| Schedule I - Parent Company Financial Statements |
SCHEDULE I — PARENT COMPANY FINANCIAL STATEMENTS
VAALCO ENERGY, INC.
UNCONSOLIDATED BALANCE SHEETS
(in thousands of dollars, except number of shares and par value amounts)
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December 31,
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December 31,
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2015
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2014
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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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-
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$
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3,780
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Receivables:
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Other
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-
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264
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Prepayments and other
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741
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505
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Total current assets
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741
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4,549
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Property and equipment - successful efforts method:
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Equipment and other
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1,222
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1,316
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1,222
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1,316
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Accumulated depreciation, depletion and amortization
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(428)
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(442)
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Net property and equipment
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794
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874
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Other noncurrent assets:
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Restricted cash
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1,582
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10,000
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Deferred tax asset
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-
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1,349
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Investment in subsidiaries
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26,781
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166,232
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Total assets
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$
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29,898
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$
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183,004
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LIABILITIES AND EQUITY
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Current liabilities:
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Accounts payable
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$
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968
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$
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215
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Accrued liabilities and other
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2,854
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2,326
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Total liabilities
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3,822
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2,541
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Commitments and contingencies
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VAALCO Energy Inc. shareholders’ equity:
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Preferred stock, none issued, 500,000 shares authorized, $25 par value
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-
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-
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Common stock, 66,041,338 and 65,194,828 shares issued,
$0.10 par value, 100,000,000 shares authorized
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6,604
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6,519
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Additional paid-in capital
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69,118
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64,351
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Less treasury stock, 7,514,169 and 7,393,714 shares at cost
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(37,882)
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(37,299)
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Retained earnings (deficit)
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(11,764)
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146,892
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Total equity
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26,076
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180,463
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Total liabilities and equity
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$
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29,898
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$
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183,004
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See accompanying notes to the unconsolidated financial statements.
VAALCO ENERGY, INC.
STATEMENTS OF UNCONSOLIDATED OPERATIONS
(in thousand dollars)
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Year Ended December 31,
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2015
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2014
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2013
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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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240
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94
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63
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General and administrative expense
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7,550
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6,740
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5,750
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General and administrative expense related to shareholder matters
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2,372
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-
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-
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Other costs and expenses
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-
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-
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-
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Total operating costs and expenses
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10,162
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6,834
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5,813
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Operating income (loss)
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(10,162)
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(6,834)
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(5,813)
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Other income (expense):
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Interest income (expense), net
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(181)
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33
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33
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Other, net
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(469)
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450
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-
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Equity in subsidiary earnings (losses)
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(146,495)
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(71,199)
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48,852
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Total other income (expense)
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(147,145)
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(70,716)
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48,885
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Income (loss) before income taxes
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(157,307)
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(77,550)
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43,072
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Income tax expense
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(1,349)
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-
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-
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Net income (loss)
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$
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(158,656)
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$
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(77,550)
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$
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43,072
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VAALCO ENERGY, INC.
STATEMENTS OF UNCONSOLIDATED CASH FLOWS
(in thousands of dollars)
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Year Ended December 31,
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2015
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2014
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2013
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net income (loss)
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$
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(158,656)
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$
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(77,550)
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$
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43,072
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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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240
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94
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63
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Deferred tax asset
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1,349
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-
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-
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Stock-based compensation
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3,810
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3,322
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3,005
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Equity in (earnings) losses from subsidiaries
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146,495
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71,199
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(48,852)
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Change in operating assets and liabilities:
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Other receivables
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293
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(257)
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180
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Prepayments and other
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(236)
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(416)
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(16)
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Accounts payable
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753
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(34)
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213
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Accrued liabilities and other
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517
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187
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158
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Net cash used in operating activities
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(5,435)
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(3,455)
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(2,177)
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CASH FLOWS FROM INVESTING ACTIVITIES
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Investment in subsidiaries
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(7,044)
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(4,371)
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(8,245)
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Decrease in restricted cash
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8,418
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-
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-
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Property and equipment expenditures
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(160)
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(816)
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(47)
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Net cash provided by (used in) investing activities
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1,214
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(5,187)
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(8,292)
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CASH FLOWS FROM FINANCING ACTIVITIES
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Proceeds from the issuances of common stock
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441
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5,685
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3,729
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Purchases of treasury stock
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-
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(1,868)
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(11,456)
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Net cash provided by (used in) financing activities
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441
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3,817
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(7,727)
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NET CHANGE IN CASH AND CASH EQUIVALENTS
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(3,780)
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(4,825)
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(18,196)
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CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
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3,780
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8,605
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26,801
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CASH AND CASH EQUIVALENTS AT END OF PERIOD
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$
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-
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$
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3,780
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$
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8,605
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See accompanying notes to the unconsolidated financial statements.
Notes to Unconsolidated Financial Statements
Note 1- The financial statements of VAALCO Energy, Inc. (the “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, 2015 and 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 Parent Company’s share of income (loss) from operations of the subsidiaries is reported as equity in subsidiary earnings, net of tax, in its unconsolidated statements of operations. 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.
The Parent Company and certain of its subsidiaries file a consolidated tax return for U.S. federal income taxes. The amount of income tax expense for the Parent Company financial statements represents the amount attributable to the U.S. federal and state tax jurisdictions. Income tax expense for foreign jurisdictions has been included in the applicable subsidiary’s results.
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