EARNINGS / TransGlobe Energy Corp. Announces First Quarter
Results
ASE, TSE SYMBOL: TGL
ASE SYMBOL: TGL.S
NASDAQ SYMBOL: TGLEF
MARCH 3, 1998
CALGARY, ALBERTA--TransGlobe Energy Corporation (ASE, symbols
"TGL" and "TGL.S", TSE symbol "TGL", NASDAQ symbol "TGLEF")
announced its financial and operating results for the three month
period ended December 31, 1997.
EXPLORATION UPDATE
During the quarter, the Company participated in a significant oil
discovery in Block 32, Republic of Yemen. The Tasour-1 well was
drilled to a total depth of 2,763 metres (8,500 feet) and flowed
at 3,250 barrels of oil per day of 29 degree API on a submersible
pump from an 11 metre perforated interval. A maximum pump capacity
rate of 4,877 barrels of oil per day was also recorded. However,
the maximum capacity of the well is calculated at over 10,000
barrels of oil per day, as the test rate was limited due to the
pump size. The oil was discovered in the Qishn Clastics reservoir,
the major producing reservoir in the nearby Masila Block. The
Company has an 8 percent working interest in the Block 32
Production Sharing Agreement ("PSA"). An appraisal program is
being proposed to the Ministry of Oil and Mineral Resources (the
"MOMR") in conjunction with a request for revised PSA terms which
could lead to commencement of production in 1999.
On December 21, 1997, the Company signed a Production Sharing
Agreement with the MOMR for the Damis S1 Block, in the Republic of
Yemen. On February 12, 1998, the Company signed a farm-out
agreement with Vintage Petroleum International Inc., ("Vintage"),
a wholly owned subsidiary of Vintage Petroleum Inc., of Tulsa,
Oklahoma, an independent U.S. oil and gas explorer listed on the
New York Stock Exchange. The farm-out agreement will allow Vintage
to earn a 75 percent working interest in the S-1 Block by funding
100 percent of the first $20 million of the work commitments under
the PSA and 75 percent of the signature bonus, agents fees and
finders fees. TransGlobe will pay 25 percent of the signature
bonus, agents fees and finders fees for a total of $1.25 million.
This farm out agreement allows TransGlobe to participate in a
highly prospective exploration program at minimal cost and risk.
The parliament of Yemen is presently reviewing the PSA and is
expected to ratify the PSA in the next few months.
Subsequent to December 31, 1997, the Company participated in the
BROG 13-19 well in Richland County, Montana at a 50 percent
working interest. The well was drilled horizontally and
production tested at a stabilized rate of 804 barrels of oil per
day from the Red River "C" formation. The Company expects to
drill additional horizontal wells in Montana and North Dakota
during 1998.
FINANCIAL UPDATE
The capital expenditures for the three month period were
$1,081,832 of which $545,481 was related to the exploration and
development activities in East Meridian, Montana and the
recompletion costs of the Madera 25-1 well in New Mexico. In
Yemen, the Company incurred $536,351 in capital expenditures
primarily on the Tasour-1 well.
Net oil and gas revenues were $301,015 for the period compared to
$338,494 and royalties and operating expenses were $39,340
compared to $45,486 for the same period in 1996. The decline in
revenue was due to lower gas production and lower oil prices
partially offset by higher oil production.
/T/
OPERATING AND FINANCIAL RESULTS SUMMARY
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Three months ended
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December September December
31, 1997 30, 1997 31, 1996
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(United States Dollars unless otherwise stated)
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Production:
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Oil and condensate
(barrels per day) 114 62 46
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Natural gas (mcf per day) 760 575 1,004
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Product prices:
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Oil ( per barrel) $17.86 $18.46 $23.66
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Natural gas (per mcf) $3.10 $2.42 $3.01
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Oil and gas revenue net
of royalties $301,015 $220,473 $338,494
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Operating expenses 39,340 51,437 45,486
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Net operating income $261,675 $169,036 $293,008
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Capital expenditures:
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United States $545,481 $881,539 $1,247,524
Republic of Yemen 536,351 848,562 -
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Total $1,081,832 $1,730,101 $1,247,524
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Loss for the period
(before write-downs) ($178,014) ($315,822) ($125,687)
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Per share ($0.01) ($0.02) ($0.01)
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Cash flow from operations $30,441 ($53,399) $44,285
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/T/ |
