TIDMTGL
RNS Number : 3931A
TransGlobe Energy Corporation
29 May 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
APPROVAL OF NEW DEVELOPMENT LEASE AND AN OPERATIONS UPDATE
AIM & TSX: "TGL" & NASDAQ: "TGA"
Calgary, Alberta, May 29, 2019 - TransGlobe Energy Corporation
("TransGlobe" or the "Company") announces an approval of a new
development lease and an operations update. All dollar values are
expressed in US dollars unless otherwise stated.
UPDATES
-- South Ghazalat Development Lease approved, targeting an
initial 1000 Bopd from the upper Bahariya formation with first oil
expected in Q4 of 2019;
-- Production averaging 17.0 MBoepd during May (month to date)
consistent with April production of 17.0 MBoepd and 7% higher than
Q1 average production;
-- Drilled and cased the K-63 Development well as an Asl A
formation oil well with an internally estimated 74 feet of net oil
pay;
-- HW-2X discovery well drilled in April continues to clean up
and is currently producing 700 Bopd (field estimate).
PRODUCTION
Production Summary (WI before royalties):
(MBoepd) Q1 2019 April 2019 May 2019
(to date)
Egypt 13.6 14.6 14.8
-------- ----------- -----------
Canada 2.3 2.4 2.2
-------- ----------- -----------
Total 15.9 17.0 17.0
-------- ----------- -----------
Corporate production increased during the second 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
Western Desert - South Ghazalat (100% WI)
The Company received notice that the Development Lease ("DL")
application for the SGZ-6X discovery well which tested 3,840 Bopd
of light oil* has been approved by the Ministry of Petroleum.
The 29.8 km(2) (7,340 acre) DL has a twenty (20) year primary
term with a 5 year extension available. In addition to the $1
million DL bonus (as per the concession agreement), the Company has
committed to drill a minimum of one exploration well on the DL
within the first four years of the primary term. Upon receiving
approval of the South Ghazalat DL, and having met all the
commitments for the first two exploration phases, the Company
elected not to enter the final 18 month exploration period and
relinquished the balance of the South Ghazalat exploration
lands.
The near term development plan is targeting first oil production
from the SGZ-6X discovery well in Q4 of 2019. The initial
development includes the construction of an early production
facility ("EPF") and equipping the SGZ-6X well for production. The
Company is targeting to initially produce the SGZ-6X well at 1,000
Bopd from the Upper Bahariya formation to assess reservoir
performance. Subject to finalizing transportation agreements with
neighboring operators, the 34 API oil will initially be trucked to
a nearby facility (15 km) which is pipeline connected to the El
Hamra Terminal located on the Mediterranean coast. Concurrently the
Company is planning to drill an appraisal well in Q3/4 (subject to
rig availability) which, if successful, would be tied into the EPF
and potentially be producing prior to year-end. In addition, the
Company has initiated a project to merge and reprocess two existing
3D seismic surveys over the DL area to better define prospects and
leads identified from current mapping for future exploration and
appraisal drilling.
Eastern Desert (100% WI)
In West Bakr, the K-63 development well was drilled to a total
depth of 4,741 feet and cased as an Asl A formation oil well. The
K-63 well encountered an internally estimated 74 feet of net oil
pay in the main Asl A pool based on well logs and samples. It is
expected that K-63 will be completed and placed on production by
early June, along with the previously drilled H-30 development well
(internally estimated 25 feet of net oil pay). Also in West Bakr,
the HW-2X discovery well (internally estimated 113 feet of net oil
pay) is producing 700 Bopd (field estimate).
The drilling rig is scheduled to move to NW Gharib to drill an
exploration well at NWG 38D-1 targeting the Red Bed formation in an
adjacent fault block to the east of the producing 38A pool. The
Company initiated water injection in the NWG 38A Red Bed pool
during the quarter to maintain reservoir pressure and increase
recoveries.
*The Company previously reported that 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.
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. Readers are
cautioned not to place undue 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: +1 403.444.4787
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
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contact rns@lseg.com or visit www.rns.com.
END
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