September 6, 2019 - 9:00 AM EDT
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Stonegate Capital Partners Updates Coverage on Transglobe Energy Corp. (Nasdaq:TGA)

DALLAS, TX / ACCESSWIRE / September 6, 2019 / Transglobe Energy Corp. (NASDAQ:TGA)

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TransGlobe Energy Corporation (“Company”) (“TGA”) is an independent oil and gas exploration and production company, with current operations in Alberta, Canada, and the Arab Republic of Egypt. The Company has operated in Egypt since 2004 and holds interests in production sharing concessions in the Eastern Desert and the Western Desert regions. TransGlobe operated in Canada from 1999 to 2008 and re-entered Canada in December 2016. The Company’s Canadian holdings include production and working interests in Cardium light oil and Mannville liquid-rich gas assets in the Harmattan area, located in west central Alberta. TransGlobe Energy is headquartered in Calgary, Alberta, and has approximately 70 employees.


TransGlobe has been in the international oil and gas industry for over 20 years and has drilled more than 400 gross wells in varying geological formations, political climates and economic environments. Through the execution of a disciplined business plan involving cost-cutting measures, a strategic acquisition, and key contracts with the Egyptian government and third-party marketers, TGA’s management has steered the Company through a difficult period involving low oil prices and political turmoil, and, as a result, TransGlobe has recently returned to profitability.

  • TransGlobe had an average production base of roughly 14,439 Boepd in 2018 and recently reported ~16.9 MBoepd for Q219 and ~16.8 MBoepd during the month of July. TGA has a number of development projects in Canada and Egypt, along with some potentially high-impact exploration opportunities in Egypt. The most recent 2019 capital budget includes a total of ~$34.1M, with ~$24.1M allocated to Egypt and ~$10.0M to Canada.
  • As Egypt has regained political and economic stability in recent years, TransGlobe’s original 2019 budget plans included completion of 4 development wells in the Eastern Desert, in addition to multiple recompletions and well optimizations, as well as 2 exploration wells. In the Western Desert, the focus is on appraisal and development of the SG 6X light oil discovery in South Ghazalat.
  • At year-end 2016, the Company acquired some producing high-quality light oil and liquids-rich gas plays in west central Alberta, Canada. The acquisition was designed to diversify TGA geographically as well as expand operations outside areas with geopolitical risk, and it came with 149 potential drilling opportunities. The operating cost structure and favorable royalty and tax structure of the area support growth at current oil prices and provide opportunities to increase reserves and production in proven plays using advanced horizontal drilling and multi-stage frac technology. In 2019, TransGlobe plans to drill 4 horizontal Cardium wells (3 development and 1 outpost) to maintain and grow Canadian light oil production.
  • Based on a January 2019 GLJ Petroleum Consultants evaluation, the Company reported 26.9 MMboe total proved (1P reserves) as well as 44.1 MMboe total proved + probable (2P reserves), ~2% and 4% decreases, respectively, from 2017 year-end.
  • TGA had inventoried entitlement crude oil in Egypt of 735.0 Mbbls as of 6/30/19 valued at $17.72/barrel on its balance sheet, which is up from levels reported as of 12/31/18 of 568.1 Mbbls.
  • For 2019, corporate production is expected to range between 15,000 and 16,000 Boepd (midpoint 15,500) with a 94% weighting to oils and liquids; this includes 12,950 to 13,750 Bopd for Egypt, and 2,050 to 2,250 Boepd for Canada.

On a comparable company basis for FY19 estimates, TGA currently trades at an EV/S multiple of 0.7x while its peers trade at an average multiple of 2.2x, and at an EV/EBITDA of 1.3x vs. the average of its peers at 3.6x. See page 9 for details.

About Stonegate Capital Partners

Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.


Stonegate Capital Partners
Shane Martin, CFA
(972) 850-2001
[email protected]

SOURCE: Stonegate Capital Partners

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Source: ACCESSWIRE Investor Awareness (September 6, 2019 - 9:00 AM EDT)

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