DESCRIPTION: TransGlobe Energy Corporation is an international exploration and production company based in Calgary, Alberta, Canada, with oil and natural gas interests in Egypt and Yemen. The company has interests in eight international blocks totaling 5.2M acres, with active programs of exploration and development drilling underway.
In Egypt, TransGlobe has 50%–100% working interest in West Gharib (TGL operated), East Ghazalat and Nuqra (TGL operated) with 2009 exit production at 6,474 barrels oil per day ("Bopd"). In Yemen, the company has 13%–33% working interest in Blocks 32, 72, 84, S-1 and 75 with 2009 exit production at 2,954 Bopd and are operated by highly reputable international oil and gas companies (Occidental Petroleum and DNO Int'l ASA). Since inception, TransGlobe has recorded continuous growth in production, reserves and funds flow, on both a gross and per-share basis.
The information provided below is based on the most recent information we have received from analysts, newsletters and other contributors to Streetwise Reports' The Gold Report or The Energy Report. We encourage you to visit the company's web site and call the company for more specifics on this company before you decide to invest.
"The top five companies in the Oil & Gas Exploration & Production industry are ranked by operating margin. A healthy operating margin is required for a company to pay for its fixed costs and generate cash. . .TransGlobe Energy has an operating margin of 55.8% on trailing 12 months sales of $130.3M and sales growth of 34.7%."
Alexander Klein, Dundee Securities
(08/06/10)
"Despite the implementation of a fracture stimulation program at the Arta field in West Gharib Egypt towards the end of Q110 that resulted in material incremental production increases, TransGlobe still reported production sequentially lower quarter-over-quarter. Production for Q210 averaged 9,206 bbls/d 5% below our 9,664 bbls/d forecast. This production rate is a 5% decrease over the previous quarter.
Notwithstanding the risk of lower production for 2010, the expanding Nukhul play provides substantial development potential through 2011 and 2012. In addition, we believe the Safwa discovery in East Ghazalat will be commercialized in early 2011, providing more incremental production. The company also has an inventory of exploration prospects that provide further potential upside. We are maintaining our BUY recommendation and $9.50 12-month target price."
David Popowich, Macquarie Equities Research
(08/06/10)
"TransGlobe reported Q210 CFPS of US$0.25 on production of 9,206bbl/d, slightly below our US$0.29 and 9,650bbl/d estimates. Downtime in June, which we had not accurately accounted for, led to the production shortfall. . .2010 production guidance is unchanged at 10,000–10,500bbl/d.
Incremental drilling results include news that the East Arta #4 exploration well encountered 32 ft. of net pay in the Nukhul formation. The East Arta #3 well, however, encountered thinner pay but has still been cased as a potential oil well. Although Q210 numbers were slightly below our forecast, TransGlobe continues to perform well operationally. We see the drilling results, particularly at East Arta #4 as incrementally positive, but await completion results before de-risking this asset further. Exploration, particularly in Yemen, should drive the story in H210."
Gerry Donnelly, FirstEnergy Capital
(08/06/10)
"TransGlobe Energy will continue on its exploration and development drilling campaign focused on ramping up production to meet stated targets with particular focus on the Nukhul play in the West Gharib Concession in Egypt for the remainder of 2010. Capital expenditure for 2010 has been increased from US$63MM to US$71MM with US$60MM now allocated to Egypt. Further drilling on the Arta Field could double petroleum in-place figures, albeit recovery factors are lower than we anticipated. Although Q2 production was behind expectations, production guidance for 2010 is maintained with a further possible increase in 2011, possible reserves bookings at the East Ghazalat Block in Egypt by year-end and depending on appraisal wells results an early production system could be put in place in 2011. We have trimmed our target price to C$8.50/share, in line with our new risked NAV. We maintain our Market Perform recommendation, which implies a return of 8% to our current target price."
Warren Verbonac, Union Securities Ltd.
(08/05/10)
"TransGlobe released its Q210 operating and financial results. . .cash flow of US$0.26 for the quarter came in ahead of our estimate of US$0.23. Notable success was achieved at the Arta field in Egypt (100% interest) where production is now 969 bd (up from 130 bd at the beginning of the year) due to successful fracturing of recent wells, a program which will be continued. Results from the recent drilling indicate estimated petroleum initially in place of 36M barrels, up from the previous estimate of 28M bbls. Fracturing will be expanded to four other fields in West Gharib. The company's budget for the year has increased from US$63M to US$71M. . .building on recent success and laying the groundwork for continued growth in 2011."
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