TransGlobe Energy Corporation (“TransGlobe” or the “Company”) (TGL.TO) (TGA) provides an update for the second quarter of 2015. All dollar values are expressed in United States dollars unless otherwise stated.
- Q2 production averaging ~15,000 Bopd to date (~9% above Q2 guidance).
- Completed the sale of 544,752 barrels of entitlement oil to a third party buyer for net proceeds of $25.8 million.
- Collected $43.5 mm year-to-date in outstanding receivables from EGPC.
- Approved the Q2 quarterly dividend of $0.05/share (payable June 30, 2015).
- Repurchased 2,134,001 common shares to June 19th under NCIB.
Production to date of approximately 15,000 Bopd during the 2nd quarter is approximately 9% ahead of guidance of 13,800 Bopd. The increase is primarily due to well performance and improved up time performance in both West Gharib and West Bakr. East Ghazalat is below plan due to well performance. Block S-1 in Yemen remains shut in due to continued political and security instability. Yemen Block S-1 production was not included in the 2015 plan.
Production is estimated to be in the 13,800 Bopd range for the 3rd quarter due to natural well declines and potential increased well servicing during the summer months.
Average daily production by project is summarized by month in the following table:
|Average Daily Production
(WI before royalties and taxes)
|West Gharib (100%)||9,010||9,018||9,268|
|West Bakr (100%)||5,516||5,664||5,235|
|East Ghazalat (50% non op)||397||455||433|
|Total Egypt & Company||14,923||15,137||14,936|
|Yemen S-1||Shut in||Shut in||Shut in|
OPERATIONS AND EXPLORATION
During the second quarter no wells were drilled. Work continued on several facility upgrade projects including the replacement central production facility at Hana/Hana West in West Gharib and water handling projects in West Bakr.
The Company completed the 400 square kilometer 3D seismic acquisition program on the western desert South Ghazalat concession in mid-June. This completes the large (1,400 Km² 3D and 330 Km 2D) 2014/15 seismic acquisition program over the four exploration concessions (Northwest Gharib, Southwest Gharib, Southeast Gharib and South Ghazalat) which were ratified in late 2013.
The eastern desert 3D seismic (1,000 Km²) has been processed and mapping/interpretation is underway. It is expected that the new South Ghazalat 3D will be processed and available for mapping by the fourth quarter. The Company expects to complete mapping by year-end and be ready to drill exploration wells in 2016.
During the second quarter TransGlobe marketed and sold 544,752 barrels of Ras Gharib blend at a sales price of $48.41 per barrel, which equated to an $11.35 per barrel differential to Dated Brent. The sold barrels will be allocated first to West Bakr entitlement oil for the first half of the year, with the remaining sold barrels being allocated to West Gharib entitlement oil produced in the second quarter. Proceeds of $25.8 million (net of selling costs of $0.5 million) were collected in May. The Company is currently tendering two additional entitlement oil shipments for the second half of 2015. Based on forecasted production the Company expects to have between 255,000 and 260,000 barrels of crude oil in inventory at end of Q2.
Through the direct marketing process, the West Bakr entitlement oil for the first half of 2015 received $0.88/barrel less than West Gharib entitlement oil which is sold as Ras Gharib blend, due to oil quality adjustments. The $0.88/barrel reduction represented a discount of approximately 2% of the Ras Gharib blend pricing, versus a historical discount of approximately 12%.
2015 DEVELOPMENT CAPITAL BUDGET
As a result of the successful marketing of our Eastern Desert entitlement crude the Company is in the process of considering a modest increase to the 2015 development capital budget. The projects being considered for acceleration include the development of the discoveries at North West Gharib (“NWG”) and the drilling of development wells at the South K field in West Bakr. If the Company proceeds, the NWG development wells would add additional production by year end 2015, however, the South K wells would not be expected to add production until 2016.
NORMAL COURSE ISSUER BID
The Company may acquire up to 6,207,585 common shares under a Normal Course Issuer Bid (“NCIB”) that commenced on March 31, 2015. To date, the Company has repurchased over 2.1 million common shares.
TransGlobe Energy Corporation is a Calgary-based, growth-oriented oil and gas exploration and development company focused on the Middle East/North Africa region with 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.