| Schedule I - Parent Company Financial Statements |
SCHEDULE I — PARENT COMPANY FINANCIAL STATEMENTS
VAALCO ENERGY, INC.
CONDENSED 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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2016
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2015
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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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1,038
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$
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-
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Receivables:
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Other
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21
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-
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Prepayments and other
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1,696
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741
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Total current assets
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2,755
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741
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Property and equipment - successful efforts method:
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Equipment and other
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1,225
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1,222
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1,225
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1,222
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Accumulated depreciation, depletion and amortization
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(497)
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(428)
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Net property and equipment
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728
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794
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Other noncurrent assets:
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Restricted cash
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-
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1,582
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Investment in subsidiaries
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-
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26,781
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Total assets
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$
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3,483
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$
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29,898
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LIABILITIES AND EQUITY (DEFICIT)
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Current liabilities:
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Accounts payable
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$
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310
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$
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968
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Accrued liabilities and other
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1,024
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2,854
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Total current liabilities
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1,334
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3,822
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Losses in excess of investment in subsidiaries
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2,507
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-
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Total liabilities
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3,841
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3,822
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Commitments and contingencies
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VAALCO Energy Inc. shareholders’ equity (deficit):
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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, 66,109,565 and 66,041,338 shares issued,
$0.10 par value, 100,000,000 shares authorized
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6,611
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6,604
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Additional paid-in capital
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70,268
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69,118
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Less treasury stock, 7,555,095 and 7,514,169 shares at cost
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(37,933)
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(37,882)
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Accumulated deficit
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(39,304)
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(11,764)
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Total equity (deficit)
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(358)
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26,076
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Total liabilities and equity (deficit)
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$
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3,483
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$
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29,898
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See accompanying notes to the unconsolidated financial statements.
VAALCO ENERGY, INC.
STATEMENTS OF CONDENSED UNCONSOLIDATED OPERATIONS
(in thousand dollars)
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Year Ended December 31,
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2016
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2015
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2014
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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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244
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240
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94
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General and administrative expense
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7,935
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7,550
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6,740
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Shareholder matters
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(332)
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2,372
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-
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Total operating costs and expenses
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7,847
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10,162
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6,834
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Other operating income, net
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16
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-
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-
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Operating loss
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(7,831)
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(10,162)
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(6,834)
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Other income (expense):
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Interest income (expense), net
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(2)
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(181)
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33
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Other, net
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(1,985)
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(469)
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450
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Equity in subsidiary earnings (losses)
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(16,732)
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(146,495)
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(71,199)
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Total other income (expense)
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(18,719)
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(147,145)
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(70,716)
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Loss before income taxes
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(26,550)
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(157,307)
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(77,550)
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Income tax expense
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-
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(1,349)
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-
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Net loss
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$
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(26,550)
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$
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(158,656)
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$
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(77,550)
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VAALCO ENERGY, INC.
STATEMENTS OF CONDENSED UNCONSOLIDATED CASH FLOWS
(in thousands of dollars)
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Year Ended December 31,
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2016
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2015
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2014
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net loss
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$
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(26,550)
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$
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(158,656)
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$
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(77,550)
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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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244
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240
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94
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Deferred tax asset
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-
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1,349
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-
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Stock-based compensation
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192
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3,810
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3,322
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Equity in (earnings) losses from subsidiaries
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16,732
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146,495
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71,199
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Change in operating assets and liabilities:
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Other receivables
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(21)
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293
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(257)
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Prepayments and other
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(955)
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(236)
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(416)
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Accounts payable
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(658)
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753
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(34)
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Accrued liabilities and other
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(1,855)
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517
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187
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Net cash used in operating activities
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(12,871)
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(5,435)
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(3,455)
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CASH FLOWS FROM INVESTING ACTIVITIES
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Investment in subsidiaries
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-
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(7,044)
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(4,371)
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Return of investment in subsidiaries
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12,556
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-
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-
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Decrease in restricted cash
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1,582
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8,418
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-
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Property and equipment expenditures
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(178)
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(160)
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(816)
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Net cash provided by (used in) investing activities
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13,960
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1,214
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(5,187)
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CASH FLOWS FROM FINANCING ACTIVITIES
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Proceeds from the issuances of common stock
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-
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441
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5,685
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Purchases of treasury stock
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(51)
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-
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(1,868)
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Net cash provided by financing activities
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(51)
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441
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3,817
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NET CHANGE IN CASH AND CASH EQUIVALENTS
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1,038
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(3,780)
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(4,825)
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CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
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-
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3,780
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8,605
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CASH AND CASH EQUIVALENTS AT END OF YEAR
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$
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1,038
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$
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-
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$
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3,780
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See accompanying notes to the unconsolidated financial statements.
Notes to Condensed Unconsolidated Financial Statements
Note 1- The condensed 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 Term Loan, VAALCO Gabon S.A. could be restricted from transferring assets or making dividends, if the positive and negative covenants are not in compliance with the Term Loan. 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, 2016 and 2015.
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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