TGA report good Q2 results
Posted: Mon Aug 12, 2013 4:25 pm
TGA had a better 2nd quarter than I expected they would considering all the political crap going on in Egypt. This small-cap is clearly not for everyone, but I like the management team and believe they will work things out over there. My Fair Value Estimate is ~$12/share, but realize it will continue to trade at a deep discount until Egypt get's its act together. TGA does seem to be on good working terms with the government. - Dan
TGA is a pure play on Middle East oil (Egypt and Yemen). Lots of unknowns in that neighborhood, but there is also a lot of oil for those willing to work the system. The fact that TGA is a Canadian really helps.
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During the political change in Egypt, business processes and operations have generally proceeded as normal. While exploration and development activities have only been subjected to short-term interruptions, the Company has continued to experience delays in the collection of accounts receivable from the Egyptian Government due to the economic impact caused by the political and civil instability in the country. The Company is in continual discussions with the Egyptian Government to determine solutions to the delayed cash collections, and expects to recover the accounts receivable balance in full. During the first six months of 2013, the Company collected $106.9 million in accounts receivable from the Egyptian Government. The Company expects to receive approximately $115 million in the second half of 2013 through monthly cash payments and through an additional one and a half cargo liftings. These cargo liftings have a current estimated value of $70 million to $75 million depending on the prevailing oil price at the time of lifting. A typical full cargo lifting is approximately 510,000 barrels.
In late June civil protests in Egypt led to the Egyptian military removing the President from his office. Immediately following his removal an interim government was appointed and a road map to new elections, that are expected to take place in early 2014, was announced. These events have had no significant impact on the Company's current operations. At this time it is not possible for TransGlobe to predict how the transition to a newly-elected government will impact the Company in the long-term. However, the interim government officials appointed and the significant financial support pledged from neighboring countries are viewed as positive by TransGlobe
TGA is a pure play on Middle East oil (Egypt and Yemen). Lots of unknowns in that neighborhood, but there is also a lot of oil for those willing to work the system. The fact that TGA is a Canadian really helps.
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During the political change in Egypt, business processes and operations have generally proceeded as normal. While exploration and development activities have only been subjected to short-term interruptions, the Company has continued to experience delays in the collection of accounts receivable from the Egyptian Government due to the economic impact caused by the political and civil instability in the country. The Company is in continual discussions with the Egyptian Government to determine solutions to the delayed cash collections, and expects to recover the accounts receivable balance in full. During the first six months of 2013, the Company collected $106.9 million in accounts receivable from the Egyptian Government. The Company expects to receive approximately $115 million in the second half of 2013 through monthly cash payments and through an additional one and a half cargo liftings. These cargo liftings have a current estimated value of $70 million to $75 million depending on the prevailing oil price at the time of lifting. A typical full cargo lifting is approximately 510,000 barrels.
In late June civil protests in Egypt led to the Egyptian military removing the President from his office. Immediately following his removal an interim government was appointed and a road map to new elections, that are expected to take place in early 2014, was announced. These events have had no significant impact on the Company's current operations. At this time it is not possible for TransGlobe to predict how the transition to a newly-elected government will impact the Company in the long-term. However, the interim government officials appointed and the significant financial support pledged from neighboring countries are viewed as positive by TransGlobe