Vaalco completes Phase I of Etame 5H development well, begins new well off Gabon

Vaalco Energy Inc., Houston, has cased the vertical portion of the Etame 5H development oil well off Gabon and will drill the horizontal portion following installation of flowlines and umbilicals to tie in the well and the next development well, Etame 6H, to the floating production, storage, and offloading facility moored at the field. Etame 6H will be drilled early in 2005.

June 18, 2004

By OGJ editors

HOUSTON< June 17 -- Vaalco Energy Inc., Houston, has cased the vertical portion of the Etame 5H development oil well off Gabon and will drill the horizontal portion following installation of flowlines and umbilicals to tie in the well and the next development well, Etame 6H, to the floating production, storage, and offloading facility moored at the field. Etame 6H will be drilled early in 2005.

When Etame 5H's lateral is connected, the well can commence production to the FPSO. First production, expected in August, is expected to increase Etame field production to more than 20,000 b/d of oil.

Meanwhile the company is drilling a new exploration well, Avouma No. 1, offshore 17 km south of the main Etame field. It is the second of two wells required under Gabon's production-sharing contract.

Vaalco's partners are Pan-Ocean Energy Corp. Ltd., St. Helier, Jersey; Sasol Petroleum International (Pty.) Ltd., Johannesburg; Energy Resources Japan Etame (Gabon) Ltd.; PetroEnergy Resources Corp.; and Energy Africa Ltd., Cape Town.