(Alliance News) - TransGlobe Energy Corp on Tuesday said it swung to a substantial loss in the first half of its financial year as revenue fell and expenses almost doubled.
The Egypt and Canada-focused oil exploration and production firm posted a USD61.6 million pretax loss for the six months ended June 30, swinging from a USD14.9 million profit the year before.
Expenses proved the most significant factor in the company's loss, rising 92% to USD126.5 million from USD65.8 million, though a 20% drop in revenue to USD64.9 million from USD80.7 million was also partly responsible.
Second quarter production average 14,300 barrels of oil equivalent per day, down 5% from the prior quarter. In July, production averaged around 12,439 barrels per day, down 13% from the second quarter and in line with TransGlobe's revised budget expectations due to natural declines.
TransGlobe has narrowed its annual production guidance range to 13,300 to 13,800 barrels of oil equivalent per day from previous guidance of 13,300 to 14,300 barrels. This is to reflect the company's deferred well interventions in Egypt.
No drilling activity took place in Egypt or Canada in the second quarter, in line with the firm's revised 2020 budget.
The company has also hedged its remaining unhedged forecast 2020 Egypt entitlement oil production with Brent collars "protecting a floor price of USD30.00 purchased puts against USD40.70 sold calls".
"TransGlobe continues to actively evaluate M&A opportunities, with a view to not only better position the company to weather the current downturn but also rebound strongly once commodity prices begin to strengthen," the company said.
The company also commented that: "Despite restrictions on travel, constructive negotiations with [Egyptian General Petroleum Corp] to amend, extend and consolidate the company's Eastern Desert concession agreements continued through the quarter. With both parties recognising the attractiveness of a revised agreement to stabilise and ultimately improve investment in production, following a return to a more sustainable commodity price environment, the company is increasingly confident that a successful conclusion will be reached in the near-term."
Shares in TransGlobe were untraded on Tuesday at midday in London, having last closed at 45.50 pence.
By Anna Farley; annafarley@alliancenews.com
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