TIDMTGL
RNS Number : 0239Z
TransGlobe Energy Corporation
20 January 2022
The information contained within this Announcement is deemed by
TransGlobe Energy Corporation to constitute inside information as
stipulated under the Market Abuse Regulation (EU) No. 596/2014 as
it forms part of UK law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR").
TRANSGLOBE ENERGY CORPORATION
ANNOUNCES EASTERN DESERT CONTRACT EXECUTION
AIM & TSX: "TGL" & NASDAQ: "TGA"
Calgary, Alberta, January 20, 2022 - TransGlobe Energy
Corporation ("TransGlobe" or the "Company") announces execution of
the new concession agreement consolidating and amending its three
existing Eastern Desert concession agreements (West Gharib, West
Bakr and North West Gharib) (the "Agreement") . All dollar values
are expressed in US dollars unless otherwise stated.
PRODUCTION SHARING CONTRACT FINALIZATION
TransGlobe has signed the Agreement which was ratified into law
in December 2021 by the Egyptian parliament, at an official signing
ceremony with the Ministry of Petroleum held on January 19, 2022.
The Agreement brings together the three producing concessions which
in December 2021 had average production of 9,394 Bopd (8,590 Bopd
Heavy Crude; 803 Bopd Light and Medium Crude).
The Company has paid the initial modernization payment of $15
million and signature bonus of $1 million as a precondition to the
official signing. The Company will be required to pay an additional
$10 million on February 1st for each of the next five years
beginning on February 1, 2022. In addition, the Company has
committed to spending a minimum of $50 million over each five-year
period for the 15 years of the primary term (total $150 million).
Amounts spent beginning on the Agreement effective date of February
1, 2020 will be included against the capital commitment.
RANDY NEELY, PRESIDENT AND CEO'S STATEMENT
"This Agreement with the Egyptian General Petroleum Corporation,
resets the TransGlobe business in Egypt; not only does it give us
the added time to exploit the existing producing fields to their
maximum potential, including the pursuit of identified contingent
resources (detailed in the news release dated December 3, 2020),
the improved fiscal terms incentivize TransGlobe to continue to
invest across our Eastern Desert portfolio.
Our strong financial position allowed us to fund the payment of
the modernization payment and the signature bonus through cash on
hand and cash from operations, and we expect to fund subsequent
payments in the same manner.
TransGlobe is well positioned to generate increased free cash,
and with supportive commodity prices and settlement of the
effective date adjustment associated with the Agreement, we expect
we will be in a position to revisit our dividend policy in the
near-term."
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.
For further information, please contact:
TransGlobe Energy Corporation +1 403 264 9888
Randy Neely, President and CEO investor.relations@trans-globe.com
Eddie Ok, CFO http://www.trans-globe.com
or via Tailwind Associates
Tailwind Associates (Investor Relations) +1 403 618 8035
Darren Engels darren@tailwindassociates.ca
http://www.tailwindassociates.ca
Canaccord Genuity (Nomad & Joint-Broker)
Henry Fitzgerald-O'Connor
James Asensio +44(0) 20 7523 8000
Shore Capital (Joint Broker)
Toby Gibbs
John More +44(0) 20 7408 4090
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", "strengthened",
"confidence", "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 anticipated benefits resulting from the
ratified Agreement, including its ability to provide TransGlobe
with additional time to exploit existing fields to their maximum
potential and pursue identified contingent resources; that
TransGlobe will continue to invest across its Eastern Desert
portfolio; TransGlobe's expectations that it will be able to fund
its next payment under the Agreement through cash on hand and the
anticipated timing thereof; that TransGlobe is well positioned to
generate increased free cash; that it the Company will revisit its
dividend policy ; and the anticipated timing thereof 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: that TransGlobe will have the free
cash at hand to fund the next payment under the Agreement; that
TransGlobe will revisit its dividend policy; 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; 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: that TransGlobe will not be able to exploit existing
fields to their maximum potential; that TransGlobe will not pursue
identified contingent resources; that TransGlobe will not continue
to invest across its Eastern Desert portfolio; that TransGlobe will
not be able to fund its next payment under the Agreement through
cash on hand; that TransGlobe is not well positioned to generate
increased free cash; that TransGlobe will not revisit its dividend
policy; 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.
The Company's future dividend payments, if any, and the level
thereof is uncertain. Any decision to implement a divided policy or
pay dividends will be subject to the discretion of the board of
directors of the Company and may depend on a variety of factors,
including, without limitation the Company's business performance,
financial condition, financial requirements, growth plans, expected
capital requirements and other conditions existing at such future
time including, without limitation, contractual restrictions and
satisfaction of the solvency tests imposed on the Company under
applicable corporate law. There can be no assurance that dividends
will be paid in the future.
The following abbreviations used in this press release have the
meanings set forth below:
Bopd barrels of oil per day
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END
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January 20, 2022 02:00 ET (07:00 GMT)
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