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.

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