TransGlobe (TGA) Reports 38% Increase in Proved Reserves for FY11; Other Info Issued
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TransGlobe Energy Corporation (Nasdaq: TGA) today announced its 2011 year-end reserves. All dollar values are expressed in United States dollars unless otherwise stated.
The Company's 2011 and 2010 year-end reserves were prepared by the independent reserves evaluation firm of DeGolyer and MacNaughton Canada Limited, in accordance with National Instrument 51-101. The following is a summary of DeGolyer's evaluation for the year ended December 31, 2011 with comparatives to the year ended December 31, 2010.
Year-End 2011 Reserves
Proved Reserves
TransGlobe's total proved reserves increased 38 percent to 28.2 million barrels of oil ("MMBbl") at December 31, 2011 from 20.5 MMBbl at December 31, 2010. This increase in proved reserves represents a production replacement in 2011 of 275 percent. The Company produced 4.4 MMBbl of reserves during 2011.
Proved Plus Probable Reserves ("2P")
Total 2P reserves grew 45 percent to 44.2 MMBbl at December 31, 2011 from 30.4 MMBbl at December 31, 2010. The increase in 2P reserves represents a production replacement in 2011 of 412 percent.
Proved Plus Probable Plus Possible Reserves ("3P")
Total 3P reserves grew 43 percent to 59.8 MMBbl at December 31, 2011 from 41.9 MMBbl at December 31, 2010. The increase in 3P reserves represents a production replacement in 2011 of 507 percent.
2011 Reserve Changes
In 2011, the Company's activities focused primarily on the continued development of its operated West Gharib concession and the acquisition of the West Bakr concession in the Arab Republic of Egypt ("Egypt").
In Egypt, the Company's 1P reserves grew 60 percent over 2010, representing a production replacement of 335 percent. On 2P basis, the year-over-year increase was 61 percent, equal to a production replacement of 475 percent, while on a 3P basis, the year-over-year increase was 53 percent, equal to a production replacement of 574 percent.
The most significant reserves additions during the year resulted from appraisal drilling at Arta/East Arta in West Gharib and the acquisition of West Bakr (closed December 29, 2011).
At Arta/East Arta, reserve additions were achieved in the Lower Nukhul through step-out and appraisal drilling along with continued development of the Upper Nukhul.
At West Bakr reserve adds of 7.4 MMBbl (1P), 11.6 MMBbl (2P) and 16.8 MMBbl (3P) were assigned to the year end 2011 report.
In the Republic of Yemen ("Yemen"), reserves were reduced primarily due to a curtailment of future drilling activities in Block S-1 due to political instability. The Company's Yemen 1P, 2P and 3P reserves were decreased by 27%, 11% and 5% respectively from the 2010 year-end numbers.
Estimated Future Net Revenues
All evaluations and reviews of future net cash flow are stated prior to any provision for interest costs or general and administrative costs and after the deduction of estimated future capital expenditures for wells to which reserves have been assigned. It should not be assumed that the estimated future net cash flow shown below is representative of the fair market value of the Company's properties. There is no assurance that such price and cost assumptions will be attained, and variances could be material. The recovery and reserve estimates of crude oil, NGL and natural gas reserves provided herein are estimates only, and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, NGL and natural gas reserves may be greater than or less than the estimates provided herein.
The estimated future net revenues for years ended 2011 and 2010 presented below in millions of U.S. dollars ("$MM") are calculated using DeGolyer's price forecast at December 31, 2011 and December 31, 2010, respectively, and constant pricing using the Securities and Exchange Commissions' ("SEC") average price (the 12-month average price using the first day of the month prices during 2011 and 2010, respectively). In the constant price cases, the prices were held constant for the life of the reserves.
The Company's 2011 and 2010 year-end reserves were prepared by the independent reserves evaluation firm of DeGolyer and MacNaughton Canada Limited, in accordance with National Instrument 51-101. The following is a summary of DeGolyer's evaluation for the year ended December 31, 2011 with comparatives to the year ended December 31, 2010.
Year-End 2011 Reserves
Proved Reserves
TransGlobe's total proved reserves increased 38 percent to 28.2 million barrels of oil ("MMBbl") at December 31, 2011 from 20.5 MMBbl at December 31, 2010. This increase in proved reserves represents a production replacement in 2011 of 275 percent. The Company produced 4.4 MMBbl of reserves during 2011.
Proved Plus Probable Reserves ("2P")
Total 2P reserves grew 45 percent to 44.2 MMBbl at December 31, 2011 from 30.4 MMBbl at December 31, 2010. The increase in 2P reserves represents a production replacement in 2011 of 412 percent.
Proved Plus Probable Plus Possible Reserves ("3P")
Total 3P reserves grew 43 percent to 59.8 MMBbl at December 31, 2011 from 41.9 MMBbl at December 31, 2010. The increase in 3P reserves represents a production replacement in 2011 of 507 percent.
2011 Reserve Changes
In 2011, the Company's activities focused primarily on the continued development of its operated West Gharib concession and the acquisition of the West Bakr concession in the Arab Republic of Egypt ("Egypt").
In Egypt, the Company's 1P reserves grew 60 percent over 2010, representing a production replacement of 335 percent. On 2P basis, the year-over-year increase was 61 percent, equal to a production replacement of 475 percent, while on a 3P basis, the year-over-year increase was 53 percent, equal to a production replacement of 574 percent.
The most significant reserves additions during the year resulted from appraisal drilling at Arta/East Arta in West Gharib and the acquisition of West Bakr (closed December 29, 2011).
At Arta/East Arta, reserve additions were achieved in the Lower Nukhul through step-out and appraisal drilling along with continued development of the Upper Nukhul.
At West Bakr reserve adds of 7.4 MMBbl (1P), 11.6 MMBbl (2P) and 16.8 MMBbl (3P) were assigned to the year end 2011 report.
In the Republic of Yemen ("Yemen"), reserves were reduced primarily due to a curtailment of future drilling activities in Block S-1 due to political instability. The Company's Yemen 1P, 2P and 3P reserves were decreased by 27%, 11% and 5% respectively from the 2010 year-end numbers.
Estimated Future Net Revenues
All evaluations and reviews of future net cash flow are stated prior to any provision for interest costs or general and administrative costs and after the deduction of estimated future capital expenditures for wells to which reserves have been assigned. It should not be assumed that the estimated future net cash flow shown below is representative of the fair market value of the Company's properties. There is no assurance that such price and cost assumptions will be attained, and variances could be material. The recovery and reserve estimates of crude oil, NGL and natural gas reserves provided herein are estimates only, and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, NGL and natural gas reserves may be greater than or less than the estimates provided herein.
The estimated future net revenues for years ended 2011 and 2010 presented below in millions of U.S. dollars ("$MM") are calculated using DeGolyer's price forecast at December 31, 2011 and December 31, 2010, respectively, and constant pricing using the Securities and Exchange Commissions' ("SEC") average price (the 12-month average price using the first day of the month prices during 2011 and 2010, respectively). In the constant price cases, the prices were held constant for the life of the reserves.
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