11 Best Fundamentally Strong Penny Stocks to Buy Now

7. VAALCO Energy, Inc. (NYSE:EGY)

Number of Hedge Fund Holders: 16

VAALCO Energy, Inc. (NYSE:EGY) is an independent energy company engaged in the exploration, development, and production of crude oil and natural gas. The company’s primary operations are located offshore West Africa, with a focus on the Etame Marin block offshore Gabon, where it has operated for over two decades. EGY also holds assets in Equatorial Guinea and has expanded through mergers and acquisitions to diversify its portfolio. Its production is predominantly oil, and the company emphasizes low-cost, high-margin projects. The company operates under production-sharing contracts and licenses, working with host governments and joint venture partners.

VAALCO Energy, Inc. (NYSE:EGY) achieved record operational and financial results in 2024, including increased adjusted EBITDAX of $303 million and record production of nearly 25,000 working interest barrels equivalent per day. The company’s SEC proved reserves grew 57% YoY to 45 million BOE, while 2P CPR reserves increased to 96.1 million BOE. EGY completed the Svenska acquisition in April 2024, which has already seen a 1.8x payback on the initial investment by year-end 2024. The company is executing significant development projects across its portfolio, including a drilling campaign in Gabon starting in Q3 2025, an FPSO refurbishment project in Cote d’Ivoire, and additional drilling in Egypt and Canada.

VAALCO Energy, Inc. (NYSE:EGY) expects production and sales to be lower in 2025 due to the Cote d’Ivoire field shutdown but anticipates a material increase in 2026 when the FPSO returns to service and the full impact of the Gabon drilling campaign is realized. The company has secured a new revolving credit facility with an initial commitment of $190 million, expandable to $300 million, to support its development capital programs. EGY remains committed to returning cash to shareholders, having returned $83 million through dividends and share buybacks over the past two years. With 16 hedge funds owning the stock, EGY is one of the best fundamental stocks to buy now.