TransGlobe Energy Corporation (TSX:TGL) (NASDAQ:TGA)
(“TransGlobe” or the “Company”) is pleased to announce its
financial and operating results for the three and nine months ended
September 30, 2017. 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 month periods ended September
30, 2017 and 2016, are available on TransGlobe's website at
www.trans-globe.com.
|
Highlights: |
|
|
|
• |
|
Third quarter production
averaged 14,912 boepd (18,020 boepd sales) versus 11,733 bopd
(11,485 bopd sales) in Q3-2016, a 27% increase, reflecting
increased volumes in Egypt and the December 2016 Canadian
acquisition. Nine months ended September 30, 2017 average
production was 16,029 boepd, which is within the full-year 2017
production guidance range of 15,500 to 16,500 boepd; |
|
|
|
• |
|
Positive funds flow of
$19.2 million and $38.6 million for the three and nine month
periods ended September 30, 2017, respectively, (2016 - $2.3
million and $1.5 million); |
|
|
|
• |
|
Completed one direct sale
tanker-lifting of TransGlobe's entitlement oil for proceeds of
$21.5 million ($19.6 million net of realized hedging loss); of
which sale proceeds were collected in October. In addition, sold
351,002 barrels of inventoried entitlement crude oil to EGPC for
$14.9 million to cover in-country expenditures during the third
quarter; |
|
|
|
• |
|
Inventory sales of 285,967
bbls and 276,990 bbls in excess of production for the three and
nine month periods ended September 30, 2017, respectively,
(2016 - Q3 production exceeded sales by 22,826 bbls and for the
nine months ended Q3, sales exceeded production by 193,704
bbls); |
|
|
|
• |
|
Inventory of 988,090
barrels of entitlement crude oil inventory at quarter-end, and next
lifting is scheduled for November; |
|
|
|
• |
|
Third quarter net loss of
$6.9 million (includes a $10.3 million impairment loss and a $3.2
million unrealized loss on derivative commodity contracts).
Excluding the impairment charge and the unrealized loss on
derivative commodity contracts, the Company would have achieved a
positive net profit for the quarter of $6.6 million; |
|
|
|
• |
|
Spent $10.1 million on
exploration and development during the quarter ($6.0 million in
Egypt and $4.1 million in Canada); |
|
|
|
• |
|
In the Western Desert,
commenced testing at South Alamein; Boraq 2 flowed at 1,140 Bopd
from the AR-E formation during a short test to confirm
productivity, subsequent to the end of the quarter the AR-G and
AR-E were tested unsuccessfully in the Boraq 5 appraisal well; |
|
|
|
• |
|
In the Eastern Desert, the
Company received approval for three development leases at North
West Gharib ("NWG"). The discoveries at NWG development leases 2, 3
and 4 are scheduled to start production in Q4-2017 and
Q1-2018; |
|
|
|
• |
|
Drilled and began
completions on three Cardium horizontal oil wells in
Harmattan; |
|
|
|
• |
|
Acquired 2.5 sections
(1,600 acres) of Cardium rights in the Harmattan area. The new
lands have increased the Company’s internally estimated Cardium
drilling location inventory by 8-10 locations; |
|
|
|
• |
|
Ended the quarter with
positive working capital of $58.8 million, which includes cash and
cash equivalents of $26.3 million (including restricted cash); |
|
|
|
• |
|
Repaid $5.0 million of the
amount outstanding under the prepayment agreement; and |
|
|
|
• |
|
Long-term debt net of
working capital was $21.0 million as at September 30, 2017. |
|
|
|
A conference call to discuss TransGlobe’s 2017
second quarter results presented in this news release will be held
Thursday, November 9, 2017 at 8:00 AM Mountain Time (10:00 AM
Eastern Time) and is accessible to all interested parties in Canada
and US by dialing 416-340-2218 or toll free at
1-800-377-0758. The webcast may be accessed at
http://www.gowebcasting.com/8979. The international dial-in
is https://www.confsolutions.ca/ILT?oss=1P1R8003770758.
FINANCIAL AND OPERATING RESULTS(US$000s, except
per share, price, volume amounts and % change)
|
Three months ended September 30 |
|
Nine months ended September 30 |
Financial |
2017 |
|
2016 |
|
% Change |
|
2017 |
|
2016 |
|
% Change |
Petroleum
and natural gas sales |
68,372 |
|
|
|
36,376 |
|
|
|
88 |
|
|
179,637 |
|
|
|
97,859 |
|
|
|
84 |
|
Petroleum
and natural gas sales, net of royalties |
44,839 |
|
|
|
20,704 |
|
|
|
117 |
|
|
107,739 |
|
|
|
57,917 |
|
|
|
86 |
|
Realized
derivative gain (loss) on commodity contracts |
(1,904 |
) |
|
|
— |
|
|
|
— |
|
|
(375 |
) |
|
|
(956 |
) |
|
|
— |
|
Unrealized derivative gain (loss) on commodity contracts |
(3,235 |
) |
|
|
— |
|
|
|
— |
|
|
(386 |
) |
|
|
— |
|
|
|
— |
|
Production and operating expense |
14,310 |
|
|
|
10,945 |
|
|
|
31 |
|
|
39,356 |
|
|
|
34,706 |
|
|
|
13 |
|
Transportation costs |
212 |
|
|
|
— |
|
|
|
— |
|
|
566 |
|
|
|
— |
|
|
|
— |
|
Selling
costs |
424 |
|
|
|
— |
|
|
|
— |
|
|
1,926 |
|
|
|
875 |
|
|
|
120 |
|
General
and administrative expense |
3,809 |
|
|
|
4,094 |
|
|
|
(7 |
) |
|
11,617 |
|
|
|
11,742 |
|
|
|
(1 |
) |
Depletion, depreciation and amortization expense |
10,760 |
|
|
|
6,439 |
|
|
|
67 |
|
|
29,635 |
|
|
|
24,538 |
|
|
|
21 |
|
Income
taxes |
5,179 |
|
|
|
4,067 |
|
|
|
27 |
|
|
16,104 |
|
|
|
7,728 |
|
|
|
108 |
|
Cash flow
generated by (used in) operating activities |
20,437 |
|
|
|
(14,857 |
) |
|
|
238 |
|
|
15,187 |
|
|
|
(7,420 |
) |
|
|
305 |
|
Funds
flow from operations1 |
19,217 |
|
|
|
2,347 |
|
|
|
719 |
|
|
38,574 |
|
|
|
1,543 |
|
|
|
2,400 |
|
Basic per
share |
0.27 |
|
|
|
0.03 |
|
|
|
|
|
0.53 |
|
|
|
0.02 |
|
|
|
|
Diluted
per share |
0.27 |
|
|
|
0.03 |
|
|
|
|
|
0.53 |
|
|
|
0.02 |
|
|
|
|
Net
earnings (loss) |
(6,855 |
) |
|
|
(25,369 |
) |
|
|
73 |
|
|
(76,354 |
) |
|
|
(53,668 |
) |
|
|
(42 |
) |
Net
earnings (loss) - diluted |
(6,855 |
) |
|
|
(25,369 |
) |
|
|
73 |
|
|
(76,354 |
) |
|
|
(53,668 |
) |
|
|
(42 |
) |
Basic per share |
(0.09 |
) |
|
|
(0.35 |
) |
|
|
|
|
(1.06 |
) |
|
|
(0.74 |
) |
|
|
|
Diluted per share |
(0.09 |
) |
|
|
(0.35 |
) |
|
|
|
|
(1.06 |
) |
|
|
(0.74 |
) |
|
|
|
Capital
expenditures |
10,133 |
|
|
|
8,692 |
|
|
|
17 |
|
|
29,081 |
|
|
|
17,794 |
|
|
|
63 |
|
Working
capital |
58,815 |
|
|
|
53,029 |
|
|
|
11 |
|
|
58,815 |
|
|
|
53,029 |
|
|
|
11 |
|
Long-term
debt |
79,839 |
|
|
|
— |
|
|
|
— |
|
|
79,839 |
|
|
|
— |
|
|
|
— |
|
Convertible debentures |
— |
|
|
|
74,854 |
|
|
|
(100 |
) |
|
— |
|
|
|
74,854 |
|
|
|
(100 |
) |
Common
shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
Basic (weighted average) |
72,206 |
|
|
|
72,206 |
|
|
|
— |
|
|
72,206 |
|
|
|
72,206 |
|
|
|
— |
|
Diluted (weighted average) |
72,206 |
|
|
|
72,206 |
|
|
|
— |
|
|
72,206 |
|
|
|
72,206 |
|
|
|
— |
|
Total assets |
338,802 |
|
|
|
414,363 |
|
|
|
(18 |
) |
|
338,802 |
|
|
|
414,363 |
|
|
|
(18 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Operating |
|
|
|
|
|
|
|
|
|
|
|
Average
production volumes (boepd) |
14,912 |
|
|
|
11,733 |
|
|
|
27 |
|
|
16,029 |
|
|
|
11,754 |
|
|
|
36 |
|
Average
sales volumes (boepd) |
18,020 |
|
|
|
11,485 |
|
|
|
57 |
|
|
17,050 |
|
|
|
12,461 |
|
|
|
37 |
|
Inventory
(MBbls) |
988 |
|
|
|
729 |
|
|
|
35 |
|
|
988 |
|
|
|
729 |
|
|
|
35 |
|
Average
sales price ($ per boe) |
41.24 |
|
|
|
34.43 |
|
|
|
20 |
|
|
38.59 |
|
|
|
28.66 |
|
|
|
35 |
|
Operating expense ($ per boe) |
8.63 |
|
|
|
10.36 |
|
|
|
(17 |
) |
|
8.46 |
|
|
|
10.16 |
|
|
|
(17 |
) |
1 Funds flow from operations 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. |
|
|
Average reference prices |
|
2017 |
|
2016 |
|
|
Q-3 |
|
Q-2 |
|
Q-1 |
|
Q-4 |
|
Q-3 |
Crude oil |
|
|
|
|
|
|
|
|
|
|
Dated
Brent average oil price (US$/bbl) |
|
52.11 |
|
|
49.67 |
|
|
53.68 |
|
|
49.19 |
|
|
45.79 |
|
Edmonton
Sweet index (US$/bbl) |
|
45.32 |
|
|
46.03 |
|
|
48.37 |
|
|
46.18 |
|
|
41.99 |
|
Natural gas |
|
|
|
|
|
|
|
|
|
|
AECO
(C$/mmbtu) |
|
1.45 |
|
|
2.78 |
|
|
2.69 |
|
|
3.09 |
|
|
2.32 |
|
U.S./Canadian Dollar average exchange rate |
|
1.247 |
|
|
1.345 |
|
|
1.323 |
|
|
1.334 |
|
|
1.305 |
|
|
CORPORATE SUMMARY
TransGlobe Energy Corporation ("TransGlobe" or
the "Company") produced an average of 14,912 barrels of oil
equivalent per day ("boepd") during the third quarter of 2017.
Egypt production was 12,268 barrels of oil per day ("bopd"), and
Canada production was 2,644 boepd. The Company's production in the
quarter was impacted by delays in well servicing in Egypt during
August/September and shut-in Canadian gas production during
September due to low spot gas prices at AECO. For the nine
months ended September 30, 2017 the average production was 16,029
boepd, which is within the full-year 2017 production guidance range
of 15,500 to 16,500 boepd.
In Egypt, the Company released the
workover/completion rig supporting the Eastern Desert operations in
early August due to escalating safety and performance
issues. A replacement rig was contracted and mobilized in late
September to begin restoring approximately 1,500+ bopd of shut-in
production associated with pump/rod replacements. A second workover
rig was contracted in early October for the Eastern Desert to
accelerate removal of the backlog of well workovers. The
second rig is expected to be operational in late November following
mobilization and certification.
In Canada, approximately 100 boepd (~600 Mcfd)
of dry gas was shut-in August 30 due to low gas prices associated
with system outages (expansion/maintenance) in the TransCanada
system. In September, the Company hedged approximately 4,300
GJ/day (~4.1 MMcfd) of Q4-2017 gas production at $2.065 C/GJ.
The 600 Mcfd of dry gas will be put back online in November as a
result of improved spot prices. The majority of the Company’s
~6.0 MMcfd of Canadian gas production is liquids rich gas or gas
production associated with light oil production. This production
will remain on stream as the majority of revenue is derived from
oil and liquids sales.
The Company completed one direct sale tanker
lifting during the quarter, consisting of 442,953 barrels of
entitlement crude oil. Proceeds of $21.5 million ($19.6 million net
of hedging) were received in October. The Company's next cargo
lifting from Egypt, originally scheduled for December 2017, is now
scheduled for late November 2017. In addition to the lifting
the Company sold 351,002 barrels of inventoried entitlement crude
oil to the Egyptian General Petroleum Company ("EGPC") during the
third quarter for $14.9 million. The EGPC proceeds are used to
cover in-country expenditures. Canadian production was sold during
the quarter.
Dated Brent oil prices averaged $52.11 per
barrel in the third quarter of 2017. The selling differential for
the Ras Gharib heavy oil improved this year to approximately $8.00
per barrel as compared to the approximately $10.00 to $15.00 per
barrel differentials experienced during 2015 and 2016. This has
resulted in an improvement to the current netbacks and future
economics of Eastern Desert developments. TransGlobe received a
blended price of $44.82 per barrel during the quarter. TransGlobe's
Canadian production received an average of $44.91 per barrel of oil
and $1.65 per Mcf of natural gas during the third quarter.
The Company had funds flow of $19.2 million
($0.27 per share) and ended the quarter with positive working
capital of $58.8 million, which includes cash and cash equivalents
of $26.3 million (including restricted cash).
During the quarter the Company repaid $5.0
million of the amount outstanding under the prepayment agreement.
Long-term debt net of working capital was $21.0 million as at
September 30, 2017.
The Company experienced a net loss in the
quarter of $6.9 million, which includes a $10.3 million non-cash
impairment loss on the Company's exploration and evaluation assets
at South Alamein and a $3.2 million unrealized derivative loss on
commodity contracts. The $3.2 million loss on derivative commodity
contracts represents a fair value adjustment on the Company's
hedging contracts as at September 30, 2017.
In the Western Desert the Company mobilized a
completion rig to South Alamein in September to commence a two well
testing program at Boraq. The Boraq 2 well was re-entered and
tested light oil from the AR-E channel to re-establish oil
production prior to completing and testing the Boraq 5 appraisal
well. The Boraq 5 well failed to produce any hydrocarbons from the
two zones. The lower AR G zone, although very similar on open hole
logs and drill cutting samples to the original Boraq 2 discovery
well, tested tight with virtually no inflow of fluids from a 20
foot perforated interval in the AR G carbonate zone. The AR E zone
was also perforated and tested wet from the E channel sand.
The Boraq 5 well was plugged and abandoned. At this point,
the Boraq 2 discovery does not have sufficient scale to proceed
with development without additional exploration success on the
South Alamein Concession. A number of exploration prospects have
been identified that, if successful, could provide the addition
reserves and productivity to bring forward a South Alamein
development.
In the Eastern Desert, the Company received
approval for three development leases at NWG in September. The
discoveries at NWG development leases 2, 3 and 4 are scheduled to
start production in Q4-2017 and Q1-2018. The NWG-38A1 was
fractured stimulated and placed on production in October at an
initial rate of 340 bopd. NWG 1X and NWG 5BX have been placed on
production and are cleaning up at combined rates of approximately
300 bopd.
The Company drilled and completed three
horizontal Cardium oil wells in Harmattan during the
quarter. The three wells were drilled, completed and equipped
for approximately $2.1 million (C$2.5 million) per well. In
addition, the Company acquired 2.5 sections (1,600 acres) of
Cardium rights in the Harmattan area at government land
sales. The new lands have increased the Company’s internally
estimated Cardium drilling location inventory by 8-10
locations.
Brent oil prices strengthened during the quarter
and firmed up to above $50.00 per barrel. The fundamentals seem to
be slowly improving (lower world inventories, increasing demand).
The Company’s cost structure for operating expenses and G&A has
been improved significantly over the past three years. The
devaluation of the Egyptian pound, which occurred in Q4 of 2016,
also had a significant positive impact on operating expenses. The
increased oil sales during the quarter resulted in a significant
improvement to funds flow and net earnings, posting the highest
result in ten quarters. Management will continue to steward the
balance sheet conservatively and focus on a return to
profitability.
The Company continues to investigate methods to
increase its liquidity and general market support, including
alternative listings.
OPERATIONS UPDATE
ARAB REPUBLIC OF EGYPT
EASTERN DESERT
West Gharib, Arab Republic of Egypt
(100% working interest, operated)
Operations and Exploration
No wells were drilled during the third
quarter.
Production
Production from West Gharib averaged 5,741 Bopd
to TransGlobe during the third quarter, a 10% (648 bopd) decrease
from the previous quarter. Third quarter production was negatively
impacted by well servicing delays. The Company has resumed
servicing operations and has contracted a second workover rig for
the Eastern Desert to accelerate well workovers. The second rig is
expected to be operational in late November.
Production averaged 5,020 bopd during October,
representing a 14% (721 Bopd) reduction from Q3-2017 production.
The drop in production during October was primarily due to shut-in
wells awaiting servicing and natural declines. With the addition of
the second workover rig in November, it is expected that the
backlog of shut-in production in the Eastern Desert will be back on
stream by year end.
Sales
TransGlobe lifted and sold 442,953 barrels of
Ras Gharib blend in September, all of which was allocated to West
Gharib entitlement crude inventory (after royalties and tax).
Subsequent to the quarter, the Company received $21.5 million
($19.6 million net of hedging) for the September lifting.
TransGlobe sold 351,002 barrels of inventoried entitlement crude
oil (after royalties and tax) to EGPC for $14.9 million in the
third quarter of 2017 to cover in-country expenditures. TransGlobe
held 109,645 barrels of West Gharib entitlement oil as inventory at
the end of the third quarter.
|
Quarterly West
Gharib Production (bopd) |
|
2017 |
|
2016 |
|
|
|
Q-3 |
|
|
|
Q-2 |
|
|
|
Q-1 |
|
|
Q-4 |
|
Gross production
rate |
|
5,741 |
|
|
|
6,389 |
|
|
|
6,683 |
|
|
6,601 |
|
TransGlobe working
interest |
|
5,741 |
|
|
|
6,389 |
|
|
|
6,683 |
|
|
6,601 |
|
TransGlobe inventory
held (lifted) |
|
(5,715 |
) |
|
|
(92 |
) |
|
|
3 |
|
|
3,339 |
|
Total sales |
|
11,456 |
|
|
|
6,481 |
|
|
|
6,680 |
|
|
3,262 |
|
Government share (royalties and tax) |
|
2,826 |
|
|
|
3,155 |
|
|
|
3,304 |
|
|
3,262 |
|
TransGlobe sales (after royalties and tax)1 |
|
8,630 |
|
|
|
3,326 |
|
|
|
3,376 |
|
|
— |
|
1 Under the terms of the West Gharib Production
Sharing Concession, royalties and taxes are paid out of the
Government's share of production sharing oil. |
|
West Bakr, Arab Republic of Egypt (100%
working interest, operated)
Operations and Exploration
Due to the backlog of well workovers and the
impact of well service delays, the Company deferred all low cost,
behind-pipe opportunities in the K and H fields. These
opportunities are being scheduled as part of the 2018 production
uplift program.
No wells were drilled during the third quarter.
Production
Production from West Bakr averaged 5,651 bopd to
TransGlobe during the third quarter, a 7% (434 bopd) decrease from
the previous quarter. The Company has resumed servicing operations
and has contracted a second workover rig for the Eastern Desert to
accelerate well workovers. The second rig is expected to be
operational in late November.
Production averaged 5,046 bopd during October,
representing an 12% (605 Bopd) reduction from Q3-2017 production.
The drop in production during October was primarily due to shut-in
wells awaiting servicing and natural declines. With the addition of
the second workover rig in November, it is expected that the
backlog of shut-in production in the Eastern Desert will be back on
stream by year end.
Sales
TransGlobe did not sell its entitlement share of
production (after royalties and tax) from West Bakr during the
quarter which resulted in an ending inventory position (under-lift)
of 769,909 barrels at the end of the third quarter.
|
|
Quarterly West
Bakr Production (bopd) |
|
2017 |
|
2016 |
|
|
|
|
Q-3 |
|
|
Q-2 |
|
|
|
Q-1 |
|
|
Q-4 |
|
|
Gross production
rate |
|
5,651 |
|
|
6,085 |
|
|
|
6,284 |
|
|
6,134 |
|
TransGlobe working
interest |
|
5,651 |
|
|
6,085 |
|
|
|
6,284 |
|
|
6,134 |
|
TransGlobe inventory
held (lifted) |
|
2,288 |
|
|
(3,202 |
) |
|
|
2,545 |
|
|
2,484 |
|
Total sales |
|
3,363 |
|
|
9,287 |
|
|
|
3,739 |
|
|
3,650 |
|
Government share (royalties and tax) |
|
3,363 |
|
|
3,621 |
|
|
|
3,739 |
|
|
3,650 |
|
TransGlobe sales (after royalties and tax)1 |
|
— |
|
|
5,666 |
|
|
|
— |
|
|
— |
|
1 Under the terms of the West Bakr Production Sharing
Concession, royalties and taxes are paid out of the Government's
share of production sharing oil. |
|
|
|
North West Gharib, Arab Republic of
Egypt (100% working interest, operated)
Operations and Exploration
No wells were drilled during the
third quarter. Subsequent to quarter-end, the drilling rig was
re-activated and re-entered NWG-3A targeting the Red Bed in an
up-dip structural position. The NWG 3A ST 1 well encountered the
targeted thick Red Bed formation in an up-dip position, however the
zone was wet and subsequently abandoned. Following NWG 3A
ST1, the drilling rig moved to the NWG 38A2 appraisal well
offsetting the NWG 38 A discovery well which is currently producing
~550 Bopd.
The NWG-38A1 appraisal well was stimulated
during the third quarter. Due to delays in well servicing, this
well was not completed and placed on production until after the 3rd
quarter. The well continues to clean up and is currently
producing approximately 340 bopd.
In addition, the Company received approval for
three development leases at NWG in September. The discoveries
at NWG DL 2, 3 and 4 are scheduled to start production in Q4-2017
and Q1-2018. The NWG 1 and NWG 5 discoveries (discovered in
2014) wells were put on production in October.
The NWG 5 discovery is an upper Nukhul discovery
similar to and located immediately south of the Arta Upper Nukhul
pool in the West Gharib concession. The NWG 5 discovery wells
(discovery well and one appraisal well) are expected to produce at
similar rates to TransGlobe’s Arta Nukhul wells which typically
have an initial 30 day production rate (IP 30) of 150-180 bopd with
ultimate recoveries of 120-150 MBbls per well on primary
production. The NWG 5x well was placed on production
and continues to cleanup from the frac stimulation with a current
production rate of 210 Bopd.
The NWG 1 discovery is located immediately north
of the Arta Red Bed (Lower Nukhul) pool in the West Gharib
concession. The NWG 1 wells (discovery well and one appraisal well)
encountered a tight Red Bed conglomerate sequence which requires
stimulation to produce. Longer-term production from the NWG 1 wells
will be required to establish expected per well recoveries and the
associated reserve assignments. NWG 1X was placed on production in
late October and is continuing to clean-up following fracture
stimulation with an initial rate of approximately 90 Bopd.
Production
Production from NWG averaged 876 bopd to
TransGlobe during the third quarter, a 36% (501 bopd) decrease from
the previous quarter, primarily due to well servicing delays at NWG
3.
Production averaged 985 bopd during October,
with current production of approximately 1,600 bopd. The increase
in current production levels is primarily due to the new wells (NWG
38A1, NWG 1x and NWG 5x) being placed on production during
October.
Sales
TransGlobe did not sell its entitlement share of
production (after royalties and tax) from NWG during the quarter,
which resulted in an ending inventory position (under-lift) of
108,536 barrels.
|
Quarterly North
West Gharib Production (bopd) |
|
2017 |
|
2016 |
|
|
|
Q-3 |
|
|
Q-2 |
|
|
Q-1 |
|
|
Q-4 |
|
Gross production
rate |
|
876 |
|
|
1,377 |
|
|
982 |
|
|
55 |
|
TransGlobe working
interest |
|
876 |
|
|
1,377 |
|
|
982 |
|
|
55 |
|
TransGlobe inventory
held (lifted) |
|
318 |
|
|
499 |
|
|
356 |
|
|
20 |
|
Total sales |
|
558 |
|
|
878 |
|
|
626 |
|
|
35 |
|
Government share (royalties and tax) |
|
558 |
|
|
878 |
|
|
626 |
|
|
35 |
|
TransGlobe sales (after royalties and tax)1 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
1 Under the terms of the North West Gharib Production Sharing
Concession, royalties and taxes are paid out of the Government's
share of production sharing oil. |
|
WESTERN DESERT
South Alamein, Arab Republic of Egypt
(100% working interest, operated)
Operations and Exploration
The Boraq 5 commenced drilling in May to test
the down-dip extent of the two pools discovered at Boraq 2. The
Boraq 5 well encountered significant drilling difficulties. The
first attempt to reach the target encountered significant caving
and lost circulation resulting in a requirement to sidetrack the
well to a different location. The well reached a total depth of
8,900 feet measured depth and encountered up to 15 feet of possible
pay in the AR ‘G’ Cretaceous oil pool. The well missed the
AR-E channel sands. The well was therefore plugged back and
again sidetracked to a structurally up-dip location targeting AR-E
channel and the AR-G pool. The side track also encountered
significant drilling difficulties but eventually reached a total
depth of 8,755 feet measured depth and encountered six feet of AR E
channel and 19 feet AR G formation. The well was cased as a
potential oil well.
The Company mobilized a completion rig to South
Alamein in September to commence a two well testing program at
Boraq. The Boraq 2 well was re-entered and tested light oil from
the AR-E channel to re-establish oil production from the well. The
short retest of Boraq 2 produced 550 bbls of oil over a 14 hour
period. The well was flowed at an average rate of 1,140 Bopd
of 35 API oil on a 64/64 inch choke over an 8 hour flow period
prior to being shut-in for buildup. Following the Boraq 2 re-test,
the Company completed testing the Boraq 5 appraisal well which
failed to produce any hydrocarbons from the two zones. The lower AR
G zone, although very similar on open hole logs and drill cutting
samples to the original Boraq 2 discovery well, tested tight with
virtually no inflow of fluids from a 20 foot perforated interval in
the AR G carbonate zone. The AR E zone was also perforated and
tested wet from the E channel sand. The Boraq 5 well was plugged
and abandoned. Based on the Boraq 5 test results, the Boraq 2
discovery does not have sufficient scale to proceed with
development without additional exploration success on the South
Alamein Concession. A number of exploration prospects that,
if successful, could provide the additional reserves and
productivity to bring forward a South Alamein development. These
targets are being reviewed to determine if they should be added
into the 2018 exploration program.
South Ghazalat, Arab Republic of Egypt
(100% working interest, operated)
Operations and Exploration
At South Ghazalat, the Company has met all
financial commitments for the first exploration phase and is
targeting to have a drill-ready prospect inventory prepared during
2017. The Company is planning to drill two wells in South
Ghazalat in conjunction with North West Sitra drilling in the 2018
exploration program.
North West Sitra, Arab Republic of Egypt
(100% working interest, operated)
At NW Sitra, the Company completed the 600 km2
seismic acquisition program at the end of March. The processed data
was received in September and prospect mapping is underway. The
Company has a two well commitment in the current exploration phase.
The Company is targeting to drill the two wells in 2018.
CANADA
Operations and Exploration
The Company drilled and initiated the
completions on three horizontal Cardium oil wells in Harmattan
during the quarter. The three horizontal wells were drilled
during July/August and completed in September/October with 40 stage
(15 t/stage) fracs. The number of stages and size of the fracs are
more than double the average done on the Company’s existing
Harmattan wells by the previous owners. The Company is optimistic
the increased stimulation will result in higher production rates
and ultimate oil recoveries for the project. The wells were
equipped and placed into production in late October. The initial
flow rates are very encouraging, although a 30 and 60 day average
rate (IP 30/60) will be more representative of the ultimate
potential of the wells. The Company expects to have initial
production rates by year-end, following the frac flow back and
clean up period. The three wells were drilled, completed and
equipped for approximately $2.1 million (C$2.5 million) per
well.
In addition, the Company acquired 2.5 sections
(1,600 acres) of Cardium rights in the Harmattan area at government
land sales. The new lands have increased the Company’s
internally estimated Cardium drilling location inventory by 8-10
locations.
The Company continues to evaluate properties for
acquisition in the greater Harmattan area.
Production
Production from Canada averaged 2,644 boepd to
TransGlobe during the third quarter, a 1% (31 bopd) increase from
the previous quarter. Approximately 100 boepd (~600 Mcfd) of dry
gas was shut-in on August 30 due to low gas prices associated with
system outages (expansion/maintenance) on the TransCanada system.
In September, the Company hedged approximately 4,300 GJ/day (~4.1
MMcfd) of Q4-2017 gas production at $2.065 C/GJ. The 600 Mcfd
of dry gas remains shut-in but will be put back online in November
as a result of improved spot prices. The majority of the Company’s
~6.0 MMcfd of Canadian gas production is liquids rich gas or gas
production associated with light oil production. This production
will remain on stream as the majority of revenue is derived from
oil and liquids sales.
Production averaged 2,633 bopd during October,
which is essentially flat with Q3-2017 production. The three new
Cardium Hz wells were tied in and placed on production during
October. The initial flow-back and clean up rates, although very
encouraging, contributed very little to the monthly October
production numbers due to limited producing days during the
month.
|
Quarterly
Canada Production (boepd) |
|
2017 |
|
2016 |
|
|
|
Q-3 |
|
|
Q-2 |
|
|
Q-1 |
|
|
Q-4 |
|
Canada crude oil
(bbls/d) |
|
518 |
|
|
496 |
|
|
565 |
|
|
18 |
|
Canada NGLs
(bbls/d) |
|
1,081 |
|
|
919 |
|
|
1,037 |
|
|
34 |
|
Canada natural gas
(mcf/d) |
|
6,268 |
|
|
7,191 |
|
|
7,075 |
|
|
230 |
|
Total
production (boe/d) |
|
2,644 |
|
|
2,613 |
|
|
2,782 |
|
|
90 |
|
|
READER ADVISORIES
Forward-Looking Statements
This news release may include certain statements
that may be deemed to be “forward-looking statements” within the
meaning of the U.S. Private Securities Litigation Reform Act of
1995. Such statements relate to possible future events. All
statements other than statements of historical fact may be
forward-looking statements. Forward-looking statements are often,
but not always, identified by the use of words such as “seek”,
“anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”,
“will”, “project”, “predict”, “potential”, “targeting”, “intend”,
“could”, “might”, “should”, “believe” and similar expressions.
These statements involve known and unknown risks, uncertainties and
other factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
statements. Although TransGlobe’s forward-looking statements are
based on the beliefs, expectations, opinions and assumptions of the
Company’s management on the date the statements are made, such
statements are inherently uncertain and provide no guarantee of
future performance. In particular, this press release contains
forward-looking statements regarding the Company's appraisal,
development and evaluation plans and the focus of the Company's
exploration and development budget. In addition, information and
statements relating to “resources” are deemed to be forward-looking
information and statements, as they involve the implied assessment,
based on certain estimates and assumptions, that the resources
described exist in the quantities predicted or estimated, and that
the resources described can be profitably produced in the future.
Actual results may differ materially from TransGlobe’s expectations
as reflected in such forward-looking statements as a result of
various factors, many of which are beyond the control of the
Company. These factors include, but are not limited to, 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 and natural
gas 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,
and other factors beyond the Company’s control. With respect to
forward-looking statements contained in this press release,
assumptions have been made regarding, among other things: 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; and the geography of the areas in which the
Company is conducting exploration and development activities.
TransGlobe does not assume any obligation to update forward-looking
statements if circumstances or management’s beliefs, expectations
or opinions should change, other than as required by law, and
investors should not attribute undue certainty to, or place undue
reliance on, any forward-looking statements. Please consult
TransGlobe’s public filings at www.sedar.com and
www.sec.gov/edgar.shtml for further, more detailed information
concerning these matters, including additional risks related to
TransGlobe's business.
For further information, please contact:
Investor
RelationsTelephone: (403)
264-9888Email: investor.relations@trans-globe.comWeb
site: www.trans-globe.com
OR
Public RelationsFTI
Consulting+44 (0) 203 727 1000Ben Brewerton / Ed Westropp / Emerson
Clarkeenergy@fticonsulting.com
TransGlobe Energy (NASDAQ:TGA)
Historical Stock Chart
From Feb 2024 to Mar 2024
TransGlobe Energy (NASDAQ:TGA)
Historical Stock Chart
From Mar 2023 to Mar 2024