TIDMTGL
RNS Number : 1339N
TransGlobe Energy Corporation
28 January 2021
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 ITS
2021 CAPITAL BUDGET
AIM & TSX: "TGL" & NASDAQ: "TGA"
Calgary, Alberta, January 28, 2021 - TransGlobe Energy
Corporation ("TransGlobe" or the "Company") announces its 2021
capital budget and production guidance. All dollar values are
expressed in US dollars unless otherwise stated.
2021 BUDGET HIGHLIGHTS
-- 2021 capital budget of $27.2MM (before capitalized G&A);
o Egypt $16.6MM
o Canada $10.6MM
-- With a significant portion of investment scheduled in the
second half of the year, 2021 average production guidance is set at
12.0 to 13.0 MBoepd with a midpoint of 12.5 MBoepd:
o Egypt 9.7 - 10.5 MBopd;
o Canada 2.3 - 2.5 MBoepd;
o With the drilling program back-end loaded the Company expects
exit production to be in the range of 13.5 to 14.0 MBoepd;
The 2021 drilling program includes 12 Egypt wells and 3 Canadian
Cardium wells in South Harmattan.
Randy Neely, Chief Executive Officer of TransGlobe, said:
"With the approval of the agreement to merge our Eastern Desert
concessions behind us and recent commodity price improvements, the
Company is rapidly moving forward to re-start investment in Egypt
and Canada to support our growth plans in both countries. In Egypt,
the focus will be chiefly on growing production in the Eastern
Desert while we work to mature our contingent resource portfolio
and restart our evaluation of the South Ghazalat acreage. In
Canada, the focus will be on developing South Harmattan with a
specific goal of decreasing the uncertainty across the northern
land holdings. Our 2021 budget underlines the confidence we have in
the potential of the TransGlobe portfolio and paves the way to
resume dividend distributions in 2022."
2021 CAPITAL GUIDANCE
The Company's 2021 capital program of $27.2MM (before
capitalized G&A) includes $16.6MM for Egypt and $10.6MM for
Canada. The 2021 Plan was prepared to focus on value accretive
projects within its portfolio, maximize free cash flow to direct at
future value growth opportunities and to increase the Company's
production base.
Egypt
As announced in early December, 2020, the Company reached an
agreement with the Egyptian General Petroleum Company ("EGPC") to
merge its three existing Eastern Desert concessions with a 15-year
primary term and improved Company economics. Ratification of the
concession is anticipated in Q2, 2021, and the February 1, 2020
effective date for the improved concession terms supports increased
investment in parallel with ratification.
The $16.6MM Egypt program is entirely allocated to development.
The primary focus of the 2021 Egypt plan is to accelerate the
exploitation of the Company's Eastern Desert acreage with the aim
of increasing oil production, while evaluating and increasing
production from the more prospective lower Bahariya reservoir on
the South Ghazalat development lease in the Western Desert.
The 2021 development program is principally focused on the
Eastern Desert and includes: nine development wells in West Bakr
(three in H and six in K pools), one Red Bed appraisal well in the
NW Gharib 3X pool, two development wells targeting the Arta Nukhul
reservoir in West Gharib, two recompletions in West Bakr, two
recompletions in West Gharib, three conversions to water injectors
in West Gharib, and development/maintenance projects in the Eastern
Desert (West Bakr, NW Gharib and West Gharib). A recompletion of
SGZ-6X well to the more prospective lower Bahariya reservoir is
also planned.
Egypt production is expected to average between 9.7 and 10.5
MBopd for the year and an exit rate of 10.4 to 10.7 MBopd.
Canada
The $10.6MM Canada program consists of drilling three (three
net) horizontal wells and completing one (one net) standing well,
all targeting the Cardium light oil resource at Harmattan, with
additional maintenance/development capital. The Cardium drilling
program in 2021 consists of one 2-mile and two 1-mile development
wells in South Harmattan. The one 2-mile horizontal well drilled,
but not completed, in South Harmattan in 2020 will also be
stimulated, equipped and brought into production.
Canada production is expected to average between 2.3 and 2.5
MBoepd for the year and an exit rate of 3.1 to 3.3 MBoepd.
Detailed Capital Plan
The approved 2021 capital program is summarized in the following
table:
TransGlobe Net Capital Gross Well Count
(US$MM)
Concession Development Exploration Total New Drills Total
Capex(2) Wells
----------------- ------------ ---------- ------------- -------
Wells Other(1) Wells Dev Expl
------ --------- ------------ ---------- ----- ------ -------
West Gharib 1.1 2.0 - 3.1 2 - 2
------ --------- ------------ ---------- ----- ------ -------
West Bakr 9.3 0.5 - 9.8 9 - 9
------ --------- ------------ ---------- ----- ------ -------
NW Gharib 0.9 - - 0.9 1 - 1
------ --------- ------------ ---------- ----- ------ -------
South Ghazalat - 0.3 - 0.3 - - -
------ --------- ------------ ---------- ----- ------ -------
Development/ maintenance - 2.5 - 2.5 - - -
------ --------- ------------ ---------- ----- ------ -------
Egypt 11.3 5.3 - 16.6 12 - 12
------ --------- ------------ ---------- ----- ------ -------
Canada 9.0 1.6 - 10.6 3 3
------ --------- ------------ ---------- ----- ------ -------
Total 20.3 6.9 - 27.2 15 - 15
------ --------- ------------ ---------- ----- ------ -------
1. Other includes completions, workovers, recompletions and equipping, and HSE capital.
2. Table may not total due to rounding.
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.
For further information, please contact:
TransGlobe Energy Corporation +1 403 264 9888
Randy Neely, President and CEO investor.relations@trans-globe.com
Eddie Ok, CFO http://www.trans-globe.com
or via Tailwind Associates
or
FTI Consulting
Tailwind Associates (Investor Relations) +1 403 618 8035
Darren Engels darren@tailwindassociates.ca
http://www.tailwindassociates.ca
FTI Consulting (Financial PR) +44(0) 20 3727 1000
Ben Brewerton transglobeenergy@fticonsulting.com
Genevieve Ryan
Canaccord Genuity (Nomad & Joint-Broker)
Henry Fitzgerald-O'Connor
James Asensio +44(0) 20 7523 8000
Shore Capital (Joint Broker)
Jerry Keen
Toby Gibbs +44(0) 20 7408 4090
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", "strengthened",
"confidence", "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 Company's strategy to grow its annual cash
flow; anticipated drilling, completion and testing plans,
including, the anticipated timing thereof, prospects being targeted
by the Company, and rig mobilization plans; expected future
production from certain of the Company's drilling locations;
TransGlobe's plans to drill additional wells, including the types
of wells, anticipated number of locations and the timing of
drilling thereof; the timing of rig movement and mobilization and
drilling activity; the Company's plans to file development lease
applications for certain of its discoveries, including the expected
timing of
filing of such applications and the expected timing of receipt
of regulatory approvals; anticipated production and ultimate
recoveries from wells; to negotiate future military access
(including the expected timing thereof), including the anticipated
timing of wells on production; TransGlobe's plans to continue
exploration, development and completion programs in respect of
various discoveries; future requirements necessary to determine
well performance and estimated recoveries; the ratification of the
amendment, extension, and consolidation of the Company's Eastern
Desert Concessions; 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. Ron Hornseth, B.Sc., General Manager - Canada 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 the technical information
contained in this report. Mr. Hornseth is a professional engineer
who obtained a Bachelor of Science in Mechanical Engineering from
the University of Alberta. He is a member of the Association of
Professional Engineers and Geoscientists of Alberta ("APEGA") and
the Society of Petroleum Engineers ("SPE") and has over 20 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
Bpd barrels per day
BOE barrel of oil equivalent
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
MCFD thousand cubid feet per day
MMCFD million cubic feet per day
WI working interest
PRODUCTION DISCLOSURE
Light and Natural Natural
Medium Crude Heavy Crude Gas Gas Liquids Total
Bpd Bpd MCFD Bpd Boepd
2021 Guidance Corporate
High 1,656 9,678 5,000 833 13,000
Mid Point 1,591 9,309 4,800 800 12,500
Low 1,526 8,940 4,600 767 12,000
2021 Guidance
Egypt
High 822 9,678 10,500
Mid Point 791 9,309 10,100
Low 760 8,940 9,700
2021 Guidance
Canada
High 833 5,000 833 2,500
Mid Point 800 4,800 800 2,400
Low 767 4,600 767 2,300
2021 Exit Rate Corporate
High 1,927 9,900 6,517 1,086 14,000
Low 1,859 9,547 6,284 1,047 13,500
2021 Exit Rate
Egypt
High 841 9,900 10,742
Low 811 9,547 10,358
2021 Exit Rate
Canada
High 1,086 6,517 1,086 3,258
Low 1,047 6,284 1,047 3,142
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