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Acquisitions And Dispositions | 12 Months Ended
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Dec. 31, 2017
Acquisitions And Dispositions [Abstract] |
Acquisitions And Dispositions | 5. ACQUISITIONS AND DISPOSITIONS Sojitz Acquisition On November 2 2, 2016, we closed on the purchase of an additional 2.98% working interest (3.23% p articipating interest) in the Etame Marin block located offshore the Republic of Gabon from Sojitz Etame Limited (“Sojitz”), which represents all interest owned by Sojitz in the concession. The acquisition ha d an effective date of August 1, 2016 and was funded with cash on hand. The following amounts represent the fair value of identifiable assets acquired and liabilities assumed in the Sojitz acquisition. ﻿
﻿ |  |
﻿ | November 22, 2016
﻿ | (in thousands)
﻿Assets acquired: |  |
﻿Wells, platforms and other production facilities | $ | 5,754
﻿Equipment and other |  | 684
﻿Value added tax and other receivables |  | 297
﻿Abandonment funding |  | 546
﻿Accounts receivable - trade |  | 888
﻿Prepayments and other |  | 220
﻿Liabilities assumed: |  |
﻿Asset retirement obligations |  | (1,731)
﻿Accrued liabilities and other |  | (747)
﻿Total identifiable net assets and consideration transferred | $ | 5,911
All assets and liabilities associated with Sojitz’s interest in Et ame Marin b lock, including oil and gas properties, asset retirement obligations and working capital items were recorded at their fair value. In determining the fair value of the oil and gas properties, we prepared estimates of oil and natural gas reserves. We used estimated future prices to apply to the estimated reserve quantities acquired and the estimated future operating and development costs to arrive at the estimates of future net revenues. The valuations to derive the purchase price included the use of both proved and unproved categories of reserves, expectation for timing and amount of future development and operating costs, projections of future rates of production, expected recovery rates, and risk adjusted discount rates. Other significant estimates were used by management to calculate fair value of assets acquired and liabilities assumed. These assumptions represent Level 3 inputs, as further discussed in Note 3. The actual impact of the Sojitz Acquisition was an increase to “Total revenues” in the consolidated statement of operations of $0.2 million for the year ended December 31, 2016 and a minimal decrease to “Net loss” in the consolidated statement of operations for the year ended December 31, 2016. The unaudited pro forma results presented below have been prepared to give the effect of the acquisition discussed above on our results of operations for the years ended December 31, 2016 and 2015 as if it had been consummated on January 1, 2015. The unaudited pro forma results do not purport to represent what our actual results of operations would have been if the acquisition had been completed on such date or to project our results of operations for any future date or period. ﻿
﻿ |  |  |  |  |
﻿ | Year Ended December 31,
﻿ | 2016 |  | 2015
﻿ | (in thousands)
﻿Pro forma (unaudited) |  |  |  |  |
﻿Oil and natural gas sales | $ | 65,427 |  | $ | 88,940
﻿Operating loss |  | (4,295) |  |  | (101,494)
﻿Loss from continuing operations |  | (19,232) |  |  | (120,546)
﻿Basic and diluted net loss per share: |  |  |  |  |
﻿Loss from continuing operations | $ | (0.33) |  | $ | (2.07)
﻿Net loss | $ | (0.47) |  | $ | (2.72)
﻿ Sale of Certain U.S. Properties During 2015, we completed the sale of our interests in various wells in Texas and Alabama for $0.4 million resulting in a minimal loss. In December 2016, we completed the sale of our interests in two wells in the Hefley field in North Texas for $0.8 million resulting in a minimal loss. In April 2017, we completed the sale of our interests in the East Poplar Dome field in Montana for $0.3 million, resulting in a gain of approximately $0.3 million reported on the line “Other operating income (expense), net” in our results of operations for the year ended December 31, 2017. Discontinued Operations - Angola In November 2006, we signed a production sharing contract for Block 5 offshore Angola (“PSA”). The four year primary term, referred to as the Initial Exploration Phase (“IEP”), with an optional three year extension, awarded us exploration rights to 1.4 million acres offshore central Angola, with a commitment to drill two exploratory wells. The IEP was extended on two occasions to run until December 1, 2014. In October 2014, we entered into the Subsequent Exploration Phase (“SEP”) which extended the exploration period to November 30, 2017 and required us and the co-participating interest owner, the Angolan national oil company, Sonangol P&P, to drill two additional exploration wells. Our working interest is 40%, and it carries Sonangol P&P, for 10% of the work program. On September 30, 2016, we notified Sonangol P&P that we were withdrawing from the joint operating agreement effective October 31, 2016. On November 30, 2016, we notified the national concessionaire, Sonangol E.P., that we were withdrawing from the PSA. Further to the decision to withdraw from Angola, we have taken actions to close our office in Angola and reduce future activities in Angola. As a result of this strategic shift, we classified all the related assets and liabilities as those of discontinued operations in the condensed consolidated balance sheets. The operating results of the Angola segment have been classified as discontinued operations for all periods presented in our condensed consolidated statements of operations. We segregated the cash flows attributable to the Angola segment from the cash flows from continuing operations for all periods presented in our condensed consolidated statements of cash flows. The following tables summarize selected financial information related to the Angola segment assets and liabilities as of December 31, 2017 and 2016 and its results of operations for the years ended December 31, 2017, 2016 and 2015. Summarized Results of Discontinued Operations
﻿ |  |  |  |  |  |  |  |
﻿ | Year Ended December 31,
﻿ | 2017 |  | 2016 |  | 2015
﻿ | (in thousands)
﻿Operating costs and expenses: |  |  |  |  |  |  |  |
﻿Exploration expense | $ | — |  | $ | 15,137 |  | $ | 36,044
﻿Depreciation, depletion and amortization |  | — |  |  | 9 |  |  | 12
﻿General and administrative expense |  | 615 |  |  | 1,269 |  |  | 2,535
﻿Bad debt recovery and other |  | — |  |  | (7,629) |  |  | —
﻿Total operating costs, expenses and (recovery) |  | 615 |  |  | 8,786 |  |  | 38,591
﻿Other operating loss, net |  | — |  |  | (172) |  |  | (1,856)
﻿Operating loss |  | (615) |  |  | (8,958) |  |  | (40,447)
﻿Other income (expense): |  |  |  |  |  |  |  |
﻿Interest income |  | — |  |  | 3,201 |  |  | —
﻿Other, net |  | (3) |  |  | 552 |  |  | 2,345
﻿Total other income (expense) |  | (3) |  |  | 3,753 |  |  | 2,345
﻿Loss from discontinued operations before income taxes |  | (618) |  |  | (5,205) |  |  | (38,102)
﻿Income tax expense |  | 3 |  |  | 3,078 |  |  | —
﻿Loss from discontinued operations | $ | (621) |  | $ | (8,283) |  | $ | (38,102)
﻿ Assets and Liabilities Attributable to Discontinued Operations
﻿ |  |  |  |  |  |
﻿ |  | December 31,
﻿ |  | 2017 |  | 2016
﻿ |  | (in thousands)
﻿ASSETS |  |  |  |  |  |
﻿Accounts with partners |  | $ | 2,836 |  | $ | 2,139
﻿Total current assets |  |  | 2,836 |  |  | 2,139
﻿Total assets |  | $ | 2,836 |  | $ | 2,139
﻿ |  |  |  |  |  |
﻿LIABILITIES |  |  |  |  |  |
﻿Current liabilities: |  |  |  |  |  |
﻿Accounts payable |  | $ | 158 |  | $ | 77
﻿Foreign taxes payable |  |  | — |  |  | 3,078
﻿Accrued liabilities and other |  |  | 15,189 |  |  | 15,297
﻿Total current liabilities |  |  | 15,347 |  |  | 18,452
﻿Total liabilities |  | $ | 15,347 |  | $ | 18,452
Drilling Obligation Under the PSA, we and the other participating interest owner, Sonangol P&P, were obligated to perform exploration activities that included specified seismic activities and drilling a specified number of wells during each of the exploration phases identified in the PSA. The specified seismic activities were completed, and one well, the Kindele #1 well, was drilled in 2015. The PSA provides a stipulated payment of $10.0 million for each exploration well for which a drilling obligation remains under the terms of the PSA, of which our participating interest share would be $5.0 million per well. We have reflected an accrual of $15.0 million for a potential payment as of December 31, 2017 and 2016, respectively, which represents what we believe to be the maximum potential amount attributable to VAALCO Angola’s interest under the PSA. Other Matters – Partner Receivable The government-assigned working interest partner was delinquent in paying their share of the costs several times in 2009 and was removed from the production sharing contract in 2010 by a governmental decree. Efforts to collect from the defa ulted partner were abandoned in 2012. The available 40% working interest in Block 5, offshore Angola was assigned to Sonangol P&P e ffective on January 1, 2014. We invoiced Sonangol P&P for the unpaid delinquent amounts from the defaulted partner plus the amounts incu rred during the period prior to assignment of the working interest totaling $7.6 million plus interest in April 2014. Because this amoun t was not paid and Sonangol P&P was slow in paying monthly cash call invoices since their assignment, we placed Sonangol P&P in default in the first quarter of 2015. On March 14, 2016, we received a $19.0 million payment from Sonangol P&P for the full amount o wed us as of December 31, 2015, including the $7.6 million of pre-assignment costs and default interest of $3.2 million. The $7.6 million re covery is reflected in the “Bad debt expense and other” line item in our summarized results of discontinued operations. Default interest of $3.2 million is shown in the “Interest income” line item in our summarized results of discontinued operations.

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