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 (“TransGlobe” or the “Company”)
(
AIM & TSX: “TGL” & NASDAQ:
“TGA”) announces an operations update.
All dollar
values are expressed in US dollars unless otherwise
stated.
Updates
- Corporate production during the
quarter averaged 14.8 MBoepd in July, 13.5 MBoepd in August and
14.4 MBoepd to date in September.
- Received proceeds of $59 million
during the third quarter for cargos lifted in June and July.
- Drilled and preparing to abandon NW
Sitra 12 exploration well (Jurassic target).
- Drilled two successful oil wells in
M Pool in the West Bakr.
PRODUCTION
Corporate production averaged ~14.8 MBoepd
during July, ~13.5 MBoepd during August and has averaged ~14.4
MBoepd to date in September. August production was lower due to
routine well servicing in Egypt. In Canada, the Company shut
in 80 Boepd of natural gas production on May 11th due to low gas
prices.
Production Summary:
(MBoepd) |
July |
August |
Sept (to date) |
Egypt |
12.3 |
11.2 |
12.2 |
Canada |
2.5 |
2.3 |
2.2 |
Total |
14.8 |
13.5 |
14.4 |
|
|
|
|
MARKETING
The Company completed its third lifting of 2018
of approximately 501,000 barrels of entitlement crude oil on July
19th for proceeds of approximately $32 million, received in August.
The Company expects the final lifting of the year to occur in Q4
2018.
OPERATIONS UPDATEARAB
REPUBLIC OF EGYPT
Western Desert
In North West Sitra (“NWS”) the Company drilled
the NWS 12X exploration well to a total depth of 13,300 feet
targeting a stacked Cretaceous/Jurassic prospect. The well did not
encounter hydrocarbons in the targeted zones and will be abandoned.
With the drilling of NWS 12X, the first phase work commitments have
been met. 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). The second exploration phase 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. A final decision on whether the Company will elect to
relinquish the concession or enter the second exploration phase of
the concession will be made following a full evaluation of the data
obtained from the wells.
In South Ghazalat (“SGZ”) the Company is
preparing the location for SGZ 6X, the second exploration well in
the concession. SGZ 6X is located on the eastern portion of the
concession offsetting the Raml oil field in the Abu Gharadig basin.
The SGZ 6X prospect is targeting stacked Cretaceous targets similar
to the Raml and SW Raml fields. Site construction is underway and
it is expected that SGZ 6X will be drilled in October/November.
Eastern Desert
In West Bakr, the Company drilled a two well
infill program in the M field resulting in two oil wells during
August/September. M-North was drilled to a total depth of 5,113
feet and cased as an oil well. M-North encountered an internally
estimated 132 feet of net oil pay. The M-North well is currently
producing ~750 Bopd. M-South was drilled to a total depth of 5,077
feet and cased as an oil well. M-South encountered an internally
estimated 142 feet of net oil pay. The M-South well was placed on
production at an initial rate of ~500 Bopd in September. Both of
these wells have exceeded internal pre-drill estimates of initial
production rates.
Following M-South, the rig was moved to NW
Gharib 38A-7 to drill a potential water injector in the NWG 38A
pool. The NWG 38A-7 well is currently drilling as a potential water
injector targeting the 38A Red Bed pool in a structurally lower
position 0.4 kilometers south of the NWG 38A Injector well (NWG
38A-I, drilled Q2). The NWG 38A-I well encountered oil with an
internally estimated 34 feet of net Red Bed oil pay and was placed
on production in September at an initial rate of ~110 Bopd
(following a fracture stimulation). 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.
Canada
In Canada, the Company commenced drilling the
2018 Cardium development program, which includes six gross (five
net) horizontal Cardium development wells to be drilled from a
common pad to improve efficiencies and reduce costs. The Company
has drilled and cased two one-mile horizontal wells and is
currently drilling the third horizontal well of the six well
program. The program includes a two-mile extended reach horizontal
(“ERH”) well to evaluate the performance of ERH wells in the
Harmattan area. The remainder of the 2018 drilling program will
consist of one-mile horizontal wells.
Following the six well development drilling
program, the Company will drill a one-mile horizontal well to
evaluate a portion of the newly acquired lands (16 net sections
(10,240 acres) of Cardium prospective acreage) located south/south
west of the Harmattan pool. If successful, the new lands could
provide a significant development opportunity which is proximal to
the Company's Harmattan production and facilities. The Harmattan
Cardium pool has typically been developed by drilling four one mile
horizontal wells per section.
Dividend
The Company reinstated a variable semiannual
dividend in August and paid a $0.035 per share dividend to
shareholders on September 14th.
About TransGlobe
TransGlobe Energy Corporation is a
Calgary-based, 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.
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
day |
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 |
|
|
|
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
|
|
|
Canaccord
Genuity |
+44 (0) 20 7523
8000 |
(Nomad &
Joint Broker) |
|
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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