VAALCO Energy, Inc. issued an operational update on its oil and gas exploration and development activities at its acreage located offshore Africa in Gabon. The company is focused on the Etame Field, where it has several prospects.

VAALCO Energy, Inc. reported that the company has started oil and gas production from a development well located off the coast of Africa. VAALCO Energy, Inc. said that the ETBSM-2H well located in the South Tchibala field started production on November 26, 2010, and is currently producing 3,800 barrels per day of oil.

VAALCO Energy, Inc. originally encountered problems during the completion process on the well but has corrected those problems and installed pumps to enable production. The company said that it has moved a contracted offshore drilling rig to the Omangou prospect, and has begun drilling the ETOMG-10 well, a new exploration well in that prospect.

VAALCO Energy, Inc. is also working on building the subsea infrastructure to enable additional production at the ET-7H well. The company expects to complete the infrastructure and start up production by the end of 2010.

VAALCO Energy, Inc. has a 28.7% interest in the Etame Field. The company’s partners include Addax Petroleum Etame Inc. and Sasol Petroleum Etame Limited.

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