TransGlobe Energy Corporation (TSX:TGL) (NASDAQ:TGA) (“TransGlobe”
or the “Company”) announces operations update.
All dollar
values are expressed in US dollars unless otherwise
stated.
Updates
- Corporate production averaged approximately 14.9 MBoepd during
June
- Received net proceeds of $27.2 million in mid-July for the June
cargo of 450 Mbbls
- Sold 501 Mbbls of entitlement oil July 19 (3rd cargo of 2018),
priced off July Brent, proceeds expected in 30 days
- Western Desert: drilled NW Sitra 9 exploration well (Cretaceous
target) to a total depth of 5,950 feet and abandoned as dry, rig
moving to South Ghazalat for two exploration wells (Cretaceous
targets). Rigged up on NW Sitra 12 exploration well (Jurassic
target), finalizing acceptance testing with drilling expected to
commence in the next week
- Eastern Desert: mobilized a drilling rig to M field in West
Bakr to commence a three well development drilling program (2 in M
field and 1 well in NWG 38 pool)
PRODUCTIONJune production
averaged ~14.9 MBoepd (12.3 MBopd Egypt, 2.6 MBoepd
Canada)MARKETINGIn Egypt, the Company completed
two crude oil cargo sales from inventory during the second
quarter. The first cargo was lifted in April (~452 Mbbls) for
proceeds of ~$26.5 million and the second cargo was lifted in June
(~450 Mbbls) with proceeds of ~$27.2 million received
mid-July. Total sales including direct sales to EGPC during
the second quarter totaled approximately 1.0 million barrels of
entitlement oil from inventory for proceeds of ~$58 million before
hedging adjustments.
In addition, the Company lifted ~501Mbbls of
entitlement crude oil on July 19th, with proceeds due 30 days from
lifting (July Brent pricing less quality adjustments for Ras Gharib
blend). The Company expects the final lifting of the year to
occur in Q4 2018.
OPERATIONS UPDATE
ARAB REPUBLIC OF EGYPT
Western Desert
In North West Sitra (“NWS”) the Company drilled
the NWS 9 exploration well to a total depth of 5,950 feet targeting
a stacked Cretaceous prospect. The well did not encounter
hydrocarbons in the targeted zones and was abandoned. Although
disappointing, NWS 9 has provided key information that will be
integrated into the regional database and prospect mapping for the
area. The NWS 9 well cost was ~$1.0 million to drill and
abandon.
The rig is now moving to the South Ghazalat #1
to drill the first of two planned exploration wells in the South
Ghazalat concession, targeting Cretaceous prospects.
The larger 2,000 HP drilling rig is rigged up on
NWS 12 and is expected to commence drilling in the next week,
following the close out of acceptance testing. NWS 12 is targeting
a deeper stacked Cretaceous/Jurassic prospect with a planned
drilling time of approximately 60 days.
The Company requested and received a six-month
extension to the first exploration phase (now expiring January 7,
2019) in NWS to drill and evaluate the Phase 1 exploration
commitment wells (NWS 9 & 12). Prior to January 7, 2019,
the Company can elect to enter the second and final exploration
phase (3.0 years after the extension of phase one), which has a two
well ($6.0 million) work commitment and a mandatory relinquishment
of 30% of the original concession area not held by development
leases.
Eastern Desert
The Company has mobilized a third drilling rig
in Egypt and is preparing to drill the first of three planned
development wells in the Eastern Desert.
In West Bakr, drilling is expected to commence
on the M-North well in the next few days. M-North is the
first of two wells targeting the producing Asl formations in the M
field. Following the M wells, the drilling rig will move to
NW Gharib to drill NWG 38A-7.
The NWG 38A-7 well is targeting the 38A Red Bed
pool in a structurally lower position as a potential water injector
approximately 0.4 kilometers south of the NWG 38A Injector well
(drilled Q2) which encountered 92 feet of Red Bed with an
internally estimated net oil pay of approximately 34 feet.
The NWG 38A Injector well was completed and confirmed oil in the
lower portion of the Red Bed. The NWG 38AInjector well will require
a fracture stimulation prior to producing (similar to NWG 38A-1).
Should the NWG 38A-7 well also encounter additional oil
column, the Company has planned an additional well further south at
NWG 38A-8 as a contingency for reservoir pressure support.
In addition, production from the four well (Arta
48, Arta 54, NWG 1AX, NWG 5X) stimulation program completed during
May/June targeting Nukhul and tight Red Bed conglomerate wells, has
averaged approximately 775 Bopd (~195 Bopd/ well) during the
respective first 30 days of production after recovering frac
fluid. About TransGlobeTransGlobe 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 and the AIM
market of the London 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, the
Company's strategy to grow its annual cash flow; expectations
regarding its acquisition efforts; 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; 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. Brett Norris, M.Sc., P Geo, - Vice President
Exploration 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
and approved the technical information contained in this
announcement. Mr. Norris obtained a Master’s of Science Degree in
Geology from the University of Western Ontario. He is a
Registered Professional Geoscientist in the province of Alberta and
has over 30 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.
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.
The following abbreviations used in this press
release have the meanings set forth below:
Bopd barrels of oil per
dayMBopd thousand barrels of oil per
dayBoepd barrels of oil
equivalent per dayMBoepd thousand barrels of oil
equivalent per
dayMBbl thousand
barrels
For further information, please contact:
Investor RelationsTelephone: 403.264.9888
Email: investor.relations@trans-globe.com Web site:
http://www.trans-globe.com
TransGlobe
Energy |
Via FTI Consulting |
Ross Clarkson, Chief
Executive Officer Randy Neely, President Eddie Ok, Chief Financial
Officer |
www.trans-globe.com
|
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Canaccord
Genuity (Nomad & Joint Broker) |
+44 (0) 20 7523
8000 |
Henry
Fitzgerald-O'Connor James Asensio |
|
GMP First
Energy (Joint Broker) |
+44(0)207 448 0200 |
Jonathan Wright
|
|
FTI Consulting
(Financial PR) |
+44 (0) 203 727
1000 |
Ben Brewerton Emerson
Clarke |
transglobeenergy@fticonsulting.com |
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