(Alliance News) - Vaalco Energy Inc on Monday said its development plan for the Venus-Block P production sharing contract has been approved by the government of Equatorial Guinea.
The Canada and Africa-focused hydrocarbon explorer said the production sharing contract will allow for a development and production period of 25 years.
Vaalco has an 80% interest in the project.
It targets first oil in 2026, with 23.1 million barrels of oil of 2P CPR gross reserves. It also expects production from the field to reach about 15,000 gross barrels of oil per day upon completion of the two development wells and injector well.
Chief Executive Officer George Maxwell said: "With final documents for Block P signed, we are very excited to proceed with our plans to develop, operate, and begin producing from the discovery in Block P offshore Equatorial Guinea over the next few years. We will now proceed with our Front-End Engineering Design ("FEED") study.
"We anticipate the completion of the FEED study will lead to an economic Final Investment Decision or "FID" which will enable the development of the Venus POD."
He continued: "Over the past two years, we have greatly diversified our portfolio, which has expanded our ability to generate operational cash flow, all while growing our cash position and remaining bank-debt free.
"The Block P development will further enhance our portfolio by adding yet another strong producing asset to Vaalco's global portfolio. Vaalco is well-placed to execute our projects in our enhanced portfolio, and has a proven operating track record for a development of this type."
Shares in Vaalco were down 3.3% at 445.00 pence each in London on Monday morning.
By Sabrina Penty, Alliance News reporter
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Vaalco Energy (EGY)