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 independent oil and gas company Vaalco Energy (NYSE: EGY  ) dropped as much as 11% today after the company released earnings.

So what: First quarter revenue fell 3%, to $44.1 million, and the company reported net income of $7.2 million, or $0.12 per share. The problem is that analysts were expecting earnings of $0.25 per share, so Vaalco fell well short of expectations. 

Now what: The earnings numbers aren't terribly strong, but the future is what investors should be worried about. Management is proceeding to get a partner in Angola approved, and the Block P award off the coast of Equatorial Guinea is expected to have exploratory wells drilled either this year or next. As these projects move forward, I think revenue and earnings will increase, which will drive the stock higher after today's discount.

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


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2424231, ~/Articles/ArticleHandler.aspx, 4/20/2014 1:46:13 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement