CALGARY, ALBERTA–(Marketwired – Nov 11, 2015) – TransGlobe Energy Corporation (“TransGlobe” or the “Company”) (TGL.TO)(TGA) announces that its Board of Directors has approved a capital budget of $41 million for 2016 and declared a quarterly dividend of US$0.025 per common share, which will be paid in cash on December 31, 2015 to shareholders of record on December 15, 2015.
The rationale for decreasing the dividend at this time is based on the Company’s philosophy that forecasted funds flow should cover development/maintenance capital and the dividend, while exploration expenditures can be financed from the Company’s existing working capital. Based on the capital budget set out below the Company’s management believes it will be able to maintain 2015 exit level production flat for 2016 in the range of 13,300 to 13,800 bopd.
The quarterly dividend is designated as an eligible dividend under the Income Tax Act (Canada).
2016 CAPITAL GUIDANCE
The Company has approved 22 exploration drilling locations on its recently acquired Eastern Desert seismic. The prospects range in size from 2 million to 16 million barrels of recoverable resource (internally estimated P-mean, un-risked) with an individual estimated chance of success ranging from 11% to 42%. This exploration program is targeting a total risked undiscovered resource potential of between 8 and 26 million barrels (on a P-50 and P-Mean basis respectively).
The entire 2016 capital program has $22.3 million (54%) allocated to Exploration and $18.7 million (46%) to Development. The $22.3 million exploration program includes $20.9 million for drilling up to 22 wells in the Eastern Desert with an additional $0.4 million for seismic acquisition in the Western Desert and $1.0 million for annual land costs. The $18.7 million 2016 development program includes: $4.5 million for three development wells in West Bakr K south field, $2.5 million for three development projects at NWG (NWG 1, 3 & 5) plus $4.6 million for development/optimization projects and $7.1 million for maintenance projects at West Gharib and West Bakr.
| The approved 2016 Capital program is summarized in the following table: | ||||||||||||||||||||
| Concession | TransGlobe 2016 Capital ($MM) | Gross Well Count | ||||||||||||||||||
| Development | Exploration | Total | (Wells) | |||||||||||||||||
| Wells | Maint | Projects | Wells | Bonus | Seismic | Devel | Explor | Total | ||||||||||||
| West Gharib | – | 3.5 | 2.5 | – | – | – | 6.0 | – | – | – | ||||||||||
| West Bakr | 4.5 | 3.6 | 2.1 | – | – | – | 10.2 | 3 | – | 3 | ||||||||||
| NW Gharib | – | – | 2.5 | 11.6 | 0.2 | – | 14.3 | – | 13 | 13 | ||||||||||
| SW Gharib | – | – | – | 6.8 | 0.2 | – | 7.0 | – | 6 | 6 | ||||||||||
| SE Gharib | – | – | – | 2.5 | 0.2 | – | 2.7 | – | 3 | 3 | ||||||||||
| South Ghazalat | – | – | – | – | 0.2 | – | 0.2 | – | – | – | ||||||||||
| NW Sitra | – | – | – | – | 0.2 | 0.4 | 0.6 | – | – | – | ||||||||||
| 2016 Total | $4.5 | $7.1 | $7.1 | $20.9 | $1.0 | $0.4 | $41.0 | 3 | 22 | 25 | ||||||||||
| Splits (%) | 46% | 54% | 100% | 12% | 88% | 100% | ||||||||||||||
TransGlobe Energy Corporation is a Calgary-based, growth-oriented oil and gas exploration and development company with exploration and production operations in the Arab Republic of Egypt. TransGlobe’s common shares trade on the Toronto Stock Exchange under the symbol TGL and on the NASDAQ Exchange under the symbol TGA. TransGlobe’s convertible debentures trade on the Toronto Stock Exchange under the symbol TGL.DB.
