[ACCESSWIRE]
DALLAS, TX / ACCESSWIRE / October 19, 2017 / TransGlobe Energy Corporation ("Company") ("TGA") (NASDAQ: TGA).
COMPANY DESCRIPTION
TransGlobe Energy Corporation ("Company") ("TGA") is an independent oil and gas exploration and production company, with current operations in Alberta, Canada, and the Arab Republic of Egypt. TGA also operated in Yemen for 19 years, before selling those interests in 2015. The Company has operated in Egypt since 2004 and holds interests in production sharing concessions in the Eastern Desert and the Western Desert regions. TransGlobe operated in Canada from 1999 to 2008 and recently re-entered Canada in December 2016. The Company's Canadian holdings include production and working interests in Cardium light oil and Mannville liquid-rich gas assets in the Harmattan area, located in west-central Alberta. TransGlobe Energy is headquartered in Calgary, Alberta, and has approximately 77 employees.
SUMMARY
TransGlobe has been in the international oil and gas industry for over twenty years and has drilled more than 400 gross wells in varying geological formations, political climates and economic environments. Through the execution of a disciplined business plan involving significant cost-cutting measures, a strategic acquisition, and key contracts with the Egyptian government and third-party marketers, TGA's experienced management team has steered the Company through a difficult period involving low oil prices and political turmoil, and, as a result, TransGlobe is well-positioned to return to profitability over the near-term.
- TransGlobe has a current production base of roughly 16,000 boepd, and a number of low-risk development projects in Canada and Egypt, along with some potentially high-impact exploration opportunities in Egypt. All of the projects have very high company ownership/working interest, which better enables TGA to react quickly to commodity prices. Short-term, we look for TransGlobe to focus on its low-risk programs, pivoting its attention to high-impact opportunities beginning in 2018.
- Following a chaotic period in the aftermath of the Arab Spring uprising in 2014, Egypt has regained political and economic stability. Consequently, TransGlobe has gained access to the Boraq field (formerly blocked by the Egyptian military) in the South Alamein concession in the Western Desert. This is a low-cost, potentially high-impact field that is especially attractive because of its high flow rates and light oil that sells at close to Brent crude pricing. Successful appraisal wells could lead to first production at year-end 2017 or early 2018.
- At year-end 2016, TGA acquired some producing high-quality light oil and liquid-rich gas plays in in west-central Alberta, Canada. The acquisition was designed to diversify TGA geographically and expand operations outside areas with geopolitical risk. The property has a slow decline rate (12% over the last year), and the acquisition came with 149 potential drilling opportunities. The historical low operating costs and favorable royalty and tax structure of the area supports growth at current oil prices and provides opportunities to increase reserves and production in proven plays using advanced horizontal drilling and multi-stage frac technology.
- Based on a 12/31/16 D&M evaluation, the Company reports ~29.3MMbl 2P gross reserves for its Egyptian assets (~18.3MMbl 1P gross), as well as ~20.7MMboe 2P gross reserves in Canada (~9.0MMboe 1P gross), with both areas offering extensive and diversified development and exploration opportunities.
- Per the most recent filing, if not for an impairment charge associated with a write-down of a property in Egypt, TransGlobe would have shown positive net income for Q217, which would have been the best quarter since Q4 2014. The Company's guidance includes production growth of between 30% and 40%, compared with 2016. Notably, as of June 30, 2017, the Company had 1,274,057 barrels of entitlement oil in inventory valued at $13.43 per barrel on its balance sheet.
- An October 16, 2017 press release detailed that TGA produced on average ~14.9 MBoepd in Q317 and sold ~793,000 bbls of entitlement crude oil for net proceeds of ~$34.5M (includes realized hedging loss).
On a comparable company basis for FY17 estimates, TGA currently trades at an EV/S multiple of 1.2x while its peers trade at a median multiple of 2.7x, an EV/EBITDA of 2.5x vs. the median of its peers at 5.3x, and a P/CFPS of 2.8x vs. the median of its peers at 4.9x. See the full report for further details.
The full report can be accessed by clicking on the following link:
http://stonegateinc.com/reports/TGA_Intitial_Report_Oct_2017_Final.pdf
About Stonegate Capital Partners
Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.
SOURCE: Stonegate Capital Partners
