TIDMTGL
RNS Number : 2968R
TransGlobe Energy Corporation
29 June 2020
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, June 29, 2020 - TransGlobe Energy Corporation
("TransGlobe" or the "Company") announces an operations update. All
dollar values are expressed in US dollars unless otherwise
stated.
UPDATES
-- Production has averaged 14,447 Boepd in Q2 2020 to date
(April 14,378 Boepd, May 14,334 Boepd and June 1 to June 19 14,740
Boepd) versus 14,997 Boepd in Q1 2020;
-- Production guidance for 2020 remains unchanged at an average of 13,300 to 14,300 Boepd ;
-- Sold 100,000 bbls oil in each of the months of April and May
to EGPC, with net proceeds of $4.0 million;
-- Collected $31.8 million in receivables during Q2 2020 to date;
-- Business continuity plans remain effective across our
locations in response to COVID-19 with no health and safety impacts
or disruption to production;
-- 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) Q1 2020 Apr 2020 May 2020 Jun 2020 YTD Average
(to Jun 19(th)
)
Egypt 12,544 12,113 12,126 12,506 12,389
-------- --------- --------- ---------------- ------------
Canada 2,453 2,265 2,208 2,234 2,351
-------- --------- --------- ---------------- ------------
Total 14,997 14,378 14,334 14,740 14,740
-------- --------- --------- ---------------- ------------
Over the quarter to date, production decreased marginally due to
natural declines in Egypt and Canada, with June Egypt production
positively impacted by successful well maintenance in May and
timing of production recognition.
Please see the table entitled "Production Disclosure" at the end
of this news release for the detailed constituent product types and
their respective quantities measured at the first point of sale for
all production amounts disclosed in this news release on a Bopd and
Boepd basis.
OPERATIONS UPDATE
Arab Republic of Egypt
Western Desert - South Ghazalat (100% WI)
SGZ-6X well continues to produce from the Upper Bahariya
reservoir at a rate restricted to a field estimated 200 - 250 Bopd
light and medium crude to evaluate the well, manage the reservoir
and optimize the separation of oil, gas and water.
Eastern Desert (100% WI)
Consistent with the Company's revised 2020 budget, there has
been no drilling activity in the Eastern Desert during Q2 2020.
Discussions with our joint venture operating partner continue to
further reduce operating expenditures. Material operating cost
reductions in Egypt require the assistance of the Company's
Egyptian joint venture partner, the Egyptian General Petroleum
Corporation ("EGPC");
Despite restrictions on travel, constructive negotiations with
EGPC to amend, extend and consolidate the Company's Eastern Desert
concession agreements have continued throughout the quarter.
Canada
Consistent with the Company's revised 2020 budget, there has
been no drilling or completion activity during Q2 2020.
The 2-mile horizontal 2-20 well, completed in Q4 2019 and
de-risking the South Harmattan fairway, was producing at field
estimated rates of 186 Boepd (146 Bopd light oil, 151 Mcf/d gas, 15
Bopd NGL) in June. The Company remains encouraged as the well
continues to produce above expectations for this significant new
resource play.
TransGlobe's light oil production continued to be produced at a
positive field netback, despite lower crude oil prices in Western
Canada early in the quarter, further supported by continued
relatively strong natural gas prices. The Company put into service
spare oil storage capacity of 12,000 bbls at our Canadian producing
locations during the quarter to take advantage of strength in the
forward pricing curve and has retained optionality to bring on
flush production in a higher commodity price environment with the
deferral of completion operations on the South Harmattan well
drilled in the first quarter of 2020.
CORPORATE
The Company has sold 100,000 bbls oil in each of April and May
to EGPC with net proceeds of $4.0 million, and expects to continue
selling to EGPC at approximately this same monthly rate through the
remainder of 2020, supplemented by a physical cargo in Q4 2020.
The Company has collected $31.8 million of receivables in Q2
2020 to date, of which $21.4 million was from EGPC.
As noted in our Q1 2020 update, the Company repaid $10.0 million
on the $75.0 million prepayment facility agreement with Mercuria in
April, leaving $20.0 million drawn and outstanding of a revolving
balance of up to $75.0 million.
The Company remains forward looking and prepared to use its
operational control to take advantage of any sustained upward
movement in oil price. TransGlobe continues to be vigilant for
attractive M&A opportunities steadfastly retaining its focus on
shareholder value creation .
COVID-19
Business continuity plans have been implemented in all our
locations and operations continue as normal. The Company has had
three reported cases of COVID-19 in its joint venture operating
partner in Egypt, which were managed according to established
Company and local national quarantine guidelines. All three have
recovered and returned to work with no onward infection spread
reported.
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 ;
production guidance for 2020, the use of proceeds by the Company
from the sale of inventory in 2020, expectations relating to the
liquidity of the Company for the next twelve months; 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
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. Ron Hornseth, B.Sc., General Manager - Canada 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 report. Mr. Hornseth is a
professional engineer who obtained a Bachelor of Science in
Mechanical Engineering from the University of Alberta. He is a
member of the Association of Professional Engineers and
Geoscientists of Alberta ("APEGA") and the Society of Petroleum
Engineers ("SPE") and has over 20 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 NGL: 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
bbl barrels
Boe barrel of oil equivalent
Boepd barrels of oil equivalent per day
MMBtu One million British thermal units
mcf thousand cubic feet
mcf/d thousand cubic feet per day
NGL Natural Gas Liquids
Production Disclosure
Production Summary (WI before royalties and taxes)
(Boepd) June May April Q1 - Q4 - Q3 Q2 -
- 20 - 20 - 20 20 19 - 19 19
To Date
Egypt (Bopd) 12,506 12,126 12,113 12,544 12,831 13,750 14,663
--------- ------- ------- ------- ------- ------- -------
Heavy Crude (bbls/d) 11,729 11,164 11,078 11,544 11,984 12,909 13,785
--------- ------- ------- ------- ------- ------- -------
Light and Medium Crude
(bbls/d) 777 962 1,035 1,000 847 841 878
--------- ------- ------- ------- ------- ------- -------
Canada (Boepd) 2,234 2,208 2,265 2,453 2,531 2,193 2,277
--------- ------- ------- ------- ------- ------- -------
Light and Medium Crude
(bbls/d) 743 688 697 860 908 666 788
--------- ------- ------- ------- ------- ------- -------
Natural Gas (mcf/d) 4,588 4,699 4,746 4,996 5,334 5,652 5,730
--------- ------- ------- ------- ------- ------- -------
Associated Natural Gas
Liquids (bbls/d) 726 737 775 761 735 585 533
--------- ------- ------- ------- ------- ------- -------
Total (Boepd) 14,740 14,334 14,378 14,997 15,362 15,943 16,940
--------- ------- ------- ------- ------- ------- -------
Production Guidance
(Boepd) Low High Mid-Point
Egypt (Bopd) 11,300 12,100 11,700
------- ------- ----------
Heavy Crude (bbls/d) 10,396 11,132 10,743
------- ------- ----------
Light and Medium Crude (bbls/d) 904 968 957
------- ------- ----------
Canada (Boepd) 2,000 2,200 2,100
------- ------- ----------
Light and Medium Crude (bbls/d) 672 740 706
------- ------- ----------
Natural Gas (mcf/d) 5,142 5,646 5,394
------- ------- ----------
Associated Natural Gas Liquids
(bbls/d) 471 519 495
------- ------- ----------
Total (Boepd) 13,300 14,300 13,800
------- ------- ----------
For further information, please
contact:
TransGlobe Energy Via FTI Consulting
Randy Neely, President and Chief
Executive Officer
Eddie Ok, Chief Financial Officer
Canaccord Genuity (Nomad & Sole
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
Tailwind Associates (Investor Relations)
Darren Engels darren@tailwindassociates.ca
http://www.tailwindassociates.ca
+1 403.618.8035
investor.relations@trans-globe.com
http://www.trans-globe.com
+1 403.264.9888
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
UPDDGGDLLUDDGGI
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