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Monday, November 16, 2020
TransGlobe Energy announced its highlights of its operational program in Egypt within its financial and operating results for the three and nine months ended September 30, 2020, which included a workover- program at the West Bakr asset.
Corporate Summary
TransGlobe Energy Corporation (“TransGlobe” or the “Company”) produced an average of 12,044 barrels of oil equivalent per day (“boe/d”) during the third quarter of 2020. Egypt production was 9,812 barrels of oil per day (“bbls/d”) and Canada production was 2,232 boe/d. Production for the quarter was below revised full year 2020 guidance of 13,300 to 13,800 boe/d due to deferred well interventions in Egypt during low oil prices and natural declines. It is expected that, with well interventions performed in September and Q4-2020, TransGlobe will be within full year 2020 guidance on an annual basis.
TransGlobe’s Egyptian crude oil is sold at a quality discount to Dated Brent. The Company received an average price of $37.15 per barrel in Egypt during the quarter. Gharib Blend has benefited from a relative increase in demand for heavy oil in the past nine months and the resultant decrease in the differential to Brent. For the year to date the Gharib Blend differential to Brent has been ~$4.50/bbl. In Canada, the Company received an average of $36.99 per barrel of oil, $15.65 per barrel of NGL and $1.80 per thousand cubic feet (“Mcf”) of natural gas during the quarter.
During Q3-2020, the Company had funds flow from operations of $0.3 million and ended the quarter with positive working capital of $12.7 million, including cash and cash equivalents of $27.1 million. The Company had a net loss in the quarter of $6.0 million, inclusive of a $0.3 million unrealized derivative loss on commodity contracts which represents a fair value adjustment on the Company’s hedging contracts as at September 30, 2020.
In Egypt, the Company sold 259.2 thousand barrels (“Mbbls”) of entitlement crude oil to EGPC during the quarter, and had 534.2 Mbbls of entitlement crude oil inventory at September 30, 2020. The increase in inventoried crude oil is attributed to a decrease in sales volumes, offset by a decrease in production in Q3-2020. Subsequent to the quarter, TransGlobe completed a ~452 Mbbls cargo lifting of Egypt entitlement crude oil, with proceeds expected in December. In Canada, the Company sold the Q2-2020 ending inventory balance of 6.3 Mbbls of Canadian light crude oil in July 2020; all Canadian production was sold during the quarter.
In Egypt, the Company contracted a workover rig to perform well interventions at West Bakr beginning in September 2020, and continuing into the fourth quarter. Consistent with the Company’s revised 2020 budget, there has been no drilling activity in Canada or Egypt during the third quarter.
Despite restrictions on travel, management concluded its negotiations with EGPC to amend, extend and consolidate the Company’s Eastern Desert concession agreements during the quarter. At this time, it is the Company’s belief that EGPC approval will occur in the near term. Following such approval, the merged concession will require parliamentary ratification. The Company will provide timely updates as developments unfold.
The Company remains forward looking and prepared to use its operational control to take advantage of any sustained upward movement in oil price. TransGlobe continues to be vigilant in its search for attractive M&A opportunities while steadfastly retaining its focus on shareholder value creation.
Highlights
The full announcement can be found on the Transglobe Energy website here
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