TIDMTGL
RNS Number : 8699W
TransGlobe Energy Corporation
24 April 2019
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 ANNOUNCES
AN OPERATIONS UPDATE
AIM & TSX: "TGL" & NASDAQ: "TGA"
Calgary, Alberta, April 24, 2019 - TransGlobe Energy Corporation
("TransGlobe" or the "Company") announces a Q1 operations update.
All dollar values are expressed in US dollars unless otherwise
stated.
UPDATES
-- Production averaged 15.9 MBoepd in Q1 2019 (January 15.8
MBoepd, February 15.0 MBoepd and March 16.9 MBoepd) versus 15.3
MBoepd in Q4 2018;
-- Drilled 2 oil wells (M 10, NWG 38A8) and re-entered/deepened
2 water disposal wells (K 8 & K 10) during the quarter;
-- Drilled a new pool oil well (HW 2X) in West Bakr with an
estimated 113 feet of net oil pay subsequent to the quarter;
-- Submitted South Ghazalat 6X development lease to EGPC for approval;
-- Equipped and tied in six Cardium oil wells (2018 program) in
the Harmattan area, Canada during January;
-- Net proceeds of $25 million received in April for a cargo lifted in mid-March;
PRODUCTION
Production Summary:
(MBoepd) January February 2019 March 2019 Average
2019
Egypt 13.0 13.2 14.6 13.6
-------- -------------- ----------- --------
Canada 2.8 1.7 2.3 2.3
-------- -------------- ----------- --------
Total 15.8 15.0 16.9 15.9
-------- -------------- ----------- --------
Corporate production increased during the first quarter due to
drilling and well optimization results in Egypt and new wells in
Canada, which was partially offset by reduced ethane production in
Canada.
OPERATIONS UPDATE
ARAB REPUBLIC OF EGYPT
Eastern Desert
During the quarter:
Drilled and completed the M-10 replacement well (M-10 Twin) as
an Asl A oil producer which was placed on production in February
and is currently producing 400 Bopd.
Drilled the NWG 38A-8 well to a total depth of 5,350 feet and
cased as a potential Red Bed oil well/water injector. NWG 38A-8 was
targeting the southern area of the NWG 38A Red Bed pool to provide
water injection/reservoir pressure support for the 38A pool. The
well was completed and placed on production at an initial average
rate of 45 Bopd and 100 Bpd of water, confirming the well had
intersected the oil water contact for the pool. Based on early
production results, the well will be converted to water injection
during Q2 to initiate water injection and pressure support for the
NWG 38A pool.
Re-entered/deepened two suspended oil wells and converted them
to water disposal wells (K-8 WDW and K-10 WDW).
Subsequent to the quarter:
Drilled a discovery oil well in H Block. The HW-2X exploration
well was drilled to a total depth of 1,654 meters (5,425 feet) and
cased as a Yusr oil well. Based on open-hole logs and wireline
samples, the well encountered an internally estimated 34.5 meters
(113 feet) of net oil pay in the Yusr formation. The HW 2X well is
scheduled for completion this month and expected to be on
production in early May. Following HW-2X, the drilling rig is
scheduled to drill two development wells at (H-30 and K-63) and one
exploration well (NWG 38 D-1).
Western Desert
Based on the previously announced (11/19/18) well test results*
from SGZ-6X (3,840 Bopd of light oil), the Company filed a South
Ghazalat development lease application with EGPC in late
February.
Subject to final approvals by EGPC, the Ministry and necessary
regulatory approvals, the Company is targeting first production
prior to year end. Concurrent to the construction of an early
production facility and equipping SGZ 6X for production, the
Company has submitted permits to drill an appraisal well in the SGZ
6X pool during the second half of 2019 and initiated a project to
merge and reprocess two existing 3D seismic surveys over the
proposed development lease area. In addition to the planned
appraisal well, the Company is committed to drill a minimum of one
additional exploration well.
*The SGZ-6X tested a combined 3,840 barrels per day of light oil
from the upper and lower Bahariya. The lower Bahariya formation
flowed naturally at an average rate of 2,437 barrels per day of
light (38 API) oil, 21 barrels per day of water and 1.4 million
cubic feet of natural gas per day on a 40/64 inch choke from a 42
foot perforated interval. A total of 918 barrels of oil and 7
barrels of water were produced during the 10 hour test. The upper
Bahariya formation flowed at an average rate of 1,403 barrels per
day of light (35 API) oil, 210 barrels per day of water and 1.0
million cubic feet of natural gas per day on a 64/64 inch choke
from a 23 foot perforated interval. A total of 456 barrels of oil
and 65 barrels of water were produced during the 8 hour test.
Although encouraging, test rates are not necessarily indicative of
long-term performance or ultimate recovery.
The Company continued South Alamein extension discussions with
EGPC during the first quarter and resubmitted a request for
military access to drill the SA 24X Jurassic exploration prospect,
which was rejected by the military in April. Based on the 2017 well
results in the Boraq area, the limited commerciality of the
original Boraq 2 discovery (2009) and continued access restrictions
in the eastern area of the concession, the Company is exploring a
variety of extension options with EGPC, which include partial, or
possibly complete, relinquishment of the concession.
Canada
In early January, the Company completed the equipping and tie-in
of the six Cardium wells drilled and completed in the Harmattan
area in late 2018. The wells were brought on production in a
systematic manner in order to maximize ultimate recoveries, however
this process was hampered somewhat by facility outages and
extremely cold winter weather during the quarter.
The main gas processing plant (third party) for the Company's
gas production shut down their deep cut ethane extraction plant in
January due to low ethane prices and pipeline egress issues in
Alberta. It is expected that the ethane will remain in sales gas
until the fourth quarter at a minimum, which will be sold with a
higher energy content and is expected to be generally revenue
neutral, due to the low prices for ethane. It is estimated that
approximately 250 boepd of ethane is now sold as natural gas.
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.
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. Darrin Drall, P.Eng., - Manager Engineering 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. Drall obtained a
Bachelor of Science Degree in Engineering from the University of
Manitoba. He is a Registered Professional Engineer in the province
of Alberta (Association of Professional Engineers and Geoscientists
of Alberta) and in the province of Saskatchewan (Association of
Professional Engineers and Geoscientists of Saskatchewan) 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.
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 Relations
Telephone: +1 403.264.9888
Email: investor.relations@trans-globe.com
Web site: http://www.trans-globe.com
TransGlobe Energy Via FTI Consulting
Randy Neely, President and Chief
Executive Officer
Eddie Ok, Chief Financial Officer
Canaccord Genuity (Nomad & Joint
Broker) +44 (0) 20 7523 8000
Henry Fitzgerald-O'Connor
James Asensio
GMP First Energy (Joint Broker) +44 (0) 20 7448 0200
Jonathan Wright
FTI Consulting (Financial PR) +44 (0) 20 3727 1000
Ben Brewerton transglobeenergy@fticonsulting.com
Genevieve Ryan
This information is provided by RNS, the news service of the
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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