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Transglobe Completes First Sale of Egyptian Crude
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TransGlobe Energy Corporation has announced its financial and operating results for the three months ended March 31, 2015.
All dollar values are expressed in United States dollars unless otherwise stated.
Highlights:
- First quarter production averaged 14,886 Bopd (12,876 Bopd sales);
- Completed the first direct sale of Egyptian crude oil entitlement production to a third party buyer in February. The second shipment was lifted on April 4, 2015;
- Spent $14.1 million on exploration and development during the quarter;
- Ratification of the NW Sitra concession completed on January 8, 2015;
- Ended the quarter with $126.1 million in cash and cash equivalents; positive working capital of $207.7 million or $142.2 million net of debt (including convertible debentures);
- Collected $27.1 million in accounts receivable from the Egyptian Government during the quarter, which includes $5.8 million attributable to the over-lift on the January cargo;
- Held 179,730 bbls of West Bakr entitlement crude production in inventory at quarter-end (valued at cost)
Summary
- strong>TransGlobe Energy Corporation completed its first ever direct sale of Egyptian crude production to a third party buyer in the first quarter of 2015, which marks a significant milestone in the Company's history. The cargo was delivered to the buyer in late February, and payment was received in full in late March. The Company lifted a second cargo in early April and expects to collect the proceeds from that sale in early May. The Company is in discussions with EGPC to schedule additional liftings in the second half of 2015. This change in how TransGlobe's crude is sold significantly reduces the Company's credit risk exposure going forward. The Company's entry into self-marketing allowed the Company to increase the pricing it would have received on the January lifting by approximately $3.58/Bbl inclusive of the additional selling costs that were incurred. These selling costs of $2.70/Bbl are expected to decrease in the future as the Company enhances its marketing capabilities.
- TransGlobe's total production averaged 14,886 barrels of oil per day ("Bopd") during the quarter, which is down slightly from Q4-2014 production of 15,172 Bopd.
- In the Eastern Desert the Company drilled five wells during the first quarter, and has since released all drilling rigs. No further drilling is currently planned in 2015 if oil prices remain depressed. The Company completed the acquisition of seismic data on the Eastern Desert exploration blocks in Q4-2014. Processing and interpretation of the seismic data is currently ongoing, and the goal is to have a drill-ready prospect inventory prepared prior to year end.
- In the Western Desert the Company has begun the 3-D seismic acquisition program of approximately 400 square kilometers in the South Ghazalat block.
- Dated Brent oil prices averaged $53.92 in the first quarter of 2015. Egypt crude is sold at a quality discount to Dated Brent and received a blended price of $46.71 during the quarter. The Company had funds flow of negative $3.3 million. However, the Company did not sell the 179,730 barrels of West Bakr entitlement oil in Q1-2015. Had the West Bakr entitlement oil been sold in the quarter, the increase in funds flow would have been approximately $6.1 million using Q1-2015 realized pricing. This would have resulted in an estimated funds flow of $2.8 million for the quarter. TransGlobe ended the quarter with positive working capital of $207.7 million or $142.2 million net of debt (including the convertible debentures). The Company collected $27.1 million of accounts receivable from the Egyptian government during the quarter, resulting in an accounts receivable balance of $91.4 million as at March 31, 2015.