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Crude may be soaring, but some of the energy stocks are cheap. VAALCO Energy, Inc. (EGY - Snapshot Report) is an E&P which is trading at just 8.6x forward estimates. This Zacks #1 Rank (strong buy) is also expected to generate double digit earnings growth in 2011.

VAALCO is a Houston-based explorer and producer of crude oil with a market cap of 394 million.

It has properties in Gabon and Angola, West Africa as well as the United States.

Expansion in the Bakken

The company has been acquiring acreage in Montana over the past several months.

On May 31, it purchased 70% working interest in 5,214 acres in Sheridan County, Montana from a privately held company. The acreage adjoins the Flat Lake Field which produces from the Middle Bakken formation.

VAALCO believes the acreage has the potential to add significant reserves and cash flow. Financial terms were not disclosed.

On July 18, the company signed a letter of intent with Magellan Petroleum Corp. to acquire and develop a 65% working interest in about 23,000 net mineral acres of oil, gas and mineral leases covering the Bakken and deeper formations in the East Poplar Unit and the Northwest Poplar Field in Montana.

First Quarter Revenue Surged

On May 9, VAALCO reported its first quarter results and saw revenue jump 56% to $46.8 million from $30 million in the year ago period.

The quarter was boosted by both an increase in production as well as much higher oil prices.

VAALCO sold 450,800 net barrels of oil at an average price of $103.76 per barrel in the quarter compared to 403,200 net barrels at an average price of $74.33 per barrel in the first quarter of 2010.

The company surprised on the Zacks Consensus Estimate by 11.8%. Earnings per share were 19 cents compared to the consensus of 17 cents. It made just 11 cents in the first quarter of last year.

Cash Rich

It pays to have cash in the exploration game.

VAALCO had unrestricted cash of $92.6 million at the end of the first quarter and NO debt.

Zacks Consensus Estimates Rise

Oil prices are still high so full year estimates remain elevated.

The 2011 Zacks Consensus Estimate has moved up 5 cents to 80 cents per share in the last month. That is earnings growth of 23.1%.

The Stock Is Cheap

Shares have been rallying since the end of June but still have very attractive valuations.

Not only is the P/E very low, at just 8.6, which is well under its peers which are trading at 43x, but it has a price-to-book ratio of 1.9.

A P/B under 3.0 is usually considered a "value."

Additionally, the company has a solid 1-year return on equity (ROE) of 22.2%.

The small explorers will rise and fall with the price of crude. But with crude once again at $100 a barrel, and earnings expected to grow by the double digits, VAALCO makes for a very attractive value stock.

Tracey Ryniec is the Value Stock Strategist for She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her at