EARNINGS / Transglobe Energy Corp. Year End Results
TRANSGLOBE ENERGY CORPORATION
TSE, ASE SYMBOL: TGL
ASE SYMBOL: TGL.S
NASDAQ SYMBOL: TGLEF
DECEMBER 31, 1997
TransGlobe Announces Year End Results
CALGARY, ALBERTA--TransGlobe Energy Corporation (TSE symbol TGL,
ASE symbols TGL and TGL.S, NASDAQ symbol TGLEF) announced today
its financial and operating results for the year ended September
30, 1997 compared to year ended September 30, 1996.
During 1997, the Company undertook a successful exploration
program in the East Meridian lands in Montana and participated in
the exploration of Block 32 in Yemen. The Company raised funds
from the issuance of convertible debentures and special warrants.
Subsequent to the year- end, in December, 1997, the Company
concluded a production sharing agreement ("PSA") with the
Ministry of Oil and Mineral Resources (the "MOMR") in Yemen
involving the Block S-1.
During 1997, the Company's oil and gas revenues were US $1,121,798
compared to US $1,113,274 for 1996. The revenues were generated
primarily from the Madera No. 30-1 well in New Mexico. The Prevost
#1, Larson 18-1 and Oakland wells in the East Meridian field were
placed on full production in June, August and September 1997
respectively and therefore their full impact on the Company's
operating results will be felt in fiscal 1998. One other
discovery, the CWI BN 17-1 well, was not yet on stream at
September 30, 1997.
During the year, TransGlobe sold its investment in IPC
International Power Corporation for US $1,012,500, which resulted
in a gain of US $262,500.
The Company has written off the capitalized costs of US
$1,724,310 relating to the Barstow property to operations. The
Company also determined that the net book value of the oil and gas
properties exceeded the future net revenue by US $3,710,000.
Consequently this amount was charged to operations.
The Company reported a loss of US $6,268,791 (US $0.46 per share)
for the year ended September 30, 1997 as compared to a loss of US
$3,370,096 (US $0.43 per share) for 1996.
During 1997, TransGlobe incurred US $4.0 million in capital
expenditures in the United States and US $3.6 million on its
activities in the Republic of Yemen. In the United States, the
Company drilled four oil wells and one dry hole. In Yemen, the
Company participated in two dry holes and one well that is
currently under going testing.
During fiscal 1997, TransGlobe was involved in two major
financings. The first one was the issuance in November 1996 of
zero coupon convertible debentures for net proceeds of US
$3,221,852. In January 1997, all convertible debentures were
converted into 4,569,021 common shares. In March 1997 the Company
issued 4,400,000 special warrants at US $1.30 per special
warrant. All special warrants were exercised in July 1997,
resulting in the issuance of 4,400,000 common shares. This
offering generated net proceeds of US $5,179,127 to the Company.
At September 30, 1997, the Company had cash resources of US $3.5
million and net working capital of US $2.4 million, after accounts
payable and accrued liabilities relating to the capital
expenditures.
In fiscal 1998, the Company plans to continue its exploration
activities in Yemen and the United States. The amount of
TransGlobe's capital expenditures on Block S-1, Yemen will depend
on the extent of partner participation. In addition, the Company
is anticipating additional seismic acquisition and drilling costs
on Block 32, Yemen during fiscal 1998.
In the United States, the Company expects to continue its
exploration program on East Meridian lands, Montana. The Company
has also acquired an interest in the Moline Lake prospect in North
Dakota. The Company anticipates drilling up to eight wells in the
United States during fiscal 1998. |
