oil amounts shown for Gabon are recoverable under the Etame PSC, and the reserves in place at the end of the contract remain the property of the Gabon government. The reserves at the end of the contract, including extensions, are not included in the table above. The reserves at the end of the contract are not included in the table above.
We do not reflect proved reserves on discoveries in our reserve estimates until such time as a development plan has been prepared and approved by our joint venture owners and the host government, where applicable.
There are numerous uncertainties inherent in estimating quantities of proved reserves and in projecting future rates of production and timing of development expenditures, including many factors beyond our control. Reserve engineering is a
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subjective process of estimating underground accumulations of crude oil, natural gas and NGLs that cannot be measured in an exact manner, and the accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. The quantities of crude oil, natural gas and NGLs that are ultimately recovered, production and operating costs, the amount and timing of future development expenditures and future crude oil, natural gas and NGLs sales prices may all differ from those assumed in these estimates. The quantities of crude oil and natural gas that are ultimately recovered, production and operating costs, the amount and timing of future development expenditures and future crude oil and natural gas sales prices may all differ from those assumed in these estimates. The standardized measure of discounted future net cash flows should not be construed as the current market value of the estimated crude oil, natural gas and NGLs reserves attributable to our properties.
Proved Undeveloped Reserves
Historically, we have reviewed on an annual basis all of our proved undeveloped reserves (“PUDs”) to ensure an appropriate plan for development exists.
The following table discloses our estimated PUD reserve activities:
Our PUD reserves at December 31, 2025 increased by 1.4 MMBoe, primarily due to:
Conversion to Proved Developed — Conversions of 1.2 MMBoe are attributable to our Egypt segment where we had four wells, which were previously classified as PUDs, were drilled and converted to proved developed producing (“PDP”) as part of the 2025 drilling program. We also had one well in our Gabon segment, which was previously classified as PUD and was converted to PDP due to operational optimization where the reserves were confirmed to be accessible through existing infrastructure. The Company spent approximately $19.0 million in 2025 to convert PUDs to PDPs.
Revisions of Previous Estimates — We had total net positive revisions of 1.3 MMBoe in 2025. We had an increase of 1.9 MMBoe from our Cote d’Ivoire segment which includes increased recovery expectations from the upcoming Phase 5 drilling program supported by additional technical analysis. We also had an additional total upward revision of 0.4 MMBoe due to future well performance expectations in Egypt and updates to the gas supply in Gabon. These positive revisions were offset by negative revisions of 1.0 MMBoe in Canada due to wells that were not reasonably expected to be developed within the five-year timeframe in accordance with the SEC guidance.
Extensions and Discoveries — Extensions and discoveries of 1.2 MMBoe are associated with the drilling program in Gabon that extended the Etame Field and added new, proved undeveloped locations on the Company’s existing acreage in the Etame block.
As of December 31, 2025, we plan to drill all scheduled PUD locations within the next five years and within the five years following the initial disclosure of the PUDs as proved reserves. All PUDs are tracked with respect to the year the reserves were initially booked to verify compliance. The PUD schedule of the Company is reviewed and approved by management as part of our reserves control process and the schedule is also reviewed by our independent petroleum engineers.
Controls over Reserve Estimates
Our policies and practices regarding internal controls over the recording of reserves are structured to objectively and accurately estimate our crude oil, natural gas, and NGLs reserves quantities and present values in compliance with SEC regulations and generally accepted accounting principles in the U.S. (“GAAP”). Compliance with these rules and regulations with respect to our reserves is the responsibility of the Technical & Reserves Committee of the Board of Directors (the “Technical & Reserves Committee”) and our reservoir engineer, who is our principal engineer. Our principal engineer has over 25 years of experience in the crude oil and natural gas industry, including over five years as a reserve evaluator and trainer, and is a qualified reserves estimator, as defined by the Society of Petroleum Engineers’ standards. Our principal engineer has over 30 years of experience in the crude oil and natural gas industry, including over 10 years as a reserve evaluator and trainer, and is a qualified reserves estimator, as defined by the Society of Petroleum Engineers’ standards. Further professional qualifications include degrees in geological engineering and petroleum engineering, with a Master’s
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degree in petroleum engineering, extensive internal and external reserve training, and asset evaluation and management. In addition, the principal engineer is an active participant in industry reserve seminars, professional industry groups and is a member of the Society of Petroleum Engineers. The Technical & Reserves Committee meets periodically with senior management to discuss matters and policies related to reserves.
Our reserves estimation process involves methods generally accepted in the industry to assess our proved reserves, including production decline curve analysis methods, and may include volumetric methods, material balance methods, and reservoir simulation methods, or a combination of these methods, as well as taking into account economic parameters and considerations in finalizing these assessments, as appropriate. Technical information used by us to assess our proved reserves estimates may include geological, geophysical, engineering and financial data as well as other relevant static and dynamic data. In order to satisfy the requirements for establishing a reasonable certainty for proved reserves, including material increase in proved reserves estimates, we adopt field-tested repeatable and consistent reliable technologies, which may include, among others, logging, 3D and 4D seismic data, rock core analyses, static or dynamic pressure tests and production well testing, as appropriate. Where appropriate analogous reservoirs are available, we will use analogous reservoir parameters to enhance the quality of our reserve assessment results so as to be consistent with the reliable results required for proved reserves assessment as specified in applicable SEC rules.
Our controls over reserve estimation include engaging and retaining qualified independent petroleum and geological firms with respect to reserves information.Our controls over reserve estimation include retaining NSAI as our independent petroleum and geological firm for all years presented. We provide information to our independent reserve engineers about our crude oil, natural gas and NGLs properties in Gabon, Egypt, Cote d'Ivoire and Canada which includes, but is not limited to, production profiles, ownership and production sharing rights, prices, costs and future drilling plans. Our independent reserve engineers prepare their own estimates of the reserves attributable to our properties. The reserves estimates for our Gabon, Egypt, Cote d'Ivoire and Canada assets shown herein have been independently evaluated by NSAI and our Technical & Reserves Committee. Reserves estimates for Canada assets prior to 2025 had been independently evaluated by GLJ.
NET VOLUMES SOLD, PRICES, AND PRODUCTION COSTS
Net volumes sold, average sales prices per unit, and production costs per unit for our 2025, 2024 and 2023 operations are shown in the tables below.
(1)Reflects sales and production costs from April 30, 2024 through December 31, 2024 related to the Svenska Acquisition.
(2)The production volumes, average sales price, sales volumes and per Boe information are reported on NRI basis.
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AVAILABLE INFORMATION
VAALCO Energy, Inc. is a Delaware corporation, incorporated in 1985 and headquartered at 2500 CityWest Blvd., Suite 400, Houston, Texas 77042. Our telephone number is (713) 623-0801 and our website address is www.vaalco.com. We make available, free of charge on our website, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports, at https://www.vaalco.com/investors/sec-filings as soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC. These reports and other information are also available on the SEC's website at https://www.sec.gov. Information contained on our website and the SEC’s website is not incorporated by reference into this Annual Report. Information contained on our website is not incorporated by reference into this Annual Report. We have placed on our website copies of charters for our Audit Committee, Compensation Committee and Environmental, Social and Governance Committee as well as our Code of Business Conduct and Ethics (“Code of Ethics”), Corporate Governance Principles and Code of Ethics for the CEO and Senior Financial Officers. We have placed on our website copies of charters for our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee as well as our Code of Business Conduct and Ethics (“Code of Ethics”), Corporate Governance Principles and Code of Ethics for the CEO and Senior Financial Officers. Stockholders may request a printed copy of these governance materials by writing to the Company Secretary, VAALCO Energy, Inc., 2500 CityWest Blvd., Suite 400, Houston, Texas 77042. We intend to disclose updates, waivers or amendments to our Code of Ethics and Code of Ethics for the CEO and Senior Financial Officers on our website within four business days following the date of such update, waiver or amendment.
CUSTOMERS
For the years ended December 31, 2025, 2024 and 2023, our revenue concentration by customer for each operating segment are shown on the table below.
(1)For Cote d'Ivoire, reflects sales from April 30, 2024 through December 31, 2024 related to the Svenska Acquisition.
EMPLOYEES AND HUMAN CAPITAL RESOURCE MANAGEMENT
We operate on the fundamental philosophy that people are our most valuable asset as every person who works for us has the potential to impact our success. Identifying quality talent is at the core of everything we do and our success is dependent upon our ability to attract, develop and retain highly qualified employees. Our core values include honesty/integrity, treating people fairly, high performance, efficient and effective processes, open communication and being respected in our local communities. These values establish the foundation on which our culture is built and represent the key expectations we have of our employees. We believe our culture and commitment to our employees creates an environment that allows us to attract and retain our qualified talent, while simultaneously providing significant value to us and our stockholders by helping our employees attain their highest level of creativity and efficiency.
Demographics
As of December 31, 2025, we had 281 full-time employees, 159 of whom were located in Gabon, 44 in Egypt, 11 in Canada, 1 in Cote d’Ivoire, 1 in Equatorial Guinea, 61 in Houston and 4 corporate employees based in the United Kingdom. We also had 44 contractors in Gabon, 17 contractors in Egypt, 2 contractors in Equatorial Guinea, 2 contractors in Cote d’Ivoire, 5 contractors in the United Kingdom, 8 contractors in Canada and 24 contractors in Houston as of December 31, 2025. We are not subject to any collective bargaining agreements, although some of the national employees in Gabon are members of the National Organization of Petroleum Workers union. We believe relations with our employees are satisfactory.
Diversity and Inclusion
We value building diverse teams, embracing different perspectives and fostering an inclusive, empowering work environment for our employees. We have a long-standing commitment to equal employment opportunity as evidenced by our Equal Employment Opportunity policy. We have a long-standing commitment to equal employment opportunity as evidenced by the Company’s Equal Employment Opportunity policy. Approximately 19% of our management team are female employees, 96% of our Gabon workforce is Gabonese and 85% of our Egypt workforce is Egyptian.
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Compensation and Benefits
Critical to our success is identifying, recruiting, retaining, and incentivizing our existing and future employees. We strive to attract and retain the most talented employees in the industry by offering competitive compensation and benefits. Our pay-for-performance compensation philosophy is based on rewarding each employee’s individual contributions and striving to achieve equal pay for equal work regardless of gender, race or ethnicity. We use a combination of fixed and variable pay including base salary, bonus, and merit increases, which vary across the business. In addition, as part of our long-term incentive plan for executives and certain employees, we provide share-based compensation to foster our pay-for-performance culture and to attract, retain and motivate our key leaders.
As the success of our business is fundamentally connected to the well-being of our people, we offer benefits that support their physical, financial and emotional well-being. As the success of our business is fundamentally connected to the well-being of our people, we offer benefits that support their physical, financial and emotional well-being. We provide our employees with access to flexible and convenient medical programs intended to meet their needs and the needs of their families. In addition to this medical coverage, we offer eligible employees dental and vision coverage, health savings and flexible spending accounts, paid time off, employee assistance programs, voluntary short-term and long-term disability insurance and term life insurance. In addition to standard medical coverage, we offer eligible employees dental and vision coverage, health savings and flexible spending accounts, paid time off, employee assistance programs, employee loans, voluntary short-term and long-term disability insurance and term life insurance. Additionally, we offer a 401(k) Savings Plan and Deferred Compensation Plan to certain employees. Certain employees receive additional compensation for working in foreign jurisdictions.
Workplace environment is also crucial in attracting and retaining key talent. Most of our offices offer a certain level of flexibility (i.e. work from home days and/or flexible core hours) to help meet the needs of the multigenerational workforce and the needs of the business. Our benefits and compensation packages vary by location and are designed to meet or exceed local laws and to be competitive in the marketplace. Our benefits vary by location and are designed to meet or exceed local laws and to be competitive in the marketplace.
Commitment to Values and Ethics
Along with our core values, we act in accordance with our Code of Ethics, which sets forth expectations and guidance for employees to make appropriate decisions. Our Code of Ethics covers topics such as anti-corruption, discrimination, harassment, privacy, appropriate use of company assets, protecting confidential information, and reporting Code of Ethics violations. The Code of Ethics reflects our commitment to operating in a fair, honest, responsible and ethical manner and also provides direction for reporting complaints in the event of alleged violations of our policies (including through an anonymous hotline). Our executive officers and supervisors maintain “open door” policies and any form of retaliation is strictly prohibited.
Professional Development, Safety and Training
We believe that key factors in employee retention are professional development, safety and training. We have training programs across all levels to meet the needs of various roles, specialized skill sets and departments across the Company. We have training programs across all levels of the Company to meet the needs of various roles, specialized skill sets and departments across the Company. We provide compliance education as well as general workplace safety training to our employees and offer Occupational Safety and Health Administration training to key employees. We are committed to the security and confidentiality of our employees’ personal information and employ software tools and periodic employee training programs to promote security and information protection at all levels. We are committed to the security and confidentiality of our employees’ personal information and employs software tools and periodic employee training programs to promote security and information protection at all levels. We utilize certain employee turnover rates and productivity metrics in assessing our employee programs to ensure that they are structured to instill high levels of in-house employee tenure, low levels of voluntary turnover and the optimization of productivity and performance across our entire workforce. Additionally, we have a performance evaluation program which adopts a modern approach to valuing and strengthening individual performance through on-going interactive progress assessments related to established goals and objectives.
Communication and Engagement
We strongly believe that our success depends on employees understanding how their work contributes to our overall strategy. To this end, we communicate with our workforce through a variety of channels and encourage open and direct communication, including: (i) quarterly company-wide CEO updates; (ii) regular company-wide calls with management and (iii) frequent corporate email communications.
COMPETITION
The crude oil, natural gas and NGLs industry is highly competitive. Competition is particularly intense from other independent operators and from major crude oil, natural gas and NGLs companies with respect to acquisitions and
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development of desirable crude oil, natural gas and NGLs properties and licenses, and contracting for drilling equipment. There is also competition for the hiring of experienced personnel. In addition, the drilling, producing, processing and marketing of crude oil, natural gas and NGLs is affected by a number of factors beyond our control, which may delay drilling, increase prices and have other adverse effects, which cannot be accurately predicted. In addition, the drilling, producing, processing and marketing of crude oil and natural gas is affected by a number of factors beyond our control, which may delay drilling, increase prices and have other adverse effects, which cannot be accurately predicted.
Our competition for acquisitions, exploration, development and production includes the major crude oil, natural gas and NGLs companies in addition to numerous independent crude oil companies, individual proprietors, investors and others. We also compete against companies developing alternatives to petroleum-based products, including those that are developing renewable fuels. Many of these competitors have financial and technical resources and staff that are substantially larger than ours. As a result, our competitors may be able to pay more for desirable crude oil, natural gas and NGLs assets, or to evaluate, bid for and purchase a greater number of properties and licenses than our financial or personnel resources will permit. As a result, our competitors may be able to pay more for desirable crude oil and natural gas assets, or to evaluate, bid for and purchase a greater number of properties and licenses than our financial or personnel resources will permit. Furthermore, these companies may also be better able to withstand the financial pressures of lower commodity prices, unsuccessful wells, volatility in financial markets and generally adverse global and industry-wide economic conditions. These companies may also be better able to absorb the burdens resulting from changes in relevant laws and regulations, which may adversely affect our competitive position. Our ability to generate reserves in the future will depend on our ability to select and acquire suitable producing properties and/or develop prospects for future drilling and exploration.
INSURANCE
For protection against financial loss resulting from various operating hazards, we maintain insurance coverage, including insurance coverage for certain physical damage, blowout/control of a well, comprehensive general liability, worker’s compensation and employer’s liability. We maintain insurance at levels we believe to be customary in the industry to limit our financial exposure in the event of a substantial environmental claim resulting from sudden, unanticipated and accidental discharges of certain prohibited substances into the environment. Such insurance might not cover the complete claim amount and would not cover fines or penalties for a violation of environmental law. We are not fully insured against all risks associated with our business either because such insurance is unavailable or because premium costs are considered uneconomic. A material loss not fully covered by insurance could have an adverse effect on our financial position, results of operations or cash flows.
REGULATORY
General
Our operations and our ability to finance and fund our operations and growth are affected by political developments and laws and regulations in the areas in which we operate. In particular, crude oil, natural gas and NGLs production operations and economics are affected by:
•change in governments;
•civil unrest;
•price and currency controls;
•limitations on crude oil, natural gas and NGLs production;
•tax, environmental, safety and other laws relating to the petroleum industry;
•changes in laws relating to the petroleum industry;
•changes in administrative regulations and the interpretation and application of administrative rules and regulations; and
•changes in contract interpretation and policies of contract adherence.
In any country in which we may do business, the crude oil, natural gas and NGLs industry legislation and agency regulation are periodically changed, sometimes retroactively, for a variety of political, economic, environmental and other reasons, the impact of which could substantially increase our costs or affect our operations. Numerous governmental departments and agencies issue rules and regulations binding on the crude oil, natural gas and NGLs industry. Numerous governmental departments and agencies issue rules and regulations binding on the crude oil and natural gas industry, some of which carry substantial penalties for the failure to comply. Failure to comply with these laws and regulations may result in the suspension or termination of our operations and subject us to administrative, civil and criminal penalties. The regulatory burden on the crude oil, natural gas and NGLs industry increases our cost of doing business and our potential for economic loss. The regulatory burden on the crude oil and natural gas industry increases our cost of doing business and our potential for economic loss.
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Gabon
The 2019 Hydrocarbons Law in Gabon contains provisions applicable to both the upstream and downstream segments. However, despite the publication of the 2019 Hydrocarbons Law, there are various issues and matters yet to be fully enacted by implementing regulations. Under the transitory provision contained in the 2019 Hydrocarbons Law, existing PSCs and other petroleum contracts, permits and authorizations remain in full force and effect until their expiration. However, any renewal or extension of those instruments is subject to the provisions of the 2019 Hydrocarbons Law, and its implementing regulations. However, any renewal or extension of those instruments are subject to the provisions of the 2019 Hydrocarbons Law, and its implementing regulations.
The 2019 Hydrocarbons Law also provides for obligations for immediate application, irrespective of the date of signature of existing PSCs or petroleum contracts and/or granting of petroleum permits and authorizations. The 2019 Hydrocarbons Law also provides for obligations for immediate application, irrespective of the date of signature of existing PSCs or petroleum contracts and/or granting of petroleum permits and authorizations. These include (i) the requirement for foreign producers and explorers applying for an exclusive development and production authorization to conduct their operations in Gabon through a company incorporated in Gabon rather than through branches of entities incorporated in other jurisdictions; and (ii) the obligation for all companies undertaking hydrocarbon activities to domicile their site rehabilitation funds with the Bank of Central African States, which is the Central African Economic and Monetary Community (“CEMAC”) or a Gabonese bank or financial institution subject to the Central African Banking Commission, which supervises banks and financial institutions licensed to operate in CEMAC countries, within one year after the entry into force of the 2019 Hydrocarbons Law.
PSCs entered into between independent contractors and the State of Gabon (“State”) since the implementation of the 2019 Hydrocarbons Law must include a clause providing that participation by the State cannot exceed a 10% participating interest in the operations, to be carried by the contractor. PSCs entered into between independent contractors and the State of Gabon since the implementation of the 2019 Hydrocarbons Law must include a clause providing that participation by the State of Gabon cannot exceed a 10 percent participating interest in the operations, to be carried by the contractor.
Under the 2019 Hydrocarbons Law, the direct or indirect assignment of a Contractor’s rights or obligations to third parties (non affiliates) under the PSC is subject to approval of the Minister of Petroleum. The State and the national operator have preemption rights, which the State must exercise within 60 days and the national operator must exercise within 45 days if the State does not exercise its rights within the 60 days. The preemption right of the State and the national operator also applies in change of control situations. In February 2024, the State/national operator exercised its preemption right in a share transaction involving a number of PSCs and concessions already in effect prior to 2014.
The 2019 Hydrocarbons Law also entitles the national operator to acquire a maximum 15% stake at market value in all PSCs as of the date of signature. Further, it also provides that the State of Gabon may acquire an equity stake of up to 10%, at market value, in an operator applying for or already holding an exclusive development and production authorization. In addition, the 2019 Hydrocarbons Law provides that the State of Gabon may acquire an equity stake of up to 10 percent, at market value, in an operator applying for or already holding an exclusive development and production authorization.
Of critical note, the Government of Gabon announced in October 2025 its intention to replace the current 2019 Hydrocarbons Law with a new dual legal framework, comprising separate Oil and Gas Codes. This new legislation, expected to be implemented during the third quarter of 2026, aims to enhance transparency, improve fiscal terms, and provide greater legal clarity for investors in the Gabonese oil and gas sector. While existing contracts are generally expected to be honored under transitional provisions, any future renewals, extensions, or new agreements will be subject to the provisions of this forthcoming framework, which could introduce changes to current operating conditions, fiscal regimes, and regulatory requirement.
Egypt
Laws and Regulations
The Egyptian Ministry of Petroleum and Mineral Resources (“MOP”) is the ministerial governmental authority responsible for the regulation and development of the oil and gas industry in Egypt. Certain government entities have been set up to help the MOP achieve its objectives.
Under the Egyptian Constitution, all oil and gas resources are under the control of the State of Egypt. Accordingly, only the State can grant rights for exploration and exploitation of oil and gas resources for interested investors. The Egyptian Constitution provides that concessions for the exploitation of such resources shall be issued by virtue of a law for a period not exceeding 30 years.
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Concession Agreement
The mechanism for granting a contractor the right to carry out oil and gas exploration and development activities is the concession agreement. Concession agreements have the force and privileges of law in Egypt, meaning each agreement is an Egyptian Act of Parliament. The concession agreement overrides any contradictory Egyptian laws but not the Egyptian Constitution. In the absence of any legal rule under the relevant concession agreement, the exploration and exploitation operations will be subject to the rules of the Fuel Materials Law No. 66/1953, as amended, and its executive regulation issued by Minister of Industry Decree No. 758/1972, as amended (the “Fuel Materials Law”), and related ministerial decrees, where applicable.
Concession agreements usually follow a standard format which may be updated by the MOP and the relevant government entity from time to time, with slight variations. The commercial terms of concession agreements are open to negotiation, but each concession agreement will typically set out certain factors such as: (i) minimum work and financial commitments associated with each exploration and development program; (ii) any bonus payment(s) to be paid by the contractor to the relevant government agency upon triggering events (usually tied to certain production milestones); (iii) royalties payable to the government in cash or in kind; (iv) exploration and development periods and extensions of each; (v) rules concerning the contractor's recovery of its costs and expenses in association with exploration, development and related operations; (vi) production sharing valuations; (vii) priority right to the relevant government entity to offtake the production for domestic needs; (viii) relinquishment obligations and the associated triggering events; and (ix) requirements and procedures to convert an area to a development and to obtain a development lease, conclude sales and offtake agreement, and to dispose of the contractor’s share of production.
Cost Recovery and Production Allocation
The concession agreement will set out in detail the distribution of cost recovery for the contractor, including a dedicated annex outlining the accounting procedures for treatment of costs, expenses, and taxes under the concession agreement. Typically, the contractor bears all the risks until a commercial discovery is made, and, following which, the joint operating committee (“JOC”) is formed. The contractor will then be entitled to recover a certain percentage of its costs related to its previous and ongoing exploration and development activities in proportion to its working interest in the concession agreement. These costs may be recovered from the total petroleum production at a rate set out under the concession agreement on a quarterly basis. If the recoverable expenditures exceed the amount recoverable from petroleum production in any period, the unrecovered portion of the expenditures can usually be carried forward to subsequent periods. Full title to fixed and movable assets that are charged to cost recovery will usually pass from the contractor to the relevant government agency when its total costs have been recovered in accordance with the concession agreement, or at the time of relinquishment of the concession agreement with respect to all assets chargeable to the operations whether recovered or not, whichever occurs earlier.
Ownership of Assets
Under the model concession agreements, the movable and immovable assets (other than lands, which become the government entities' property as of the purchase thereof) are transferred automatically and gradually from the contractor to the government entity, as they become subject to cost recovery pursuant to the cost recovery provisions of the concession. The contractor (through the JOC) only has the right to use such assets for the purpose of petroleum operations under the concession agreement.
Termination and Revocation of Concession
The concession agreement is terminated by the lapse of its term, unless terminated prematurely. In addition, the government has the right to prematurely terminate the concession agreement in several instances set out in the concession. The government may, among other things, terminate the concession in the event of a misrepresentation by the contractor, an assignment of the contractor's rights without obtaining the required approvals, or the contractor being declared bankrupt, or committing any material breach under the concession or the Fuel Materials Law. If the government deems that one of these causes (other than force majeure events) exists, it will give the contractor 90 days’ written notice to remedy and remove the cause. If, at the end of the 90-day notice period, the cause has not been remedied and removed, the concession agreement may be terminated by a presidential decree.
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Cote d'Ivoire
The Petroleum Code of Cote d'Ivoire (the “Petroleum Code”) is the main legislation governing the country's oil and gas sector. Due to the general nature of the Petroleum Code, most of the specific provisions governing petroleum exploration and production are included in petroleum contracts (the “Petroleum Contracts”) which implement the principles of the Extractive Industries Transparency Initiative, a global framework for disclosure and multi-stakeholder oversight. The Uniform Acts adopted by the Organization for the Harmonisation of Business Law in Africa (the “OHADA”), of which Cote d'Ivoire is a member state, apply to companies carrying out oil and gas activities in Cote d'Ivoire, especially the OHADA Companies Act. Oil and gas activities are subject to exchange control regulations applicable within the West African Economic and Monetary Union, which is an organization of West African states established to promote economic integration among countries that share the CFA franc as a common currency, and the Economic Community of West African States, a regional group of West African nations created to promote economic integration across the region. The main regulatory oversight bodies in Cote d'Ivoire include, among others, the Ministry of Mines, Petroleum and Energy, the Direction Générale des Hydrocarbures, and Société Nationale d'Opérations Pétroliéres de la Cote d'Ivoire (PETROCI), the national oil company for oil and gas operations.
The Petroleum Code requires abandonment and rehabilitation obligations to be included in the Petroleum Contracts. In addition, the Petroleum Code provides for the obligation to include environmental provisions, in particular environmental management plans, in the Petroleum Contracts.
Canada
Pursuant to The Constitution Act, 1867 (Canada), the Canadian federal government has primary jurisdiction over interprovincial oil and gas pipelines, import and export trade in oil and gas, and offshore oil and gas exploration and production. Proposed interprovincial pipeline projects require a regulatory review by the Canada Energy Regulator under the Canadian Energy Regulator Act (Canada) to proceed. An impact assessment by the Impact Assessment Agency and a determination by the Cabinet that a pipeline project is in the public interest will also likely be required under the Impact Assessment Act (Canada)(“IAA”). On October 13, 2023, the Supreme Court of Canada found the “designated projects” component of the IAA to be largely unconstitutional, ruling that it exceeded federal legislative jurisdiction. In response, the federal government introduced and passed legislative amendments to the IAA, and one of such amendments came into force on June 20, 2024. The amended IAA aims to align the legislation with the Supreme Court’s decision by focusing on areas of clear federal jurisdiction for impact assessments.
The Alberta Energy Regulator (“AER”) is the primary regulator of resource development in Alberta. It derives its authority from the Responsible Energy Development Act (Alberta) and several related statutes. AER regulatory approval is required for all oil and natural gas projects or activities in Alberta.
In addition to conducting project approvals, the AER regulates the lifecycle of projects and performs ongoing monitoring of oil and gas projects to ensure compliance with standards and conditions set out in the licenses and approvals it issues and in the AER directives and regulations. The AER also oversees project closure obligations.
Canada also has extensive climate change regulations at both the federal and provincial level mandating greenhouse gas (“GHG”) emission reductions by oil and natural gas producers. The federal government enacted the Greenhouse Gas Pollution Pricing Act (Canada) (the “GGPPA”), which came into force on January 1, 2019. While the GGPPA previously included a fuel charge, Regulations Amending Schedule 2 to the GGPPA and the Fuel Charge Regulations (SOR/2025-107) effectively removed the fuel charge by setting applicable rates to zero, effective April 1, 2025. The federal government intends to permanently repeal the fuel charge framework under Part 1 of the GGPPA, refocusing federal carbon pollution pricing requirements on industrial emissions. One component of the GGPPA regime that remains is an emissions trading system for large industry (the Output-Based Pricing System). The GGPPA allows provinces to develop their own carbon pollution pricing systems that meet the minimum federal benchmark, failing which the federal carbon pollution pricing system applies.
Alberta’s Technology Innovation and Emissions Reduction Regulation (“TIER”) regulates emissions of heavy industry in line with federal standards. TIER was significantly amended on December 3, 2025, through Order in Council 369/2025. Key changes include the introduction of investment credits as a new compliance pathway, allowing facilities to meet up to 90% of their compliance obligation through direct investments in on-site emission reductions. The amendments also provide flexibility for smaller emitters to opt out of the TIER system for 2025. The TIER fund price was frozen at C$95/tonne in May 2025, and the regulation's automatic review and expiry dates have been extended to December 31, 2030, and December 31, 2035, respectively.
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The Government of Alberta also enacted the Methane Emission Reduction Regulation (Alberta), which, in line with AER Directive 060: Upstream Petroleum Industry Flaring, Incinerating, and Venting and AER Directive 017: Measurement Requirements for Oil and Gas Operations, sets vent gas limits for methane per month, monitored through representative measuring data. Furthermore, the federal government announced new enhanced oil and gas methane regulations on December 16, 2025, expected to take effect in January 2028, with a target to reduce methane emissions by at least 75% below 2012 levels by 2030.
In Canada, there is a general presumption against the retroactive application of legislation absent an express statutory statement to the contrary. Significant changes to oil and gas regulations impacting existing projects are also often implemented through a prospective phase-in approach.
Equatorial Guinea
All hydrocarbons existing in Equatorial Guinea’s onshore territory, as well as in its sovereign and jurisdictional waters, are Equatorial Guinea property and part of the public domain. The monetization of such hydrocarbons is to be pursued exclusively by Equatorial Guinea under its constitution, which reserves the exploitation of mineral and hydrocarbons resources exclusively to Equatorial Guinea and the public sector. However, the constitution also provides that Equatorial Guinea can delegate to, grant a concession to or associate itself with private parties for purposes of exploration and production activities in the manner and cases set forth by law.
All contracts signed with the State of Equatorial Guinea for the exploration and production of hydrocarbons have taken the form of PSCs. PSCs are subject to ratification by the President of the Republic of Equatorial Guinea and become effective only on the date the contractor is notified of presidential ratification. The powers to sign and amend PSCs and supervise their performance belong to the ministry responsible for petroleum operations (the “EG Petroleum Ministry”). In addition, the national oil company of Equatorial Guinea holds, manages and takes participations in petroleum activities on behalf of Equatorial Guinea. In addition, the national oil company of Equatorial Guinea, GEPetrol, holds, manages and takes participations in petroleum activities on behalf of Equatorial Guinea.
The 2006 Hydrocarbons Law currently in effect in Equatorial Guinea (the “Hydrocarbons Law”) incorporates the regime applicable to the exploration, appraisal, development and production of hydrocarbons, as well as the rules on their transportation, distribution, storage, preservation, decommissioning, refining, marketing, sale and other disposal. The Hydrocarbons Law contains provisions on a number of aspects concerning exploration and production operations and contracts, such as national content obligations, unitization, transfers and abandonment. The EG MHMD, which is currently the appointed EG Petroleum Ministry, has been exercising the powers contained within the Hydrocarbons Law.
Equatorial Guinea enforces national content regulations, established under its Hydrocarbons Law, with the primary goal of maximizing local participation and economic benefits from its oil and gas sector. Furthermore, they aim to increase the domiciliation of materials, equipment, and services within the country, fostering technology transfer and curbing capital outflow. Specific obligations also include the registration of all sector companies with the Ministry and the construction of prestigious office buildings by contractors after a commercial discovery.
In a move to bolster investor confidence and increase foreign investment, the Government of Equatorial Guinea passed Decree No. 100/2024 in early 2025. This decree introduces key regulations for the enforcement of judicial rulings against oil companies operating within the country, aiming to ensure procedural consistency and fairness in the execution of judgments. It reflects the government's commitment to safeguarding national interests while maintaining an attractive and predictable environment for international investors.
ENVIRONMENTAL REGULATIONS
General
Our operations are subject to various federal, state, local and international laws and regulations, including laws and regulations in Gabon, Egypt, Cote d'Ivoire, Canada (prior to the Canada Asset Divestment), Nigeria and Equatorial Guinea, governing the discharge of materials into the environment or otherwise relating to environmental protection or pollution control. The cost of compliance could be significant. While we are currently complying in all material respects with all environmental laws and regulations, failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal penalties, the imposition of remedial and damage payment obligations, or the issuance of injunctive relief (including orders to cease operations). While we are currently complying with and are in good standing with all environmental laws and regulations, failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal penalties, the imposition of remedial and damage payment obligations, or the issuance of injunctive relief (including orders to cease operations). Environmental laws and regulations are complex and have tended to become more stringent over time. We also are subject to various environmental permit requirements. Some environmental
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laws and regulations may impose strict liability, which could subject us to liability for conduct that was lawful at the time it occurred or joint and several liability, which could subject us to liability for conduct or conditions caused by prior operators or third parties. To the extent laws are enacted or other governmental action is taken that prohibits or restricts drilling or imposes environmental protection requirements that result in increased costs to the crude oil, natural gas and NGLs industry in general, our business and financial results could be adversely affected. Although no assurances can be made, we believe that, absent the occurrence of an extraordinary event, compliance with existing laws, rules and regulations regulating the release of materials into the environment or otherwise relating to the protection of the environment will not have a material effect upon our capital expenditures, earnings or competitive position with respect to our existing assets and operations. We cannot predict, however, what effect future environmental regulation or legislation, enforcement policies, or claims for damages to property, employees, other persons, the environment or natural resources could have on us.
In addition, a number of governmental bodies have adopted, have introduced or are contemplating regulatory changes in response to the potential impact of climate change.In addition, a number of governmental bodies have adopted, have introduced or are contemplating regulatory changes in response to the potential impact of climate change and to the lobbying effects of various climate change non-governmental organizations. Legislation, increased regulation and litigation regarding climate change could impose significant costs on us, our joint venture owners, and our suppliers, including costs related to increased energy requirements, capital equipment, environmental monitoring and reporting, and other costs to comply with such regulations. Legislation and increased regulation regarding climate change could impose significant costs on us, our joint venture owners, and our suppliers, including costs related to increased energy requirements, capital equipment, environmental monitoring and reporting, and other costs to comply with such regulations. For example, several nations, including Gabon, Egypt, Cote d'Ivoire, Canada and Equatorial Guinea, have signed and officially entered into an international climate change accord (the “Paris Agreement”). For example, in April 2016, 195 nations, including Gabon, Equatorial Guinea and the United States, signed and officially entered into an international climate change accord (the “Paris Agreement”). The Paris Agreement calls for signatory countries to set their own GHG emissions targets, make these emissions targets more stringent over time and be transparent about the GHG emissions reporting and the measures each country will use to achieve its GHG targets. The Paris Agreement calls for signatory countries to set their own greenhouse gas emissions targets, make these emissions targets more stringent over time and be transparent about the greenhouse gas emissions reporting and the measures each country will use to achieve its greenhouse gas targets. A long-term goal of the Paris Agreement is to limit global temperature increase to well below two degrees Celsius from temperatures in the pre-industrial era. The Paris Agreement is effectively a successor agreement to the Kyoto Protocol treaty, an international treaty aimed at reducing emissions of GHG, to which various countries and regions are parties. The Paris Agreement is effectively a successor agreement to the Kyoto Protocol treaty, an international treaty aimed at reducing emissions of greenhouse gases, to which various countries and regions are parties. On January 20, 2025, the US President signed an executive order to withdraw the United States from the Paris Agreement for the second time, with the withdrawal taking effect in January 2026. Such executive order could impact the SEC’s adopted new rules requiring public companies to disclose extensive climate-related information in their SEC filings, which the SEC voluntarily stayed followed a number of petitions for review filed against the SEC that were consolidated before the US Court of Appeals for the Eighth Circuit.
The State of Gabon and the Republic of Equatorial Guinea did not sign the Global Renewables and Energy Efficiency Pledge at COP28. However, a few oil companies operating in Gabon signed the Oil and Gas Decarbonization Charter at COP28.
The United States has previously announced a target for the US to achieve a 50-52% reduction from 2005 levels in economy-wide GHG emissions by 2030. Following the Paris Agreement and its ratification in Canada, the Government of Canada also pledged to cut its emissions by 40-45% from 2005 levels by 2030. In June 2021, the Canadian federal government passed the Canadian Net-Zero Emissions Accountability Act (Canada), which provides a legal foundation and framework for Canada to achieve net-zero GHG emissions by 2050. In November 2024, the Canadian government released draft regulations aimed at capping GHG emissions from the oil and gas sector. Of note, the proposed regulations set a cap on GHG emissions within the sector, equivalent to 35% below 2019 levels by 2030 and introduce a cap-and-trade system designed to recognize better-performing companies and incentivize higher polluters to invest in cleaner production processes
Given the political significance and uncertainty around the impact of climate change and how it should be dealt with, we cannot predict how legislation and regulation, including the Paris Agreement and any related GHG emissions targets, potential prices on carbon emissions, incentives to use renewable forms of energy or other requirements, will affect our financial condition and operating performance. Apart from any new legal developments, increased awareness and any adverse publicity in the global marketplace about potential impacts on climate change by us or other companies in our industry could harm our reputation, restrict our access to capital or impact the marketability of crude oil, natural gas and NGLs. In addition, the potential physical impacts of climate change on our operations are highly uncertain and would be particular to the geographic circumstances in areas in which we operate. The potential physical impacts of climate change on our operations are highly uncertain and would be particular to the geographic circumstances in areas in which we operate. These may include changes in rainfall amounts, storm patterns and storm intensities, water shortages, changing sea levels, and changing temperatures. These may include changes in rainfall and storm patterns and intensities, water shortages, changing sea levels, and changing temperatures. These impacts may adversely impact the cost, production, and financial performance of our operations.
In part, because they are economically developing countries, it is unclear how quickly and to what extent Gabon, Equatorial Guinea or Egypt will increase their regulation of climate change issues in the future. As of the date of this Annual Report, Equatorial Guinea has not adopted any new environmental legislation. Gabon has adopted Ordinance No. 019/2021 of September 13, 2021 on Climate Change, which ratification law has been published in the Official Gazette, with the objective of complying with the Paris Agreement (the "Ordinance on Climate Change"). The Ordinance on
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Climate Change particularly aims to: (a) provide a framework for targets to be set for controlling and reducing emissions and for increasing GHG absorption in the national climate change strategy and the national plans for climate change adaptation and mitigation; (b) define and develop tools and mechanisms for climate change adaptation and mitigation; (c) provide a framework for, and implement, strategies for adaptation, monitoring mitigation and assessment, action plans, policies, programs and adaptation and mitigation measures; (d) provide a framework and take effective response for adaptation and mitigation measures to facilitate the setting of specific sustainable development, security and energy efficiency goals; (e) promote and manage sustainable development through climate change mitigation and adaptation activities; (f) establish climate change financing mechanisms; and (g) complement international instruments addressing climate change. It also sets forth climate adaptation and mitigation measures for carbon intensive operators (which include petroleum companies) such as (a) the establishment of a National Plan on the Reduction of Gas Flaring with a zero flaring objective; (b) the establishment of a GHG emissions database and quota system, (c) a carbon offset register, and (d) penalties and sanctions for not complying with such measures. Egypt ratified the United Nations Framework Convention on Climate Change (“UNFCCC”) in 1994, signed the Paris Agreement in 2016 and ratified it in 2017. Egypt is among the top affected countries by climate change. Egypt is already implementing plans pertaining to energy resources diversification and acceleration of decreased carbon emissions, in line with its “Sustainable Development Strategy: Egypt Vision 2030”, the “Integrated Sustainable Energy Strategy 2035” and its “National Climate Change Strategy 2050”. Egypt hosted the United Nations Climate Change Conference-COP27, during which the role of the oil and gas sector was the highlight of the “Decarbonization Day” thereof. Egypt submitted in June 2023 a revised Nationally Determined Contribution (“NDC”) to the United Nations Development Programme, focusing on Egypt’s commitment to reduce emissions by 65% in the oil and gas sector (1.7 Mt CO2e) by 2030, increasing renewable energy capacities and alternative energy (including natural gas) sources to generate 42% of electricity by 2035, and increased policy actions and measures across key sectors including the oil and gas sector. In December 2023, during COP28, Egypt formally launched the first African voluntary carbon marketplace.
In addition to the ratification of the Paris Agreement, Côte d'Ivoire has implemented various climate regulations and policies to address the challenges of climate change. A Central Directorate in charge of the Fight against Climate Change was established to coordinate climate action. In 2022, Côte d'Ivoire submitted its revised NDC for 2021-2030, committing to reduce GHG emissions by 30.41% by 2030. The National Development Plan 2021-2025 includes climate change as one of its six priority areas. Other key climate-related policies include the National Gender and Climate Change Strategy, and the National REDD+ Strategy which look to develop credible carbon credit programs. Additionally, Côte d'Ivoire has joined international climate initiatives such as the Clean Development Mechanism and the Climate and Clean Air Coalition.
The Carbon Border Adjustment Mechanism (“CBAM”) is the EU’s carbon pricing tool designed to reduce carbon emissions and prevent carbon leakage by imposing a carbon price on certain imported goods. It requires importers to report embedded emissions in their products and eventually purchase CBAM certificates. Currently it applies to imports of cement, iron and steel, aluminum, fertilizers, hydrogen, and electricity with the aim to create a level playing field between EU and non-EU producers while encouraging cleaner industrial production globally. CBAM is poised to significantly reshape the global oil and gas trade landscape. As the mechanism gradually expands to encompass the oil and gas sector by 2028, with full coverage expected by 2036, industry players are bracing for substantial shifts in market dynamics. Based on WoodMac Research, CBAM's implementation could potentially increase crude and refined product prices by up to $5 per barrel, translating to approximately 30 euro cents per liter at the pump for consumers. This price adjustment is likely to alter the competitive landscape, favoring low-emission intensity crudes and potentially reshaping trade flows as producers and refiners adapt their strategies to maximize value in a carbon-constrained market.
Moreover, Gabon has recently adopted Law no. 007/2023 of November 2, 2023 on the prevention and management of disasters, which requires companies conducting activities defined as dangerous or operating at facilities that are deemed to have an impact on the environment, to obtain, as relevant, authorizations, or establish operational plans. There are no further guidelines on whether and how it will apply to the petroleum industry.
Any significant increase in the regulation or enforcement of environmental issues in any of our operating areas could have a material effect on us. Economically developing countries, in certain instances, have patterned environmental laws after those in the U.S. However, the extent that any environmental laws are enforced in economically developing countries varies significantly.
With regards to our development operations offshore West Africa, we are a member of Oil Spill Response Limited (“OSRL”), a global emergency and crude oil spill-response organization headquartered in London. OSRL has aircraft and equipment available for dispersant application or equipment transport, including various boom systems that can be used for
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offshore and shoreline recovery operations. In addition, VAALCO has a Tier 1 spill kit in-country for immediate deployment if required. In addition, VAALCO has a Tier 1 spill kit in-country for immediate deployment if required. See “Item 1A. Risk Factors” for further discussion on the impact of these and other regulations relating to environmental protection.
Item 1A. Risk Factors
Our business faces many risks. You should carefully consider the following risk factors in addition to the other information included in this Annual Report. If any of these risks or uncertainties actually occurs, our business, financial condition and results of operations could be materially adversely affected. Any risks discussed elsewhere in this Annual Report and in our other SEC filings could also have a material impact on our business, financial position or results of operations. Additional risks not presently known to us or that we consider immaterial based on information currently available to us may also materially adversely affect us.
Risks Relating to Our Business, Operations and Strategy
Our business requires significant capital expenditures and we may not be able to obtain needed capital or financing to fund our exploration and development activities or potential acquisitions on satisfactory terms or at all.
Our exploration and development activities, as well as our active pursuit of complementary opportunistic acquisitions, are capital intensive. To replace and grow our reserves, we must make substantial capital expenditures for the acquisition, exploitation, development, exploration and production of crude oil, natural gas and NGLs reserves. Historically, we have financed these expenditures primarily with cash from operations, debt, asset sales and private sales of equity. We are the operator of the Etame Marin block offshore Gabon, and are responsible for contracting on behalf of all the remaining parties participating in the project and rely on our joint venture owners to pay for 36.4% of the offshore Gabon budget. We are the operator of the Etame Marin block offshore Gabon and are responsible for contracting on behalf of all the remaining parties participating in the project. With respect to Block P, as the appointed technical operator, we rely on the timely payment of cash calls by our joint venture owners to pay for 46.3% of the Equatorial Guinea budget, except during any development phases where we have agreed or will agree to carry their interests. The continued economic health of our joint venture owners could be adversely affected by low crude oil prices, thereby adversely affecting their ability to make timely payment of cash calls.
If low crude oil, natural gas and NGLs prices, operating difficulties or declines in reserves result in our revenues being less than expected or limit our ability to enter into debt financing arrangements, or our joint venture owners fail to pay their share of project costs, we may be unable to obtain or expend the capital necessary to undertake or complete future drilling programs or to acquire additional reserves.
We do not currently have any commitments for future external funding for capital expenditures or acquisitions beyond cash generated from operating activities and the agreement governing our 2025 RBL Facility (the “2025 Facility Agreement”) . Our ability to secure additional or replacement financing to finance expenditure beyond our current committed capital expenditure for the next 12 months may be limited. We cannot provide any assurances that such additional debt or equity financing or cash generated by operations will be available to meet our capital requirements and fund acquisitions. We cannot assure you that additional debt or equity financing or cash generated by operations will be available to meet our capital requirements and fund acquisitions. We may not be able to obtain debt or equity financing on terms favorable to us, or at all. Even if we succeed in selling additional equity securities to raise funds, at such time the ownership percentage of our existing stockholders would be diluted, and new investors may demand rights, preferences or privileges senior to those of existing stockholders. If we raise additional capital through debt financing, the financing may involve covenants that restrict our business activities or our ability to make future acquisitions. If cash generated by operations or cash available under any financing sources is not sufficient to meet our capital requirements beyond our current committed expenditure for the next 12 months, the failure to obtain additional financing could result in a curtailment of our operations relating to the development of our properties or prevent us from consummating acquisitions of additional reserves. If cash generated by operations or cash available under any financing sources is not sufficient to meet our capital requirements, the failure to obtain additional financing could result in a curtailment of our operations relating to the development of our properties or prevent us from consummating acquisitions of additional reserves. Such a curtailment in operations or activities could lead to a decline in our estimated net proved reserves and would likely materially adversely affect our business, financial condition and results of operations.
Unless we are able to replace the proved reserve quantities that we have produced through acquiring or developing additional reserves, our cash flows and production will decrease over time.
Our future success depends upon our ability to find, develop or acquire additional crude oil, natural gas and NGLs reserves that are economically recoverable. Our future success depends upon our ability to find, develop or acquire additional crude oil and natural gas reserves that are economically recoverable. In general, production from crude oil, natural gas and NGLs properties declines as reserves are depleted, with the rate of decline depending on reservoir characteristics. In general, production from crude oil and natural gas properties declines as reserves are depleted, with the rate of decline depending on reservoir characteristics. Our ability to make the necessary capital investment to maintain or expand our asset base of crude oil, natural gas and NGLs reserves would be limited to the
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extent cash flow from operations is reduced and external sources of capital become limited or unavailable. We may not be successful in exploring for, developing or acquiring additional reserves. Except to the extent that we conduct successful exploration or development activities or acquire properties containing proved reserves, our estimated net proved reserves will generally decline as reserves are produced.
There can be no assurance that our development and exploration projects and acquisition activities will result in significant additional reserves or that we will have continuing success drilling productive wells at economic finding costs. The drilling of crude oil, natural gas and NGLs wells involves a high degree of risk, especially the risk of dry holes or of wells that are not sufficiently productive to provide an economic return on the capital expended to drill the wells. The drilling of crude oil and natural gas wells involves a high degree of risk, especially the risk of dry holes or of wells that are not sufficiently productive to provide an economic return on the capital expended to drill the wells. Additionally, seismic and other technology does not allow us to know conclusively prior to drilling a well that crude oil, natural gas or NGLs is present or economically producible. Our drilling operations may be curtailed, delayed or cancelled as a result of numerous factors, including declines in crude oil, natural gas or NGLs prices and/or prolonged periods of historically low crude oil, natural gas and NGLs prices, weather conditions, political instability, availability of capital, economic/currency imbalances, compliance with governmental requirements, receipt of additional seismic data or the reprocessing of existing data, failure of wells drilled in similar formations, equipment failures (such as ESPs), delays in the delivery of equipment, and the availability of drilling rigs. Our drilling operations may be curtailed, delayed or canceled as a result of numerous factors, including declines in crude oil or natural gas prices and/or prolonged periods of historically low crude oil and natural gas prices, weather conditions, political instability, availability of capital, economic/currency imbalances, compliance with governmental requirements, receipt of additional seismic data or the reprocessing of existing data, failure of wells drilled in similar formations, equipment failures (such as ESPs), delays in the delivery of equipment and availability of drilling rigs. If we are unable to increase our proved quantities, there will likely be a material impact on our cash flows, business and operations.
The Company does not always control decisions made under joint operating agreements, and the parties under such agreements may fail to meet their obligations.
The Company conducts many of its exploration and production operations through joint operating agreements with other parties under which the Company may not control decisions, either because it does not have a controlling interest or is not an operator under the agreement. Such decisions may relate to development and exploitation activities, including the timing of the capital expenditures for such activities. The success and timing of development and exploitation activities on such properties, depends upon a number of factors, including:
•the timing and amount of capital expenditures;
•the availability of suitable offshore drilling rigs, drilling equipment, support vessels, production and transportation infrastructure and qualified operating personnel;
•the operator’s expertise, financial resources and willingness to initiate exploration or development projects;
•approval of other participants in drilling wells;
•risk of a non-operator’s failure to pay its share of costs, which may require us to pay our proportionate share of the defaulting party’s share of costs;
•selection of technology;
•delays in the pace of exploratory drilling or development;
•the rate of production of the reserves; and/or
•the operator’s desire to drill more wells or build more facilities on a project inconsistent with our capital budget, whether on a cash basis or through financing, which may limit our participation in those projects or limit the percentage of our revenues from those projects.
There is also a risk that these parties may at any time have economic, business, or legal interests or goals that are inconsistent with the Company’s, and therefore, decisions may be made that the Company does not believe are in its best interest. Moreover, parties to these agreements may be unable to meet their economic or other obligations, and the Company may be required to fulfill those obligations alone. In either case, the value of the investment may be adversely affected.
The occurrence of any of the foregoing events could have a material adverse effect on our anticipated exploration and development activities.
Provisions of our agreements could discourage an acquisition of us by a third-party.
Certain provisions of our production sharing contracts, joint operating agreements and other agreements could make it more difficult or more expensive for a third-party to acquire us or our assets, or may even prevent a third-party from acquiring us or our assets. For example, some of these agreements contain restrictions on assignments of our assets, including requirements to obtain consent from applicable counterparties, preemption rights and requirements to make
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bonus payments. In some cases, these restrictions apply to “indirect assignments.” By discouraging an acquisition of us or our assets by a third-party, these provisions could have the effect of deterring otherwise interested third-parties from proposing or consummating these acquisitions. This could deprive the holders of our common stock of an opportunity to sell their common stock at a premium over prevailing market prices.
We have limited control over the assets we do not operate.
We have limited control over matters relating to development and exploitation activities, including the timing of and capital expenditures for such activities and compliance with environmental, safety, and other standards, of assets where we are not the operator.We may have limited control, over matters relating to the development and exploitation activities, including the timing of and capital expenditures for such activities, in projects where we are not the operator, including properties operated by the BWE Consortium. The operator and our fellow non-operating owners of these properties may act in ways that are not in our best interest. Additionally, we are dependent on the operator and our fellow non-operating owners of such projects to fund their contractual share of the capital expenditures of such projects. Our dependence on the operator and such parties could have a material adverse effect on our business, results of operations or financial condition. The occurrence of certain of these events may have a material adverse effect on our business, results of operations and financial condition.
Our offshore operations involve special risks that could adversely affect our results of operations.
Offshore operations are subject to a variety of operating risks specific to the marine environment. Our offshore production facilities are subject to hazards such as capsizing, sinking, grounding, collision and damage from severe weather conditions. Our production facilities are subject to hazards such as capsizing, sinking, grounding, collision and damage from severe weather conditions. The relatively deep offshore drilling that we conduct involves increased drilling risks of high pressures and mechanical difficulties, including stuck pipe, collapsed casing and separated cable. The relatively deep offshore drilling conducted by us involves increased drilling risks of high pressures and mechanical difficulties, including stuck pipe, collapsed casing and separated cable. We have experienced pipeline blockages in the past and may experience additional pipeline blockages in the future. The impact that any of these risks may have upon us is increased due to the low number of producing properties we own. We could incur substantial expenses that could reduce or eliminate the funds available for exploration, development or license acquisitions, or result in loss of equipment and license interests.
Exploration and development operations offshore Africa often lack the physical and oilfield service infrastructure present in other regions. As a result, a significant amount of time may elapse between an offshore discovery and the marketing of the associated crude oil, natural gas and NGLs, increasing both the financial and operational risks involved with these operations. As a result, a significant amount of time may elapse between an offshore discovery and the marketing of the associated crude oil and natural gas, increasing both the financial and operational risks involved with these operations. Offshore drilling operations generally require more time and more advanced drilling technologies, involving a higher risk of equipment failure and usually higher drilling costs. In addition, there may be production risks for which we are currently unaware. The development of new subsea infrastructure and use of floating production systems to transport crude oil from producing wells may require substantial time for installation or encounter mechanical difficulties and equipment failures that could result in loss of production, significant liabilities, cost overruns or delays.
In addition, in the event of a well control incident, containment and, potentially, clean-up activities for offshore drilling are costly. The resulting regulatory costs or penalties, and the results of third-party lawsuits, as well as associated legal and support expenses, including costs to address negative publicity, could well exceed the actual costs of containment and clean-up. As a result, a well control incident could result in substantial liabilities for us and have a significant negative impact on our earnings, cash flows, liquidity, financial position and stock price.
Acquisitions and divestitures of properties and businesses may subject us to additional risks and uncertainties, including that acquired assets may not produce as projected, may subject us to additional liabilities and may not be successfully integrated with our business. In addition, any sales or divestments of properties we make may result in certain liabilities that we are required to retain under the terms of such sales or divestments.
One of our growth strategies is to capitalize on opportunistic acquisitions of crude oil, natural gas and NGLs reserves and/or the companies that own them and other strategic transactions that fit within our overall business strategy. Any future acquisition will require an assessment of recoverable reserves, title, future crude oil, natural gas and NGLs prices, operating costs, potential environmental hazards, potential tax and employer liabilities, regulatory requirements and other liabilities and similar factors. Any future acquisition will require an assessment of recoverable reserves, title, future crude oil and natural gas prices, operating costs, potential environmental hazards, potential tax and employer liabilities, regulatory requirements and other liabilities and similar factors. Ordinarily, our review efforts are focused on the higher valued properties and are inherently incomplete because it generally is not feasible to review in depth every potential liability on each individual property involved in each acquisition. Even a detailed review of records and properties may not necessarily reveal existing or potential problems, nor will it permit a buyer to become sufficiently familiar with the properties to assess fully their deficiencies and potential. Inspections may not always be performed on every well, and potential problems, such as ground water contamination and other environmental conditions and deficiencies in the mechanical integrity of equipment are not necessarily observable even when an inspection is undertaken. Any unidentified problems could result in material liabilities and costs that negatively impact our financial condition.
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Additional potential risks related to acquisitions include, among other things:
•incorrect assumptions regarding the reserves, future production and revenues, or future operating or development costs with respect to the acquired properties, as well as future prices of crude oil, natural gas and NGLs;
•decreased liquidity as a result of using a significant portion of our cash from operations or borrowing capacity to finance acquisitions;
•significant increases in our interest expense or financial leverage if we incur additional debt to finance acquisitions;
•the assumption of unknown liabilities, losses or costs (including potential regulatory actions) that we are not indemnified for or that our indemnity, insurance or other protection is inadequate to protect against;
•an increase in our costs or a decrease in our revenues associated with any claims or disputes with governments or other interest owners;
•an incurrence of non-cash charges in connection with an acquisition and the potential future impairment of goodwill or intangible assets acquired in an acquisition;
•the risk that crude oil, natural gas and NGLs reserves acquired may not be of the anticipated magnitude or may not be developed as anticipated;
•difficulties in the assimilation of the assets and operations of the acquired business, especially if the assets acquired are in a new business segment or geographic area;
•the diversion of management’s attention from other business concerns during the acquisition and throughout the integration process;
•losses of key employees at the acquired businesses;
•difficulties in operating a significantly larger combined organization and adding operations;
•delays in achieving the expected synergies from acquisitions;
•the failure to realize expected profitability or growth;
•the failure to realize expected synergies and cost savings; and
•challenges in coordinating or consolidating corporate and administrative functions.
If we consummate any future acquisitions, our capitalization and results of operations may change significantly, and you may not have the opportunity to evaluate the economic, financial and other relevant information that we will consider in evaluating future acquisitions. In addition, acquisitions of businesses often require the approval of certain government or regulatory agencies and such approval could contain terms, conditions, or restrictions that would be detrimental to our business after a merger.
In the case of sales or divestitures of our properties and businesses, we may become exposed to future liabilities that arise under the terms of those sales or divestitures. Under such terms, sellers typically are required to retain certain liabilities for matters with respect to their sold properties or businesses. The magnitude of any such retained liability or indemnification obligation may be difficult to quantify at the time of the transaction and ultimately may be material. Also, as is typical in divestiture transactions, third parties may be unwilling to release us from guarantees or other credit support provided prior to the sale of the divested assets. As a result, after a sale, we may remain secondarily liable for the obligations guaranteed or supported to the extent that the buyer of the assets fails to perform these obligations. In addition, we may be required to recognize losses in accordance with exit or disposal activities.
Our reserve information represents estimates that may turn out to be incorrect if the assumptions on which these estimates are based are inaccurate. Any material inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present values of our reserves.
There are numerous uncertainties inherent in estimating quantities of proved crude oil, natural gas and NGLs reserves, including many factors beyond our control. Reserve engineering is a subjective process of estimating the underground accumulations of crude oil, natural gas and NGLs that cannot be measured in an exact manner. The estimates included in this document are based on various assumptions required by the SEC, including non-escalated prices and costs and capital expenditures subsequent to December 31, 2025, and, therefore, are inherently imprecise indications of future net revenues.
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Estimates of economically recoverable crude oil, natural gas and NGLs reserves and the future net cash flows from them are based upon a number of variable factors and assumptions, such as historical production from the properties, production rates, ultimate reserves recovery, timing and amount of capital expenditures, marketability of crude oil, natural gas and NGLs, royalty rates, the assumed effects of regulation by governmental agencies, and future operating costs, all of which may vary materially from actual results. For those reasons, among others, estimates of the economically recoverable crude oil, natural gas and NGLs reserves attributable to any particular group of properties, classification of such reserves based on risk of recovery, and estimates of future net revenues associated with reserves may vary and such variations may be material.
Actual future production, revenues, taxes, operating expenses, development expenditures and quantities of recoverable crude oil, natural gas and NGLs reserves may vary substantially from those assumed in the estimates. Any significant variance in these assumptions could materially affect the estimated quantity and value of our reserves.
In addition, our reserves may be subject to downward or upward revision based upon production history, results of future development, availability of funds to acquire additional reserves, prevailing crude oil, natural gas and NGLs prices and other factors. Moreover, the calculation of the estimated present value of the future net revenue using a 10% discount rate as required by the SEC is not necessarily the most appropriate discount factor based on interest rates in effect from time to time and risks associated with our reserves or the crude oil, natural gas and NGLs industry in general. It is also possible that reserve engineers may make different estimates of reserves and future net revenues based on the same available data.
Our reserve estimates are prepared using an average of the first-day-of-the-month prices received for crude oil, natural gas and NGLs for the preceding twelve months. Future reductions in prices, below the average calculated for 2025, would result in the estimated quantities and present values of our reserves being reduced. The forecast prices and costs assumptions assume changes in wellhead selling prices and take into account inflation with respect to future operating and capital costs.
Our proved reserves are in foreign countries and are or will be subject to service contracts, production sharing contracts and other arrangements. The quantity of crude oil, natural gas and NGLs that we will ultimately receive under these arrangements will differ based on numerous factors, including the price of crude oil, natural gas and NGLs, production rates, production costs, cost recovery provisions and local tax and royalty regimes. The quantity of crude oil and natural gas that we will ultimately receive under these arrangements will differ based on numerous factors, including the price of crude oil and natural gas, production rates, production costs, cost recovery provisions and local tax and royalty regimes. Changes in many of these factors could affect the estimates of proved reserves in foreign jurisdictions.
If our assumptions underlying accruals for abandonment and decommissioning costs are too low, we could be required to expend greater amounts than expected.
Our estimates of the future abandonment and remediation costs are subject to change and could vary substantially from our actual costs. Under various contracts, permits and regulations, we have material legal obligations to remove tangible equipment and restore the land or seabed at the end of operations at operational sites. Our largest asset removal obligations involve plugging and abandonment of wells, removal and disposal of offshore oil and gas platforms around the world, as well as oil and gas production facilities. Estimating future asset removal costs requires significant judgment. Most of these removal obligations are many years, or decades, in the future and the contracts and regulations often have vague descriptions of what removal practices and criteria must be met when the removal event actually occurs. The carrying value of our asset retirement obligation estimate is sensitive to inputs such as asset removal technologies and costs, regulatory and other compliance considerations, expenditure timing, and other inputs into valuation of the obligation, including discount and inflation rates, which are all subject to change between the time of initial recognition of the liability and future settlement of our obligation.
If we are required to expend greater amounts than expected on abandoning or decommissioning costs or on future abandonment funding, this could materially affect our revenues and financial performance.
We could lose our interest in Block P in Equatorial Guinea if we do not meet our commitments under the production sharing contract.We could lose our interest in Block P if we do not meet our commitments under the production sharing contract.
Our Block P production sharing contract provides for a development and production period of 25 years from the first oil production. We and our Block P joint venture owners are evaluating the timing and budgeting for development and exploration activities in the block. There can be no certainty that any such transaction will be completed or that we will be able to commence drilling operations in Block P. If the joint venture owners of Block P fail to meet the commitments under
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the production sharing contract amendment, our capitalized costs of $10 million associated with Block P interest would be impaired.
The FPSO in Côte d’Ivoire ceased hydrocarbon production on January 31, 2025 for scheduled maintenance. Our results will be adversely affected until the FPSO is returned to service which may be a time later than we expect.
As an offshore asset, we, along with the operator and contractors of the Block CI-40 PSC, depend on the FPSO to store the crude oil produced prior to sale to customers. As part of the planned dry dock refurbishment, the Baobab FPSO ceased hydrocarbon production on January 31, 2025, with the final crude oil lifting in February 2025. The vessel departed from the field in late March 2025 and arrived at the shipyard in Dubai in May 2025. Although, the refurbishment work was completed in February 2026 and the Baobab FPSO has commenced its mobilization back to Cote d’Ivoire, there can be no assurance that the FPSO will return to service in the expected timeframe or that the costs of returning it to service will not be more than expected, and in either such case our results would be adversely affected. In addition, there can be no assurance that wells that are currently shut in will be returned to production on a timely basis, if at all, or at historical or anticipated production levels. As a result, substantial liabilities to third parties or governmental entities may be incurred, the payment of which could have a material adverse effect on our financial condition, results of operations and liquidity.
Commodity derivative transactions that we enter into may fail to protect us from declines in commodity prices and could result in financial losses or reduce our income.Commodity derivative transactions we enter into may fail to protect us from declines in commodity prices and could result in financial losses or reduce our income.
In order to reduce the impact of commodity price uncertainty and increase cash flow predictability relating to the marketing of our crude oil, natural gas and NGLs we have entered into and may continue to enter into derivative arrangements with respect to a portion of our expected production in order to hedge against potential commodity price declines.In order to reduce the impact of commodity price uncertainty and increase cash flow predictability relating to the marketing of our crude oil and natural gas, we have entered into and may continue to enter into derivative arrangements with respect to a portion of our expected production. In addition, under the 2025 RBL Facility agreement, if the aggregate borrowings under the 2025 RBL Facility exceeds 35% of the lower of (a) the available total commitments and (b) the applicable borrowing base amount, we are also required to enter into commodity price hedge positions covering certain volumes of anticipated future production set out in the banking case.
Our derivative contracts typically consist of a series of commodity swap contracts, such as puts, collars and fixed price swaps, and are limited in duration.
The hedge counterparty will be obligated to make payments to us to the extent that the floating (market) price is below an agreed fixed (strike) price. However, hedging agreements expose us to risk of financial loss if the counterparty to a hedging contract defaults on its contract obligations. Disruptions in the market could also lead to sudden changes in the liquidity of the counterparties to our hedge transactions, which in turn limits our ability to perform under their hedging contracts with us. Disruptions in the market could also occur that lead to sudden changes in the liquidity of the counterparties to our hedge transactions which in turn limit their ability to perform under their hedging contracts with us. Even if we accurately predict sudden changes, our ability to negate the related risk may be limited depending upon market conditions. Even if we do accurately predict sudden changes, our ability to negate the risk may be limited depending upon market conditions. If the creditworthiness of our counterparties deteriorates and results in their non-performance, we could incur a significant loss.
Derivative arrangements also expose us to the risk of financial loss in some circumstances, including when production is less than the volume covered by the derivative instruments or when there is an increase in the differential between the underlying price and actual prices received pursuant to the derivative instrument. In addition, certain types of derivative arrangements may limit the benefit that we could receive from increases in the prices for crude oil, natural gas and NGLs, and may expose us to cash margin requirements. In addition, certain types of derivative arrangements may limit the benefit we could receive from increases in the prices for crude oil and natural gas and may expose us to cash margin requirements.
We are exposed to the credit risks of the third parties with whom we contract.
We are exposed to third-party credit risk through our contractual arrangements with government entities party to our PSCs, our current or future joint venture owners, marketers of our petroleum and natural gas production, purchasers of our oil, natural gas and NGLs products and other parties. In addition, we are exposed to third-party credit risk from operators of properties in which we have a working interest or royalty interest. In the event such entities fail to meet their contractual obligations to us, such failures may have a material adverse effect on our business, financial condition, results of operations and prospects. As a result, substantial liabilities to third parties or governmental entities may be incurred, the payment of which could have a material adverse effect on our financial condition, results of operations and liquidity. In addition, poor credit conditions in the industry generally and among our joint venture owners may affect a joint venture owner’s willingness to participate in our ongoing capital program, potentially delaying the program and the results of such program until we find a suitable alternative partner. To the extent that any of such third parties go bankrupt, become insolvent, or make a proposal or institute any proceedings relating to bankruptcy or insolvency, it could result in our inability to collect all or a portion of any money owing from such parties. Any of these factors could materially adversely affect our financial and operational results.
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Our ability to collect payments from the sale of crude oil, natural gas and NGLs from our customers depends on the payment ability of our customer base, which may include a small number of significant customers. For example, our revenue concentration by customer for each of the Gabon, Egypt, and Cote d’Ivoire operating segments for the year ended December 31, 2025, was with a single respective significant customer. If our significant customers fail to pay for any reason, we could experience a material loss. If our significant customers fail to pay us for any reason, we could experience a material loss. In addition, if our significant customers cease to purchase or reduce the volume they purchase of our crude oil, natural gas or NGLs, the loss or reduction could have a detrimental effect on our production volumes and may cause a temporary interruption in sales of, or a lower price for, our crude oil, natural gas and NGLs. In addition, if our significant customers cease to purchase our crude oil or natural gas or reduce the volume of the crude oil or natural gas that they purchase from us, the loss or reduction could have a detrimental effect on our production volumes and may cause a temporary interruption in sales of, or a lower price for, our crude oil and natural gas.
In addition, we are and may in the future be exposed to third-party credit risk through our contractual arrangements with governmental entities in countries where we operate. Significant changes in the crude oil industry, including fluctuations in commodity prices and economic conditions, environmental regulations, government policy, royalty rates and other geopolitical factors, could adversely affect our ability to realize the full value of our accounts receivable from government entities in countries where we operate. Historically, we have had significant account receivables outstanding from governmental entities in countries where we operate. For example, while EGPC has made regular payments of these amounts, the timing of these payments have historically been longer than the normal industry standard. In addition, EGPC has at times faced difficulties in accessing foreign exchange markets for the purpose of obtaining U.S. dollars in exchange for Egyptian pounds. In the event the governments of the countries where we operate fail to meet their respective obligations or we are forced to accept payment in foreign currencies, such failures could materially adversely affect our financial and operational results.
We are also exposed to third-party credit risk through our banking relationships in the jurisdictions in which we operate. In 2023, macroeconomic conditions caused turmoil in the banking sector in the United States and elsewhere. We were not impacted by such turmoil. However, if similar conditions arise in the banking sector again and if any of the banks in which we keep our deposits is affected by such turmoil, we could be materially and adversely affected.
Our business could be materially and adversely affected by security threats, including cybersecurity threats, and other disruptions.
As a crude oil, natural gas and NGLs producer, we face various security threats, including cybersecurity threats to gain unauthorized access to sensitive information or to render data or systems unusable; threats to the security of our facilities and infrastructure or third-party facilities and infrastructure, such as processing plants and pipelines; and threats from terrorist acts. As a crude oil producer, we face various security threats, including cybersecurity threats to gain unauthorized access to sensitive information or to render data or systems unusable; threats to the security of our facilities and infrastructure or third-party facilities and infrastructure, such as processing plants and pipelines; and threats from terrorist acts. The potential for such security threats has subjected our operations to increased risks that could have a material adverse effect on our business. In particular, our implementation of various procedures and controls to monitor and mitigate security threats and to increase security for our information, facilities and infrastructure may result in increased capital and operating costs. Costs for insurance may also increase as a result of security threats, and some insurance coverage may become more difficult to obtain, if available at all. Moreover, there can be no assurance that such procedures and controls will be sufficient to prevent security breaches from occurring. If any of these security breaches were to occur, they could lead to losses of sensitive information, critical infrastructure or capabilities essential to our operations and could have a material adverse effect on our reputation, financial position, results of operations and cash flows.
Cybersecurity attacks in particular are becoming more sophisticated, and geopolitical tensions or conflicts, such as Russia’s invasion of Ukraine or the ongoing conflicts in the Middle East, may further heighten the risk of such attacks. We rely extensively on information technology systems, including internet sites, computer software, data hosting facilities and other hardware and platforms, some of which are hosted by third parties, to assist in conducting our business. We rely extensively on information technology systems, including internet sites, computer software, and data hosting facilities and other hardware and platforms, some of which are hosted by third parties, to assist in conducting our business. Our technologies systems and networks, and those of our business associates may become the target of cybersecurity attacks, including without limitation malicious software, attempts to gain unauthorized access to data and systems, and other electronic security breaches that could lead to disruptions in critical systems and materially and adversely affect our business in a variety of ways, including the following:
•unauthorized access to and release of seismic data, reserves information, strategic information or other sensitive or proprietary information, which could have a material adverse effect on our ability to compete for crude oil, natural gas and NGLs resources;
•data corruption, communication interruption, or other operational disruption during drilling activities could result in failure to reach the intended target or a drilling incident;
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•unauthorized access to and release of personal identifying information of employees and vendors, which could expose us to allegations that we did not sufficiently protect that information and potential liabilities under domestic and international data and privacy laws;
•a cybersecurity attack on a vendor or service provider, which could result in supply chain disruptions that could delay or halt operations;
•a cybersecurity attack on third-party gathering, transportation, processing, fractionation, refining or export facilities, which could delay or prevent us from transporting and marketing our production, resulting in a loss of revenues;
•a cybersecurity attack involving commodities exchanges or financial institutions could slow or halt commodities trading, thus preventing us from engaging in hedging activities, resulting in a loss of revenues; and
•business interruptions, including use of social engineering schemes and/or ransomware, could result in expensive remediation efforts, distraction of management, damage to our reputation, or a negative impact on the price of our common stock.
To protect against such attempts of unauthorized access or attack, we have implemented multiple layers of cybersecurity protection, infrastructure protection technologies, disaster recovery plans and employee training. While we have invested significant amounts in the protection of our technology systems and maintain what we believe are adequate security controls over sensitive data, there can be no guarantee such plans will be effective.
Any cyber incident could damage our reputation and lead to financial losses from remedial actions, loss of business or potential liability. Additionally, certain cyber incidents, such as surveillance, may remain undetected for an extended period.
Current and future geopolitical events outside of our control could adversely impact our business, results of operations, cash flows, financial condition and liquidity.
We face risks related to geopolitical events, international hostility, epidemics, outbreaks and other macroeconomic events that are outside of our control. The occurrence of certain geopolitical events, including those arising from terrorist activity, international hostility, public health crises, and the economic impact of global trade tensions and the imposition of tariffs, could significantly disrupt our business and operational plans and adversely affect our results of operations, cash flows, financial condition and liquidity. For instance, the ongoing conflicts in the Middle East, including the United States-Israel-Iran war and between Russia and Ukraine have and may continue to cause geopolitical instability, and adversely impact the global economy, supply chains and specific markets and industries. Although we are not able to enumerate all potential risks to our business resulting from these and other similar events, we believe that such risks include, but are not limited to, the following:
•disruption to our supply chain for materials essential to our business, including restrictions on importing and exporting products;
•customers, suppliers and other third parties arguing that their non-performance under our contracts with them is permitted as a result of force majeure or other reasons;
•cybersecurity attacks, particularly as digital technologies may become more vulnerable and experience a higher rate of cyberattacks in the current environment of remote connectivity;
•any reductions of our workforce to adjust to market conditions, including severance payments, retention issues, and possible inability to hire employees when market conditions improve;
•logistical challenges, including those resulting from border closures and travel restrictions, as well as the possibility that our ability to continue production may be interrupted, limited or curtailed if workers and/or materials are unable to reach our offshore platforms, our FPSO vessel and our FSO charter vessel or our counterparties are unable to lift crude oil from our FPSO vessel or our FSO charter vessel;
•economic, political and regulatory conditions domestically and internationally, including imposition of tariffs or other tax incentives or disincentives;
•we may be materially adversely affected by the effects of sanctions and other penalties imposed on Russia by the U.S., the European Union and other countries; and
•we may experience a structural shift in the global economy and our demand for crude oil, natural gas and NGLs as a result of changes in the way people work, travel and interact, or in connection with a global recession or depression.
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In 2025 and continuing into 2026, the current U.S. presidential administration has implemented wide-ranging policy changes and issued numerous executive actions on topics including international trade, energy resources, corporate taxes, global climate change initiatives, employment practices, corporate compliance programs and environmental regulations, among other matters. In addition, the administration has continued to pursue structural changes to the executive branch of the federal government, including significant reductions in the federal workforce and reorganization of certain regulatory agencies. Ongoing legal challenges to many of these policy changes and executive actions remain unresolved, contributing to increased regulatory uncertainty.
In addition, any disruption in the operations of the U.S. federal government, including as a result of any future temporary or prolonged shutdowns resulting from the failure of Congress to enact appropriations bills, raise the federal debt ceiling or otherwise, could adversely affect our business, operations and financial condition. Recently, beginning on October 1, 2025 through November 12, 2025, the U.S. federal government shut down, during which time certain regulatory agencies, such as the SEC, furloughed large numbers of employees and stopped routine activities and operations. Additionally, on October 10, 2025, the U.S. federal government implemented substantial layoffs and workforce reductions in connection with the federal government shutdown, which resulted in the suspension or delay of various government-funded programs. Furthermore, the recent federal government shutdown resulted in reduced availability of government services, and the suspension or delay of activities by key agencies that regulate or otherwise interact with our business, including the SEC. As a result, review and approval of our filings, applications, and submissions could be delayed, and we may be unable to access or rely upon certain government data or systems. Any U.S. federal government shutdown or prolonged budget negotiation uncertainty may further adversely affect the broader U.S. economy, investor confidence, and capital markets. Such conditions could negatively impact the liquidity or trading volume of our securities, which in turn could have a material adverse effect on our business, results of operations, and stock price.
Furthermore, geopolitical events, including the recent developments in Venezuela and Iran and changing U.S. foreign policy priorities, have heightened volatility in the regulatory environment affecting our industry. We cannot predict how these policy changes, executive actions, and geopolitical events will be implemented or interpreted or the impact of a possible U.S. federal government shutdown or prolonged budget negotiation, or the ultimate effect they will have on our business, financial condition, and results of operations.
We cannot reasonably estimate the period of time that these conditions will persist; the full extent of the impact they will have on our business, results of operations, cash flows, financial condition and liquidity; or the pace or extent of any subsequent recovery. We cannot reasonably estimate the period of time that the COVID-19 pandemic and related market conditions will persist, the full extent of the impact they will have on our business, results of operations, cash flows, financial condition and liquidity, or the pace or extent of 21 any subsequent recovery.
Production cuts mandated by the government of Gabon, a member of OPEC, could adversely affect our revenues, cash flow and results of operations.
Historically and from time to time, members of OPEC and other leading allied producing countries (collectively, “OPEC+”) have entered into agreements to reduce worldwide production of crude oil to reduce the gap between excess supply and demand in an effort to stabilize the international oil market. As a member of OPEC+, Gabon may take measures to comply with such OPEC+ production quota agreements. As a result, the Minister of Hydrocarbons may request us to limit our production for a period of time in compliance with the OPEC+ mandate.
The ability of the OPEC+ to agree on and to maintain crude oil price and production controls has also had, and is likely to continue to have, a significant impact on the market prices of crude oil.
We have not received any mandate to reduce current oil production from the Etame Marin block as a result of an OPEC+ initiative and currently, our production is not impacted by OPEC+ curtailments. However, any future reduction in our crude oil production or export activities for a substantial period could materially and adversely affect our revenues, cash flows and results of operations. Gabon remains a member of OPEC+.
We have less control over our investments in foreign properties than we would have over our domestic investments.
Our exploration, development and production activities are subject to various political, economic and other uncertainties, including but not limited to changes, sometimes frequent or marked, in energy policies or the personnel administering them, expropriation of property, cancellation or modification of contract rights, changes in laws and policies governing operations of foreign-based companies, unilateral renegotiation of contracts by governmental entities, uncertainties as to whether laws and regulations will be applicable in any particular circumstance, uncertainty as to whether we will be able to demonstrate to the satisfaction of the applicable governing authorities compliance with governmental or contractual
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requirements, redefinition of international boundaries or boundary disputes, foreign exchange restrictions, currency fluctuations, foreign currency availability, royalty and tax increases, changes to tax legislation or the imposition of new taxes, the imposition of production bonuses or other charges and other risks arising out of governmental sovereignty over the areas in which our operations are conducted.
Our operations require, and any future opportunistic acquisitions may require, protracted negotiations with host governments, local governments and communities, local competent authorities, national oil companies, and third parties. Host governments may also conduct audits of our operations, the results of which may have a significant negative impact on our reported earnings or cash flows. These companies may also be better able to absorb the burdens resulting from changes in relevant laws and regulations, which may adversely affect our competitive position. Host governments may seek to participate in oil, natural gas or NGLs projects in a manner that could be dilutive to our interests. Host governments may also require us to hire a specified percentage of local citizens in our operations. In addition, if a dispute arises with respect to our foreign operations, we may be subject to the exclusive jurisdiction of foreign courts or may not be successful in subjecting foreign persons, especially foreign crude oil ministries and national oil companies, to the jurisdiction of the U.S.
Private ownership of crude oil reserves under crude oil leases in the U.S. differs distinctly from our rights in foreign reserves where the state generally retains ownership of the minerals and, in many cases participates in, the exploration and production of hydrocarbon reserves. In the foreign countries in which we may do business, the state generally retains ownership of the minerals and consequently retains control of, and in many cases participates in, the exploration and production of hydrocarbon reserves. Accordingly, operations outside the U.S. may be materially affected by host governments.
Any of the factors detailed above or similar factors could have a material adverse effect on our business, results of operations or financial condition. If our operations are disrupted and/or the economic integrity of our projects are threatened for unexpected reasons, our business may be harmed. Prolonged problems may threaten the commercial viability of our operations.
Our operations may be adversely affected by political and economic circumstances in the countries in which we operate.
Our operations are subject to risks of loss due to civil strife, acts of war, acts of terrorism, piracy, disease, guerrilla activities, insurrection, military activities and other political risks, including tension and confrontations among political parties, that may result in:
•volatility in global crude oil prices, which could negatively impact the global economy, resulting in slower economic growth rates, which could reduce demand for our products;
•negative impact on the world crude oil supply if infrastructure or transportation are disrupted, leading to further commodity price volatility;
•difficulty in attracting and retaining qualified personnel to work in areas with potential for conflict;
•the inability of our personnel or supplies to enter or exit the countries where we are conducting operations;
•disruption of our operations due to evacuation of personnel;
•the inability to deliver our production due to disruption or closing of transportation routes;
•a reduced ability to export our production due to efforts of countries to conserve domestic resources;
•damage to or destruction of our wells, production facilities, receiving terminals or other operating assets;
•the incurrence of significant costs for security personnel and systems;
•damage to or destruction of property belonging to our commodity purchasers leading to interruption of deliveries, claims of force majeure, and/or termination of commodity sales contracts, resulting in a reduction in our revenues;
•the inability of our service and equipment providers to deliver items necessary for us to conduct our operations resulting in a halt or delay in our planned exploration activities, delayed development of major projects, or shut-in of producing fields;
•a lack of availability of drilling rig, oilfield equipment or services if third party providers decide to exit the region;
•the imposition of U.S. government or international sanctions that limit our ability to conduct our business;
•a shutdown of a financial system, communications network, or power grid causing a disruption to our business activities; and
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•a capital market reassessment of risk and reduction of available capital, making it more difficult for us and our joint owners to obtain financing for potential development projects.
Some of these risks may be higher in the developing countries in which we conduct our activities, namely, Gabon, Egypt, Cote d'Ivoire, Nigeria and Equatorial Guinea.
While we monitor the economic and political environments of the countries in which we operate, loss of property and/or interruption of our business plans resulting from civil or political unrest could have a significant negative impact on our earnings and cash flow. In addition, losses caused by these disruptions may not be covered by insurance, or even if they are covered by insurance, we may not have enough insurance to cover all of these losses. If any violent action causes us to become involved in a dispute, we may be subject to the exclusive jurisdiction of courts outside the U.S. or may not be successful in subjecting non-U.S. persons to the jurisdiction of courts in the U.S. or international arbitration, which could adversely affect the outcome of such dispute.
Inflation could adversely impact our ability to control costs, including operating expenses and capital costs.
The U.S. inflation rate has fluctuated throughout 2024 and 2025, and it remains close to the historic levels over the past several decades. Although the current outlook is uncertain, heightened inflation may persist in the near to medium-term, particularly in the U.S., with the possibility that monetary policy may tighten in response. In addition, global and industry-wide supply chain disruptions have resulted in shortages in labor, materials and services. Such shortages have resulted in inflationary cost increases for labor, materials and services and could continue to cause costs to increase, or cause a scarcity of certain products and raw materials. To the extent inflation remains elevated, we may experience further cost increases for our operations, including oilfield services and equipment as a result of increasing prices of oil, natural gas and NGLs, increased drilling activity in our areas of operations, and increased labor costs. An increase in the prices of oil, natural gas and NGLs may cause the costs of materials and services we use to rise. We cannot predict any future trends in the rate of inflation, and a significant increase in inflation, to the extent we are unable to recover higher costs through higher commodity prices and revenues, could negatively impact our business, financial condition and results of operation.
Our results of operations, financial condition and cash flows could be adversely affected by changes in currency exchange rates.
We are exposed to foreign currency risk from our foreign operations. While crude oil sales are denominated in U.S. dollars, portions of our costs in Gabon and Cote d'Ivoire are denominated in the local currency. A weakening U.S. dollar will have the effect of increasing costs, while a strengthening U.S. dollar will have the effect of reducing operating costs. The Gabonese and Ivorian local currency is tied to the Euro. The Gabon local currency is tied to the Euro. The exchange rate between the Euro and the U.S. dollar has fluctuated widely in recent years in response to international political conditions, general economic conditions, the European sovereign debt crisis and other factors beyond our control. Our financial statements, presented in U.S. dollars, may be affected by foreign currency fluctuations through both translation risk and transaction risk. In addition, currency devaluation can result in a loss to us for any deposits of that currency, such as our deposits in the Etame PSC abandonment account, which have been converted from U.S. dollars to the Gabonese local currency.
We are also exposed to foreign currency exchange risk related to certain cash, accounts receivable, lease obligations and accounts payable and accrued liabilities denominated in Canadian dollars, and on cash balances denominated in Egyptian pounds. Some collections of our accounts receivable from the Egyptian Government are received in Egyptian pounds, and while we are generally able to spend the Egyptian pounds received on accounts payable denominated in Egyptian pounds, there remains foreign currency exchange risk exposure on Egyptian pound cash balances.
We currently do not utilize derivative instruments to manage these foreign currency risks. As a result, our consolidated earnings and cash flows may be impacted by movements in the exchange rates.
We operate in international jurisdictions, and we could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-corruption laws.
We are subject to the provisions of the U.S. Foreign Corrupt Practices Act, the UK Bribery Act and other similar laws. The foregoing laws prohibit companies and their intermediaries from making improper payments to officials for the purpose of obtaining or retaining business. In addition, such laws require the maintenance of records relating to transactions and an adequate system of internal controls over accounting. There can be no assurance that our internal control policies and procedures, compliance mechanisms or monitoring programs will protect us from recklessness, fraudulent behavior,
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dishonesty or other inappropriate acts or adequately prevent or detect possible violations under applicable anti-bribery and anti-corruption legislation.
Our failure to comply with anti-bribery and anti-corruption legislation, or investigations by governmental authorities, could result in severe criminal or civil sanctions and may subject us to other liabilities, including fines, prosecution, potential debarment from public procurement and reputational damage, all of which could have a material adverse effect on our business, results of operations and financial condition.
Our business could suffer if we lose the services of, or fail to attract, key personnel.
We are highly dependent upon the efforts of our senior management and other key employees. The loss of the services of our Chief Executive Officer, Chief Operating Officer or Chief Financial Officer, as well as any loss of the services of one or more other members of our senior management, could delay or prevent the achievement of our objectives. The loss of the services of our Chief Executive Officer or Chief Financial Officer, as well as any loss of the services of one or more other members of our senior management, could delay or prevent the achievement of our objectives. We do not maintain any “key-man” insurance policies on any of our senior management, and do not intend to obtain such insurance. In addition, due to the specialized nature of our business, we are highly dependent upon our ability to attract and retain qualified personnel with extensive experience and expertise in evaluating and analyzing drilling prospects and producing crude oil, natural gas and NGLs from proved properties and maximizing production from crude oil, natural gas and NGLs properties. There is competition for qualified personnel in the areas of our activities, and we may be unsuccessful in attracting and retaining these personnel.
We are subject to relinquishment obligations under certain of our title documents.
We are subject to relinquishment obligations under certain of our title documents that oblige us to relinquish certain proportions of our concession lease and license areas and thereby reduce our acreage. Additionally, we may be unable to drill all of our prospects or satisfy our minimum work commitments prior to relinquishment and may be unable to meet our obligations under the title documents. Failure to meet such obligations could result in concessions, leases and licenses being suspended, revoked or terminated which could have a material adverse effect on our business.
Our results of operations, financial condition and cash flows could be adversely affected by changes in currency regulations.
From time to time, emerging market countries such as those in which we operate adopt measures to restrict the availability of the local currency or the repatriation of capital across borders. These measures are imposed by governments or central banks, in some cases during times of economic instability, to prevent the removal of capital or the sudden devaluation of local currencies or to maintain in-country foreign currency reserves. In addition, many emerging markets countries require consents or reporting processes before local currency earnings can be converted into U.S. dollars or other currencies and/or such earnings can be repatriated or otherwise transferred outside of the operating jurisdiction. These measures may have a number of negative effects on us, including the reduction of the immediately available capital that we could otherwise deploy for investment opportunities or the payment of expenses. In addition, measures that restrict the availability of the local currency or impose a requirement to operate in the local currency may create other practical difficulties for us.
In December 2021 and during 2022, the Bank of Central African States (“BEAC”), which is the central bank for the CEMAC, passed new regulations and instructions for the CEMAC FX regulations, which were introduced in 2018, that only apply to the extractive industry. The intent of the new regulations is to ensure the application of the FX regulations as of January 1, 2022, without impeding the operations of the extractive industry. Due to the lack of necessary banking infrastructure and preparedness by the banking sector and the various government agencies to apply the new regulations, it is foreseeable that we will run the risk of seeing delays in paying our vendors and domiciliation of goods and services into the CEMAC region throughout 2026 and beyond.
As part of securing the first of two five-year extensions to the Etame PSC in 2016, we agreed to a cash funding arrangement for the eventual abandonment of all offshore wells, platforms and facilities on the Etame Marin block. On February 28, 2019, in accordance with certain foreign currency regulatory requirements, the Gabonese branch of the international commercial bank holding the abandonment funds in a U.S. dollar-denominated account transferred the funds to the Central Bank for CEMAC and later converted, at the request of BEAC, the funds in U.S. dollars to franc CFA, the currency of the CEMAC, of which Gabon is one of the six member states. The Etame PSC provides that these payments must be denominated in U.S. dollars. After continued discussions with CEMAC, they agreed to the return of the USD funds and on January 12, 2023, the abandonment funds were returned to the USD account of the Gabonese branch of the international commercial bank. We were allowed to re-establish a USD denominated account and made whole for the
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original USD amount. Pursuant to Amendment No. 5 of the Etame PSC, we are working with Directorate of Hydrocarbons in Gabon on establishing a payment schedule to resume funding of the abandonment fund in compliance with the Etame PSC.
Our results of operations, financial condition and cash flows could be adversely affected by changes to interest rates.
As of December 31, 2025, we had $190.0 million of aggregate facility commitments, $130.0 million of available borrowing capacity and $60.0 million of outstanding borrowings under the 2025 RBL Facility. An increase in interest rates could result in a significant increase in the amount we pay to service any subsequently drawn, and any future other debt taken out by us, resulting in a reduced amount available to fund our exploration and development activities and, if applicable, the cash available for dividends. Such an increase could also negatively impact the market price of the shares of common stock.
The development of our estimated proved undeveloped reserves may take longer and may require higher levels of capital expenditures than we currently anticipate. Therefore, our estimated proved undeveloped reserves may not be ultimately developed or produced.
At December 31, 2025, approximately 59% of our total estimated proved reserves were undeveloped reserves. Recovery of undeveloped reserves requires significant capital expenditures and successful drilling. Our reserves data assumes that we can and will make these expenditures and conduct these operations successfully. These assumptions, however, may not prove correct. Delays in the development of our reserves, increases in costs to drill and develop such reserves, or decreases in commodity prices will reduce the value of our estimated proved undeveloped reserves and future net revenues estimated for such reserves and may result in some projects becoming uneconomic. If we choose not to spend the capital to develop these reserves, or if we are not otherwise able to successfully develop these reserves, we will be required to write-off these reserves. In addition, under the SEC’s reserve rules, because proved undeveloped reserves may be recognized only if they relate to wells planned to be drilled within five years of the date of their initial recognition, we may be required to write off any proved undeveloped reserves that are not developed within this five-year time frame.
Risks Relating to Our Industry
Crude oil, natural gas and NGLs prices are highly volatile and a depressed price regime, if prolonged, may negatively affect our financial results.
Our revenues, cash flow, profitability, crude oil, natural gas and NGLs reserves value and future rate of growth are substantially dependent upon prevailing prices for crude oil, natural gas and NGLs. Our ability to enter into debt financing arrangements and to obtain additional capital on reasonable terms, or at all, is substantially dependent on crude oil, natural gas and NGLs prices. Our ability to enter into debt financing arrangements and to obtain additional capital on reasonable terms is also substantially dependent on crude oil and natural gas prices.
World-wide crude oil, natural gas and NGLs prices and markets have been volatile and may continue to be volatile in the future. Prices for crude oil, natural gas and NGLs are subject to wide fluctuations in response to relatively minor changes in the supply of and demand for crude oil, natural gas and NGLs, market uncertainty and a variety of additional factors that are beyond our control. Prices for crude oil and natural gas are subject to wide fluctuations in response to relatively minor changes in the supply of and demand for crude oil and natural gas, market uncertainty and a variety of additional factors that are beyond our control. These factors include, but are not limited to, increases in supplies from U.S. shale production; international political conditions, including war, uprisings, terrorism and political unrest in the Middle East and Africa; slowdowns to the global supply chain; the domestic and foreign supply of crude oil, natural gas and NGLs; actions by OPEC+ member countries and other state-controlled oil companies to agree upon and maintain crude oil price and production controls; the level of consumer demand that is impacted by economic growth rates; weather conditions; domestic and foreign governmental regulations and taxes; the price and availability of alternative fuels; technological advances affecting energy consumption; the health of international economic and credit markets; and changes in the level of demand resulting from global or national health epidemics and concerns. In addition, various factors including the effect of federal, state and foreign regulation of production and transportation, general economic conditions, changes in supply due to drilling by other producers and changes in demand may adversely affect our ability to market our crude oil, natural gas and NGLs production. In addition, various factors, including the effect of federal, state and foreign regulation of production and transportation, general economic conditions, changes in supply due to drilling by other producers and changes in demand may adversely affect our ability to market our crude oil and natural gas production.
In a period of depressed or declining crude oil, natural gas and NGLs prices, we are subject to numerous risks, including but not limited to the following:
•our revenues, cash flows and profitability may decline substantially, which could also indirectly impact expected production by reducing the amount of funds available to engage in exploration, drilling and production;
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•third-party confidence in our commercial or financial ability to explore and produce crude oil, natural gas and NGLs could erode, which could impact our ability to execute on our business strategy;
•our suppliers, hedge counterparties (if any), vendors and service providers could renegotiate the terms of our arrangements, terminate their relationship with us or require financial assurances from us;
•we may take measures to preserve liquidity, such us our decision to cease or defer discretionary capital expenditures during such periods of depressed or declining oil prices; and
•it may become more difficult to retain, attract or replace key employees.
The occurrence of certain of these events may have a material adverse effect on our business, results of operations and financial condition.
If crude oil, natural gas or NGLs prices decline, we expect that the estimated quantities and present values of our reserves will be reduced, which may necessitate write-downs. Any future write-downs or impairments could have a material adverse impact on our results of operations. A material decline in prices could also result in a reduction of our net production revenue. Any substantial and extended decline in the price of oil, natural gas and NGLs would have an adverse effect on the carrying value of our reserves, borrowing capacity, revenues, profitability and cash flows from operations and may have a material adverse effect on our business, financial condition, results of operations and prospects. Volatile oil, natural gas and NGLs prices make it difficult to estimate the value of producing properties for acquisitions and often cause disruption in the market for oil, natural gas and NGLs producing properties, as buyers and sellers have difficulty agreeing on such values. Price volatility also makes it difficult to budget for, and project the return on, acquisitions and development and exploitation projects.
Exploring for, developing, or acquiring reserves is capital intensive and uncertain.
We may not be able to economically find, develop, or acquire additional reserves, or may not be able to make the necessary capital investments to develop our reserves, if our cash flows from operations decline or external sources of capital become limited or unavailable. Drilling activities are subject to many risks, including the risk that no commercially productive reservoirs will be encountered. There can be no assurance that new wells that we drill will be productive or that we will recover all or any portion of our investment. There can be no assurance that new wells drilled by us will be productive or that we will recover all or any portion of our investment. Drilling for crude oil, natural gas and NGLs may involve unprofitable efforts, not only from dry wells, but also from wells that are productive but do not produce sufficient net revenues to return a profit after drilling, operating and other costs. Drilling for crude oil and natural gas may involve unprofitable efforts, not only from dry wells, but also from wells that are productive but do not produce sufficient net revenues to return a profit after drilling, operating and other costs. The cost of drilling, completing and operating wells is often uncertain and cost overruns are common. In particular, offshore drilling and development operations require highly capital-intensive techniques.
Our drilling operations may be curtailed, delayed or cancelled as a result of numerous factors, many of which are beyond our control, including weather conditions, equipment failures or accidents, elevated pressure or irregularities in geologic formations, compliance with governmental requirements and shortages or delays in the delivery of or increased costs for equipment and services. If we are unable to continue drilling operations and we do not replace the reserves we produce or acquire additional reserves, our reserves, revenues and cash flow will decrease over time, which could have a material effect on our ability to continue as a going concern.
Our costs could escalate and become uncompetitive due to supply chain disruptions, inflationary cost pressures, equipment limitations, escalating supply costs, commodity prices, and additional government intervention through stimulus spending or additional regulations. Our inability to manage costs may impact project returns and future development decisions, which could have a material adverse effect on our financial performance and cash flows.
Competitive industry conditions may negatively affect our ability to conduct operations.
The crude oil, natural gas, and NGLs industry is intensely competitive. Our competitors include major integrated oil companies and substantial independent energy companies, many of which possess greater financial, technological, personnel and other resources than we do.Our competitors include major integrated oil companies and substantial independent energy companies, many of which possess greater financial, technological, personnel and other resources than we do.
We may be outbid by our competitors in our attempts to acquire exploration and production rights in crude oil, natural gas and NGLs properties. These properties include exploration prospects as well as properties with proved reserves. Our competitors may also use superior technology that we may be unable to afford or that would require costly investment in
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order to compete. There is also competition for contracting for drilling equipment and the hiring of experienced personnel. Factors that affect our ability to compete in the marketplace include, among other things:
•our access to the capital necessary to drill wells and acquire properties;
•our ability to acquire and analyze seismic, geological and other information relating to a property;
•our ability to retain and hire experienced personnel, especially for our engineering, geoscience and accounting departments; and
•the location of, and our ability to access, platforms, pipelines and other facilities used to produce and transport crude oil, natural gas and NGLs production.
In addition, competition due to advances in renewable fuels may also lessen the demand for our products and negatively impact our profitability.
Alternatives to petroleum-based products and production methods are continually under development. For example, a number of automotive, industrial and power generation manufacturers are developing alternative clean power systems using fuel cells or clean-burning gaseous fuels that may address increasing worldwide energy costs, the long-term availability of petroleum reserves and environmental concerns, which if successful could lower the demand for crude oil, natural gas and NGLs. If these non-petroleum based products and crude oil alternatives continue to expand and gain broad acceptance such that the overall demand for crude oil, natural gas and NGLs is decreased, it could have an adverse effect on our operations and the value of our assets. If these non-petroleum based products and crude oil alternatives continue to expand and gain broad acceptance such that the overall demand for crude oil and natural gas is decreased, it could have an adverse effect on our operations and the value of our assets.
Weather, unexpected subsurface conditions and other unforeseen operating hazards may adversely impact our crude oil, natural gas and NGLs activities.
The crude oil, natural gas and NGLs business involves a variety of operating risks, including fire, explosions, blow-outs, pipe failure, casing collapse, abnormally pressured formations; and environmental hazards such as crude oil spills, natural gas leaks, ruptures and discharges of toxic gases, underground migration, and surface spills or mishandling of well fluids, including chemical additives. The occurrence of any of these or other related events could result in substantial losses due to injury and loss of life, severe damage to and destruction of property, natural resources and equipment, pollution and other environmental damage, clean-up responsibilities, regulatory investigation and penalties and suspension of operations.
Climate change could have an effect on the severity of weather (including hurricanes, floods and wildfires), sea levels, the arability of farmland, and water availability and quality. If such effects were to occur, our exploration and production operations may be adversely affected. If such effects were to occur, our exploration and production operations have the potential to be adversely affected. Potential adverse effects could include damages to our facilities, disruption of our production activities, less efficient or non-routine operating practices necessitated by climate effects or increased costs for insurance coverages in the aftermath of such effects. Significant physical effects of climate change could also have an indirect effect on our financing and operations by disrupting the transportation or process-related services provided by midstream companies, service companies or suppliers with whom we have a business relationship.
We maintain insurance against some, but not all, potential risks; however, there can be no assurance that such insurance will be adequate to cover any losses or exposure for liability. The occurrence of a significant unfavorable event not fully covered by insurance could have a material adverse effect on our financial condition, results of operations and cash flows. Furthermore, we cannot predict whether insurance will continue to be available to us at a reasonable cost or at all.
An increased societal and governmental focus on ESG matters, including climate change issues, may adversely impact our business, hinder access to investors and financing, and decrease demand for our product.
Heightened expectations for companies to address ESG matters, including climate change, social license to operate, human rights, and governance, have a myriad of potential impacts on our business. Investors, lenders, and other stakeholders are increasingly factoring these issues into investment, financing, and business decisions, often relying on ESG ratings from third-party agencies. Unfavorable ESG ratings, coupled with growing activism around fossil fuels, could dissuade investors or lenders from engaging with us, potentially impacting our share price or access to capital across all of our operating jurisdictions (Gabon, Egypt, Cote d'Ivoire and Equatorial Guinea). Furthermore, the European Commission, in February 2025, adopted proposals to focus the Corporate Sustainability Reporting Directive (CSRD) primarily on the largest companies (those with over 1000 employees), which, while potentially easing burdens on smaller entities, reinforces the global trend towards increased sustainability reporting requirements and scrutiny for significant market participants.
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While we may issue voluntary disclosures regarding ESG matters, these are often based on hypothetical expectations and assumptions that may not fully represent current or future risks, due to the inherent uncertainties, long timelines, and evolving methodologies for identifying, measuring, and reporting on many ESG topics. The approaches to climate change and the transition to a lower-carbon economy, including governmental regulations, corporate policies, and consumer behavior, are continuously evolving globally. Our operating countries, including Gabon, Egypt, Cote d'Ivoire, and Equatorial Guinea, are signatories to the Paris Agreement and are developing or implementing various climate-related strategies, NDCs, and regulations, including those aimed at reducing flaring, capping emissions, and promoting energy efficiency. We cannot reliably estimate the full impact of these evolving approaches on our financial condition, results of operations, and ability to compete.
Operational activities across our global footprint, including exploration and development, are increasingly subject to stringent social and environmental review. Certain social license risks, involving community engagement, land access, and local content requirements, are pertinent in all our operating countries and can affect our ability to obtain or renew necessary permits and approvals.
Any long-term material adverse effect on the global oil and gas industry, whether driven by climate policies, social pressures, or other ESG factors, may adversely affect our financial condition, results of operations, and cash flows. Such impacts could also arise from increased awareness and adverse publicity, restricting our access to capital or impacting the marketability of our crude oil, natural gas, and NGLs. The physical impacts of climate change, such as changes in weather patterns, sea levels, and temperatures, also pose highly uncertain but potentially significant risks to our operations in specific geographic areas. We cannot predict the full extent of how these multifaceted ESG and climate change considerations will ultimately affect us.
We face various risks associated with increased opposition to and activism against crude oil, natural gas and NGLs exploration and development activities.We face various risks associated with increased activism against crude oil and natural gas exploration and development activities.
The oil and natural gas exploration, development and operating activities that we conduct may, at times, be subject to public opposition. Opposition against crude oil, natural gas and NGLs drilling and development activity has been growing globally.Opposition against crude oil and natural gas drilling and development activity has been growing globally. Companies in the crude oil, natural gas and NGLs industry are often the target of activist efforts from both individuals and non-governmental organizations regarding safety, human rights, climate change, environmental matters, sustainability and business practices. Companies in the crude oil and natural gas industry are often the target of activist efforts from both individuals and non-governmental organizations regarding safety, human rights, climate change, environmental matters, sustainability, and business practices. Anti-development activists are working to, among other things, delay or cancel certain operations such as offshore drilling and development.
Such public opposition could expose us to higher costs, delays or even project cancellations, due to increased pressure on governments and regulators by special interest groups, including Indigenous groups, landowners, environmental interest groups (including those opposed to oil and natural gas production operations) and other non-governmental organizations, blockades, legal or regulatory actions or challenges, increased regulatory oversight, reduced support from the federal, provincial or municipal governments, reputational damage, delays in, challenges to or the revocation of regulatory approvals, permits and/or licenses, and direct legal challenges, including the possibility of climate-related litigation. There is no guarantee that we will be able to satisfy the concerns of the special interest groups and non-governmental organizations, and attempting to address such concerns may require us to incur significant and unanticipated capital and operating expenditures. Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying, measuring and reporting on many ESG matters.
Further, recent activism directed at shifting funding away from companies with energy-related assets could result in limitations or restrictions on certain sources of funding for the energy sector. Moreover, activist shareholders in our industry have introduced shareholder proposals that may seek to force companies to adopt aggressive emission reduction targets or to shift away from more carbon-intensive activities. Moreover, activist shareholders in our industry have introduced proposals that may seek to force companies to adopt aggressive emission reduction targets or to shift away from more carbon-intensive activities. While we cannot predict the outcomes of such proposals, they could ultimately make it more difficult for us to engage in exploration and production activities.
Risks Relating to Legal and Regulatory Matters
Our operations are subject to risks associated with climate change and potential regulatory programs meant to address climate change; these programs may impact or limit our business plans, result in significant expenditures or reduce demand for our product.
Climate change continues to be the focus of political and societal attention. Numerous proposals have been made and are likely to be forthcoming on the international, national, regional, state and local levels to reduce the emissions of GHG emissions. These efforts have included or may include cap-and-trade programs, carbon taxes, GHG emissions reporting
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obligations and other regulatory programs that limit or require control of GHG emissions from certain sources. These programs may limit our ability to produce crude oil, natural gas and NGLs, limit our ability to explore in new areas, or may make it more expensive to produce. These programs may limit our ability to produce crude oil and natural gas, limit our ability to explore in new areas, or may make it more expensive to produce. In addition, these programs may reduce demand for our product either by incentivizing or mandating the use of other alternative energy sources, by prohibiting the use of our product, by requiring equipment using our product to shift to alternative energy sources, or by directly increasing the cost of fossil fuels to consumers. Additionally, in March 2024, the SEC adopted final rules intended to enhance and standardize climate-related disclosures by public companies and in public offerings. Immediately after the SEC’s release of the final rules, several lawsuits were filed to challenge their legality, and the rules were stayed pending judicial review. On March 27, 2025, the SEC ended its defense of the final rules on climate-related disclosures, effectively withdrawing its support for the regulation; however, the rules remain on hold pending such legal challenges, which are currently held in abeyance by the Eighth Circuit Court of Appeals until such time as the SEC determines whether the rules will be rescinded, repealed, modified or defended in litigation.
Compliance with applicable environmental laws and other government regulations could be costly and could negatively impact production.
The laws and regulations of countries where we have activities control our current business. These laws and regulations may require that we obtain permits for our development activities, limit or prohibit drilling activities in certain protected or sensitive areas or restrict the substances that can be released in connection with our operations.
Our operations could result in liability for personal injuries, property damage, natural resource damages, crude oil spills, discharge of hazardous materials, remediation and clean-up costs and other environmental damages. Failure to comply with environmental laws and regulations may trigger a variety of administrative, civil and criminal enforcement measures, including the assessment of monetary penalties and the issuance of orders enjoining operations. In addition, we could be liable for environmental damages caused by, among others, previous property owners or operators of properties that we purchase or lease. Some environmental laws provide for joint and several strict liabilities for remediation of releases of hazardous substances, rendering a person liable for environmental damage without regard to negligence or fault on the part of such person. Some environmental laws provide for joint and several strict liability for remediation of releases of hazardous substances, rendering a person liable for environmental damage without regard to negligence or fault on the part of such person. As a result, we may incur substantial liabilities to third parties or governmental entities and may be required to incur substantial remediation costs. We could also be affected by more stringent laws and regulations adopted in the future, including any related to climate change and GHG and the use of hydraulic fracturing fluids, resulting in increased operating costs. We could also be affected by more stringent laws and regulations adopted in the future, including any related to climate change and greenhouse gases and the use of hydraulic fracturing fluids, resulting in increased operating costs.
We are also subject to a wide variety of laws relating to health and safety, taxes, employment, labor standards, money laundering, terrorist financing, and other matters in the jurisdictions in which we operate.
These laws and other governmental regulations, which cover matters including drilling operations, taxation and environmental protection, may be changed from time to time in response to economic or political conditions and could have a significant impact on our operating costs, as well as the crude oil, natural gas and NGLs industry in general. The compliance mechanisms and monitoring programs that we have adopted and implemented may not adequately prevent or detect possible violations of such applicable laws. Our failure to comply with any such legislation could result in severe criminal or civil sanctions and may subject us to other liabilities, including fines, prosecution and reputational damage, all of which could have a material adverse effect on our business, consolidated results of operations and consolidated financial condition.
While we believe that we are currently in compliance with environmental laws and other government regulations applicable to our operations, no assurances can be given that we will be able to continue to comply with such environmental laws and regulations without incurring substantial costs.
We have been, and in the future may become, involved in legal proceedings with governmental bodies and private litigants, and, as a result, may incur substantial costs in connection with those proceedings.
Our business subjects us to liability risks from litigation or government actions. We have been involved in legal proceedings from time to time and may in the future be party to various lawsuits or governmental actions. We have been involved in legal proceedings, and from time to time we may in the future be a defendant or plaintiff in various lawsuits. There is risk that any matter in litigation could be decided unfavorably against us, which could have a material adverse effect on our financial condition, results of operations and cash flows. There is risk that any matter in litigation could be decided unfavorably against us regardless of our belief, opinion, and position, which could have a material adverse effect on our financial condition, results of operations, and cash flows. Litigation can be very costly, and the costs associated with defending litigation could also have a material adverse effect on our results of operation, net cash flows and financial condition. Adverse litigation decisions or rulings may also damage our business reputation.
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Often, our operations are conducted through joint ventures over which we may have limited influence and control. Private litigation or government proceedings brought against us could also result in significant delays in our operations.
Risks Relating to the 2025 Facility Agreement
A significant level of indebtedness incurred under the 2025 Facility may limit our ability to borrow additional funds or capitalize on acquisition or other business opportunities in the future. In addition, the covenants in the 2025 Facility impose restrictions that may limit our ability and the ability of our subsidiaries to take certain actions. Our failure to comply with these covenants could result in the acceleration of any future outstanding indebtedness under the 2025 Facility.
The 2025 Facility Agreement governing our 2025 Facility with The Standard Bank of South Africa Limited, Isle of Man Branch, The Standard Bank of South Africa Limited, and the other financial institutions contains certain affirmative and negative covenants, including, among other things, as to compliance with laws (including environmental laws and anti-corruption laws), delivery of quarterly and annual financial statements and compliance certificates, no change of business, no merger and maintenance of corporate existence, field preservations and related contracts relating to the Borrowing Base Assets (as defined in the 2025 Facility Agreement), maintenance of insurance, entry into certain derivatives contracts which are regulated by the 2025 Facility Agreement and the Hedging Policy (as defined in the 2025 Facility Agreement), restrictions on the incurrence of liens, indebtedness, asset dispositions, acquisitions, restricted payments, entry into offtake agreements with Qualifying Offtakers (as defined in the 2025 Facility Agreement) and other customary covenants. The 2025 Facility Agreement also contains certain financial covenants and other covenants that restrict our ability to pay dividends and to enter into certain acquisitions and disposition transactions. We were in compliance with covenants under the 2025 Facility Agreement as of the date hereof.
Restrictions contained in the 2025 Facility Agreement governing any future indebtedness may reduce our ability to incur additional indebtedness, engage in certain transactions or capitalize on proposed acquisition or other business opportunities. Any future indebtedness under the 2025 Facility and other financial obligations and restrictions could have financial consequences. For example, they could:
•impair our ability to obtain additional financing in the future for capital expenditures, potential acquisitions, general business activities or other purposes;
•increase our vulnerability to general adverse economic and industry conditions;
•require us to dedicate a substantial portion of future cash flows to payments of our indebtedness and other financial obligations, thereby reducing the availability of our cash flows to fund working capital, capital expenditures and other general corporate requirements;
•limit our flexibility in planning for, or reacting to, changes in our business and industry; and
•place us at a competitive disadvantage to those who have proportionately less debt.
In addition, our ability to comply with the 2025 Facility Agreement's covenants could be affected by events beyond our control and we cannot assure you that we will satisfy those requirements. A prolonged period of oil and gas prices at depressed levels could further increase the risk of our inability to comply with covenants to maintain specified financial ratios. A breach of any of these provisions could result in a default under the 2025 Facility, which could allow all amounts outstanding thereunder to be declared immediately due and payable. In the event of such acceleration, we cannot assure that we would be able to repay our debt or obtain new financing to refinance our debt. Even if new financing was made available to us, it may not be on terms acceptable to us. We may also be prevented from taking advantage of business opportunities that arise if we fail to meet certain ratios or because of the limitations imposed on us by the covenants under the 2025 Facility.
The borrowing base under the 2025 RBL Facility may be reduced pursuant to the terms of the 2025 Facility Agreement, which may limit our available funding for exploration and development. We may have difficulty obtaining additional credit, which could adversely affect our operations and financial position.
In the future we may depend on the 2025 RBL Facility for a portion of our capital needs. The 2025 RBL Facility had initial aggregate commitments of $190 million and an initial borrowing base of $182 million. Subject to certain conditions, we may request, at any time prior to the date falling 30 months after the date of the 2025 Facility Agreement to increase the total commitments available under the 2025 RBL Facility to an aggregate principal amount not to exceed $300 million. In addition, subject to certain conditions precedent, certain existing Lenders under the 2025 RBL Facility agreed to increase their initial commitment effective January 23, 2026 (the “Effective Increase Date”) so that the aggregate borrowing base
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under the 2025 RBL Facility as of the Effective Increase Date increased from $190.0 million to $255.0 million. The increase in commitments was undertaken with the existing accordion feature included in the 2025 RBL Facility.
The total amount of loans which may be drawn under the 2025 Facility is limited to the lower of the amount of the aggregate commitments and the Borrowing Base Amount at the relevant time. The Borrowing Base Amount is calculated pursuant to the 2025 Facility Agreement and redetermined on March 31 and September 30 of each year beginning June 30, 2025 and other interim triggers set out in the 2025 Facility Agreement.
In the future, we may not be able to access adequate funding under the 2025 RBL Facility as a result of (i) a decrease in our borrowing base due to the outcome of a subsequent borrowing base redetermination, or (ii) an unwillingness or inability on the part of the lenders to meet their funding obligations. As a result, we may be unable to obtain adequate funding under the 2025 RBL Facility. If funding is not available when needed, or is available only on unfavorable terms, it could adversely affect our development plans as currently anticipated, which could have a material adverse effect on our production, revenues and results of operations.
Risks Relating to Ownership of Our Common Stock
The price of our Common Stock may fluctuate significantly.
Our common stock currently trades on the New York Stock Exchange (“NYSE”) and the London Stock Exchange (“LSE”), but an active trading market for our common stock may not be sustained. The market price of our common stock could fluctuate significantly as a result of:
•dilutive issuances of our common stock;
•announcements relating to our business or the business of our competitors;
•changes in expectations as to our future financial performance or changes in financial estimates of public market analysis;
•actual or anticipated quarterly variations in our operating results;
•conditions generally affecting the crude oil, natural gas and NGLs industry;
•the success of our operating strategy; and
•the operating and stock price performance of other comparable companies.
Many of these factors are beyond our control, and we cannot predict their potential effects on the price of our common stock. In addition, the stock markets can experience considerable price and volume fluctuations. In addition, the stock markets in general can experience considerable price and volume fluctuations. Recent volatility in the financial markets has resulted in significant price and volume fluctuations that have affected the market prices of equity securities without regard to a company’s operating performance, underlying asset values or prospects. Accordingly, the market price of our common stock may decline even if our operating results, underlying asset values or prospects have not changed. Accordingly, the market price of the common stock may decline even if our operating results, underlying asset values or prospects have not changed. Additionally, these factors, as well as other related factors, may cause decreases in asset values, which may result in impairment losses. Additionally, these factors, as well as other related factors, may cause decreases in asset values that are deemed to be other than temporary, which may result in impairment losses. There is no assurance that fluctuations in the price and volume of publicly traded equity securities will not occur. There is no assurance that continuing fluctuations in the price and volume of publicly traded equity securities will not occur. If such increased levels of volatility and market turmoil continue, our operations could be adversely impacted, and the trading price of our common stock may be adversely affected.
We currently intend to pay dividends on our common stock; however, no assurance can be given that we will be able to pay dividends to our stockholders in the future at indicated levels or at all.We currently intend to pay dividends on our common stock; however our ability to pay dividends in the future may be limited and no assurance can be given that we will be able to pay dividends to our stockholders in the future at current levels or at all.
Our Board of Directors adopted a quarterly cash dividend policy of an expected $0.0625 per share of common stock commencing in the first quarter of 2023. To the extent we have adequate cash on hand and cash flows from operations, we will consider continuing to pay dividends on our common stock in the future. Payment of future dividends, if any, and the establishment of future record and payment dates will be at the discretion of our Board of Directors after taking into account various factors, including current financial condition, the tax impact of repatriating cash, operating results and current and anticipated cash needs. Payment of future dividends, if any, and the establishment of future record and payment dates will be at the discretion of the board of directors after taking into account various factors, including current financial condition, the tax impact of repatriating cash, operating results and current and anticipated cash needs. As a result, no assurance can be given that we will be able to continue to pay dividends to our stockholders or that the level of any future dividends will achieve a market yield or increase or even be maintained over time, any of which could materially and adversely affect the market price of our common stock. As a result, no assurance can be given that we will be able to continue to pay dividends to our stockholders in the future or that the level of any future dividends will achieve a market yield or increase or even be maintained over time, any of which could materially and adversely affect the market price of our common stock.
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Dual-listing on the NYSE and the LSE may lead to an inefficient market in our common stock.
Our common stock is quoted on the NYSE and the LSE. Consequently, the trading in and liquidity of our common stock are split between these two exchanges. Consequently, the trading in and liquidity of the common stock is split between these two exchanges. The price of our common stock may fluctuate and may at any time be different on the NYSE and the LSE. The price of the common stock may fluctuate and may at any time be different on the NYSE and the LSE. Dual-listing of our common stock will result in differences in liquidity, settlement and clearing systems, trading currencies, and prices and transaction costs between the exchanges where our common stock will be quoted.Dual-listing of our common stock will result in differences in liquidity, settlement and clearing systems, trading currencies, prices and transaction costs between the exchanges where the common stock will be quoted. These and other factors may hinder the transferability of our common stock between the two exchanges. These and other factors may hinder the transferability of the common stock between the two exchanges.
Investors could seek to sell or buy our common stock to take advantage of any price differences between the two markets through a practice referred to as arbitrage. Investors could seek to sell or buy common stock to take advantage of any price differences between the two markets through a practice referred to as arbitrage. Any arbitrage activity could create unexpected volatility in both common stock prices on either exchange and in the volumes of our common stock available for trading on either market. This could adversely affect the trading of our common stock on these exchanges and increase their price volatility and/or adversely affect the price and liquidity of the shares of common stock on these exchanges. This could adversely affect the trading of the common stock on these exchanges and increase their price volatility and/or adversely affect the price and liquidity of the common stock on these exchanges. In addition, holders of our common stock in either jurisdiction will not be immediately able to transfer such shares for trading on the other market without effecting necessary procedures with our transfer agents/registrars. In addition, holders of common stock in either jurisdiction will not be immediately able to transfer such shares for trading on the other market without effecting necessary procedures with our transfer agents/registrars. This could result in time delays and additional cost for stockholders.
Our common stock is quoted and traded in USD on the NYSE and traded in GBX on the LSE. The market price of our common stock on those exchanges may also differ due to exchange rate fluctuations.
Substantial future sales of our common stock, or the perception that such sales might occur, or additional offerings of our common stock could depress the market price of our common stock.
We cannot predict what effect, if any, future sales of our common stock, or the availability of our common stock for future sale, or the offer of additional shares of our common stock in the future, will have on the market price of our common stock. Sales or an additional offering of substantial number of shares of our common stock in the public market, or the perception or any announcement that such sales or an additional offering could occur, could adversely affect the market price of our common stock and may make it more difficult for stockholders to sell their common stock at a time and price that they deem appropriate and could also impede our ability to raise capital through the issuance of equity securities. Sales or an additional offering of substantial numbers of common stock in the public market, or the perception or any announcement that such sales or an additional offering could occur, could adversely affect the market price of common stock and may make it more difficult for stockholders to sell their common stock at a time and price which they deem appropriate and could also impede our ability to raise capital through the issuance of equity securities.
Any issuance of preferred shares will rank in priority to our shares of common stock.
While we do not currently have any preferred shares outstanding, under our certificate of incorporation, we are authorized to issue up to 500,000 preferred shares. Any issuance of preferred shares would rank in priority to our shares of common stock with respect to the payment of dividends, liquidation, and other matters. Any issuance of preferred shares would rank in priority to our common shares with respect to payment of dividends, liquidation, and other matters.
Our certificate of incorporation and bylaws do not contain any rights of pre-emption in favor of existing stockholders, which means that stockholders may be diluted if additional shares of common stock are issued.
Our stockholders do not have pre-emptive rights and we, without stockholder consent, may issue additional shares of common stock, preferred shares, warrants, rights, units and debt securities for general corporate purposes, including, but not limited to, working capital, capital expenditures, investments, acquisitions and repayment or refinancing of borrowings. We actively seek to expand our business through complementary or strategic acquisitions and may issue additional shares of common stock in connection with those acquisitions. We also issue shares of our common stock to our executive officers, employees and independent directors as part of their compensation. We also issue common stock to our executive officers, employees and independent directors as part of their compensation. This may have the effect of diluting the interests of existing stockholders. Additionally, to the extent that pre-emptive rights are granted, stockholders in certain jurisdictions may experience difficulties in exercising or the inability to exercise their pre-emptive rights. Additionally, to the extent that preemptive rights are granted, stockholders in certain jurisdictions may experience difficulties or may be unable to exercise their preemptive rights.
The choice of forum provisions in our Third Amended and Restated Bylaws (the “Bylaws”) could limit our stockholders’ ability to obtain a favorable judicial forum for disputes.
Our Bylaws provide that the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware) shall be the sole and exclusive forum for (i) any derivative action or proceeding brought in the name or right of the Company or on its behalf, (ii) any action asserting a claim for breach of a fiduciary duty owed by any director, officer, employee, stockholder or other agent of the Company to the Company or the stockholders, (iii) any action arising or asserting a claim arising pursuant to any provision of the General Corporation Law of Delaware (the “DGCL”) or any provision of our Restated Certificate of Incorporation, as amended (the “Charter”), or the Bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State
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of Delaware or (iv) any action asserting a claim governed by the internal affairs doctrine, including, without limitation, any action to interpret, apply, enforce or determine the validity of the Charter or the Bylaws. Nonetheless, pursuant to our Bylaws, the foregoing provisions will not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Our Bylaws further provide that unless we consent in writing to the selection of an alternative forum, the federal district courts of the U.S. shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Under the Securities Act, federal and state courts have concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act, and stockholders cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce such a forum selection provision as written in connection with claims arising under the Securities Act. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of and have consented to the provisions in the Bylaws related to choice of forum. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Company will be deemed to have notice of and have consented to the provisions of our Bylaws related to choice of forum. The choice of forum provisions in our Bylaws may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us. Additionally, the enforceability of choice of forum provisions in other companies’ governing documents has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in our Bylaws to be inapplicable or unenforceable in such action. If so, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
Risk management and strategy
Our corporate information technology, communication networks, enterprise applications, accounting and financial reporting platforms, and related systems are necessary for the operation of our business. We use these systems, among others, to manage our exploration, development and production processes, for internal communications, for accounting to operate record-keeping function, and for many other key aspects of our business. Our business operations rely on the secure collection, storage, transmission, and other processing of proprietary, confidential, and sensitive data.
We rely on a multidisciplinary team, including our information security function, legal department, management, and third-party service providers, as described further below, to identify, assess, and manage cybersecurity threats and risks. We identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment and our risk profile using various methods including, for example, using manual and automated tools, subscribing to reports and services that identify cybersecurity threats, analyzing reports of threats and threat actors, conducting scans of the threat environment, evaluating our industry’s risk profile, utilizing internal and external audits, and conducting threat and vulnerability assessments.
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Governance
Management, in coordination with our information technology department, is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel. Management is responsible for approving budgets, approving cybersecurity processes, and reviewing cybersecurity assessments and other cybersecurity-related matters.
Recently Filed
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| Ticker * | File Date |
|---|---|
| COPR | 2 hours ago |
| GAP | 3 hours ago |
| MGTI | 4 hours ago |
| CHCI | 7 hours ago |
| LWAY | 8 hours ago |
| XPON | 8 hours ago |
| LSBK | 8 hours ago |
| STIM | 9 hours ago |
| ABEO | 9 hours ago |
| PSQH | 9 hours ago |
| BCYC | 9 hours ago |
| GLUE | 10 hours ago |
| CLNN | 10 hours ago |
| XFOR | 10 hours ago |
| MCHB | 19 hours ago |
| LIFE | 21 hours ago |
| MUX | 21 hours ago |
| XRX | 22 hours ago |
| MBVI | 23 hours ago |
| BSVN | 23 hours ago |
| PCAP | 23 hours ago |
| BMOK | 23 hours ago |
| FRST | 23 hours ago |
| FLYYQ | 23 hours ago |
| MVST | 23 hours ago |
| ITIC | 23 hours ago |
| PANL | 23 hours ago |
| AGEN | 23 hours ago |
| GDOT | 23 hours ago |
| RLYB | 23 hours ago |
| MCBS | 23 hours ago |
| MYPS | 23 hours ago |
| CAEP | 23 hours ago |
| TAVI | 1 day ago |
| CWCO | 1 day ago |
| ARTNA | 1 day ago |
| QSEA | 1 day ago |
| EGY | 1 day ago |
| AP | 1 day ago |
| APT | 5 days, 23 hours ago |
| IBO | 5 days, 23 hours ago |
| DAIC | 5 days, 23 hours ago |
| AEAQ | 5 days, 23 hours ago |
| NUWE | 5 days, 23 hours ago |
| KDK | 5 days, 23 hours ago |
| SKYT | 6 days ago |
| CRWE | 6 days ago |
| CWBC | 6 days ago |
| EXOD | 6 days ago |
| DMRC | 6 days ago |
