There are certain things that must happen. And clearly, there’s a time frame that we will be engaged with CNRL around of what is happening for that field to shut down and recommence. So there’s a commitment there that we are absolutely committed to based on the operator’s time schedule as soon as we can discuss that with them. When we look at our own operations with regard to the drilling program and the enhancement that we talked about and the opportunities in Gabon for early 2025 and the timing around the EG development. Again, as I said, we’ve looked at the EG development and said, well, it’s CapEx intensive. However, we’re looking at opportunities where we replace CapEx with lease opportunities given the tax environment in EG. And also, given that there’s a nice dovetail opportunity between drilling programs in Gabon and Equatorial Guinea, so we can, as I mentioned earlier, back to — I think it was Charlie that we may have a seven, up to seven well program opportunity in Gabon, we can tag that to potential 10-well opportunity and a much more exciting program for a rig operator if we dovetail the wells that we have planned in Equatoral Guinea.
So I do agree with you. Financially, we’re placed exceptionally well to execute all of these projects. But we’re not challenged to the extent that we see we’d have to delay any as a result of financial constraints, it’s really going to be on technical.
Operator: The next question is from Bill Dezellem with Tieton Capital.
Bill Dezellem: Congratulations on a great quarter. Would you please talk about the sourcing of the Svenska deal? And talk about if you would be willing to do an additional transaction in ’24 or if this is enough for now?
George Maxwell: I think obviously, additional transactions are difficult to comment on, Bill, as you’d appreciate. But we do look for opportunities where our natural experience and experience we have inside the company where we can get a deal structure that we see as immediately accretive and immediately adding production. So are we a company that’s going to look around for Bluewater exploration acreage. That’s not really — doesn’t fit our bill, but we will be looking at opportunities where we see production. Now do we have enough for now? Yes, we’ve got a lot of opportunities. And with the opportunities we’ve acquired to date, we’ve created considerable longevity to the production profile that VAALCO has. When you look at the source, I’m not quite sure what you’re referring to when it comes to source.
We’ve got lots of information around opportunities as they exist in West Africa and in other parts of the world. When we looked at this particular opportunity that we’ve managed to conclude subject to closing precedences, we actually looked at that some time ago when we were running another company called [indiscernible] and a lot of these deals, as some of you will be aware, in Africa can take a long time to percolate. And what really aided and abetted VAALCO’s opportunity to close this particular deal was our knowledge of the asset, which came from a number of years ago. and our speed at which we could do technical and financial due diligence. And that came from the knowledge base we have inside the company. So the real sources is inherent inside VAALCO’s DNA right now.
And we do apply that to areas where maybe some of our shareholders have never heard of before, but we know there’s accretive opportunities in those geographies.
Bill Dezellem: George, that’s very helpful. And one country that or area that we have heard of is Canada. And given the success that you have had there, would you be willing to make additional acquisitions in Canada? How are you thinking about that?
George Maxwell: That’s a good question. And I will respond exactly the same challenge that the Board gave the executive team over 12 months ago. They said, look, this is a nice business, a small business, how do you make it more viable? How do you make it more contributive to the overall corporate plan? How do you make it cash generative while still expanding the opportunities inside Canada? And that’s exactly what we’ve done. We have a 5-year plan that was put together by the Canadian management team. It’s an excellent plan, and I have to commend them for putting it together. In that plan, as we mentioned, we’re moving to longer lateral wells to enhance the economic returns that we get from our investment activities there. And in order to do that, we have to acquire land parcels that connect the disconnected land parcels that we have to allow the 3-mile laterals instead of a 1-mile lateral or we have to go into joint ventures where we see opportunities in connecting those land parcels where perhaps the existing incumbent does not.
And that’s exactly — some of this campaign we’re growing right now is based on that strategy, where we have went into agreements with partners and adjoining land parcels with us where they come in as a co-venture initially. And in one instance, they decided they didn’t want to and we’ve taken 100%. So I see opportunities to grow that strategy, but I don’t see it growing into 3x or 4x, 5x a footprint we have today. But we do have a very nice contributing business in Canada right now.
Operator: Next question is from Jamie Wilen with Wilen Management.
Jamie Wilen: Nice quarter on all fronts. A couple of cash questions. As you talk about the acquisition. You’re paying $60 million, but it will be $30 million to $40 million in cash by the time it closes. I assume that means that the operation is generating north of $5 million a quarter for you when it closes?
