TransGlobe Energy Corporation (AIM & TSX: “TGL” & NASDAQ:
“TGA”) (“TransGlobe” or the “Company”) announces a Q1 financial,
operations and corporate update.
All dollar values are
expressed in US dollars unless otherwise stated.
OVERVIEW
Corporate
- Business continuity plans have been activated across our
locations in response to COVID-19 with no health and safety impacts
or disruption to production;
- The previously announced ~80% reduction in 2020 capital program
has been fully implemented;
- The Company has reduced monthly G&A costs across the
business by ~35% through headcount reduction, universal salary
rollbacks and reducing all discretionary expenditures;
- The Company currently holds cash of $26.7 million;
- Negotiations continue with the Egyptian government to amend,
extend and consolidate the Company’s Eastern Desert concession
agreements;
Production
- Production guidance for 2020 remains unchanged at an average of
13,300 to 14,300 Boepd;
- Production averaged ~14,965 Boepd in Q1 2020 to date (January
~15,188 Boepd, February ~15,169 Boepd and March to date ~14,551
Boepd) versus 15,345 Boepd in Q4 2019;
Operational
- A 452 Mbbls cargo of Gharib blend crude was lifted in mid-March
with proceeds (inclusive of hedging gains) of $14.6 million
anticipated in April;
- Sold ~758.5 Mbbls to EGPC in Q1 2020 for net proceeds of ~$37.3
million;
- Drilled a Yusr development well in Egypt (HW-2A) with rig
release imminent;
- Drilled a 2-mile horizontal Cardium development well in the
South Harmattan area, Canada (100/13-16-029-03W5/0) and released
rig;
PRODUCTION
Production Summary (WI before royalties and
taxes):
|
(Boepd) |
Q4 2019 |
Jan 2020 |
Feb 2020 |
Mar 2020 (to Mar 28th) |
YTD Average |
|
Egypt |
12,832 |
12,666 |
12,648 |
12,239 |
12,515 |
|
Canada |
2,513 |
2,522 |
2,521 |
2,312 |
2,450 |
|
Total |
15,345 |
15,188 |
15,169 |
14,551 |
14,965 |
During the quarter, production decreased
marginally due to natural declines in Egypt and Canada, with March
production impacted by severe weather in Egypt and the shut-in for
13 days of the 2-20 well in Canada while drilling a well from the
same location.
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 is producing 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)During the first quarter
of 2020, the Company drilled a development oil well in the Eastern
Desert at West Bakr. The HW-2A development well was drilled to a
total depth of 1,639 meters. Due to stuck pipe, only the
Yusr-B reservoir was fully logged and evaluated with an internally
estimated 0.3 meters of net oil pay. The other Yusr reservoirs and
the upper Bakr reservoir, though all exhibiting good oil shows,
were not logged at this time. HW-2A is expected to be completed in
April 2020 as a producer on 5.4m of oil bearing Yusr-C reservoir
observed on the mud logs. The SHAMS-2 rig will be demobilized
following the HW-2A completion.
Discussions with our joint venture operating
partner are ongoing to reduce operating expenditures. Any
material operating cost reductions in Egypt will require the
assistance of the Company’s Egyptian joint venture partner, the
Egyptian General Petroleum Corporation (“EGPC”);
Constructive negotiations with EGPC to amend,
extend and consolidate the Company’s Eastern Desert concession
agreements have continued through the period, with both parties
recognizing the attractiveness of a revised agreement to stabilize
and ultimately improve investment in production, following a return
to a more normalized commodity price environment.
Canada
A 2-mile Cardium development well has been
successfully drilled and the rig released. Stimulation and
equipping for production will await improved oil prices. By
extending the well trajectory by a further 218 meters into an
adjacent section, this well holds an additional 7.5 sections of
land in the South Harmattan fairway. Prudently extending the well
allowed TransGlobe to cost effectively secure future upside
potential in South Harmattan.
The 2-mile horizontal 2-20 well, completed in Q4
2019 and de-risking the South Harmattan fairway, continues to
produce at field estimated rates of 234 Boepd (197 Bopd light oil,
119 Mcf/d gas, 18 Bopd NGL). The Company is very encouraged
that production performance remains in line with Company
expectations for this significant new resource play.
Crude oil prices in Western Canada have been
significantly impacted by the current oversupply into the market
exacerbated by the COVID-19-related demand contraction.
TransGlobe’s light oil production continues to be produced at a
positive field netback. In addition, natural gas prices have
been relatively strong through the first quarter averaging Cdn
$1.83/MMbtu. Nonetheless, the Company is exploring all avenues with
its contractors and suppliers to reduce operating costs in its
Canadian operations.
CORPORATE
The Company is prudently conserving cash to
proactively manage its balance sheet in the current low commodity
price environment.
In addition to the previously announced 80%
reduction in the 2020 capital program, the Company has undertaken a
G&A cost reduction exercise across all locations through staff
reductions, salary rollbacks and reducing all discretionary
expenditures. This also includes a rollback of non-executive
director remuneration of 10%. The Company anticipates these
actions will reduce on-going monthly G&A by ~35%, but there
will be non-recurring restructuring charges that will impact the Q1
and Q2 results.
The Company remains in constant communication
with its lenders (Mercuria Energy Trading and ATB Financial) and
does not anticipate deviating from its intended debt reduction
schedule.
In this period of extreme volatility, 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.
COVID-19
The Company has had no reported cases of
COVID-19 among its staff, contractors or joint venture partners.
Business continuity plans have been implemented in all our
locations and operations continue as normal.
Randy Neely, President and CEO comments
on the year ahead:
“Along with the actions taken to reduce spending
and remain solvent we are closely monitoring our liquidity and
access to credit. We have modeled the current year under
current forward anticipated commodity prices, adjusting for our
reduced capital plan, reduced G&A, as well as planned operating
cost reductions, and remain confident that the Company will remain
liquid for at least the next 12 months.
We have taken immediate and prudent action on
Corporate operations to mitigate the effects caused by the impact
on oil demand by COVID-19, compounded by oil oversupply resulting
from the breakdown in OPEC+. While we believe it would be
easy to focus on the short term alone, that would be a mistake. The
fundamentals of the energy market and its direction of increasing
consumption remain unchanged in the medium and long term, and we
are not alone in believing that oil and gas will continue to be
major components of the energy market for many years to come. While
managing our balance sheet and preserving cash are the right
actions to take today to ensure the Company’s survival through
these challenging times, one thing we can be sure of is the
pandemic will pass, so we must also secure the long-term future of
the Company for our investors. Therefore, management and the Board
of Directors will continue to take the necessary steps to ensure we
are positioned to grow and remain relevant to investors, through
Company actions and, potentially, appropriate M&A to add
resilience. Our focus will continue to be on improving the terms of
our existing concessions to encourage increased investment from
greater cash flows, and positively leaning into the energy
transition as the market recovers."
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 Q1 2020, internal
estimate of net oil pay at the HW-2A development well, completion
of the HW-2A development well and the timing thereof, 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.
The Company's expectation that it will remain
liquid for the next twelve months assumes, among other things, that
there will be a gradual and sustained recovery of crude oil prices
in the near future, that timely and anticipated crude oil liftings
will occur and payments for such liftings will be made when
required, that its counterparties will perform their payment
Mercuria Energy Trading and ATB Financial. 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.
This document includes an estimate of net oil
pay thickness at HW-2A development well, which estimate may be
considered to be anticipated results under National Instrument
51-101. The estimate was prepared internally. The risks and
uncertainties associated with recovery of resources from HW-2A
development well include, but are not limited to: that the Company
may encounter unexpected drilling results; the occurrence of
unexpected events in the exploration for, and the operation and
development of, oil and gas; delays in anticipated timing of
drilling and completion of wells; geological, technical, drilling
and processing problems; and other difficulties in producing
petroleum reserves.
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:
|
bbls |
barrels |
|
Mbbl |
thousand barrels |
|
MMbbl |
million barrels |
|
Mbbl/d |
thousand barrel per day |
|
boe |
barrels of oil equivalent of natural gas, on the basis of one
barrel of oil or NGLs for six thousand cubic feet of natural
gas |
|
Mboepd |
thousand barrels of oil equivalent per day |
|
MMboe |
million barrels of oil equivalent |
|
Bopd |
barrels of oil per day |
|
Mbopd |
thousand barrels of oil per day |
|
Mcf/d |
thousand cubic feet per day |
|
MMcf/d |
million cubic feet per day |
|
Bcf |
billion cubic feet |
|
NGL |
Natural Gas Liquids |
|
MM |
million |
Production Disclosure
Production Summary (WI before royalties and
taxes):
|
(Boepd) |
Q4 2019 |
Jan – 20 |
Feb – 20 |
Mar -20(to Mar 28th) |
YTD |
|
Egypt (Boepd) |
12,832 |
12,666 |
12,648 |
12,239 |
12,515 |
|
Heavy Crude (bbl/d) |
11,934 |
11,653 |
11,636 |
11,260 |
11,514 |
|
Light and Medium Crude (bbl/d) |
898 |
1,013 |
1,012 |
979 |
1,001 |
|
Canada (Boepd) |
2,513 |
2,522 |
2,521 |
2,312 |
2,450 |
|
Light and Medium Crude (bbl/d) |
899 |
955 |
890 |
765 |
870 |
|
Natural Gas (Mcf/d) |
5,395 |
4,992 |
5,125 |
4,853 |
4,987 |
|
Associated Natural Gas Liquids (bbl/d) |
709 |
732 |
777 |
739 |
748 |
|
Total (Boepd) |
15,345 |
15,188 |
15,169 |
14,551 |
14,965 |
Production Guidance
|
(Boepd) |
Low |
High |
Mid-Point |
|
Egypt (Boepd) |
11,300 |
12,100 |
11,700 |
|
Heavy Crude (bbl/d) |
10,396 |
11,132 |
10,743 |
|
Light and Medium Crude (bbl/d) |
904 |
968 |
957 |
|
Canada (Boepd) |
2,000 |
2,200 |
2,100 |
|
Light and Medium Crude (bbl/d) |
672 |
740 |
706 |
|
Natural Gas (Mcf/d) |
5,142 |
5,646 |
5,394 |
|
Associated Natural Gas Liquids (bbl/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.cahttp://www.tailwindassociates.ca+1
403.618.8035
investor.relations@trans-globe.comhttp://www.trans-globe.com+1
403.264.9888 |
TransGlobe Energy (TSX:TGL)
過去 株価チャート
から 12 2024 まで 1 2025
TransGlobe Energy (TSX:TGL)
過去 株価チャート
から 1 2024 まで 1 2025
