VAALCO Energy, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Segment Information

Segment Information

3 Months Ended

Mar. 31, 2018

5. SEGMENT INFORMATION

Our operations are based in Gabon and Equatorial Guinea. Each of our two reportable operating segments is organized and managed based upon geographic location. Our Chief Executive Officer, who is the chief operating decision maker, and management review and evaluate the operation of each geographic segment separately primarily based on Operating income (loss). The operations of all segments include exploration for and production of hydrocarbons where commercial reserves have been found and developed. Revenues are based on the location of hydrocarbon production. Corporate and other is primarily corporate and operations support costs which are not allocated to the reportable operating segments.

Segment activity of continuing operations for the three months ended March 31, 2018 and 2017 as well as long-lived assets and segment assets at March 31, 2018 and December 31, 2017 are as follows:


	Three Months Ended March 31, 2018
(in thousands)	Gabon		Equatorial Guinea		Corporate and Other		Total
Revenues-oil and natural gas sales	$	27,643	$	—	$	2	$	27,645
Depreciation, depletion and amortization		1,059		—		65		1,124
Bad debt recovery and other		(56)		—		—		(56)
Operating income (loss)		15,697		(30)		(2,629)		13,038
Other, net		69		3		(3)		69
Interest expense, net		354		—		—		354
Income tax expense		4,042		—		—		4,042
Additions to property and equipment - accrual		428		—		(1)		427


	Three Months Ended March 31, 2017
(in thousands)	Gabon		Equatorial Guinea		Corporate and Other		Total
Revenues-oil and natural gas sales	$	21,246	$	—	$	20	$	21,266
Depreciation, depletion and amortization		1,809		—		60		1,869
Bad debt expense and other		98		—		—		98
Operating income (loss)		10,960		(38)		(2,774)		8,148
Interest expense, net		403		—		—		403
Income tax expense		3,194		—		—		3,194
Additions to property and equipment - accrual		262		—		—		262



(in thousands)	Gabon		Equatorial Guinea		Corporate and Other		Total
Long-lived assets from continuing operations:
Balance at March 31, 2018	$	12,081	$	10,000	$	518	$	22,599
Balance at December 31, 2017		12,638		10,000		583		23,221

Assets from continuing operations:
Balance at March 31, 2018	$	75,718	$	10,097	$	3,340	$	89,155
Balance at December 31, 2017		63,122		10,095		3,580		76,797

Information about our most significant customers

For the period from August of 2015 through March 2018, we sold our crude oil production from Gabon under a term contract with Glencore Energy UK Ltd. (“Glencore”) with pricing based upon an average of Dated Brent in the month of lifting, adjusted for location and market factors. The contract with Glencore ends in January 2019. Sales of oil to Glencore were approximately 100% of total revenues for the three months ended March 31, 2018 and 2017.