Quarterly report pursuant to Section 13 or 15(d)

ORGANIZATION AND ACCOUNTING POLICIES

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ORGANIZATION AND ACCOUNTING POLICIES
 9 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
ORGANIZATION AND ACCOUNTING POLICIES ORGANIZATION AND ACCOUNTING POLICIES
VAALCO Energy, Inc. (together with its consolidated subsidiaries “we”, “us”, “our”, “VAALCO” or the “Company”) is a Houston, Texas-based independent energy company engaged in the acquisition, exploration, development and production of crude oil, natural gas and natural gas liquids (“NGLs”) properties. As operator, the Company has production operations and conducts exploration activities in Gabon and Canada and holds interests in two production sharing contracts (“PSCs”) in Egypt and holds a non-operator interest in Cote d’Ivoire. The Company has opportunities to participate in development and exploration activities in Equatorial Guinea, West Africa and Nigeria.
These unaudited condensed consolidated financial statements (“Financial Statements”) reflect the opinion of management and all adjustments necessary for a fair presentation of results for the interim periods presented. All adjustments are of a normal recurring nature unless disclosed otherwise. Interim period results are not necessarily indicative of results expected for the full year.
These unaudited interim condensed consolidated financial statements have been prepared in accordance with rules of the Securities and Exchange Commission (“SEC”) and do not include all the information and disclosures required by accounting principles generally accepted in the United States (“GAAP”) for complete financial statements. They should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, which includes a summary of the significant accounting policies.
Allowance for credit losses and other – The Company estimates the current expected credit losses based primarily using either an aging analysis or discounted cash flow methodology that incorporates consideration of current and future conditions that could impact its counterparties’ credit quality and liquidity. Uncollectible receivables are written off when a settlement is reached for an amount that is less than the outstanding historical balance or when the Company has determined that the balance will not be collected.
The following table provides an analysis of the change of the aggregate credit loss allowance and other allowances.
Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
(in thousands)
Allowance for credit losses and other
Balance at beginning of period $ (12,604) $ (13,519) $ (6,029) $ (8,704)
Credit loss charges and other, net of receipts (69) (822) (5,222) (2,437)
Cumulative effect of adjustment upon adoption of ASU 2016-13 on January 1, 2023 —  —  —  (3,120)
Reversal of allowance resulting from the
   settlement of the related receivable		 11,200  —  11,200  — 
Foreign currency gain (loss) (425) 238  (1,847) 158 
Balance at end of period $ (1,898) $ (14,103) $ (1,898) $ (14,103)
Fair value of financial instruments
As of September 30, 2024
Balance Sheet Line Level 1 Level 2 Level 3 Total
(in thousands)
Assets
Derivative asset Prepayments and other $ —  $ 244  $ —  $ 244 
$ —  $ 244  $ —  $ 244 
Liabilities
Derivative liability Accrued liabilities and other $ —  $ 35  $ —  $ 35 
$ —  $ 35  $ —  $ 35 
As of December 31, 2023
Balance Sheet Line Level 1 Level 2 Level 3 Total
(in thousands)
Assets
Derivative asset Prepayments and other $ —  $ 403  $ —  $ 403 
$ —  $ 403  $ —  $ 403 
Liabilities
SARs liability Accrued liabilities and other $ —  $ 163  $ —  $ 163 
  $ —  $ 163  $ —  $ 163