NEWS RELEASE TRANSMITTED BY Marketwire
FOR: TRANSGLOBE ENERGY CORPORATION
TransGlobe Energy Corporation Announces 2002 Reserve And Production Results
Feb 11, 2003 - 01 07 ET
CALGARY, ALBERTA--TransGlobe Energy Corporation ("TransGlobe" or
the "Company") (TSX symbol "TGL"; OTC-BB symbol "TGLEF") is
pleased to announce 2002 Year End reserve and production results.
TransGlobe's proven reserves in the Tasour field (13.81087%
working interest) in the Republic of Yemen are up 91% from
823,000 barrels at year end 2001 to 1,574,000 barrels at year end
2002. The increase replaced 233% of 2002 production. The
increase in Yemen reserves is attributable to the excellent field
performance, field extension and new pool discovery at Tasour #7
on Block 32. In February 2003 the Tasour field cumulative
production surpassed 8.0 million barrels (1.1 million barrels to
Although a light oil discovery at An Nagyah #2 on Block S-1 was
announced December 10, 2002, a medium gravity oil pool was found
at Harmel #1 and a gas-condensate pool at An Naeem #1, #2 and #3,
no proven reserves will be assigned to Block S-1 until additional
appraisal drilling and project evaluation is completed. An
appraisal well at An Nagyah #3 is currently drilling with results
expected by the end of February. If a commercial development
emerges from the current program, proven reserves can then be
assigned to Block S-1 (25% working interest).
In Canada, proven reserves declined 18% from 946,000 Boe at year
end 2001 to 772,000 Boe at year end 2002. The decline is
primarily due to production, well performance and the divestiture
of minor properties during 2002. Gas reserves were converted to
barrels of oil equivalent ("Boe") using a ratio of 6 : 1, and
represent 76% of the Canadian proven reserves at year end 2002.
TransGlobe's consolidated proven reserves increased 33% from
1.770 million Boe for 2001 to 2.347 million Boe for 2002.
In the Republic of Yemen, production increased 37% from an
average of 1,131 Bopd in 2001 to an average of 1,545 Bopd in
2002, with an exit rate of 1,996 Bopd for the month of December
2002. Production from the Tasour field is presently curtailed at
17,500 Bopd (2,417 Bopd to TransGlobe) pending the expansion of
export pumping capacity. It is expected that production will
exceed 20,000 Bopd (2,760 Bopd to TransGlobe) by the end of
February when the expansion is completed and shut in wells are
placed on production. Production increases in 2002 are primarily
attributed to the field extension and new pool discovery drilled
at Tasour #7 in September 2002. The field extension was
successfully appraised at Tasour #8 in January 2003. It is
anticipated that another development well will be drilled at
Tasour #9 in June 2003.
In Canada, production declined 21% from an average of 238 Boepd
in 2001 to 187 Boepd in 2002 with an exit rate of 184 Boepd for
the month of December 2002. It is anticipated that Canadian
production will exceed 300 Boepd by the end of the first quarter
2003 when new production at Morningside and Nevis is tied it.
The production decline in 2002 is primarily attributed to natural
declines, the divestiture of minor properties and shut in
production during the year in response to low gas prices. With
significantly improved North American natural gas prices in late
2002 the Company has expanded the Canadian capital budget to
include drilling a minimum of four exploration wells targeting
natural gas prospects.
TransGlobe's consolidated production increased 27% from an
average 1,369 Boepd for 2001 to and average 1,732 Boepd for 2002.
The higher production and higher oil prices in the fourth quarter
have resulted in an increase in the estimated 2002 cash flow to
US$8.0 million before the historical cost pool adjustment. This
represents a 37% increase over 2001. In addition, a year-end
adjustment of US$1.5 million for historical cost pool recoveries
from the Block 32 Joint Venture Partners will increase the
estimated 2002 cash flow to US$9.5 million. Consolidated cash
flow increased 63% from US$5.8 Million (US$0.12 per basic share)
in 2001 to approximately US$9.5 million (US$0.18 per basic share)
The majority of the 2002 historical cost pool adjustment
represents the recovery of TransGlobe's original farm-in costs on
Block 32 in 1997. It is anticipated that the balance of the
historical cost pools will be recovered during 2003 which will
result in a 2003 year end cost pool adjustment payment of
approximately US$1.2 million by TransGlobe to the Block 32 Joint
It is anticipated that the 2002 year end financials will be press
released on March 10, 2003 following the 2002 audit.
This release includes certain statements that may be deemed to be
"forward-looking statements" within the meaning of the US Private
Securities Litigation Reform Act of 1995. All statements in this
release, other than statements of historical facts, that address
future production, reserve potential, exploration drilling,
exploitation activities and events or developments that the
Company expects, are forward-looking statements. Although
TransGlobe believes the expectations expressed in such
forward-looking statements are based on reasonable assumptions,
such statements are not guarantees of future performance and
actual results or developments may differ materially from those
in the forward-looking statements. Factors that could cause
actual results to differ materially from those in forward-looking
statements include oil and gas prices, exploitation and
exploration successes, continued availability of capital and
financing, and general economic, market or business conditions.
TRANSGLOBE ENERGY CORPORATION
Ross G. Clarkson, President & C.E.O.
FOR FURTHER INFORMATION PLEASE CONTACT:
TransGlobe Energy Corporation
Ross G. Clarkson
President & C.E.O.
(403) 264-9898 (FAX)
TransGlobe Energy Corporation
Lloyd W. Herrick
Vice President & C.O.O.
(403) 264-9898 (FAX)