TransGlobe Energy Corporation (“TransGlobe” or the “Company”)
announces its 2021 capital budget and production guidance.
All dollar values are expressed in US dollars unless
otherwise stated.
2021 BUDGET HIGHLIGHTS
- 2021 capital budget of $27.2MM (before capitalized G&A);
- Egypt $16.6MM
- Canada $10.6MM
- With a significant portion of
investment scheduled in the second half of the year, 2021 average
production guidance is set at 12.0 to 13.0 MBoepd with a midpoint
of 12.5 MBoepd:
- Egypt 9.7 – 10.5 MBopd;
- Canada 2.3 – 2.5 MBoepd;
- With the drilling program back-end
loaded the Company expects exit production to be in the range of
13.5 to 14.0 MBoepd;
The 2021 drilling program includes 12 Egypt wells and 3 Canadian
Cardium wells in South Harmattan.
Randy Neely, Chief Executive Officer of TransGlobe,
said:
“With the approval of the agreement to merge our
Eastern Desert concessions behind us and recent commodity price
improvements, the Company is rapidly moving forward to re-start
investment in Egypt and Canada to support our growth plans in both
countries. In Egypt, the focus will be chiefly on growing
production in the Eastern Desert while we work to mature our
contingent resource portfolio and restart our evaluation of the
South Ghazalat acreage. In Canada, the focus will be on developing
South Harmattan with a specific goal of decreasing the uncertainty
across the northern land holdings. Our 2021 budget underlines the
confidence we have in the potential of the TransGlobe portfolio and
paves the way to resume dividend distributions in 2022.”
2021 CAPITAL GUIDANCE
The Company’s 2021 capital program of $27.2MM
(before capitalized G&A) includes $16.6MM for Egypt and $10.6MM
for Canada. The 2021 Plan was prepared to focus on value accretive
projects within its portfolio, maximize free cash flow to direct at
future value growth opportunities and to increase the Company’s
production base.
Egypt
As announced in early December, 2020, the
Company 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. Ratification of the concession is anticipated in Q2,
2021, and the February 1, 2020 effective date for the improved
concession terms supports increased investment in parallel with
ratification.
The $16.6MM Egypt program is entirely allocated
to development. The primary focus of the 2021 Egypt plan is to
accelerate the exploitation of the Company’s Eastern Desert acreage
with the aim of increasing oil production, while evaluating and
increasing production from the more prospective lower Bahariya
reservoir on the South Ghazalat development lease in the Western
Desert.
The 2021 development program is principally
focused on the Eastern Desert and includes: nine development wells
in West Bakr (three in H and six in K pools), one Red Bed appraisal
well in the NW Gharib 3X pool, two development wells targeting the
Arta Nukhul reservoir in West Gharib, two recompletions in West
Bakr, two recompletions in West Gharib, three conversions to water
injectors in West Gharib, and development/maintenance projects in
the Eastern Desert (West Bakr, NW Gharib and West Gharib). A
recompletion of SGZ-6X well to the more prospective lower Bahariya
reservoir is also planned.
Egypt production is expected to average between
9.7 and 10.5 MBopd for the year and an exit rate of 10.4 to 10.7
MBopd.
Canada
The $10.6MM Canada program consists of drilling
three (three net) horizontal wells and completing one (one net)
standing well, all targeting the Cardium light oil resource at
Harmattan, with additional maintenance/development capital. The
Cardium drilling program in 2021 consists of one 2-mile and two
1-mile development wells in South Harmattan. The one 2-mile
horizontal well drilled, but not completed, in South Harmattan in
2020 will also be stimulated, equipped and brought into
production.
Canada production is expected to average between
2.3 and 2.5 MBoepd for the year and an exit rate of 3.1 to 3.3
MBoepd.
Detailed Capital Plan
The approved 2021 capital program is summarized
in the following table:
|
|
TransGlobe Net Capital (US$MM) |
|
Gross Well Count |
|
Concession |
Development |
Exploration |
TotalCapex2 |
New Drills |
Total Wells |
|
|
Wells |
Other1 |
Wells |
|
Dev |
Expl |
|
|
West Gharib |
1.1 |
2.0 |
- |
3.1 |
2 |
- |
2 |
|
West Bakr |
9.3 |
0.5 |
- |
9.8 |
9 |
- |
9 |
|
NW Gharib |
0.9 |
- |
- |
0.9 |
1 |
- |
1 |
|
South Ghazalat |
- |
0.3 |
- |
0.3 |
- |
- |
- |
|
Development/ maintenance |
- |
2.5 |
- |
2.5 |
- |
- |
- |
|
Egypt |
11.3 |
5.3 |
- |
16.6 |
12 |
- |
12 |
|
Canada |
9.0 |
1.6 |
- |
10.6 |
3 |
|
3 |
|
Total |
20.3 |
6.9 |
- |
27.2 |
15 |
- |
15 |
-
Other includes completions, workovers, recompletions and equipping,
and HSE capital.
-
Table may not total due to rounding.
About TransGlobe
TransGlobe Energy Corporation is a cash
flow-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 CorporationRandy Neely,
President and CEOEddie Ok, CFO |
+1 403 264
9888investor.relations@trans-globe.comhttp://www.trans-globe.comor
via Tailwind Associates or FTI Consulting |
|
|
|
|
Tailwind Associates (Investor Relations)Darren
Engels |
+1 403 618
8035darren@tailwindassociates.cahttp://www.tailwindassociates.ca |
|
|
|
|
FTI Consulting (Financial PR)Ben
BrewertonGenevieve Ryan |
+44(0) 20 3727 1000transglobeenergy@fticonsulting.com |
|
|
|
|
Canaccord Genuity (Nomad & Joint-Broker)Henry
Fitzgerald-O’ConnorJames Asensio |
+44(0) 20 7523 8000 |
|
|
|
|
Shore Capital (Joint Broker)Jerry KeenToby
Gibbs |
+44(0) 20 7408 4090 |
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:
|
Bopd |
barrels of oil per day |
| Bpd |
barrels per
day |
| BOE |
barrel of
oil equivalent |
| MBopd |
thousand
barrels of oil per day |
| Boepd |
barrels of
oil equivalent per day |
| MBoepd |
thousand
barrels of oil equivalent per day |
| MBbl |
thousand
barrels |
| MCFD |
thousand
cubid feet per day |
| MMCFD |
million
cubic feet per day |
| WI |
working
interest |
PRODUCTION DISCLOSURE
|
|
|
Light and Medium Crude |
Heavy Crude |
Natural Gas |
Natural Gas Liquids |
Total |
|
|
|
Bpd |
Bpd |
MCFD |
Bpd |
Boepd |
|
|
|
|
|
|
|
|
| 2021
Guidance Corporate |
|
|
|
|
|
|
High |
1,656 |
9,678 |
5,000 |
833 |
13,000 |
|
|
Mid Point |
1,591 |
9,309 |
4,800 |
800 |
12,500 |
|
|
Low |
1,526 |
8,940 |
4,600 |
767 |
12,000 |
| 2021
Guidance Egypt |
|
|
|
|
|
|
|
High |
822 |
9,678 |
|
|
10,500 |
|
|
Mid Point |
791 |
9,309 |
|
|
10,100 |
|
|
Low |
760 |
8,940 |
|
|
9,700 |
| 2021
Guidance Canada |
|
|
|
|
|
|
|
High |
833 |
|
5,000 |
833 |
2,500 |
|
|
Mid Point |
800 |
|
4,800 |
800 |
2,400 |
|
|
Low |
767 |
|
4,600 |
767 |
2,300 |
| 2021 Exit
Rate Corporate |
|
|
|
|
|
|
High |
1,927 |
9,900 |
6,517 |
1,086 |
14,000 |
|
|
Low |
1,859 |
9,547 |
6,284 |
1,047 |
13,500 |
|
|
|
|
|
|
|
|
| 2021 Exit
Rate Egypt |
|
|
|
|
|
|
|
High |
841 |
9,900 |
|
|
10,742 |
|
|
Low |
811 |
9,547 |
|
|
10,358 |
|
|
|
|
|
|
|
|
| 2021 Exit
Rate Canada |
|
|
|
|
|
|
|
High |
1,086 |
|
6,517 |
1,086 |
3,258 |
|
|
Low |
1,047 |
|
6,284 |
1,047 |
3,142 |
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