TransGlobe boosts output but losses continue

16 May 2017, Week 19, Issue 689

Canada-based TransGlobe Energy’s production averaged 16,731 boepd in the first quarter of the year, up from 12,058 bpd in the same period of 2016. Much of this increase came from the company’s acquisition of a producing asset in Canada. Stripping out this production, and leaving just its Egyptian assets, gives a production number of 13,949 bpd. 

Announcing its results on May 11, the company reported positive cash flows of US$2.5 million, from US$2.8 million year on year, even while sales of its Egyptian production were low. However, it still reported a loss, reaching US$12.9 million in the quarter. For 2016, it recorded a US$87.7 million loss.  

The company also celebrated the signing of a prepayment facility with Mercuria Energy Trading, worth US$75 million. Proceeds from this went to paying off its convertible debentures. 

Spending on exploration and development in the quarter reached US$10.7 million, it said. 

TransGlobe drilled seven wells in Egypt during the quarter, with three oil discoveries and four dry holes. The company also said it had moved a rig to the South Alamein concession, with drilling expected to begin in the first half of May. The company had two rigs running in Egypt in the first quarter. One has moved to the South Alamein area, in the Western Desert, while the other will stay in the Eastern Desert, where it will continue work on the NW Gharib area. 

In the South Alamein block, one well – the Boraq 5 – will be drilled on the Boraq structure. In addition, the Boraq 2 discovery will be redrilled. 

On the North West Sitra block, the company completed 600 square km of 3D seismic. Prospect mapping is planned for the second half of 2017, it said. 

TransGlobe began producing at the NW Gharib block in December. Output from this block, reached 982 bpd gross in the first quarter, of which the government’s share was 626 bpd. 

Oil came from the NWG 3 well, with liquids from the Red Bed formation. Originally this was producing purely from natural flow, with output of 600-1,000 bpd but, in March, tubing and a downhole pump were added, bringing the well to 1,000 bpd. A second well, NWG 38, began producing in January and is currently running at around 600 bpd, giving the concession a total of 1,722 bpd in April. 

TransGlobe took a US$1.2 million impairment on its South West Gharib concession in the first quarter, in addition to a US$3.7 million unrealised loss on derivatives. 

Two exploration wells were drilled on SW Gharib, the SWG 2 and SWG 4, but they were both abandoned. The company completed its commitments under the first phase and opted to relinquish the concession. 

Edited by

Ed Reed

Editor

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