Why Vaalco Energy's Shares Dropped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of oil & gas company Vaalco Energy (NYSE: EGY  ) fell 13% today after reporting earnings.

So what: Revenue fell 21% from a year ago, to $53.6 million, and the company went from an $8.7 million profit to an $18.9 million loss. On an adjusted basis, the company lost $0.20 per share, when analysts expected a $0.32 per share profit.  

Now what: The biggest problem was the drop-off in oil sales, which fell 20% from a year ago. The company has some interesting developments in the pipeline, but until they actually start producing revenue and profits, this is a risky stock. I'm going to stay away for now and see how developments go this year.

Interested in more info on Vaalco Energy? Add it to your watchlist by clicking here.


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  • Report this Comment On March 16, 2013, at 4:49 AM, EllenBrandtPhD wrote:

    And some will have noticed that all of a sudden, the Ask on HNR popped up a whopping three dollars, despite very quiet trading on Friday.

    Even aside from Venezuela - and we all know, do we not, that another bid - or multiple bids - there is just a matter of being patient? - EGY and others now pretty much have to ratchet up their Object of Desire quotient for Harvest's promising Gabon assets.

    Note that despite the union problems, Gabon is hosting a very large - and probably very well-attended - African Energy conference in about two weeks. You can bet your booties that deals will be announced after this conference.

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