TransGlobe Energy Corporation (TSX: TGL) (NASDAQ: TGA)
("TransGlobe" or the "Company") today announced its 2009 year-end
reserves. All dollar values are expressed in United States dollars
unless otherwise stated.
The Company's 2009 and 2008 year-end reserves were prepared by
the independent reserves evaluation firm of DeGolyer and
MacNaughton Canada Limited ("DeGolyer"), in accordance with
National Instrument 51-101. Following is a summary of DeGolyer's
evaluation for the year ended December 31, 2009 with comparatives
to the year ended December 31, 2008.
The recovery and reserve estimates of crude oil, natural gas
liquids ("NGLs") and natural gas reserves provided in this news
release are estimates only, and there is no guarantee that the
estimated reserves will be recovered. Actual crude oil, NGL and
natural gas reserves may be greater than, or less than, the
estimates provided herein. All reserves presented are based on
DeGolyer's forecast pricing effective December 31, 2009 and
December 31, 2008, respectively.
Year-End 2009 Reserves(i)
Proved Reserves ("1P")
TransGlobe's total proved reserves increased 53 percent from
12.6 million barrels of oil ("MMbbl") at December 31, 2008 to 19.2
MMbbl at December 31, 2009. This increase in proved reserves
represents a production replacement in 2009 of 303 percent.
Proved Plus Probable Reserves ("2P")
Total 2P reserves grew 22 percent from 19.8 MMbbl at December
31, 2008 to 24.2 MMbbl at December 31, 2009. The increase in 2P
reserves represents a production replacement in 2009 of 234
percent.
Proved Plus Probable Plus Possible Reserves ("3P")
Total 3P reserves grew 9 percent from 28.0 MMbbl at December 31,
2008 to 30.5 MMbbl at December 31, 2009. The increase in 3P
reserves represents a production replacement in 2009 of 176
percent.
(i) Definitions of Reserves Categories:
- Proved reserves are those reserves that can be estimated with
a high degree of certainty to be recoverable. It is likely that the
actual remaining quantities recovered will exceed the estimated
proved reserves.
- Probable reserves are those additional reserves that are less
certain to be recovered than proved reserves. It is equally likely
that the actual remaining quantities recovered will be greater or
less than the sum of the estimated proved plus probable
reserves.
- Possible reserves have a less likely chance of being recovered
than probable reserves. This term is often used for reserves which
are claimed to have at least a 10 percent certainty of being
produced.
Year-End Reserves Summary
(Working Interest, before royalties)
December 31, December 31, Increase
2009 2008 (Decrease)
(MMbbl) (MMbbl) (%)
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Proved
Egypt 13.0 5.8 125
Yemen 6.2 6.8 (9)
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Total 1P 19.2 12.6 53
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Proved Plus Probable
Egypt 16.8 12.0 40
Yemen 7.4 7.8 (5)
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Total 2P 24.2 19.8 22
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Proved Plus Probable Plus Possible
Egypt 22.4 20.1 11
Yemen 8.1 7.9 3
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Total 3P 30.5 28.0 9
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2009 Significant Events
In 2009, the Company's activities focused primarily on the
development of its operated West Gharib concession in the Arab
Republic of Egypt ("Egypt").
In Egypt, the Company's 1P reserves grew 125 percent over 2008,
representing a production replacement of 440 percent. On 2P basis,
the year-over-year increase was 40 percent, equal to a production
replacement of 324 percent. The most significant reserves additions
during the year resulted from the appraisal/development drilling at
Hana West and the recognition of reserves associated with enhanced
recovery projects at the Hana, Hoshia and Hana West fields. Water
injection was initiated in both the Hana and Hoshia fields during
2008 and in the Hana West field during 2009. Approximately 67
percent of the corporate 1P reserve additions and 62 percent of the
corporate 2P reserve additions during 2009 were attributed to the
water flood projects at Hana, Hoshia and Hana West.
In Yemen, 2009 production was partially replaced by improved
recovery factors at the An Nagyah, Tasour and Godah fields. The
Company's 1P reserves in Yemen decreased 9 percent over the prior
year, representing a production replacement of 48 percent. On a 2P
basis, reserves in Yemen decreased 5 percent over the prior year,
representing a production replacement of 68 percent.
Estimated Future Net Revenues
All evaluations and reviews of future net cash flow are stated
prior to any provision for interest costs or general and
administrative costs and after the deduction of estimated future
capital expenditures for wells to which reserves have been
assigned. It should not be assumed that the estimated future net
cash flow shown below is representative of the fair market value of
the Company's properties. There is no assurance that such price and
cost assumptions will be attained, and variances could be material.
The recovery and reserve estimates of crude oil, NGL and natural
gas reserves provided herein are estimates only, and there is no
guarantee that the estimated reserves will be recovered. Actual
crude oil, NGL and natural gas reserves may be greater than or less
than the estimates provided herein.
The estimated future net revenues for year ended 2009 presented
below in millions of U.S. dollars ("$MM") are calculated using
DeGolyer's price forecast at December 31, 2009 and constant pricing
using the Securities and Exchange Commissions' ("SEC") average
price (the 12 month average price using in the first day of the
month prices during 2009).
The estimated future net revenues for year ended 2008 presented
below in millions of U.S. dollars are calculated using DeGolyer's
price forecast at December 31, 2008 and constant pricing using the
average price received on December 31, 2008.
In the constant price cases, the prices were held constant for
the life of the reserves.
Present Value of Future Net Revenues, After Tax ($MM)
Independent Evaluator's Price Forecast
December 31, 2009 December 31, 2008
Present Value Discounted at Discounted at
By Area 0% 5% 10% 15% 20% 0% 5% 10% 15% 20%
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Proved
Egypt $338 $266 $219 $186 $162 $120 $105 $ 93 $ 83 $ 75
Yemen $108 $ 90 $ 77 $ 66 $ 58 $109 $ 90 $ 75 $ 64 $ 56
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Total 1P $446 $356 $296 $252 $220 $229 $195 $ 168 $ 147 $ 131
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Proved plus
Probable
Egypt $416 $330 $272 $231 $201 $220 $189 $ 165 $ 146 $ 131
Yemen $133 $107 $ 88 $ 74 $ 64 $131 $106 $ 88 $ 74 $ 64
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Total 2P $549 $437 $361 $306 $265 $351 $295 $ 253 $ 220 $ 194
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Proved plus
Probable plus
Possible
Egypt $550 $420 $334 $274 $231 $366 $299 $ 249 $ 212 $ 182
Yemen $144 $115 $ 94 $ 79 $ 67 $133 $108 $ 90 $ 76 $ 65
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Total 3P $694 $535 $428 $353 $298 $499 $407 $ 339 $ 287 $ 247
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The following table summarizes DeGolyer's reference price
forecast used to estimate future net revenues:
DeGolyer Forecast Pricing ($/bbl)
---------------------------------
WTI Forecast Pricing
($/Bbl) 2009 2010 2011 2012 2013 2014
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Year-end 2009 $ 80.00 $ 82.88 $ 85.83 $ 88.88 $ 92.01
Year-end 2008 $ 57.00 $ 69.53 $ 76.38 $ 86.99 $ 94.74 $ 97.11
Present Value of Future Net Revenues, After Tax ($MM) Constant Pricing
December 31, 2009 December 31, 2008
Present Value Discounted at Discounted at
By Area 0% 5% 10% 15% 20% 0% 5% 10% 15% 20%
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Proved
Egypt $223 $181 $152 $132 $116 $ 39 $ 36 $ 32 $ 30 $ 27
Yemen $ 66 $ 56 $ 48 $ 42 $ 37 $ 36 $ 31 $ 28 $ 25 $ 22
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Total 1P $289 $237 $201 $174 $153 $ 75 $ 67 $ 60 $ 54 $ 49
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Proved plus
Probable
Egypt $272 $222 $187 $161 $142 $ 85 $ 76 $ 68 $ 62 $ 56
Yemen $ 81 $ 66 $ 56 $ 48 $ 41 $ 44 $ 38 $ 34 $ 29 $ 26
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Total 2P $353 $288 $243 $209 $183 $ 129 $114 $ 102 $ 91 $ 82
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Proved plus
Probable plus
Possible
Egypt $350 $274 $222 $185 $158 $ 92 $ 83 $ 75 $ 69 $ 63
Yemen $ 87 $ 71 $ 59 $ 50 $ 43 $ 45 $ 39 $ 34 $ 30 $ 27
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Total 3P $436 $345 $281 $236 $202 $ 137 $ 122 $ 109 $ 99 $ 89
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The constant pricing used to estimate future net revenues is as
follows, with Egypt prices based on prices received for West Gharib
production and Yemen prices based on prices received for production
from Blocks 32 and S-1.
Pursuant to the SEC pronouncement in 2009, the Constant price
case for 2009 is based on the average of the reference price
received on the first of each month during 2009 adjusted for
respective differentials at year ended 2009. Prior to 2009, the
2008 constant price cases were run using the December 31, 2008
pricing.
Constant Pricing ($/Bbl) 2009(SEC average) Dec. 31, 2008
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Egypt $ 54.52 $ 25.64
Yemen $ 59.44 $ 38.39
TransGlobe Energy Corporation is a Calgary-based,
growth-oriented oil and gas exploration and development company
focused on the Middle East/North Africa region with production
operations in the Arab Republic of Egypt and the Republic of Yemen.
TransGlobe's common shares trade on the Toronto Stock Exchange
under the symbol TGL and on the NASDAQ Exchange under the symbol
TGA.
Cautionary Statement to Investors:
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. 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. 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.
Contacts: TransGlobe Energy Corporation Scott Koyich Investor
Relations (403) 262-9888 investor.relations@trans-globe.com
www.trans-globe.com
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