Hi James, Like in the song, "you deserve a break today!" surely fits TGA's performance after it's earnings report came out at 1:51PM..... <g> Unlike your portfolio, TGA is my only energy related stock.
(Excerpted)
TransGlobe Energy Corporation Third Interim Report for the Three and Nine Months Ended September 30, 2005
Tuesday November 1, 1:51 pm ET
CALGARY, Alberta--(BUSINESS WIRE)--Nov. 1, 2005--TransGlobe Energy Corporation (TSX:TGL - News; AMEX:TGA - News; "TransGlobe" or the "Company") is pleased to announce its financial and operating results for the three and nine months ended September 30, 2005. All dollar values are expressed in United States dollars unless otherwise stated. Conversion of natural gas to oil is made on the basis of 6,000 cubic feet of natural gas being equivalent to one barrel of crude oil.
HIGHLIGHTS
- Record production in Q3-2005 of 5,285 Boepd (5,533 Boepd sales), a 13% increase over Q2-2005 and a 23% increase over Q3-2004
- Record net income in Q3-2005 of $7,539,000 ($0.13 per share), a 197% increase over Q3-2004
- Record cash flow in Q3-2005 of $13,142,000 ($0.22 per share), a 201% increase over Q3-2004
- Working capital increased to $9,943,000 with no debt
Corporate Summary
The Company's total production during the third quarter of 2005 averaged 5,285 Boepd, a 23% increase from the third quarter of 2004 (4,303 Boepd) and a 13% increase from the second quarter of 2005. The Canadian and Block S-1 production increased over the same period in 2004. The Tasour field in Block 32 exhibited the natural declines of a mature field. The Company is well positioned to continue growing production and reserves. The Company has plans to drill exploration wells in all four international projects as well as in Canada during 2006. Development drilling is also planned for Block S-1 and for Canada. The 2006 capital program, consisting of seismic, 40 to 50 wells, facilities construction and pipeline tie-ins, is planned to be funded entirely from cash flow and working capital.
Block S-1, Republic of Yemen (25% working interest)
Operations and Exploration
During the quarter, one producing Upper Lam A oil well (An Nagyah #16) was drilled. A second Upper Lam A oil well (An Nagyah #17) was drilling at quarter end. The An Nagyah #16 well was drilled to a total depth of 2,080 meters and completed as an Upper Lam A oil well. The An Nagyah #16 well was tested from an 864 meter horizontal Upper Lam A section at a rate of 2,520 barrels of light (43 degree API) oil per day and 1.2 million cubic feet of natural gas per day on a 52/64 inch choke at 360 psi flowing pressure. The An Nagyah #17 well was drilled to a total depth of 2,066 meters and was completed as an Upper Lam A oil well. The An Nagyah #17 well was tested from a 575 meter horizontal section at a rate of 3,250 barrels of light (43 degree API) oil per day and 1.8 million cubic feet of natural gas per day on a 48/64 inch choke at 480 psi flowing pressure. An Nagyah #16 and #17 are the fourth and fifth horizontal wells drilled in the field. It is expected that two or three more horizontal wells will be drilled in the Upper Lam A during the next year to fully develop the An Nagyah field.
A development/appraisal horizontal well is currently being drilled at An Nagyah #18. The An Nagyah #18 well is planned as an 800 meter horizontal well in the Lam B sandstone of the An Nagyah field. The Lam B sandstones were initially discovered in the An Nagyah #3 vertical well which tested at a rate of 240 barrels of light, sweet (42 degree API) oil per day. The core and test data indicated the Lam B reservoir has less porosity and permeability than the Lam A reservoir therefore a horizontal well is being drilled at An Nagyah #18 to enhance production. Depending upon the success of An Nagyah #18 well, one or two additional horizontal wells could be drilled in the Lam B pool.
Following An Nagyah #18, an exploration well at Hatat #1 is planned to evaluate a fractured Basement prospect in the An Naeem area. The Company currently has 16 exploration prospects mapped and anticipates that several of these will be drilled over the next year.
The Block S-1 Joint Venture Group has approved a capital budget of $48 million ($12 million to TransGlobe) for 2006 projects (firm and contingent). The program includes additional 3-D seismic, a continuous drilling program (a mixture of development horizontal wells and exploration wells) and production facilities. Subsequent to the approval of the 2006 capital budget, Vintage Petroleum Inc. (operator of Block S-1) has announced an agreement whereby Vintage will be merged into Occidental Petroleum Corporation. The merger is anticipated to be completed early in 2006.
Block 32, Republic of Yemen (13.81087% working interest)
Operations and Exploration
During the quarter, the Tasour #19 appraisal well was completed as a new Qishn producer. Tasour #19 is an extended reach, high angle exploration/appraisal well which appraised the central southwest portion of the Tasour field. The well was also expected to evaluate a potential Basement exploration prospect located south of the main Tasour field in Block 32. The well was directionally drilled to a total depth of 2,997 meters and did not reach the Basement due to massive lost circulation and drilling difficulties in the Naifa carbonates. It was therefore decided to complete the well as a Qishn producer and increase production from the Tasour field. A dedicated well to evaluate the Tasour Basement prospect is planned to be drilled at a later stage from a more optimal surface location.
The Balan #1 exploration well commenced drilling on October 1. The well is located approximately 11 kilometers north of the Tasour field. Balan #1 will test for three potential oil accumulations; the Qishn sandstone, the Saar carbonate and the fractured Basement. The well is expected to finish drilling by mid November.
A second rig is expected to start drilling on another exploration location at North Hemiar (Godah #1) by mid November. Godah #1 is approximately 7 kilometers east of the Tasour field and will test for a potential oil accumulation in the Qishn sandstone.
Block 72, Republic of Yemen (33% working interest)
The Block 72 PSA was ratified by the Yemen parliament on June 18, 2005 and became law following the Presidential decree on July 12, 2005. Block 72 encompasses 1,822 square kilometers (approximately 450,234 acres) and is located in the western Masila Basin adjacent to the billion barrel Nexen Masila Block. The Block 72 Joint Venture Group plans to carry out a seismic acquisition program and the drilling of two exploration wells during the first exploration period of thirty months. In October a seismic field acquisition program consisting of 255 kilometers of 2-D seismic commenced. Any discoveries made on Block 72 would follow a similar development program to Block 32 whereby a separate oil processing facility and a pipeline would be constructed to connect to the Nexen export pipeline.
Nuqra Block 1, Arab Republic of Egypt (50% working interest, Operator)
TransGlobe has recently completed the reprocessing of 3,190 kilometers of existing 2-D seismic data on the Nuqra Block. Mapping of the reprocessed data and preparations for the new seismic acquisition program are underway. A new 800 kilometer 2-D seismic acquisition program has been awarded and is expected to commence in the fourth quarter 2005. The seismic acquisition program was bid jointly with Centurion Energy who holds the exploration concession adjacent to the Nuqra Block. The seismic crew started work on the Centurion block in the third quarter and is expected to move to the Nuqra Block in December or early in January 2006. The exploration of the Nuqra Block is being fast tracked and will probably exceed the PSA requirements. TransGlobe is planning to complete the seismic acquisition by the first quarter of 2006 and is preparing for a two well drilling program in late 2006. This would complete all the first period and second period PSA commitments ahead of schedule.
Canada
Operations and Exploration
TransGlobe has drilled 13 wells during the first nine months of 2005, resulting in 4 oil wells (3.7 net) and 9 gas wells (7.9 net) of which 3 wells are currently on production. Of the remaining ten wells to be pipeline connected, four are awaiting completion and testing. The unusually wet conditions experienced in Alberta during the quarter had an adverse effect on field operations, causing delays in both well completions and pipeline tie-ins.
Subsequent to the third quarter, 3 wells were drilled in late October resulting 3 (2.6 net) potential gas wells. The Company expects to continue its drilling program into the first quarter of 2006 to complete a planned 35 well program. The Nevis and Gadsby areas are the primary focus of the drilling program.
The Company has recently completed its first Coal Bed Methane ("CBM") well in the Nevis area targeting the Horseshoe Canyon coals. The well will be pipeline connected and placed on production in November. If this initial CBM test proves commercial production, the Company has shallow mineral rights in eight sections of land where an additional 31 CBM wells could be drilled.
The original 2005 budget of 10-15 wells has been expanded significantly to 30-35 wells with an increased land acquisition budget due to the successful well results to date and the strong commodity prices. The drilling will be primarily focused in central Alberta. In 2005 to date, the Company acquired 13,500 additional net acres.
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