TGLEF TGL.T news TRANSGLOBE ENERGY CORP - 2001 First Quarter Financial and Operating Results
Toronto, Ontario, May 25, 2001 (Market News Publishing via COMTEX) --
TransGlobe Energy Corporation ("TransGlobe" or "the Company") is pleased to
announce its financial and operating results for the three months ended March
31, 2001. All dollar values are expressed in United States dollars unless
otherwise stated.
HIGHLIGHTS
* Record daily production of 1,402 barrels of oil equivalent
* Record cash flow of $1,739,300 and earnings of $1,005,300
* Tasour #5, Block 32, Yemen initial production of 7,060 barrels of oil per day,
Feb. 2001
* Seismic contracts awarded for Block S-1 and Block 32, Yemen
* Increased land holdings in Canada
FINANCIAL AND OPERATING UPDATE
Three months ended
March 31
Financial 2001 2000
Oil and gas revenue net of royalties $ 2,489,965 $ 266,815
Cash flow from operations 1,739,300 (42,655)
Basic per share $0.03 -
Net income (loss) 1,005,300 (140,449)
Basic per share $ 0.02 -
Capital expenditures - Canada 368,346 200,243
Capital expenditures - United States - 1,765
Capital expenditures - Yemen $ 751,029 $ 219,790
As at As at
March 31, March 31,
2001 2000
Debt $ 81,260 $ -
Common shares outstanding
Basic 50,507,190 37,587,485
Diluted 51,301,932 40,306,837
Production
Oil and liquids (Bopd) 1,286 108
Gas (Mcfpd) 1,164 412
Total (Boed) 1,402 149
Two significant events affected operations between the three month periods ended
March 31, 2001 and 2000. The most significant is the new production from the
Tasour field on Block 32, Yemen; this field started producing in November, 2000.
The other is the absence of operations in the United States in 2001. The Company
divested its oil and gas properties in the United States effective October 31,
2000. Proceeds from the sale of these properties were re-invested in Yemen.
Production
The first full quarter of production for the Tasour field in Yemen yielded an
average production rate of 1,215 barrels of oil per day ("Bopd") to TransGlobe.
The field commenced production in November, 2000. Oil production was 862 Bopd to
TransGlobe for November/December 2000. The increase from the last two months of
2000 was due to the addition of production from Tasour #5 in February 2001. It
is expected that production from the Tasour field will average 7,200 Bopd (994
Bopd to TransGlobe) for the year 2001.
Production from Canada averaged 187 barrels of oil equivalent per day (Boed) in
the first quarter of 2001 compared to 101 Boed in 2000 for the comparable
period. The increase in production is attributable to two new gas wells which
were brought into production at the end of 2000, increased production at Camao
as a result of recompleting a gas well and the acquisition/tie-in of a gas well
at Nevis. With the sale of the United States properties and the addition of gas
production from new wells drilled/recompleted in Canada, 60% of TransGlobe's
Canadian production was gas and 40% was oil in the first quarter of 2001, a
reverse of product mix from 2000. Production in the United States averaged 48
Boed in 2000, primarily oil, from four wells in Montana.
Operating Results
Net income for the first quarter 2001 was $1,005,300 ($0.02 per share) compared
to a net loss of $140,449 in 2000 with cash flow from operations of $1,739,300
($0.03 per share) compared to a deficiency of $(42,655) respectively. The
increase in net income and cash flow in 2001 is primarily a result of the
addition of production from Yemen on Block 32.
Revenue net of royalties was $2,489,965 for the first quarter 2001 compared to
$266,815 for the same period in 2000 reflecting the impact of Yemen production
on TransGlobe's operations. In 2001, revenues net of royalties were $1,865,432
and $624,533 from Yemen and Canada respectively. In 2000, revenues net of
royalties in Canada amounted to $179,478 and $87,337 in the United States.
Revenue in Canada increased due to a 215% increase in gas prices and an 85%
increase in production. Gas prices averaged $6.24 per Mcf in Canada in 2001 and
$1.98 per Mcf in 2000. Oil prices in Canada averaged $24.77 per barrel in 2001
and $26.26 per barrel in 2000. The average oil price for the Company's
production in Yemen for the first quarter 2001 was $22.27 per barrel. Oil
produced from the Tasour field in Yemen is marketed by Nexen Marketing
International Ltd. and the oil price is based on a Brent price less a
quality/transportation differential between the Brent blend and the Yemen Masila
crude oil blend.
The netback per barrel of oil equivalent ("Boe") was $16.19 during the first
quarter 2001. The comparable figure for the same period in 2000 was $13.21 per
Boe. The increase in netbacks between periods is primarily due to the
significant increase in gas prices and reduction in per unit operating costs.
Operating costs averaged $3.56 per barrel in the first quarter of 2001 compared
to $6.17 per barrel in 2000. The decrease on a relative basis is due to the
Yemen Block 32 operations which averaged $3.02 per barrel in 2001.
Capital Expenditures
Capital expenditures were $751,029 and $368,346 in Yemen and Canada respectively
in 2001. Expenditures in Yemen were primarily for drilling and completing Tasour
#5 on Block 32 and costs for the Harmel long term production test on Block S-1.
In 2000, the Company incurred $219,790 in capital expenditures for a seismic
program and commencement of the Tasour development program on Block 32. Canadian
capital expenditures in 2001 relate to several Crown land purchases, drilling a
well at Morningside and recompletion costs in the Morinville area. Capital
expenditures of $200,243 in Canada in the first quarter 2000 relate mainly to
Crown land purchases at Cherhill and Elk Island, completion costs at Elk Island,
and recompletion costs on a horizontal well at Camao. Capital expenditures in
the United States were minimal in 2000 as the domestic focus shifted to Canada.
The properties in the United States were divested in 2000 to fund activity in
Yemen.
OUTLOOK
The Company's growth strategy for 2001 will continue to favor exploration and
development on the Yemen properties. Seismic acquisition and drilling on both
our Yemen projects is planned for 2001/2002. In the Block 32 development area
(13.81087% working interest) drilling and seismic work will be carried out on
the Tasour structure as well as seismic and exploration drilling on some of the
additional eleven prospects. The 2001 Block 32 joint venture budget and work
program includes the acquisition of 120 kilometers of seismic, drilling at least
one development well in the Tasour field and one exploration well. The primary
focus of this year's seismic program is to further define the Tasour field and
to refine drilling locations on several prospects located in the northwestern
portion of the development area. The northwestern portion of the development
area was selected to evaluate the trend mapped towards Block 32 from the
recently announced discovery at Sharyoof on the adjacent Block 53. Two Qishn
wells were drilled on Block 53 at Sharyoof with announced well tests of 5,000
and 16,500 Bopd respectively. The seismic acquisition is anticipated to take
place between June and August and drilling is expected to commence in October.
Now that the Tasour facilities and pipeline are operational they can be used to
develop any new discoveries quickly, which significantly enhances future
investment in Block 32.
The results of the four well drilling program carried out on Block S-1 in 2000
(25% working interest) are very encouraging. Both discoveries, Harmel a large
shallow oil pool and An Naeem a gas condensate discovery, will see further
appraisal work. The 2001 joint venture budget included an additional 230 square
kilometers (90 square miles) of 3-D seismic, one exploration well, one appraisal
well at Harmel #2 and conducting extended production tests on Harmel #1 and #2.
The start-up of the 3-D seismic acquisition is expected in July 2001. The
completion of the acquisition, processing and interpretation are projected for
December 2001, which will defer the drilling schedule into the first quarter of
2002. The 3-D seismic program will evaluate a potential trend of the Alif and
Lam formations identified on existing 2-D seismic. The trend extends from the
adjacent Jannah Hunt, Dhahab and Al Nasr oil fields southeast to the Shell
discovery at An Nagyah. An exploration well is planned for this area in early
2002. The proposed Harmel #2 appraisal well will be designed to test and
evaluate the shallow oil zones encountered in Harmel #1. It is anticipated that
Harmel #2 will be drilled in conjunction with the exploration drilling program
during the first quarter of 2002 to save costs. Assuming Harmel #2 encounters
similar oil reservoirs to Harmel #1, a pilot project is planned to complete and
equip both Harmel #1 and #2 for longer-term production to determine the
feasibility of a full-scale commercial development. Although the production
rates are low by Yemen standards, the Harmel structure's size and the shallow
drilling depth greatly improve the economics of a potential development. The gas
condensate discovery at An Naeem #1 and #2 will be further evaluated during 2001
to determine if an oil rim does indeed exist down dip. TransGlobe's management
continues to view Block S-1 as highly prospective for large oil accumulations
and will focus a significant amount of exploration effort on the area. It will
take several years to evaluate the potential of Block S-1 due to the size of the
block and the numerous potential reservoir zones.
In Canada, the Company participated in an exploratory multi-zone gas test at
Morningside in central Alberta. The well (37.5% working interest) was cased as a
potential gas well. In May 2001, TransGlobe took over operatorship and acquired
the balance of the interest in the joint lands (1,400 net acres) and increased
its working interest in the well to 60%. In addition to re-completing the well
the Company plans to re-enter a suspended well for Mannville gas production
during the second quarter. The wells could be tied in for production during the
third quarter. Additional drilling on the 100% acreage will be contingent upon
the re-completion activities. At Elk Island in Central Alberta, the Company
acquired an additional 1,980 acres (990 net acres) of land. A multi-zone
exploratory gas well (50% working interest) is scheduled to be drilled in the
second quarter of 2001. The Company has assembled acreage on gas prospects at
Cherhill, Thorsby, Rimbey, Fort Kent and Wrentham. During 2001, the Company
plans to either drill or farm out these prospects.
Mary Chandler, Vice President, Finance and Chief Financial Officer, has informed
the Company of her intent to resign her position at the end of June. On behalf
of the board, management would like to thank Ms. Chandler for her contributions
over the years and wishes her success in her future endeavors. The Board
welcomes Dave Ferguson to the management team as Vice President, Finance and
Chief Financial Officer. Mr. Ferguson is a chartered accountant and has over 18
years' experience in the oil and gas industry with public and private companies.
This release includes certain statements that may be deemed to be
"forward-looking statements" within the meaning of the US Private Securities
Litigation Reform Act of 1995. All statements in this release, other than
statements of historical facts, that address future production, reserve
potential, exploration drilling, exploitation activities and events or
developments that the company expects are forward-looking statements. Although
TransGlobe believes the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements are not
guarantees of future performance and actual results or developments may differ
materially from those in the forward-looking statements. Factors that could
cause actual results to differ materially from those in forward-looking
statements include oil and gas prices, exploitation and exploration successes,
continued availability of capital and financing, and general economic, market or
business conditions.
CONTACT: TEL: (403) 264-9888 TransGlobe Energy Corporation
FAX: (403) 264-9898 Ross G. Clarkson, President & C.E.O.
Lloyd W. Herrick, Vice President & C.O.O.
E-mail: trglobe@trans-globe.com
Internet: www.trans-globe.com
URL: www.trans-globe.com
MarketbyFax(tm) - To get the NEWS as it happens, call (604) 689-3041.
(C) 2001 Market News Publishing Inc.
-0-
KEYWORD: Toronto, Ontario
*** end of story *** |
