UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

Filed by the Registrant x                            Filed by a Party other than the Registrant ¨

Check the appropriate box:

VAALCO ENERGY, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

VAALCO ENERGY MAILS LETTER TO STOCKHOLDERS

Says Public Records of Nanes Delorme Partners and Pilatus Energy Are Rife with Conflicts and Scandal

Urges Stockholders to Protect Their Investment and Support VAALCO’s Board by Voting the

WHITE Proxy Card Today

HOUSTON, TEXAS – May 15, 2008 – VAALCO Energy, Inc. (NYSE: EGY) today sent the following letter to stockholders in connection with the Annual Meeting of Stockholders on June 4, 2008.

VAALCO’s Board unanimously recommends stockholders vote “FOR” the Company’s three highly qualified and experienced directors – W. Russell Scheirman, Arne R. Nielsen and William S. Farish – by signing, dating and returning the WHITE proxy card today.

“We are successfully executing our strategy, driving superior stock price performance and expect 2008 to be a break-out year for VAALCO,” said Robert L. Gerry, III, VAALCO’s Chairman and CEO. “However, we are deeply concerned that Nanes Delorme Partners’ and Pilatus Energy’s short-term, self-serving agenda would threaten the Company and our record of value creation. We urge VAALCO stockholders to protect their investment by voting on the white proxy card today and discarding any materials they receive from Nanes Delorme Partners and Pilatus Energy.”

The full text of VAALCO’s letter follows:

May 15, 2008

Dear Fellow Stockholder:

The future value of your VAALCO investment is at risk because of Nanes Delorme Partners, a New York based hedge fund, and its recently revealed secret partner, Pilatus Energy. Should they succeed in their attempt to install their own paid, hand-picked representatives onto VAALCO’s Board, Nanes Delorme Partners and Pilatus Energy say they would pursue “mergers and/or the sale of the entire Company.”

You should know – We have confidence in our business plan and regularly evaluate the opportunities available to the Company. As part of these efforts, VAALCO’s Board, together with independent financial and legal advisers, reviewed the Company’s strategic alternatives earlier this year, including a potential merger or sale. This process affirmed the Board’s belief that a sale of VAALCO at this time would prevent stockholders from realizing the value that lies within VAALCO’s exploration portfolio.

To help ensure that you realize the value you deserve, VAALCO’s Board unanimously recommends that stockholders vote FOR the Board’s director nominees – W. Russell Scheirman, Arne R. Nielsen and William S. Farish – and sign, date and return the enclosed WHITE proxy card today.

WE STAND BY OUR RECORD OF ACCOMPLISHMENTS

VAALCO’s Board and management team are active, engaged and successfully executing on the Company’s strategy. Nanes Delorme Partners’ claim to the contrary simply ignores the facts:

We are confident in our ability to build on this strong operating and financial track record. We believe 2008 will be a break-out year for your company and for the value of your VAALCO shares.

THE PUBLIC RECORDS OF NANES DELORME PARTNERS AND PILATUS ENERGY ARE RIFE WITH CONFLICTS AND SCANDAL

Nanes Delorme Partners and Pilatus Energy appear to be concealing what the public record makes clear – Nanes Delorme Partners and Pilatus Energy are conflicted and their ethics tainted by a scandal involving corruption, kickbacks, fraud and embezzlement. You deserve to know the following:

ASK YOURSELF: If this information is available simply from the public record, what else about Nanes Delorme Partners and Pilatus Energy has yet to be revealed?

NANES DELORME PARTNERS’ SELECTIVE AND DISTORTED STATEMENTS

In its proxy materials, Nanes Delorme Partners has made a number of misleading assertions. Their deliberate repetition of these claims, despite what they now know to be true, raises further questions in our view about their ethical standards.

The facts: One of Nanes Delorme Partners’ nominees, Julien Balkany, is only 27-years old, so we question how much oil and gas experience he has had. Tellingly, Nanes Delorme Partners also states that if its nominees are elected they will propose closing VAALCO’s Aberdeen, Scotland office. This demonstrates their lack of understanding of the Company and the industry since Aberdeen is where all of the drilling professionals for VAALCO’s operations are based and is an established international center for drilling expertise.

Collectively, your Board already has more than 100 years of experience in the oil and gas industry, including international exploration and development expertise. Your current Board members also have, and VAALCO has succeeded based on, other complementary skills and experience, including geology and geophysics, finance and accounting, investment banking and tax law.

The facts: VAALCO’s stock has unequivocally outperformed its peers over the last six month, one, three and five year periods. The charts we’ve published in our May 8^th letter to stockholders prove VAALCO’s strong track record.

Nanes Delorme Partners’ financial analysis falls well-short of what you should expect for your Board. As a self-proclaimed “consultant” to E&P companies, Nanes Delorme Partners should know that the measure of price-to-EBITDA is made meaningless because of factors unique to individual E&P companies such as: emphasis on exploration or production, reserve life and oil to gas weighting. There are many factors that influence a company’s Enterprise Value / EBTIDA metric. What matters is share performance – and VAALCO’s record here is strong.

The facts: There are a number of factors that have contributed to the Company’s positive stock performance in recent months. VAALCO’s stock price historically surges when the Company moves from the property acquisition and seismic phase to the drilling phase – and this is precisely where we believe we are now. In addition, as the stock price of comparable companies has increased, VAALCO’s stock price has largely traded in step with its peers (and often better).

The facts: Maximizing stockholder value has always been a priority for VAALCO’s Board and a responsibility that we take seriously. The Board is open to considering bona fide offers that would provide stockholders with full and fair value for their shares, but NO such offers have been received. Not surprisingly, Nanes Delorme Partners provides no information about the supposed inquiries it cites, such as when they were made, who made them and how much was offered. VAALCO’s Board and management are committed to taking all appropriate actions to maximize stockholder value, and have not ruled out any action. The Board believes, however, that VAALCO’s pending drilling program and current market conditions clearly indicate that now is NOT the time to initiate a process to sell the Company as stockholders are poised to benefit from the investments we have made.

THE STAKES ARE HIGH. THE CHOICE IS CLEAR. YOUR VOTE IS IMPORTANT.

VOTE THE WHITE PROXY CARD “FOR” ALL OF YOUR BOARD’S DIRECTOR NOMINEES

Your Board is comprised of accomplished and proven industry leaders, all of whom are committed to serving the interests of all VAALCO stockholders.

Moreover, we believe the objectives of Nanes Delorme Partners and Pilatus Energy are very different from yours. The public record makes clear to us that Nanes Delorme Partners and Pilatus Energy have serious conflicts of interests and that electing their paid nominees could compromise the value of your investment and the future of your company. Rather than serve the interests of all stockholders, we strongly believe that, if elected, Nanes Delorme Partners’ paid nominees would advocate only for Nanes Delorme Partners’ and Pilatus Energy’s self-serving, opportunistic interests, including an immediate sale of VAALCO, just when stockholders are poised to benefit from our imminent drilling program.

Whether or not you plan to attend the Annual Meeting, we strongly urge you to sign, date and return the WHITE proxy card TODAY and discard all gold proxy cards that you receive from Nanes Delorme Partners and Pilatus Energy.

On behalf of VAALCO’s Board of Directors, I thank you for your support.

IF YOU HAVE ANY QUESTIONS ABOUT HOW TO VOTE YOUR SHARES, PLEASE

CONTACT THE FIRM ASSISTING US IN THE SOLICITATION OF PROXIES:

D.F. KING & CO., INC.

Toll-free: 800-901-0068

Collect: 212-269-5500

Important Information

In connection with this solicitation of proxies, VAALCO filed with the SEC definitive proxy materials (the “Proxy Materials”). The Proxy Materials contain important information about VAALCO, the 2008 Annual Stockholders Meeting, and our nominees and other directors in the solicitation. VAALCO’s stockholders are urged to read the Proxy Materials carefully. Stockholders may obtain additional free copies of the Proxy Materials and other relevant documents filed with the SEC by VAALCO through the website maintained by the SEC at www.sec.gov. The Proxy Materials and other relevant documents may also be obtained free of charge from VAALCO at VAALCO Energy, Inc., 4600 Post Oak Place, Suite 309, Houston, Texas 77027; or by phone at (713) 623-0801. The Proxy Materials are also available on VAALCO’s website at www.vaalco.com. The contents of the websites referenced above are not deemed to be incorporated by reference into the Proxy Materials.

Forward-Looking Statements

This document includes “forward-looking statements” as defined by the U.S. securities laws. Forward-looking statements are those concerning VAALCO’s plans, expectations, and objectives for future drilling, completion and other operations and activities. All statements included in this document that address activities, events or developments that VAALCO expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements include future production rates, completion and production timetables and costs to complete well. These statements are based on assumptions made by VAALCO based on its experience perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond VAALCO’s control. These risks include, but are not limited to, inflation, lack of availability of goods, services and capital, environmental risks, drilling risks, foreign operational risks and regulatory changes. Investors are cautioned that forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. These risks are further described in VAALCO’s annual report on Form 10-K for the year ended December 31, 2007 and other reports filed with the SEC which can be reviewed at http://www.sec.gov, or which can be received by contacting VAALCO at 4600 Post Oak Place, Suite 309, Houston, Texas 77027, (713) 623-0801.

The Securities and Exchange Commission generally permits oil and gas companies, in filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. In this letter, we describe volumes of oil that we believe may be discovered in the future through our existing exploration program. These amounts are not proved reserves as defined by the SEC. These estimates are by their nature more speculative than estimates of proved reserves and accordingly are subject to substantially greater risk of being actually realized by VAALCO.

About VAALCO

VAALCO Energy, Inc. is a Houston based independent energy company principally engaged in the acquisition, exploration, development and production of crude oil. VAALCO’s strategy is to increase reserves and production through the exploration of oil and natural gas properties with high emphasis on international opportunities. The Company’s properties and exploration acreage are located primarily in Gabon and Angola, West Africa.