Stonegate Capital Partners Updates Coverage on TransGlobe Energy Corporation (Nasdaq:TGA)

DALLAS, TX / ACCESSWIRE / June 14, 2022 / TransGlobe Energy Corporation (Nasdaq:TGA). The full report can be accessed by clicking on the following link: http://stonegateinc.com/reports/TGA Q1FY22.pdf

COMPANY DESCRIPTION

TransGlobe Energy Corporation ("Company") ("TGA") is an independent oil and gas exploration and production company, with current operations in Alberta, Canada, and the Arab Republic of Egypt. The Company has operated in Egypt since 2004 and holds interests in production sharing concessions in the Eastern Desert and the Western Desert regions. TransGlobe operated in Canada from 1999 to 2008 and re-entered Canada in December 2016. The Company's Canadian holdings include production and working interests in Cardium light oil and Mannville liquid-rich gas assets in the Harmattan area, located in west central Alberta. TransGlobe Energy is headquartered in Calgary, Alberta.

SUMMARY

• Well positioned operator - TransGlobe is an international oil and gas player with over 20 years of experience across diverse geological basins in several countries with a variety of fiscal regimes. With a focus on capital discipline while building a profitable, growth oriented international portfolio, TransGlobe is well positioned to navigate future market volatility.
• With established production - TransGlobe's average production in F21 was 12.9 Mboepd compared to 13.4 Mboepd in F20. Production declined due to natural declines in Egypt, partially offset by the re-commencement of Eastern Desert drilling and well optimization activities. Production guidance for 2022 is set at 12.4 Mboepd to 13.4 Mboepd.
• And a solid reserve base - At the end of 2021, the Company reported 28.0 MMboe total proved (1P) reserves as well as 46.1 MMboe total proved + probable (2P) reserves. The Company has focused on maintaining reserves through exploration success and effective resource maturation.
• Unique position in Egypt - TGA has operated in Egypt for 15 years and is considered a best-in-class operator. The Company has a strong relationship with the Egyptian Government and in December 2020, it finalized negotiations to amend, extend and consolidate three concessions (located in Eastern Desert) into a single new concession. Importantly, the agreement received parliamentary ratification and Presidential signature into law in December 2021. The consolidation provides a platform for TGA to grow its Egyptian business across all oil prices.
• Poised for long-term growth in Egypt - The Company's growth profile should improve post concession agreement, as the field life extends from a near-term expiry to 2040, updated fiscal terms and extension will allow TGA to target an additional 59 MMbbl of contingent resources, and improvement to netbacks greater than 100% at benchmark crude oil prices of $60.00/bbl is expected to drive improved cash flows. The Company is also targeting inorganic growth opportunities through acquisitions.
• Additional upside in Canada - In 2020, TGA drilled a development well in South Harmattan before the price of oil significantly declined. Well completion was deferred until Q1 2021. TGA drilled three South Harmattan horizontal wells in 2021 and all three wells were brought into production by October 2021. Furthermore, there is the potential to drill in excess of 80 additional 1-mile horizontal well locations over the next four to six years. As such, TGA believes it will see production growth at South Harmattan to create value to shareholders. TransGlobe's 2022 guidance for Canadian production is 2,400 to 2,600 boe/d.
• Valuation - Given the different geographic locations of TransGlobe's operating assets, we are using a sum-of-the-parts analysis. Based on our analysis, we arrive at a combined valuation range of $6.25 to $10.00, with a midpoint of $8.25. See page 9 and 10 for details.

About Stonegate Capital Partners
Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.

CONTACT:
Stonegate Capital Partners
info@stonegateinc.com
(214) 987-4121

SOURCE: Stonegate Capital Partners