TransGlobe Energy Corporation ("TransGlobe" or the "Company") (TSX:TGL)(NASDAQ:TGA) announces its financial and operating results for the three months ended March 31, 2017. All dollar values are expressed in United States dollars unless otherwise stated. TransGlobe's Condensed Consolidated Interim Financial Statements together with the notes related thereto, as well as TransGlobe's Management's Discussion and Analysis for the three month periods ended March 31, 2017 and 2016, are available on TransGlobe's website at www.trans-globe.com.
A conference call to discuss TransGlobe's 2017 first quarter results presented in this news release will be held Thursday, May 11, 2017 at 9:00 AM Mountain Time (11:00 AM Eastern Time) and is accessible to all interested parties by dialing 416-340-2216 or toll free at 1-800-377-0758. The webcast may be accessed at http://www.gowebcasting.com/8426.
TransGlobe Energy Corporation ("TransGlobe" or the "Company") produced an average of 16,731 barrels of oil equivalent per day ("boepd") during the first quarter of 2017, which was within the full-year 2017 production guidance range of 15,500 to 18,500 boepd. Egypt production was 13,949 barrels of oil per day ("bopd"), and Canada production was 2,782 boepd.
The Company sold 303,817 barrels of inventoried entitlement crude oil to EGPC during the first quarter for $12.7 million. The proceeds will be used to cover in-country expenditures during the first half of 2017. The Company's next cargo lifting from Egypt is scheduled for June 19, 2017, and is expected to be in the range of 500 to 540 Mbbls. All Canadian production was sold during the quarter.
The Company repaid its convertible debentures in full on March 31, 2017, which was the maturity date of the debentures. The convertible debentures were denominated in Canadian dollars, and the aggregate face value of all outstanding convertible debentures was C$97.8 million ($73.4 million). The repayment was made using the funds received by drawing on the $75 million prepayment agreement with Mercuria.
Dated Brent oil prices averaged $53.68 per barrel in the first quarter of 2017. TransGlobe's Gulf of Suez crude is sold at a quality discount to Dated Brent and received a blended price of $41.29 per barrel during the quarter. TransGlobe's Canadian production received an average of $48.82 per barrel of oil and $1.96 per mcf of natural gas during the first quarter. The Company had funds flow of $2.5 million and ended the quarter with positive working capital of $42.8 million, which includes cash and cash equivalents of $37.7 million (including restricted cash).
The Company experienced a net loss in the quarter of $12.9 million, which included a $1.2 million impairment loss on the Company's SW Gharib concession and a $3.7 million unrealized loss on derivative commodity contracts. The $3.7 million loss on derivative commodity contracts represents a fair value adjustment on the Company's hedging contracts as at March 31, 2017.
The Company had two drilling rigs operating in Egypt for the duration of the first quarter. During the quarter, the Company drilled seven wells (six exploration and one development), resulting in three oil wells and four dry holes. One drilling rig will remain in the Eastern Desert and continue drilling at NW Gharib during the second quarter, and the other drilling rig was moved in early May from the Eastern Desert to the South Alamein concession in the Western Desert. The initial drilling program at South Alamein will consist of one well (Boraq 5) on the Boraq structural complex plus re-entering the Boraq 2 discovery well for additional testing. At NW Sitra, the Company completed the 600 km2 seismic acquisition program at the end of March. The newly acquired data is being processed with prospect mapping planned for the second half of 2017.
In Canada, the Company initiated surface land acquisition/permitting for up to eight wells in the Harmattan area in 2017. The Company is targeting mid-year to commence the drilling program of horizontal (multi-stage frac) wells targeting the Cardium light oil resource. It is expected that wells will cost ~C$2.5 to C$2.7 million per well to drill, complete and place on production.
The Company appointed two new directors to its Board of Directors during the first quarter. Mr. Matthew Brister and Mr. Steve Sinclair took positions as independent directors on the Company's Board effective March 15, 2017. Mr. Geoff Chase, a long-term director with TransGlobe, will retire in May 2017.
Operations and Exploration
No wells were drilled during the first quarter.
TransGlobe took over field operations on February 1st and initiated surface land acquisition/permitting for up to eight wells in the Harmattan area. The initial 2017 program consists of up to eight horizontal (multi-stage frac) wells targeting the Cardium light oil resource at Harmattan. The Company is targeting June/July to commence the drilling program. The wells are expected to cost C$2.5 - C$2.7 million per well to drill, complete and place on production.
The Company continues to evaluate properties for acquisition in the greater Harmattan area.
Production from Canada averaged 2,782 Boepd to TransGlobe during the first quarter.
TransGlobe Energy Corporation is a Canadian-based, publicly-traded oil exploration and production company whose activities are concentrated in Egypt.
SOURCE: TransGlobe Energy Corporation
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