TIDMTGL
RNS Number : 3634B
TransGlobe Energy Corporation
30 January 2020
This Announcement contains inside information as defined in
Article 7 of the Market Abuse Regulation No. 596/2014 ("MAR"). Upon
the publication of this Announcement, this inside information is
now considered to be in the public domain.
TRANSGLOBE ENERGY CORPORATION ANNOUNCES A CANADIAN OPERATIONS
UPDATE
AIM & TSX: "TGL" & NASDAQ: "TGA"
Calgary, Alberta, January 30, 2020 - TransGlobe Energy
Corporation ("TransGlobe" or the "Company") announces a Canadian
operations update and appointment of an investor relations advisor.
All dollar values are expressed in US dollars unless otherwise
stated.
Canada - Appraisal Update in South Harmattan
The Company is pleased to provide an operational update on its
2019 Cardium drilling program. The final well of the program was a
2-mile appraisal / outpost well, drilled to 2115m (TVD) and 5028m
(TMD). This well was stimulated and equipped to test the petroleum
type and productivity of an undeveloped extension to the Cardium
resource play in the South Harmattan area. The Company is pleased
to report that this well has now been on production for 60 days at
very encouraging initial rates and has been added to the Company's
inventory of producing wells.
The calculated IP30 is estimated at 415 Boepd, including 379
Bopd of light oil, and the calculated estimated IP60 is 341 Boepd,
including 302 Bopd of light oil, both calculated on a productive
day basis. Although the production history is relatively short and
not necessarily indicative of long-term performance or ultimate
recovery, due to the nature and extent of the undeveloped area
targeted by the well, the Company is very encouraged about the
resource potential of the 18.5 undeveloped working interest
sections of land that it holds in the South Harmattan area.
Typically, each Cardium section is developed with four 1-mile
horizontal wells at $2.4 million per well, with further well
optimization possible using 2-mile horizontal wells across adjacent
sections at $3.1 million per well. Accordingly, South Harmattan
could represent a significant new resource play to the Company.
Background to the Drilling in South Harmattan
TransGlobe's Canadian operations are concentrated on the
prolific Cardium formation that spans a very large area from
southwest Alberta to northeast British Columbia, with the producing
area concentrated along the eastern slopes of the Rocky Mountains
to the northwest of Calgary. There have been over 10,000 wells
drilled into the Cardium formation, beginning in the late 1940s,
including an estimated 3,900 horizontal wells targeting the lower
permeability ("lower-perm") sandstone, which lays at depths ranging
from 1,200 to 2,300m. TransGlobe's Harmattan lands are concentrated
in the lower-perm sandstone, positioned at the southern-most end of
what is considered the productive area of the formation.
The Company's technical team developed a concept that an area to
the southwest of Harmattan (South Harmattan), despite being
positioned between what was believed to be a hydrocarbon transition
zone (oil phase to natural gas phase), would prove to be a
productive, undeveloped extension of the Cardium resource play and
be oil prone rather than natural gas prone.
After undertaking technical work in support of the concept, in
2018 the Company acquired the mineral rights to an additional
sixteen sections (each section is one square mile) of Crown Cardium
rights in this area to add to its existing land base. Lands
acquired from the Alberta government (Crown land) currently qualify
for horizontal drilling royalty incentives to enhance development
of resources in Alberta, which effectively reduce the initial
royalties to 5% until well costs are recovered from production.
The above appraisal well, now added to the Company's inventory
of producing wells, is the first well the Company has drilled into
the newly acquired South Harmattan lands.
Budget Update
As a result of this initial success of the 2-mile
appraisal/outpost well in South Harmattan, the Company has
initiated a review of its drilling program for 2020 to incorporate
this new well result and high-grade the opportunities to deploy
capital across its portfolio.
The 2020 Canadian drilling program will be designed to include
the development and further maturation of this South Harmattan
Cardium resource.
TransGlobe will news release its year-end 2019 Reserves and 2020
Budget on Wednesday, February 5 and will hold a conference call and
webcast on Thursday, February 6 to review those items and South
Harmattan in more detail (information on the webcast will be
provided in the February 5 news release). The 2020 budget will
continue to align with TransGlobe's focus of maximizing
returns.
Corporate
TransGlobe has engaged Tailwind Associates as the Company's
investor relations advisor. Darren Engels, formerly a Director,
Institutional Research, at GMP FirstEnergy, heads Tailwind. Darren
has nearly two decades of business, financial, and investment
experience of which 15 years were at FirstEnergy, a Calgary-based
boutique investment bank where he was responsible for research
coverage of international energy companies, for which he was a top
ranked stock analyst, according to Bloomberg.
Randy Neely, Chief Executive Officer of TransGlobe, said:
"TransGlobe has developed a strong asset portfolio, including
resource plays in Canada, mature producing fields in Egypt's
Eastern Desert, and exploration opportunities in Egypt's Western
Desert. This range of opportunities allows us to optimally manage
the risk-reward profile of our exploration and development
spending, and allocate capital to the projects that will have the
most significant impact on shareholder value.
In Canada, we have made a potentially significant discovery of
resources in a new, effectively undrilled area, where we already
have a significant footprint. These projects will continue to
deliver on our strategic focus of building a profitable, growth
oriented international portfolio which can provide increasing and
real returns to shareholders.
In Egypt, we have been making steady progress on the
consolidation, amendment and extension of our Eastern Desert PSCs,
which, when completed, will provide the foundation for the Company
to grow production and reserves for years to come.
We are heading into 2020 with confidence."
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, the
plans for the Company's 2020 Canadian drilling program and the
details thereof; the Company's expectation relating to the
performance of the South Harmattan Cardium prospect; and the
expected benefits to the Company of consolidating, amending and
extending the Company's Eastern Desert PSCs 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, 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.
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:
Bopd barrels of oil per day
M Metres
MBopd thousand barrels of oil per
day
Boepd barrels of oil equivalent per
day
MBoepd thousand barrels of oil equivalent
per day
MBbl thousand barrels
IP30 Initial production per day over
first 30 days of production
IP60 Initial production per day over
first 60 days of production
TMD Total Measured Depth in metres
TVD Total Vertical Depth in metres
WI working interest
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.ca
http://www.tailwindassociates.ca
+1 403.618.8035
investor.relations@trans-globe.com
http://www.trans-globe.com
+1 403.264.9888
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
UPDFFFSVLTIAFII
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