VAALCO Energy, Inc. (NYSE:EGY)

CAPS Rating: 5 out of 5

An independent energy company principally engaged in the acquisition, exploration, development and production of crude oil and natural gas.

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Member Avatar pchop12316 (72.29) Submitted: 12/19/2014 11:02:26 AM : Outperform Start Price: $4.72 EGY Score: +6.58

toe in the water

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Member Avatar personaltrader (< 20) Submitted: 12/12/2014 4:06:37 PM : Outperform Start Price: $4.54 EGY Score: +8.77

Here is an analysis of the company over the next 3 years, with average sale price of $65/barrel (forecast estimates). Please note, stocks and commodities, such as oil, are rather volatile. However, the EV/Earnings multiple on this company is ridiculous. Basically, the low end reserves for this company are 10 MBOE (Million Barrels); the high end is 20. Based on todays call, sweetening is likely necessary for a significant portion of the oil. Unsweetened, it costs them $35 to pull a barrel out. Sweetening raises that to $50-$55. As indicated on the call, event at prevailing prices, the unsweetened crude (no H2S) that they are pulling out is coming at a reasonable margin per barrel. Over the next 3 years, worst case projection would be only pulling 10 million barrels out and having to sweeten it all. Being conservative, let's have oil be $65/barrel and not even take into account that, as supply corrects, prices will likely near triple digits again. This would yield a PROFIT of $150M over 3 years, or $50M/year. Due to their extremely good cash position, their EV is only $144M, giving them an EV/Profit (or EBITDA, whatever you want to call it) of 2.88. This makes them a prime takeover target.

If they pull out 20 million barrels, that multiple drops to 1.44. That is ridiculous value.

Sweetening will not come online until 2017, but they are still pulling out a few million barrels of sweet (no H2S) oil/month. This will continue to give us healthy earnings until sweetening comes online.

They have been prudent and a lot of other oil companies haven't. They will be able to purchase the services that they need at a discount to projects due to other firms being HIGHLY leveraged and going under. Although this will definitely be a bumpy ride, they are in an excellent position being a low-cost supplier of oil with significant financial and petroleum reserves relative to market size.

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Member Avatar EnigmaDude (87.06) Submitted: 12/10/2014 11:42:18 AM : Outperform Start Price: $4.66 EGY Score: +6.86

More opportunities in the energy sector.

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Member Avatar JackDanny (72.80) Submitted: 8/21/2014 4:53:18 PM : Outperform Start Price: $9.02 EGY Score: -47.73

Passed a rigorous personal screen. In at $8.60. Expecting to hold this long term.

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Member Avatar nrandleman (36.03) Submitted: 3/20/2013 2:43:53 PM : Outperform Start Price: $7.83 EGY Score: -68.25

magic formula pick that's a 5 star CAP rating

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Member Avatar pipeblaster (< 20) Submitted: 3/16/2013 7:01:43 PM : Outperform Start Price: $7.48 EGY Score: -64.95

buying on a dip short term bounce sell

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Member Avatar Brettmj (95.57) Submitted: 3/13/2013 6:18:01 AM : Outperform Start Price: $8.05 EGY Score: -73.10

Value, growth. Didnt even cost average into this one, i just backed up the truck last week and stocked up

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Member Avatar scrubs62074 (71.60) Submitted: 2/20/2013 10:59:26 AM : Outperform Start Price: $8.45 EGY Score: -75.63

Bullish MACD crossover on 02/20/13

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Member Avatar Nasahockeykid (44.20) Submitted: 1/31/2013 12:01:32 PM : Outperform Start Price: $8.79 EGY Score: -80.08

This stock is trading at a 2014 forward p/e of 5. Seems cheap... really cheap

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Member Avatar TheAccidentOf85 (44.79) Submitted: 5/15/2012 12:40:43 PM : Outperform Start Price: $9.19 EGY Score: -92.31

Reason this is a MFI pick is because it has phenomenal earnings BEFORE taxes. All of their operating income right now is from Gabon which has a tax rate of >50%. They have negative profits in all other countries giving them an effective tax rate of >60%. They produced less in Gabon this year compared to last year because the wells are maturing. This stock is cheap and I think it stays cheap for a while. Growth needs to happen outside Gabon for this stock to take off. Buy the dips and sell the rips on this one for a bit. Be sure to read the financials when there is movement in this stock to see if there is growth potential, or if their asset in Gabon is dwindling.

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Member Avatar M0NEYKLIP (< 20) Submitted: 8/25/2011 7:39:00 PM : Outperform Start Price: $5.85 EGY Score: -92.36

This baby's growing before our very eyes. Target $10 EASY

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Member Avatar cibient (< 20) Submitted: 6/20/2011 11:54:12 AM : Outperform Start Price: $5.32 EGY Score: -203.79

MFI stats from MagicDiligence.com:

Results for ticker 'EGY' (VAALCO Energy, Inc.):
Earnings Yield: 40.6%
MFI Return on Capital: 74.3%

MagicDiligence Research for 'EGY':

Research Available for EGY! (full membership required - upgrade here)

Instant Diligence:

The Earnings Yield of 40.6% is Suspiciously High (needs additional research).

The MFI Return on Capital of 74.3% is High.

Near-term Financial Health appears to be Excellent. The current ratio is 9.98.

Calculations:

(for quarter ended 2011-03-31)
Market Cap = Stock_Price * Shares
= 5.66 * 58.26
= 329.74

Excess Cash = Cash - MAX(0; (Current Liabilities - Current Assets + Cash))
= 104.00 - MAX(0; (14.70 - 146.77 + 104.00))
= 104.00

Enterprise Value = Market Cap + Total Debt - Excess Cash
= 329.74 + 0.00 - 104.00
= 225.75

MFI Invested Capital = Total Assets - Goodwill - Intangibles - Current Liabilities + Short Term Debt - Excess Cash
= 241.93 - 0.00 - 0.00 - 14.70 + 0.00 - 104.00
= 123.24

Earnings Yield = Operating Earnings / Enterprise Value
= 91.59 / 225.75
= 0.406 (40.6%)

MFI Return on Capital = Operating Earnings / MFI Invested Capital
= 91.59 / 123.24
= 0.743 (74.3%)

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Member Avatar pmony5 (< 20) Submitted: 5/3/2011 7:45:02 AM : Outperform Start Price: $6.86 EGY Score: -78.43

EGY at 6 to 7X's 2011 EPS coupled with NO debt & close to 100 Million in Cash & will generate 70 million+ in Cash from operations this year fully funding their expansion/diversification plans seems like EGY is dirt cheap considering small cap oil peers trading at 20X's or more.

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Member Avatar jcjet (38.66) Submitted: 7/11/2010 6:53:30 PM : Outperform Start Price: $5.00 EGY Score: -153.49

This Company has great management

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Member Avatar lola99999 (< 20) Submitted: 12/16/2009 10:38:44 PM : Outperform Start Price: $4.74 EGY Score: -80.20

EGY

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Member Avatar area51xp (< 20) Submitted: 9/2/2009 1:12:44 PM : Outperform Start Price: $4.42 EGY Score: -93.06

crude oil and natural gas.. everyone needs it in america.

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Member Avatar michaeltbryant (< 20) Submitted: 8/20/2009 12:27:36 AM : Outperform Start Price: $5.23 EGY Score: -110.93

Oil going up.

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Member Avatar marketmomentum (< 20) Submitted: 8/10/2009 6:44:41 PM : Outperform Start Price: $4.94 EGY Score: -104.40

VAALCO VAALCO!!

muy dinero!

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Member Avatar cheatcountry (< 20) Submitted: 7/2/2009 3:09:48 AM : Outperform Start Price: $4.19 EGY Score: -107.43

low debt and low price vs historic prices

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Member Avatar becon800 (99.44) Submitted: 6/20/2009 3:40:25 PM : Outperform Start Price: $5.24 EGY Score: -198.52

EGY never stays below $4 for long, and when it does dip below, it bounces back quickly. Oil has gone up in the last quarter, so look for increased revs and earnings. Sell at $4.50 to $4.60. Posted 6/20/09

becon800

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