| SCHEDULE I - PARENT COMPANY FINANCIAL STATEMENTS |
SCHEDULE I — PARENT COMPANY FINANCIAL STATEMENTS
VAALCO ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars, except number of shares and par value amounts)
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December 31,
2014
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December 31,
2013
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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3,780
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$
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8,605
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Restricted cash
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-
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10,000
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Receivables:
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Other
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264
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7
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Prepayments and other
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505
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89
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Total current assets
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4,549
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18,701
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Property and equipment - successful efforts method:
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Equipment and other
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1,316
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500
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1,316
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500
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Accumulated depreciation, depletion and amortization
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(442
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)
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(348
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)
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Net property and equipment
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874
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152
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Other assets:
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Restricted cash
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10,000
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-
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Deferred tax asset
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1,349
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1,349
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Investment in Subsidiaries
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166,232
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233,061
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Total Assets
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$
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183,004
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$
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253,263
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LIABILITIES AND EQUITY
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Current liabilities:
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Accounts payable and accrued liabilities
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2,541
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2,389
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Total current liabilities
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$
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2,541
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$
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2,389
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Long term debt
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-
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-
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Total liabilities
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2,541
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2,389
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Minority Interest
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VAALCO Energy Inc. shareholders’ equity:
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Common stock, $0.10 par value, 100,000,000 authorized shares, 65,194,828 and
64,012,914 shares issued with 7,393,714 and 7,162,573 shares in treasury at
Dec. 31, 2014 and 2013, respectively
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6,519
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6,408
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Additional paid-in capital
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64,351
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55,455
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Retained earnings
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146,892
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224,442
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Less treasury stock, at cost
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(37,299
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)
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(35,431
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)
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Total Equity
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180,463
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250,874
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Total Liabililities and Equity
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$
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183,004
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$
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253,263
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VAALCO ENERGY, INC.
STATEMENTS OF CONSOLIDATED OPERATIONS
(in thousands of dollars, except per share amounts)
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Year Ended December 31,
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2014
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2013
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2012
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Revenues:
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Oil and gas sales
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$
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-
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$
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-
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$
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-
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Operating costs and expenses:
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Depreciation, depletion and amortization
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94
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63
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59
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General and administrative expense
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6,740
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5,750
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8,065
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Total operating costs and expenses
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6,834
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5,813
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8,124
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Operating income (loss)
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(6,834
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)
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(5,813
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)
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(8,124
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)
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Other income (expense):
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Interest income
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33
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33
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86
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Other, net
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450
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-
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-
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Equity in subsidiary earnings
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(71,199
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)
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48,852
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13,377
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Total other income (expense)
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(70,716
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)
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48,885
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13,463
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Income (loss) before income taxes
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(77,550
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)
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43,072
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5,339
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Income tax expense
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-
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-
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-
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Net income (loss)
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(77,550
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)
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43,072
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5,339
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Less net income (loss) attributable to noncontrolling interest
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-
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-
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(4,708
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)
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Net income (loss) attributable to VAALCO Energy, Inc.
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$
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(77,550
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)
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$
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43,072
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$
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631
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VAALCO ENERGY, INC.
STATEMENTS OF CONSOLIDATED CASH FLOWS
(in thousands of dollars)
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Year Ended December 31,
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2014
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2013
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2012
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net income (loss)
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$
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(77,550
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)
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$
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43,072
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$
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5,339
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Adjustments to reconcile net income to net cash provided by operating activities
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Depreciation, depletion and amortization
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94
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63
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59
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Stock based compensation
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3,322
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3,005
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2,406
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Equity in (earnings) loss from subsidiaries
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71,199
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(48,852
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)
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(13,377
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Change in operating assets and liabilities:
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Other receivables
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(257
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)
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180
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27
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Prepayments and other
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(416
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)
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(16
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14
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Accounts payable and other liabilities
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153
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371
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(2,710
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)
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Net cash (used in) operating activities
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(3,455
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)
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(2,177
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)
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(8,242
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)
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CASH FLOWS FROM INVESTING ACTIVITIES
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Investment in subsidiaries
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(4,371
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)
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(8,245
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)
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-
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Return of investment in subsidiaries
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-
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-
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19,307
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Decrease/(increase) in restricted cash
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-
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-
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(10,000
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)
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Property and equipment expenditures
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(816
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)
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(47
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)
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(77
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)
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Net cash (used in) investing activities
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(5,187
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)
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(8,292
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)
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9,230
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CASH FLOWS FROM FINANCING ACTIVITIES
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Proceeds from the issuance of common stock
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5,685
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3,729
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3,335
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Purchase of treasury stock
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(1,868
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)
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(11,456
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)
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-
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Distribution to noncontrolling interest
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-
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-
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(5,595
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)
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Acquisition of noncontrolling interest
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-
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-
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(26,200
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)
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Net cash provided by (used in) financing activities
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3,817
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(7,727
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)
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(28,460
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)
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NET CHANGE IN CASH AND CASH EQUIVALENTS
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(4,825
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)
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(18,196
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)
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(27,472
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)
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CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
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8,605
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26,801
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54,273
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CASH AND CASH EQUIVALENTS AT END OF PERIOD
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$
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3,780
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$
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8,605
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$
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26,801
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Note 1- The financial statements of VAALCO Energy, Inc (the “Registrant” or “Parent Company”) have been prepared pursuant to Rule 5-04 of Regulation S-X of the Securities Exchange Act of 1934, as amended, because certain of VAALCO’s subsidiaries are contractually prohibited from making payments, loans or transferring assets to the Parent Company or other affiliated entities. Specifically, under the terms of our IFC credit facility, VAALCO Etame (Gabon), Inc. could be restricted from transferring assets or making dividends, if the positive and negative covenants are not in compliance with the credit facility. The restricted net assets associated with each of these entities exceed 25% of the consolidated net assets of VAALCO Energy, Inc. as of December 31, 2014.
For purposes of these financial statements, the Parent Company’s investments in wholly owned subsidiaries are accounted for under the equity method. Under this method, the accounts of the subsidiaries are not consolidated. The investments in and advances to subsidiaries are recorded in the unconsolidated balance sheets. The income (loss) from operations of subsidiaries is reported on an equity basis as equity in subsidiary earnings, net of tax, in the unconsolidated statements of operations of registrant. These statements should be read in conjunction with the consolidated financial statements and notes thereto, included in Part II, Item 8 of in this Annual Report on Form 10-K.
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