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VAALCO (EGY),TransGlobe to Merge in $307 Million Transaction

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The Houston, TX-based independent energy company, VAALCO Energy Inc. (EGY - Free Report) , and TransGlobe Energy Corp. have jointly entered into a definitive agreement, per which VAALCO agreed to acquire all the outstanding common shares of TransGlobe in a stock-for-stock strategic business combination arrangement valued at around $307 million.

The deal, which will lead to the creation of an African-focused exploration and production firm, will see VAALCO stockholders controlling a 54.5% stake and TransGlobe shareholders owning about 45.5% of the combined company.

The combined entity will own assets at established basins in Egypt, Gabon, Equatorial Guinea and Canada, forming a bigger and more diversified reserve and production base. A combined 2022 midpoint production guidance of 19,100 boe/d is projected on a net revenue interest (96% oil and liquids) basis across Egypt, Gabon and Canada and 24,400 boe/d on a working interest basis.

EGY’s chief executive officer, George Maxwell, will continue to lead as the CEO and Ron Bain as the chief financial officer of the combined company, with the executive team of TransGlobe remaining with the business through a three-to-six-month transition period.

The merger, which is expected to close in the second half of 2022, has been approved by the board of directors of both companies.

VAALCO ENERGY is an independent energy company principally engaged in the acquisition, exploration, development and production of crude oil and natural gas. The company is organized in Delaware with operations primarily in the Etame Marin block, offshore Gabon.

VAALCO currently sports a Zacks Rank #1 (Strong Buy). Investors interested in the energy space might also look at some other similar-ranked stocks — Murphy USA (MUSA - Free Report) , BP (BP - Free Report) and Vermilion Energy (VET - Free Report) . You can see the complete list of today’s Zacks #1 Rank stocks here.

Murphy USA beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being 49.1%.

The Zacks Consensus Estimate for MUSA’s 2022 earnings per share (EPS) has been revised upward by about 4.3% over the past 60 days from $16.82 to $17.54.

The Zacks Consensus Estimate for BP’s 2022 earnings is pegged at $7.48 per share, which is an increase of about 95.8% from the year-ago earnings of $3.82.

BP beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 19.90%.

The Zacks Consensus Estimate for Vermilion’s 2022 earnings stands at $7.17 per share, which is an increase of approximately 184.5% from the year-ago earnings of $2.52.

The Zacks Consensus Estimate for VET’s 2022 EPS has been revised from $6.66 to $7.17, up about 7.6%, in the past 60 days.


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