TIDMTGL
RNS Number : 4530X
TransGlobe Energy Corporation
19 December 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, December 19, 2019 - TransGlobe Energy
Corporation ("TransGlobe" or the "Company") announces a Q4
operations update. All dollar values are expressed in US dollars
unless otherwise stated.
UPDATES
-- Production averaged 15.3 MBoepd in Q4 2019 to date (October
15.2 MBoepd, November 15.4 MBoepd and December to date 15.0 MBoepd)
versus 15.9 MBoepd in Q3 2019;
-- Production facilities have been installed at South
Ghazalat-6X, with the discovery well scheduled to be unloaded and
commence production at a target rate of 1000 Bopd on December 22,
2019
-- SHAMS-2 rig has been contracted in Egypt to drill HW-2A
(Eastern Desert appraisal well to HW-2X) followed by SGZ-6A
(Western Desert appraisal well to SGZ-6X), with HW-2A spud before
year-end 2019;
-- Stimulated, equipped, and put on production four Cardium oil
wells (2019 program) in the Harmattan area, Canada, during October
and November;
-- Proceeds of $22 million received in December for a 451 MBbls
cargo lifted in early November 2019;
-- Negotiations continue with the Egyptian government to amend,
extend and consolidate the Company's Eastern Desert concession
agreements;
PRODUCTION
Production Summary (WI before royalties and taxes):
(Boepd) Q3 2019 Oct 2019 Nov 2019 Dec 2019 YTD Average
(to Dec 14(th)
)
Egypt 13,750 13,166 12,918 12,299 13,772
-------- --------- --------- ---------------- ------------
Canada 2,193 2,028 2,498 2,661 2,279
-------- --------- --------- ---------------- ------------
Total 15,943 15,194 15,416 14,960 16,051
-------- --------- --------- ---------------- ------------
Production remains consistent with the upper end of production
guidance for fiscal 2019 of 15.5 to 16.0 MBoepd. During the
quarter, production decreased marginally due to natural declines in
Egypt, partially offset by the commencement of production from the
four 2019 Cardium drilling program wells in Canada.
OPERATIONS UPDATE
ARAB REPUBLIC OF EGYPT
Western Desert - South Ghazalat (100% WI)
Production facilities have been installed at South Ghazalat, and
oil transportation agreements put in place with neighboring joint
venture companies to truck the 34 API oil to a nearby facility (15
km), which is pipeline connected to the El Hamra Terminal located
on the Mediterranean coast. As previously announced, SGZ-6X has
been equipped for production from the Upper Bahariya formation only
to allow reservoir evaluation, and the well is scheduled to be
unloaded with coiled tubing and commence production on December 22,
2019 at an initial expected rate of 1000 Bopd.
To optimize the rig move of the SHAMS-2 rig from the Eastern
Desert, the appraisal well, SGZ-6A, will now spud in late January
2020, after drilling HW-2A (see below). If successful, SGZ-6A will
also be tied into the new production facilities and produced from
the Lower Bahariya formation at an expected initial production rate
similar to SGZ-6X to assess reservoir performance.
Eastern Desert (100% WI)
With sustained production performance from the successful HW-2X
exploration well in West Bakr, the tubing size was increased to 4
1/2 " during October, and at the present time the well is
continuing to produce in excess of a field estimated 700 Bopd. To
take further advantage of this, an appraisal well, HW-2A, targeting
the same Yusr formation has been accelerated into December 2019,
with spud using the SHAMS-2 rig anticipated before year end.
Stimulation of NWG 38 D-1 has been scheduled for late December
2019 pending availability of stimulation services.
Constructive negotiations with EGPC to amend, extend and
consolidate the Company's Eastern Desert concession agreements have
continued through the period. While alignment has been reached on
the major components of a revised concession agreement that would
incentivize the Company to significantly ramp up investment
targeting increased production and reserves in these mature fields,
EGPC internal processes to validate and approve any revised
agreement are complex and time consuming. Considering also that the
subsequent parliamentary ratification process is expected to take
4-6 months, the Company cautions that any material investments -
and cash flows - generated by the anticipated successful conclusion
of negotiations leading to a revised agreement are unlikely to be
recognized in the first half of 2020.
Canada
The three 1-mile and one 2-mile (outpost) wells comprising the
Company's 2019 Cardium drilling program have now been stimulated,
equipped for production and successfully put on stream. Early
production performance conforms to expectations. Additional
information on individual well performance will be provided when
sufficient stabilized production history has been obtained early in
2020.
Corporate
The Company has ended its joint broker relationship with GMP
FirstEnergy post acquisition by Stifel Nicolaus. Canaccord Genuity
continues as the Company's NOMAD and Broker.
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; The Company's
plans to amend, extend, and consolidate its Eastern Desert
Concessions; 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
WI working interest
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
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
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
UPDQKLBFKLFLFBQ
(END) Dow Jones Newswires
December 19, 2019 02:00 ET (07:00 GMT)
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