EXHIBIT 5.1


                       OPINION OF BUTLER & BINION, L.L.P.


                                  July 20, 1998


VAALCO Energy, Inc.
4600 Post Oak Place, Suite 309
Houston, Texas  77027

      RE:   REGISTRATION STATEMENT ON FORM S-3

Ladies and Gentlemen:

      We have examined Amendment No. 1 to the Registration Statement on Form S-3
to be filed by you with the Securities and Exchange Commission on or about July
29, 1998 (the "Registration Statement") in connection with the registration
under the Securities Act of 1933, as amended, of a total of 5,865,325 shares of
your Common Stock (the "Shares"), to be offered for sale by the Selling
Stockholders named therein. We understand that the shares are to be sold by the
Selling Stockholders to the public as described in the Registration Statement.
As legal counsel for VAALCO Energy, Inc., we have examined the proceedings
taken, and are familiar with the proceedings proposed to be taken, by you in
connection with the sale and issuance of the Shares.

      It is our opinion that, upon completion of the proceedings being taken or
contemplated by us, as your counsel, to be taken prior to the issuance of the
Shares and assuming the conversion of certain warrants in accordance with their
terms, the Shares, when sold in the manner described in the Registration
Statement and in accordance with the resolutions adopted by the Board of
Directors of the Company, will be legally and validly issued, fully paid and
nonassessable.

      We consent to the use of this opinion as an exhibit to the Registration
Statement, including the prospectus constituting a part thereof, and further
consent to the use of our name wherever it appears in the Registration Statement
and any amendments thereto.

                                    Very truly yours,

                                    /s/ Butler & Binion, L.L.P.
                                        BUTLER & BINION, L.L.P.