TIDMTGL
RNS Number : 8503X
TransGlobe Energy Corporation
07 May 2021
This Announcement contains inside information as defined in
Article 7 of the Market Abuse Regulation No. 596/2014 ("MAR"). Upon
the publication of this Announcement, this inside information is
now considered to be in the public domain.
TRANSGLOBE ENERGY CORPORATION ANNOUNCES FIRST QUARTER 2021
FINANCIAL AND OPERATING RESULTS FOR THE THREE MONTHSED MARCH 31,
2021
AIM & TSX: "TGL" & NASDAQ: "TGA"
Calgary, Alberta, May 7, 2021 - TransGlobe Energy Corporation
("TransGlobe" or the "Company") is pleased to announce its
financial and operating results for the three months ended March
31, 2021. All dollar values are expressed in United States dollars
unless otherwise stated. TransGlobe's Condensed Consolidated
Interim Financial Statements together with the notes related
thereto, as well as TransGlobe's Management's Discussion and
Analysis for the three months ended March 31, 2021 and 2020, are
available on TransGlobe's website at www.trans-globe.com .
FINANCIAL HIGHLIGHTS:
-- Sales averaged 9,691 boe/d including 171.9 Mbbls sold to EGPC
for net proceeds of $8.5 million. Average realized price for
Q1-2021 sales of $48.47/boe; Q1-2021 average realized price on
Egyptian sales of $53.31/bbl and Canadian sales of $29.70/boe;
-- Funds flow from operations of $0.1 million ($0.00 per share)
in the quarter;
-- First quarter net loss of $11.0 million ($0.15 per share),
inclusive of a $3.0 million unrealized loss on derivative commodity
contracts;
-- Ended the first quarter with positive working capital of $7.1
million, including cash of $28.7 million;
-- Subsequent to the quarter, the Company sold a 499 Mbbl cargo
of Egypt entitlement crude oil with net proceeds expected in May
2021;
-- Subsequent to the quarter, the Company entered into an
additional costless Dated Brent collar ($55.00 / $64.75) for the
month of April 2021 hedging 350 Mbbls;
OPERATIONAL HIGHLIGHTS:
-- First quarter production averaged 12,221 boe/d (Egypt 10,238
bbls/d, Canada 1,983 boe/d), a decrease of 163 boe/d (1%) from the
previous quarter, primarily due to natural declines;
-- Production in April averaged 13,316 boe/d (Egypt 11,009
bbls/d, Canada 2,307 boe/d), an increase of 9% from Q1-2021;
-- Ended the quarter with 455.7 Mbbls of entitlement crude oil
inventory, an increase of 227.8 Mbbls from year end. This increase
is due to a decrease in sales volumes, partially offset by a
decrease in production;
-- Recompletion of the SGZ-6X well to the deeper, more
prospective lower Bahariya reservoir has been concluded in the
Western Desert, Egypt ;
-- R ig mobilizing to the Eastern Desert, Egypt, where
operations on the budgeted twelve well 2021 drilling program will
commence this month;
-- Completion work commenced during Q1-2021 on the previously
drilled 2-mile horizontal well in South Harmattan, Canada;
CORPORATE HIGHLIGHTS:
-- Business continuity plans remain effective across our
locations in response to COVID-19 with no health and safety impacts
or disruption to production; and
-- The Company announced a merged concession agreement with a
15-year primary term and improved Company economics on December 3,
2020. The agreement is currently awaiting ratification by the
Egyptian Parliament but will have a February 2020 effective date
upon ratification . As such, the results achieved in Q1 are
exclusive of any effective date adjustments that will be made upon
ratification.
FINANCIAL AND OPERATING RESULTS
(US$000s, except per share, price, volume amounts and %
change)
Three Months Ended March 31
Financial 2021 2020 % Change
------------------------------------------------------------- ----------- --------- --------
Petroleum and natural gas sales 42,277 80,187 (47)
Petroleum and natural gas sales, net of royalties 18,052 53,234 (66)
Realized derivative (loss) gain on commodity contracts (1,545) 4,168 (137)
Unrealized derivative (loss) gain on commodity contracts (2,970) 4,376 (168)
Production and operating expense 9,449 23,257 (59)
Selling costs 34 626 (95)
General and administrative expense 5,037 1,904 165
Depletion, depreciation and amortization expense 4,815 12,252 (61)
Income tax expense 4,660 4,585 2
Cash flow used in operating activities (3,940) (3,672) 7
Funds flow from operations(1) 81 25,683 (100)
Basic per share - 0.35
Diluted per share - 0.35
Net loss (11,024) (55,218) (80)
Basic per share (0.15) (0.76)
Diluted per share (0.15) (0.76)
Capital expenditures 2,907 5,577 (48)
Working capital 7,055 53,294 (87)
Long-term debt, including current portion 21,699 36,591 (41)
Common shares outstanding
Basic (weighted average) 72,542 72,542 -
Diluted (weighted average) 72,891 72,542 -
Total assets 197,150 241,219 (18)
-------------------------------------------------------------- ---------- --------- --------
Operating
------------------------------------------------------------- ---------- --------- --------
Average production volumes (boe/d) 12,221 14,997 (19)
Average sales volumes (boe/d) 9,691 22,934 (58)
Inventory (Mbbls) 455.7 242.1 88
Average realized sales price ($/boe) 48.47 38.42 26
Production and operating expenses ($/boe) 10.83 11.14 (3)
-------------------------------------------------------------- ---------- --------- --------
(1) Funds flow from operations (before finance costs) is a
measure that represents cash generated from operating activities
before changes in non-cash working capital and may not be
comparable to measures used by other companies. See "Non-GAAP
Financial Measures".
2021 2020
---------------------------------------------- ------ --------------------------
Average reference prices and exchange rates Q-1 Q-4 Q-3 Q-2 Q-1
---------------------------------------------- ------ ----- ----- ----- -----
Crude oil
Dated Brent average oil price ($/bbl) 60.82 44.29 42.96 29.34 50.44
Edmonton Sweet index ($/bbl) 52.54 38.50 37.35 21.71 38.59
Natural gas
AECO ($/MMBtu) 2.30 2.18 1.69 1.41 1.43
US/Canadian Dollar average exchange rate 1.27 1.30 1.33 1.39 1.35
------------------------------------------------ ----- ----- ----- ----- -----
CORPORATE SUMMARY
TransGlobe Energy Corporation ("TransGlobe" or the "Company")
produced an average of 12,221 barrels of oil equivalent per day
("boe/d") during the first quarter of 2021. Egypt production was
10,238 barrels of oil per day ("bbls/d") and Canada production was
1,983 boe/d. Production for the quarter was within full year 2021
guidance of 12,000 to 13,000 boe/d and 1% lower than the previous
quarter, primarily due to natural declines.
TransGlobe's Egyptian crude oil is sold at a quality discount to
Dated Brent. The Company received an average price of $53.31 per
barrel in Egypt during the quarter. In Canada, the Company received
an average of $52.66 per barrel of oil, $26.42 per barrel of NGLs
and $2.46 per thousand cubic feet ("Mcf") of natural gas during the
quarter.
During Q1-2021, the Company had funds flow from operations of
$0.1 million and ended the quarter with positive working capital of
$7.1 million, including cash of $28.7 million. The Company had a
net loss in the quarter of $11.0 million, inclusive of a $3.0
million unrealized derivative loss on commodity contracts which
represents a fair value adjustment on the Company's hedging
contracts at March 31, 2021.
In Egypt, the Company sold 171.9 thousand barrels ("Mbbls") of
entitlement crude oil to EGPC during the quarter, and had 455.7
Mbbls of entitlement crude oil inventory at March 31, 2021. The
increase in inventoried crude oil is attributed to a decrease in
sales volumes, offset by a slight decrease in production from the
previous quarter. Subsequent to the quarter, TransGlobe sold a 499
Mbbl cargo of Egypt entitlement crude oil, with net proceeds
expected in May 2021. All Canadian production was sold during the
quarter.
As announced on December 3, 2020, the Company has reached an
agreement with the Egyptian General Petroleum Company ("EGPC") to
merge its three existing Eastern Desert concessions with a 15-year
primary term and improved Company economics. The Company recently
held discussions with the Ministry of Petroleum, and was informed
that due to the recent Egyptian election combined with internal
process changes for ratification, the Ministry is now expecting
ratification to occur in the second half of 2021. The February 1,
2020 effective date for the improved concession terms and
assurances from the Ministry is supportive of increased investment
in advance of ratification.
In Egypt, the recompletion of the SGZ-6X well to the deeper,
more prospective lower Bahariya reservoir has been concluded in the
Western Desert. The well commenced production in March 2021. The
rig is mobilizing to the Company's Eastern Desert concessions where
operations on the budgeted twelve well 2021 drilling program will
commence in May 2021.
In Canada, completion work commenced during Q1-2021 on the
previously drilled 2-mile horizontal well in South Harmattan. The
well was completed and equipped in February and March and brought
on production in early April with encouraging results during the
clean-up phase.
The Company remains forward looking and prepared to use its
operational control to take advantage of any sustained upward
movement in oil price. TransGlobe continues to be vigilant in its
search for M&A opportunities while steadfastly retaining its
focus on shareholder value creation.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity describes a company's ability to access cash.
Companies operating in the upstream oil and gas industry require
sufficient cash in order to fund capital programs that maintain and
increase production and reserves, to acquire strategic oil and gas
assets, to repay current liabilities and debt and ultimately to
provide a return to shareholders. TransGlobe's capital programs are
funded by existing working capital and cash provided from operating
activities. The Company's cash flow from operations varies
significantly from quarter to quarter, depending on the timing of
oil sales from cargoes lifted in Egypt, and these fluctuations in
cash flow impact the Company's liquidity. TransGlobe's management
will continue to steward capital and focus on cost reductions in
order to maintain balance sheet strength through the current
volatile oil price environment.
Funding for the Company's capital expenditures is provided by
cash flow s from operations and cash on hand. The Company expects
to fund its 2021 exploration and development program through the
use of working capital and cash flow from operations. Fluctuations
in commodity prices, product demand, foreign exchange rates,
interest rates and various other risks may impact capital resources
and capital expenditures.
Working capital is the amount by which current assets exceed
current liabilities. As at March 31, 2021, the Company had a
working capital surplus of $7.1 million (December 31, 2020 - $15.3
million). The decrease in working capital is primarily due to cash
payments on Canadian capital expenditures, an increase in crude oil
inventory, and the derivative commodity contracts returning to a
liability position, partially offset by a decrease in accounts
payable.
As at March 31, 2021, the Company's cash equivalents balance
consisted of short-term deposits with an original term to maturity
at purchase of one month or less. All of the Company's cash and
cash equivalents are on deposit with high credit-quality financial
institutions.
Over the past 10 years, the Company has experienced delays in
the collection of accounts receivable from EGPC. The length of
delay peaked in 2013, returned to historical delays of up to nine
months in 2017, and has since fluctuated within an acceptable
range. As at March 31, 2021, amounts owing from EGPC were $4.9
million. The Company considers there to be minimal credit risk
associated with amounts receivable from EGPC.
In Egypt, the Company sold 171.9 Mbbls of crude oil to EGPC in
Q1-2021 for net proceeds of $8.5 million. During the first quarter
of 2021, the Company collected $10.0 million of accounts receivable
from EGPC, an additional $1.0 million has been collected subsequent
to the quarter. The Company incurs a 30-day collection cycle on
sales to third-party international buyers. Depending on the
Company's assessment of the credit of crude oil purchasers, they
may be required to post irrevocable letters of credit to support
the sales prior to the cargo lifting. As at March 31, 2021, crude
oil held as inventory was 455.7 Mbbls.
As at March 31, 2021, the Company had $86.0 million of revolving
credit facilities with $21.7 million drawn and $64.3 million
available. The Company has a prepayment agreement with Mercuria
that allows for a revolving balance of up to $75.0 million, of
which $15.0 million was drawn and outstanding as at March 31, 2021.
The Company also has a revolving Canadian reserves-based lending
facility with ATB totaling C$15.0 million ($11.0 million), of which
C$8.4 million ($6.7 million) was drawn and outstanding. During the
three months ended March 31, 2021, the Company had drawings of
C$0.1 million ($0.1 million) on this facility.
The Company actively monitors its liquidity to ensure that cash
flows, credit facilities and working capital are adequate to
support these financial liabilities, as well as the Company's
capital programs.
OPERATIONS UPDATE
ARAB REPUBLIC OF EGYPT
EASTERN DESERT
West Gharib, West Bakr, and North West Gharib (100% working
interest, operated)
Operations and Exploration
The EDC-64 rig has been mobilized to the Company's Eastern
Desert concessions where operations on the budgeted twelve well
2021 drilling program will commence in May 2021.
Production
Production averaged 10,050 bbls/d during the quarter, a decrease
of 1% (79 bbls/d) from the previous quarter. The decrease was
primarily due to natural declines .
Production in April 2021 averaged 10,013 bbls/d.
Sales
The Company sold 165.5 Mbbls of inventoried entitlement crude
oil to EGPC during the quarter.
Quarterly Eastern Desert Production (bbls/d) 2021 2020
-------------------------------------------------- ------- -----------------------
Q-1 Q-4 Q-3 Q-2
-------------------------------------------------- ------- ------ ------ ------
Gross production rate(1) 10,050 10,129 9,635 11,757
TransGlobe production (inventoried) sold (2,531) 3,328 (1,432) (1,761)
--------------------------------------------------- ------ ------ ------ ------
Total sales 7,519 13,457 8,203 9,996
--------------------------------------------------- ------ ------ ------ ------
Government share (royalties and tax) 5,680 5,715 5,452 6,648
TransGlobe sales (after royalties and tax)(2) 1,839 7,742 2,751 3,348
--------------------------------------------------- ------ ------ ------ ------
Total sales 7,519 13,457 8,203 9,996
--------------------------------------------------- ------ ------ ------ ------
(1) Quarterly production by concession (bbls/d):
West Gharib - 3,076 (Q1-2021), 3,113 (Q4-2020), 2,808 (Q3-2020),
and 3,453 (Q2-2020)
West Bakr - 6,415 (Q1-2021), 6,656 (Q4-2020), 6,498 (Q3-2020),
and 7,935 (Q2-2020)
North West Gharib - 559 (Q1-2021), 360 (Q4-2020), 329 (Q3-2020),
and 369 (Q2-2020)
(2) Under the terms of the Production Sharing Concession
Agreements, royalties and taxes are paid out of the government's
share of production sharing oil.
WESTERN DESERT
South Ghazalat (100% working interest, operated)
Operations and Exploration
The recompletion of SGZ-6X well to the deeper, more prospective
lower Bahariya reservoir has been concluded. The well commenced
production on March 21, 2021 at a field estimated production rate
of 3,600 bbls/d of light oil on a 32/64-inch choke with 0%
watercut.
As planned, on March 22, 2021 the well was restricted to a
field-estimated 1,000 bbls/d of light-oil on a reduced choke to
facilitate reservoir data gathering and the preparation of an
effective reservoir management plan for the lower Bahariya at this
location. The Company will provide a further update on South
Ghazalat once this plan has been developed, though an increased oil
offtake rate is now considered unlikely.
Work to expand the early production facility at South Ghazalat
has been completed.
Production
Production averaged 188 bbls/d during the quarter, an increase
of 35% (49 bbls/d) from the previous quarter. The increase was due
to the recompletion noted above.
Production in April 2021 averaged 996 bbls/d.
Sales
The Company sold 6.4 Mbbls of inventoried entitlement crude oil
to EGPC during the quarter.
Quarterly Western Desert Production (bbls/d) 2021 2020
-------------------------------------------------- ----- -------------
Q-1 Q-4 Q-3 Q-2
-------------------------------------------------- ----- --- --- ---
Gross production rate 188 139 177 233
Total sales 188 139 177 233
--------------------------------------------------- ---- --- --- ---
Government share (royalties and tax) 117 86 110 145
TransGlobe sales (after royalties and tax)(1) 71 53 67 88
--------------------------------------------------- ---- --- --- ---
Total sales 188 139 177 233
--------------------------------------------------- ---- --- --- ---
(1) Under the terms of the Production Sharing Concession
Agreements, royalties and taxes are paid out of the government's
share of production sharing oil.
CANADA
Operations and Exploration
In February the previously drilled 2-mile horizontal well in
South Harmattan (13-16-29-3W5) was successfully completed. The well
was equipped in March and brought on production at the beginning of
April. The initial indications have been positive and a production
update will be provided once stabilized rates are known.
Further development activity is planned in South Harmattan in
2021; the previously announced capital program includes drilling
three horizontal wells targeting the Cardium light oil resource at
Harmattan. The Company holds 22.5 sections of land in the South
Harmattan area.
Production
In Canada, production averaged 1,983 boe/d during the quarter, a
decrease of 133 boe/d (6%) from the previous quarter and below full
year 2021 guidance of 2,300 to 2,500 boe/d. The decrease in
production from the previous quarter is partially due to the
shutting in of the 2-20-29-3W5 well while stimulation operations
were occurring for the offsetting 13-16-29-3W5 well. Natural
declines also contributed to the decrease in production. With the
execution of the 2021 capital program, it is expected that
production will be in-line with full year 2021 guidance.
Production in April 2021 averaged 2,307 boe/d with 754 bbls/d of
oil. The increase in production in April is primarily due to the
added production of the recently completed South Harmattan Cardium
Horizontal well.
Quarterly Canada Production 2021 2020
------------------------------- ------
Q-1 Q-4 Q-3 Q-2
------------------------------- ------ ----- ----- -----
Canada crude oil (bbls/d) 564 618 661 706
Canada NGLs (bbls/d) 710 755 798 826
Canada natural gas (Mcf/d) 4,259 4,454 4,633 4,665
-------------------------------- ----- ----- ----- -----
Total production (boe/d) 1,983 2,116 2,232 2,310
-------------------------------- ----- ----- ----- -----
Condensed Consolidated Interim Statements of Loss and
Comprehensive Loss
(Unaudited - Expressed in thousands of U.S. Dollars, except per
share amounts)
Three Months Ended March 31
2021 2020
-------------------------------------------------- -------------- ------------
REVENUE
Petroleum and natural gas sales, net of royalties 18,052 53,234
Finance revenue 3 58
18,055 53,292
-------------------------------------------------- ------------- ------------
EXPENSES
Production and operating 9,449 23,257
Selling costs 34 626
General and administrative 5,037 1,904
Foreign exchange loss 33 52
Finance costs 470 815
Depletion, depreciation and amortization 4,815 12,252
Asset retirement obligation accretion 66 68
Loss (gain) on financial instruments 4,515 (8,544)
Impairment loss - 73,495
24,419 103,925
-------------------------------------------------- ------------- ------------
Loss before income taxes (6,364) (50,633)
Income tax expense - current 4,660 4,585
--------------------------------------------------- ------------- ------------
NET LOSS (11,024) (55,218)
--------------------------------------------------- ------------- ------------
OTHER COMPREHENSIVE INCOME (LOSS)
Currency translation adjustments 394 (4,806)
----------------------------------------------------- ------------- ------------
COMPREHENSIVE LOSS (10,630) (60,024)
--------------------------------------------------- ------------- ------------
Net loss per share
Basic (0.15) (0.76)
Diluted (0.15) (0.76)
----------------------------------------------------- ------------- ------------
Condensed Consolidated Interim Balance Sheets
(Unaudited - Expressed in thousands of U.S. Dollars)
As at As at
March 31, 2021 December 31, 2020
--------------------------------------------- --------------- -----------------
ASSETS
Current
Cash and cash equivalents 28,669 34,510
Accounts receivable 9,209 9,996
Derivative commodity contracts 167 -
Prepaids and other 3,069 3,530
Product inventory 10,246 5,828
------------------------------------------------ -------------- -----------------
51,360 53,864
Non-Current
Intangible exploration and evaluation assets 1,147 584
Property and equipment
Petroleum and natural gas assets 137,635 140,059
Other 2,637 2,917
Deferred taxes 4,371 3,723
------------------------------------------------ -------------- -----------------
197,150 201,147
---------------------------------------------- -------------- -----------------
LIABILITIES
Current
Accounts payable and accrued liabilities 24,416 21,667
Derivative commodity contracts 3,534 398
Current portion of lease obligations 1,355 1,553
Current portion of long-term debt 15,000 14,897
------------------------------------------------ -------------- -----------------
44,305 38,515
Non-Current
Long-term debt 6,699 6,567
Asset retirement obligations 13,146 13,042
Other long-term liabilities 622 544
Lease obligations 243 461
Deferred taxes 4,371 3,723
------------------------------------------------ -------------- -----------------
69,386 62,852
---------------------------------------------- -------------- -----------------
SHAREHOLDERS' EQUITY
Share capital 152,805 152,805
Accumulated other comprehensive income 2,294 1,900
Contributed surplus 25,208 25,109
Deficit (52,543) (41,519)
------------------------------------------------ -------------- -----------------
127,764 138,295
---------------------------------------------- -------------- -----------------
197,150 201,147
---------------------------------------------- -------------- -----------------
Condensed Consolidated Interim Statements of Changes in
Shareholders' Equity
(Unaudited - Expressed in thousands of U.S. Dollars)
Three Months Ended March 31
2021 2020
--------------------------------------- -------------- ------------
Share Capital
Balance, beginning and end of period 152,805 152,805
------------------------------------------ ------------- ------------
Accumulated Other Comprehensive Income
Balance, beginning of period 1,900 1,134
Currency translation adjustment 394 (4,806)
------------------------------------------ ------------- ------------
Balance, end of period 2,294 (3,672)
------------------------------------------ ------------- ------------
Contributed Surplus
Balance, beginning of period 25,109 24,673
Share-based compensation expense 99 149
------------------------------------------ ------------- ------------
Balance, end of period 25,208 24,822
------------------------------------------ ------------- ------------
(Deficit) Retained Earnings
Balance, beginning of period (41,519) 35,878
Net loss (11,024) (55,218)
------------------------------------------ ------------- ------------
Balance, end of period (52,543) (19,340)
------------------------------------------ ------------- ------------
Condensed Consolidated Interim Statements of Cash Flows
(Unaudited - Expressed in thousands of US Dollars)
Three Months Ended March 31
2021 2020
--------------------------------------------------------------- -------------- ------------
OPERATING
Net loss (11,024) (55,218)
Adjustments for:
Depletion, depreciation and amortization 4,815 12,252
Asset retirement obligation accretion 66 68
Impairment loss - 73,495
Share-based compensation 2,771 (1,301)
Finance costs 470 815
Unrealized loss (gain) on financial instruments 2,970 (4,376)
Unrealized loss (gain) on foreign currency translation 4 (32)
Asset retirement obligations settled 9 (20)
Changes in non-cash working capital (4,021) (29,355)
---------------------------------------------------------------- ------------- ------------
Net cash used in operating activities (3,940) (3,672)
----------------------------------------------------------------- ------------- ------------
INVESTING
Additions to intangible exploration and evaluation assets (563) (330)
Additions to petroleum and natural gas assets (2,330) (5,161)
Additions to other assets (14) (86)
Changes in non-cash working capital 1,825 932
---------------------------------------------------------------- ------------- ------------
Net cash used in investing activities (1,082) (4,645)
----------------------------------------------------------------- ------------- ------------
FINANCING
Interest paid (293) (618)
Increase in long-term debt 79 96
Payments on lease obligations (592) (394)
Changes in non-cash working capital (1) -
---------------------------------------------------------------- ------------- ------------
Net cash used in financing activities (807) (916)
----------------------------------------------------------------- ------------- ------------
Currency translation differences relating to cash and cash
equivalents (12) (187)
----------------------------------------------------------------- ------------- ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (5,841) (9,420)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 34,510 33,250
----------------------------------------------------------------- ------------- ------------
CASH AND CASH EQUIVALENTS, OF PERIOD 28,669 23,830
----------------------------------------------------------------- ------------- ------------
Advisory on Forward-Looking Information and Statements
Certain statements included in this news release constitute
forward-looking statements or forward-looking information under
applicable securities legislation. Such forward-looking statements
or information are provided for the purpose of providing
information about management's current expectations and plans
relating to the future. Readers are cautioned that reliance on such
information may not be appropriate for other purposes.
Forward-looking statements or information typically contain
statements with words such as "anticipate", "strengthened",
"confidence", "believe", "expect", "plan", "intend", "estimate",
"may", "will", "would" or similar words suggesting future outcomes
or statements regarding an outlook. In particular, forward-looking
information and statements contained in this document include, but
are not limited to, the Company's strategy to grow its annual cash
flow; anticipated drilling, completion and testing plans,
including, the anticipated timing thereof, prospects being targeted
by the Company, and rig mobilization plans; expected future
production from certain of the Company's drilling locations;
TransGlobe's plans to drill additional wells, including the types
of wells, anticipated number of locations and the timing of
drilling thereof; the timing of rig movement and mobilization and
drilling activity; the Company's plans to file development lease
applications for certain of its discoveries, including the expected
timing of filing of such applications and the expected timing of
receipt of regulatory approvals; anticipated production and
ultimate recoveries from wells; to negotiate future military access
(including the expected timing thereof), including the anticipated
timing of wells on production; TransGlobe's plans to continue
exploration, development and completion programs in respect of
various discoveries; future requirements necessary to determine
well performance and estimated recoveries; the ratification of the
amendment, extension, and consolidation of the Company's Eastern
Desert Concessions; and other matters.
Forward-looking statements or information are based on a number
of factors and assumptions which have been used to develop such
statements and information but which may prove to be incorrect.
Although the Company believes that the expectations reflected in
such forward-looking statements or information are reasonable,
undue reliance should not be placed on forward-looking statements
because the Company can give no assurance that such expectations
will prove to be correct. Many factors could cause TransGlobe's
actual results to differ materially from those expressed or implied
in any forward-looking statements made by, or on behalf of,
TransGlobe.
In addition to other factors and assumptions which may be
identified in this news release, assumptions have been made
regarding, among other things, anticipated production volumes; the
timing of drilling wells and mobilizing drilling rigs; the number
of wells to be drilled; the Company's ability to obtain qualified
staff and equipment in a timely and cost-efficient manner; the
regulatory framework governing royalties, taxes and environmental
matters in the jurisdictions in which the Company conducts and will
conduct its business; future capital expenditures to be made by the
Company; future sources of funding for the Company's capital
programs; geological and engineering estimates in respect of the
Company's reserves and resources; the geography of the areas in
which the Company is conducting exploration and development
activities; current commodity prices and royalty regimes;
availability of skilled labour; future exchange rates; the price of
oil; the impact of increasing competition; conditions in general
economic and financial markets; availability of drilling and
related equipment; effects of regulation by governmental agencies;
future operating costs; uninterrupted access to areas of
TransGlobe's operations and infrastructure; recoverability of
reserves and future production rates; that TransGlobe will have
sufficient cash flow, debt or equity sources or other financial
resources required to fund its capital and operating expenditures
and requirements as needed; that TransGlobe's conduct and results
of operations will be consistent with its expectations; that
TransGlobe will have the ability to develop its properties in the
manner currently contemplated; current or, where applicable,
proposed industry conditions, laws and regulations will continue in
effect or as anticipated as described herein; that the estimates of
TransGlobe's reserves and resource volumes and the assumptions
related thereto (including commodity prices and development costs)
are accurate in all material respects; and other matters.
Forward-looking statements or information are based on current
expectations, estimates and projections that involve a number of
risks and uncertainties which could cause actual results to differ
materially from those anticipated by the Company and described in
the forward-looking statements or information. These risks and
uncertainties which may cause actual results to differ materially
from the forward-looking statements or information include, among
other things, operating and/or drilling costs are higher than
anticipated; unforeseen changes in the rate of production from
TransGlobe's oil and gas properties; changes in price of crude oil
and natural gas; adverse technical factors associated with
exploration, development, production or transportation of
TransGlobe's crude oil reserves; changes or disruptions in the
political or fiscal regimes in TransGlobe's areas of activity;
changes in tax, energy or other laws or regulations; changes in
significant capital expenditures; delays or disruptions in
production due to shortages of skilled manpower equipment or
materials; economic fluctuations; competition; lack of availability
of qualified personnel; the results of exploration and development
drilling and related activities; obtaining required approvals of
regulatory authorities; volatility in market prices for oil;
fluctuations in foreign exchange or interest rates; environmental
risks; ability to access sufficient capital from internal and
external sources; failure to negotiate the terms of contracts with
counterparties; failure of counterparties to perform under the
terms of their contracts; and other factors beyond the Company's
control. Readers are cautioned that the foregoing list of factors
is not exhaustive. Please consult TransGlobe's public filings at
www.sedar.com and www.sec.goedgar.shtml for further, more detailed
information concerning these matters, including additional risks
related to TransGlobe's business.
The forward-looking statements or information contained in this
news release are made as of the date hereof and the Company
undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of
new information, future events or otherwise unless required by
applicable securities laws. The forward-looking statements or
information contained in this news release are expressly qualified
by this cautionary statement.
Oil and Gas Advisories
Mr. Ron Hornseth, B.Sc., General Manager - Canada for TransGlobe
Energy Corporation, and a qualified person as defined in the
Guidance Note for Mining, Oil and Gas Companies, June 2009, of the
London Stock Exchange, has reviewed the technical information
contained in this report. Mr. Hornseth is a professional engineer
who obtained a Bachelor of Science in Mechanical Engineering from
the University of Alberta. He is a member of the Association of
Professional Engineers and Geoscientists of Alberta ("APEGA") and
the Society of Petroleum Engineers ("SPE") and has over 20 years'
experience in oil and gas.
BOEs may be misleading, particularly if used in isolation. A BOE
conversion ratio of six thousand cubic feet of natural gas to one
barrel of oil equivalent (6 MCF: 1 Bbl) is based on an energy
equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the wellhead.
Given that the value ratio based on the current price of crude oil
as compared to natural gas is significantly different from the
energy equivalency of 6:1, utilizing a conversion on a 6:1 basis
may be misleading as an indication of value.
References in this press release to production test rates, are
useful in confirming the presence of hydrocarbons, however such
rates are not determinative of the rates at which such wells will
commence production and decline thereafter and are not indicative
of long term performance or of ultimate recovery. While
encouraging, readers are cautioned not to place reliance on such
rates in calculating the aggregate production for TransGlobe. A
pressure transient analysis or well-test interpretation has not
been carried out in respect of all wells. Accordingly, the Company
cautions that the production test results should be considered to
be preliminary.
The following abbreviations used in this press release have the
meanings set forth below:
bbl barrels
bbls/d barrels per day
Mbbls thousand barrels
boe barrel of oil equivalent
boe/d barrels of oil equivalent per day
MMBtu One million British thermal units
Mcf thousand cubic feet
Mcf/d thousand cubic feet per day
NGL Natural Gas Liquids
Production Disclosure
Production Summary (WI before royalties and taxes):
Apr - Q1 - Q4 - Q3 - Q2 - Q1 -
21 21 20 20 20 20
------- ------- ------- ------- ------- -------
Egypt (bbls/d) 11,009 10,238 10,268 9,812 11,990 12,544
------- ------- ------- ------- ------- -------
Eastern Desert of Egypt
(bbls/d) 10,013 10,052 10,132 9,635 11,757 12,343
------- ------- ------- ------- ------- -------
Heavy Crude (bbls/d) 9,248 9,419 9,490 9,066 11,001 11,548
------- ------- ------- ------- ------- -------
Light and Medium Crude
(bbls/d) 765 633 642 569 756 795
------- ------- ------- ------- ------- -------
Western Desert of Egypt
(bbls/d) 996 186 136 177 233 201
------- ------- ------- ------- ------- -------
Light and Medium Crude
(bbls/d) 996 186 136 177 233 201
------- ------- ------- ------- ------- -------
Canada (boe/d) 2,307 1,983 2,116 2,232 2,310 2,453
------- ------- ------- ------- ------- -------
Light and Medium Crude
(bbls/d) 754 564 618 661 706 860
------- ------- ------- ------- ------- -------
Natural Gas (Mcf/d) 4596 4,259 4,454 4,633 4,665 4,996
------- ------- ------- ------- ------- -------
Associated Natural Gas
Liquids (bbls/d) 787 710 755 798 826 761
------- ------- ------- ------- ------- -------
Total (boe/d) 13,316 12,221 12,384 12,044 14,300 14,997
------- ------- ------- ------- ------- -------
Production Guidance
Low High Mid-Point
------- ------- ----------
Egypt (bbls/d) 9,700 10,500 10,100
------- ------- ----------
Heavy Crude (bbls/d) 8,940 9,678 9,309
------- ------- ----------
Light and Medium Crude (bbls/d) 760 822 791
------- ------- ----------
Canada (boe/d) 2,300 2,500 2,400
------- ------- ----------
Light and Medium Crude (bbls/d) 767 833 800
------- ------- ----------
Natural Gas (Mcf/d) 4,600 5,000 4,800
------- ------- ----------
Associated Natural Gas Liquids
(bbls/d) 767 833 800
------- ------- ----------
Total (boe/d) 12,000 13,000 12,500
------- ------- ----------
About TransGlobe
TransGlobe Energy Corporation is a cashflow focused oil and gas
exploration and development company whose current activities are
concentrated in the Arab Republic of Egypt and Canada. TransGlobe's
common shares trade on the Toronto Stock Exchange and the AIM
market of the London Stock Exchange under the symbol TGL and on the
NASDAQ Exchange under the symbol TGA.
For further information, please contact:
TransGlobe Energy Corporation +1 403 264 9888
Randy Neely, President and CEO investor.relations@trans-globe.com
Eddie Ok, CFO http://www.trans-globe.com
or via Tailwind Associates
or
FTI Consulting
Tailwind Associates (Investor Relations) +1 403 618 8035
Darren Engels darren@tailwindassociates.ca
http://www.tailwindassociates.ca
FTI Consulting (Financial PR) +44(0) 20 3727 1000
Ben Brewerton transglobeenergy@fticonsulting.com
Genevieve Ryan
Canaccord Genuity (Nomad & Joint-Broker)
Henry Fitzgerald-O'Connor
James Asensio +44(0) 20 7523 8000
Shore Capital (Joint Broker)
Jerry Keen
Toby Gibbs +44(0) 20 7408 4090
This information is provided by RNS, the news service of the
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END
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