TransGlobe Energy Corp fka TGA

[UIC Jeff]

TGA Conference Call
Q3 2013 Conference Call and Webcast_Presentation (PDF)
Q3 2013 Conference Call and Webcast_Audio (MP3)

TGA Conference call was very positive Detailed notes at the end of the post..
But my key takeaways were.
- Expect 2014 to have moderate production growth (20 Kto 24K bopd) with consistent cash flows.
- Expect a Dividend announcement (Ross seemed to talk as if it was a done deal)
- Expect Reserves to grow towards the end of 2014 as the 3D is shot and evaluated.
- Expect/Hope Egypt stabilizes: Meaning receivables should stop growing and actually be reduced.
(Also the discount the stock is trading due to being in Egypt should decrease)

The stock is Currently trading @$9.03 with a market cap of 667 Million, and Forward P/E of ~11.2 and a Cashflow of 5x.

I think its still a good value at 9.00 and the news stream in the next month or two should be positive. Of course the risk is the political situation in Egypt.

Thoughts?
Jeff

- Slide 8 Production increasing from 18519 (Oct) to 20,100 (Dec)
- Slide 10 - 12 ~11:30 New concessions (NW Gharib) need 3D shot
Working to move all production to the pipeline to eliminate trucking
(So I‘d expect reserves to increase in 2014)
- Slide 13 ~15:00 East Ghazalat operator (Vegas) bought out by a state run Chinese company. They expect a much more aggressive drilling program in 2014. 50% WI to TGA
- Slide 14 ~16:20 South Alamein Currently drilling 2 exploration wells now “significant potential”
- Slide 15 17:00 South Ghazalat prue exploration play. Need to shoot 3D probably late in 2014.
Q&A
- ~22:45 Expect enough to increase CAPX spend and perhaps even some M&A to diversify from Egypt but still expect a large cash balance.
- ~25:14 Development to exploration CAPX spend to be 100M a year spend for the next 5 years. In 2014 70% Development to 30% exploration. In 2015 shift more 30/70.
~30:30 Shooting for 40,000 in 4 years. Sounds like 22K to 24K in 2014. Can grow to 40K with 100 million dollar spend per year.
~33:00 Reserves for this expect to be flat. Because South Alamein was deferred to 2014.
~ 34:30 Reserves on West Gharid has 10 to 40 million barrel can not be booked to reserves until they get an approved development plan.
~ 38:00 Ross’s Conclusion is extremely positive. TGA is in a strong position. Huge inventory of development and exploration property, and more cash than they can spend. New update ops reports and 2014 budget in a few weeks.