Vaalco Energy

Gabon, on Africa's Atlantic coast, is one of those remote places where it usually takes the deep pockets of an energy industry giant like Exxon Mobil (XOM) or Royal Dutch Shell (RDS'A) to discover and produce oil and natural gas. So what is Vaalco Energy, an upstart with just 20 full-time employees and annual revenue of $93 million, doing there drilling into the ocean floor? Pumping a lot of cash.

Executives at the Houston-based outfit figured the odds of striking it rich were better in foreign territory than at home, where hundreds of other wildcatters were hustling for a dwindling number of prospects. The timing of its African foray could hardly have been better. With oil prices around $70 a barrel, reserves valued at $101.6 million in 2003 are now worth 60% more. Says Chief Executive Robert Gerry III: "For us there's a lot less competition and a lot more opportunity offshore."The Gabon oil has fueled phenomenal growth for the energy outfit. Over the past three years, its revenues have increased more than eightfold, while profits are up 75 times, to $33.7 million, from just $445,000 in 2002. That not only put Vaalco on BusinessWeek's Hot Growth list for the first time, it allowed it to debut at No. 1.