US oil firm Vaalco looking for multi-million pound acquisitions on London listing
The boss of US oil explorer Vaalco has said the company could quadruple its size through an acquisition as he announced a plan to list in London.
Vaalco, which produces 3,664 barrels of oil per day from an oil field in Gabon in West Africa, sees significant opportunities to expand through mergers or acquisitions, chief executive Cary Bounds told City PM
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It comes amid the firm plan to grow fivefold by 2025, it can triple its size organically, he added. The rest, or more, will come from acquisitions.
“We are focused on Africa where we can manage the above-ground risk,” Bounds said, referring to political and security risk.
It holds nearly $50m (£40m) in cash on the balance sheet and has plans to drill three development wells at its Gabon license. There are also plans for appraisal wells to test new reserves.
Bounds said the London listing will broaden Vaalco’s shareholder base, grow the company and raise capital for acquisitions, and look for analyst coverage.
“We’ve met with a few fund managers [in London] and they like our story,” he said.
The company also looked at Oslo, but decided London would be a better fit.
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The company has gone through a multi-year turnaround, Bounds told City PM In 2016 it was selling its oil for $28 a barrel and had $15m of debt. Since then it has cut costs to the bone and paid off its debt last year.
A boost in the oil market also helped the company, and in 2018 it signed a 10-year extension on its Gabon licence which could be further extended to 20 years.
Vaalco has a market value of around $120m on the New York Stock Exchange.
Main image credit: Vaalco