TransGlobe Energy Corporation (“TransGlobe” or the “Company”)
provides an operations update, announces its intention to list its
common stock on the London Stock Exchange’s AIM market and pending
changes to the Board of Directors.
Q1 Highlights
• Company production for Q1-2018 was on plan
averaging ~14,366 Boepd (~11,776 Bopd Egypt, ~2,590 Boepd Canada).•
Drilled a successful oil well at Arta 48 which will be placed on
production in May following stimulation. •
Drilled a successful oil well at K-46 in the West Bakr South
K-field with an estimated 96 feet of net oil pay in the Asl A and
15 feet of net oil pay in the Asl B.• Currently drilling a second
development well at K-45 South K field. • Reached agreement with
GPC to drill two additional wells in the M-field buffer-zone, which
are expected to be drilled and put on production in late Q2 or Q3.•
Preparations for the 2018 Western Desert drilling program (5
exploration wells) are underway. Program expected to commence in
June with two drilling rigs on NW Sitra.• The 2018 Canadian
drilling plan is targeting to commence drilling up to 8 (6 net)
Cardium wells in July. This program could include a two-mile
horizontal well to evaluate extended reach horizontals in the
Harmattan area.• Sold ~236 thousand barrels of crude oil to EGPC
during Q1.• Confirmed with EGPC four crude oil cargo liftings in
2018.
- The first cargo was scheduled to begin lifting in late March,
but due to bad weather it was slightly delayed. On April 7th
a total of ~452 thousand barrels were lifted and will be booked as
a Q2 sale.
Production
Total Company production for the first quarter was on plan,
averaging approximately 14,366 Boepd, comprised of 11,776 Bopd in
Egypt (100% oil) and 2,590 Boepd in Canada (57% light oil and
liquids).
Total Company production averaged 14,248 Boepd in March,
comprised of 11,739 Bopd in Egypt (100% oil) and 2,509 Boepd in
Canada (60% light oil and liquids).
Operations Update
In the Eastern Desert the K-46 development well drilled in March
was initially completed in the Asl B zone to obtain a production
rate prior to perforating the main Asl A formation. The Asl B
produced approximately 45 Bopd from an internally estimated 15 feet
of net oil pay overlying a water zone. The Asl A formations (A1, A2
and A3), which encountered an internally estimated 96 feet of net
oil pay are scheduled for completion later this month.
The Company is currently drilling the second South K-field
development well at K-45 targeting the main Asl A sand in the
crestal position on the South K field. The Asl B sand
is also expected to be encountered in K-45.
Following K-45, the drilling rig is scheduled to move to West
Gharib and NW Gharib to drill Arta 54 and NWG 38A-3
respectively. Arta 54 is targeting the Nukhul/Red bed
formation at the northern edge of the main Arta pool. The NWG
38A-3 well is planned as a water injection well to provide
reservoir pressure support and enhanced recovery in the NWG 38 Red
Bed pool. The first three wells drilled in the NWG 38 pool
did not encounter a water leg and are currently producing at a
combined, reduced rate of approximately 920 bopd. It is expected
that the current production rates will be optimized upon completion
of the water injection scheme and stabilized reservoir
pressures.
Following NWG 38A-3, the rig will return to the West Bakr
concession and drill up to three development wells including two
wells inside the recently negotiated reduced buffer zone targeting
the M-field Asl A formation.
Concurrently, the Company will be stimulating and completing two
drilled and uncompleted wells (DUC’s) the NWG 1 and NWG 5
Development Areas (discovered in 2014), in addition to the West
Gharib Arta 48 well currently awaiting stimulation. These NWG 1 and
5 wells encountered a tight Red Bed conglomerate sequence which
requires stimulation to produce and 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 Company also has an active recompletion campaign scheduled
throughout the year, targeting low risk behind pipe opportunities
in addition to water-flood optimization opportunities. The
majority of these opportunities reside in the West Bakr K-field
where the Company anticipates completion of Phase 2 and 3 of the
K-field facility expansion to double/triple the current fluid
handling capacity respectively. Concurrent with the K-field
facility expansions the drilling rig was used to re-enter and
deepen a legacy well (K-5) for water disposal. The K-5
water disposal well is scheduled for completion in late April/early
May to handle additional planned water production from the expanded
facilities. The expansion will allow for accelerated fluid
withdrawal rates supporting incremental production volumes and
additional reserves from both West Bakr K and M fields.
In the Western Desert the Company is preparing for the 2018
exploration drilling program expected to commence in the NW Sitra
concession utilizing two drilling rigs in June. The larger
(2,000 HP) drilling rig will drill NWS 12 targeting a stacked
Cretaceous/Jurassic prospect. Subject to additional
approvals, the larger rig can be moved to South Alamein to drill a
Jurassic prospect following NWS 12. The smaller (~1,000 HP)
drilling rig will drill NWS 9 targeting a stacked Cretaceous
prospect. Following NWS 9, the rig will be moved to the South
Ghazalat Concession to drill two independent stacked Cretaceous
structures. The four, basin opening wells in NWS and S.
Ghazalat could de-risk 13 of the 21 additional prospects currently
mapped on 3-D seismic. No production is currently budgeted
from the Western Desert exploration assets in 2018.
In Canada, the Company is preparing for a 3 to 4 week
turnaround/maintenance program at the Company’s central oil
processing battery and main natural gas compressor site. The
work has been scheduled to coincide with a planned turnaround at
the main natural gas processing plant in the Harmattan area which
is operated by a third party. It is expected that the majority of
the Canadian production will be shut-in during May due to this
planned outage. The 2018 production guidance numbers include
the planned turnaround.
In addition, the Company is finalizing the 2018 Cardium drilling
program scheduled to commence in July. The 2018 Cardium
development program of up to eight gross (six net) horizontal wells
will be drilling from a common pad to improve efficiencies and
reduce costs. The Company is planning to drill one
two-mile extended reach horizontal (“ERH”) well to evaluate the
performance of ERH wells in the Harmattan area. The remainder
of the 2018 program will be one-mile horizontal wells.
AIM Listing
Beginning in early 2017, the Company undertook
an extensive review of its existing stock market listings and its
current and potential common share investors. The Company
determined that its traditional North American investor base and
liquidity has diminished significantly over the past six years,
beginning with the Egyptian revolution in January of 2011 and
continuing through the recent and prolonged downturn in oil prices
from 2014 to 2017. Although oil prices have shown tangible
and structural improvement over the past six to nine months the
Company’s share price and liquidity have not responded to that
improvement despite significant increases in profitability and
funds flow. The Company concluded that a listing on the London
Stock Exchange’s AIM market will provide access to a significant
pool of specialist investors who currently do not have adequate
access to TransGlobe’s common shares due to time-zone challenges
and European market investment requirements. The Company also
believes that a listing on the AIM market may eventually improve
its profile by placing TransGlobe alongside many of its
international E&P peers. This may attract European analyst
coverage focused on international companies similar to
TransGlobe.
TransGlobe has retained Canaccord Genuity as its
nominated advisor (“NOMAD”) and preparations are at an advanced
stage for an AIM Admission filing.
In further support of the listing on the AIM
market, the Company intends to establish an executive office in
London by September 2018.
Pending Board of Directors
Changes
As part of TransGlobe’s succession plan, the
Company is pleased to announce that Randy Neely will stand for
election to the Board of Directors at the upcoming Annual and
Special Meetings of Shareholders. Mr. Neely was
recently promoted to President on January 8, 2018 after serving as
the Company’s VP Finance and CFO since joining the Company in
2012. In order to make room for Mr. Neely, Mr. Lloyd Herrick,
VP and COO will not stand for re-election this year. Mr.
Herrick has served on the Board as a non-independent director since
joining the Company in 1999 and will remain with the Company as VP
and COO.
Annual and Special Meeting of the
Shareholders
Date: Thursday May 10, 2018Time: 3 PM
MSTLocation: 3rd floor, Centennial Place West, Bow River Room, 250
- 5th Street S.W., Calgary, Alberta Canada
About TransGlobe
TransGlobe Energy Corporation is a
Calgary-based, growth-oriented 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 under the symbol TGL and on the
NASDAQ Exchange under the symbol TGA.
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",
"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, anticipated drilling, completion and testing
plans, including, the anticipated timing thereof, prospects being
targeted by the Company, formations expected to be encountered
during drilling, and rig mobilization plans; estimated net oil pay;
expectation that current production rates will be optimized upon
completion of a water injection scheme and stabilized reservoir
pressures; the Company's anticipation that completion of the Phase
2 and 3 of the K-field facility expansion will double/triple the
current fluid handling capacity respectively; the expected effect
of the planned turnaround at the main natural gas processing plant
in the Harmattan area on the Company's production; 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; anticipated production and ultimate
recoveries from wells; the Company’s planned drilling program
in each of Egypt and Canada; 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 Company's beliefs
related to the AIM market; the Company's intention to establish an
office in London and the expected timing thereof; 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; the AIM markets access to
investors; the AIM markets improvement to TransGlobe's corporate
profile; the perceived benefits of the AIM market; 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; uncertainty in obtaining
required approvals from TransGlobe's nominated advisor; uncertainty
in obtaining required approvals from the London Stock Exchange;
failure to advance an AIM admission filing; failure to achieve the
perceived benefits of the AIM market; failure to establish an
executive office in London on the time anticipated or at all; no
assurances are given that an application to list will be made or
that any TransGlobe security will be listed on the AIM market;
general economic and financial conditions of the AIM market; 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.gov/edgar.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
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.
Certain type curve information included to in
this news release, including IP30, represents estimates of the
production decline and ultimate volumes expected to be recovered
from wells over the life of the well. This information is based on
management-generated type curves based on a combination of
historical performance of older wells and management's expectation
of what might be achieved from future wells. The information
represents what management thinks an average well will achieve.
Individual wells may be higher or lower but over a larger number of
wells management expects the average to come out to the type curve.
Over time type curves can and will change based on achieving more
production history on older wells or more recent completion
information on newer wells.
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:
Bopd |
barrels of oil per
day |
Boepd |
barrels of oil
equivalent per day |
MBbl |
one thousand barrels of
oil |
GJ/d |
giga joules per
day |
$C/JG |
Canadian dollars per
giga joule |
For further information, please contact:
Investor RelationsTelephone: 403.264-9888Email:
investor.relations@trans-globe.comWeb site:
http://www.trans-globe.com
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