ETAME FIELD OUTPUT IS INCREASED TO 21,000 BOPD
WITH THE COMPLETION OF ET 5H

REPORT ISSUED BY VAALCO, July 12, 2004 : VAALCO Energy Announces successful completion of Gabon Development Well.

HOUSTON - (PR Newswire) - August 23, 2004 - VAALCO Energy, Inc. (EGY -Amex). (the "Company") announced that it had successfully completed the ET-5H development well in the Etame Field offshore Gabon. Oil was flowing to the Floating Production Storage and Offloading facility (FPSO) at the rate of 6,400 barrels per day on a 48/64" choke.

Robert L. Gerry, III, Chairman &CEO stated, "VAALCO and its partners are extremely pleased to have our ET-5H well inline. This will be our fourth producing well in the Etame Field and our intent is to slowly raise the production level as the well cleans up. It is currently anticipated we should stabilize production over the next few weeks of the ET-5H well at around 6,500 to 7,500 barrels of oil per day thereby bringing total field production to over 21,000 barrels of oil per day.

VAALCO and its partners recently sold approximately 400,000 barrels of oils. Current inventory in the FPSO is 240,000 barrels with another sale approximately 500,000 barrels scheduled for September.

Partners in the consortium are VAALCO Energy, Inc. (28.07%), PanAfrican Energy Gabon Corp. (31.36%), Sasol Petroleum West Africa (Ltd.) (27.75%), Sojitz Etame Limited (2.98%), PetroEnergy Resources Corp. (2.34%) and Energy Africa Gabon (7.5%).