WOW! TGA is being taken down quite hard this morning. As I type this it is trading at $14.10 down $1.00. This is after a significant take down yesterday. What are some thoughts from the pros here on the board? Is this take down the real thing OR is it the Mo MO folks taking profits?
I see this as a buying opportunity but will wait to see where it ends up at the close.
Patrick
TGA
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prince_jake_33
- Posts: 242
- Joined: Mon Apr 26, 2010 2:21 pm
Re: TGA
TransGlobe still has good visibility into becoming a 20,000 barrel a day company, but people are focused on the one negative result right now," the analyst said.
Shares of Calgary, Alberta-based TransGlobe were down 10 percent at C$15.31 in mid-day trade on the Toronto Stock Exchange.
They touched a low of C$15.08 earlier in the session.
"If the stock pulls back anymore down to the C$15 per share level, it's an excellent entry point for people looking to reenter the name," Popowich said. (Reporting by Gowri Jayakumar in Bangalore; Editing by Jarshad Kakkrakandy)
Shares of Calgary, Alberta-based TransGlobe were down 10 percent at C$15.31 in mid-day trade on the Toronto Stock Exchange.
They touched a low of C$15.08 earlier in the session.
"If the stock pulls back anymore down to the C$15 per share level, it's an excellent entry point for people looking to reenter the name," Popowich said. (Reporting by Gowri Jayakumar in Bangalore; Editing by Jarshad Kakkrakandy)
Re: TGA
I definitely rate TGA a "Strong Buy" under $15/share. I saw nothing in the operations update to reduce my Fair Value estimate of $20/share. In fact, the East Arta #7 is very encouraging to me. Note that the well had an IP of 1,400 Bopd without being fracture stimulated and is now producing over 2,000 bopd. That indicates to me that TGA may ramp up their production very quickly next year.
"East Arta #7, which encountered a thicker lower Nukhul section structurally down dip of the main Arta pool was placed on production at an initial rate of 1,400 Bopd. The reservoir found at East Arta #7 has high porosity and permeability and did not require fracture stimulation. The rate was increased to 2,000 Bopd last week following the installation of a higher volume pump. The upper Nukhul formation has not been completed in East Arta #7."
"The two drilling rigs will focus on drilling Nukhul development and appraisal wells for the balance of 2010 and 2011. A third drilling rig will be added in early 2011. It is expected that up to 44 wells will be drilled in West Gharib during 2011, primarily focused on the Nukhul formation.< What if a bunch of these wells come on at over 1,000 BOPD?
Plus the market seems to be missing the fact that production in Yemen is going up and that the An Nagyah #31 found a new oil pool and shows in other zones they had not anticipated. This is very good news.
3rd quarter production was 7,601 Bopd in Egypt and 2,537 Bopd in Yemen. Look what it is now and oil prices are about $5/bbl higher.
"Production averaged 10,957 Bopd to TransGlobe during November (7,967 Bopd from Egypt and 2,990 Bopd from Yemen). Production for the first twelve days of December was 11,600 Bopd, on track to exceed the 11,000 Bopd target exit rate."
"The An Nagyah #31 exploration well has discovered a new Lam 'B' oil pool in the intermediate portion of the well. Two additional oil shows were encountered in the Shuqra carbonates and in the Kholan sandstones located above Basement."
"East Arta #7, which encountered a thicker lower Nukhul section structurally down dip of the main Arta pool was placed on production at an initial rate of 1,400 Bopd. The reservoir found at East Arta #7 has high porosity and permeability and did not require fracture stimulation. The rate was increased to 2,000 Bopd last week following the installation of a higher volume pump. The upper Nukhul formation has not been completed in East Arta #7."
"The two drilling rigs will focus on drilling Nukhul development and appraisal wells for the balance of 2010 and 2011. A third drilling rig will be added in early 2011. It is expected that up to 44 wells will be drilled in West Gharib during 2011, primarily focused on the Nukhul formation.< What if a bunch of these wells come on at over 1,000 BOPD?
Plus the market seems to be missing the fact that production in Yemen is going up and that the An Nagyah #31 found a new oil pool and shows in other zones they had not anticipated. This is very good news.
3rd quarter production was 7,601 Bopd in Egypt and 2,537 Bopd in Yemen. Look what it is now and oil prices are about $5/bbl higher.
"Production averaged 10,957 Bopd to TransGlobe during November (7,967 Bopd from Egypt and 2,990 Bopd from Yemen). Production for the first twelve days of December was 11,600 Bopd, on track to exceed the 11,000 Bopd target exit rate."
"The An Nagyah #31 exploration well has discovered a new Lam 'B' oil pool in the intermediate portion of the well. Two additional oil shows were encountered in the Shuqra carbonates and in the Kholan sandstones located above Basement."
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: TGA
http://www.vegasoil.com/en/main.php
The great news on the East Ghazalat Concession (operated by Vegas Oil & Gas) is that it is very close to Mediterranean coast with plenty of production infrastructue in place. This field could be on-line quick. Note that TGA is not including this in their 2011 production forecast until the development is approved by the government. I cannot imagine why the govt would not approve this.
This project will become a big deal for TGA by the middle of next year. Notice how shallow these wells are, so wells can be drilled and completed quickly. When this project is approved it means TGA could be looking at a 2011 exit rate over 16,000 Bopd.
East Ghazalat Block, Arab Republic of Egypt (50% working interest)
Drilling
During the fourth quarter, the Company drilled two Upper Bahariya oil wells (Sabbar #1 and Safwa #2).
Sabbar #1 was drilled to a total depth of 4,600 feet, cased and completed as a Bahariya oil well. Sabbar #1 encountered 40+ feet of net pay in the Bahariya sandstones, 27 feet structurally higher than the Safwa discovery wells. A 45 foot interval was perforated and flowed naturally at a rate of 500 Bopd on a short test. Sabbar #1 is located approximately 1.7 kilometres northeast of Safwa NW-1 which tested 250 Bopd and Safwa #1 which tested 300 Bopd from the Upper Bahariya (un-stimulated). The positive results at Sabbar #1 have increased the internally estimated gross Petroleum Initially in Place ("PIIP") to 58.0 million barrels of oil ("MMBbl"), up from the initial estimate of 20.6 MMBbl of oil using the respective probabilistic P-mean cases.
Safwa #2 was drilled to a total depth of 7,987 feet and cased as a Bahariya oil well. Safwa #2 encountered 30+ feet of net pay in the Bahariya sandstones and is the fourth Bahariya oil well drilled on the Safwa structure. Safwa #2 is a step-out appraisal well located approximately 350 metres east of Safwa #1. The Safwa #2 well will be completed and tested as part of the early production test program planned for early 2011, subject to Egyptian TransGlobe will update production guidance following approval by the Egyptian Government.
Government approval.
The operator, Vegas Oil and Gas SA, has indicated it plans to file for an early production approval by the first quarter of 2011. The East Ghazalat Safwa project could contribute an additional 600 to 1,000 Bopd to TransGlobe in 2011 based on internal estimates. The drilling rig is currently moving to the Nakhil prospect. Nakhil #1 is located approximately eight kilometres southwest of Safwa #1. The Nakhil #1 exploration well is targeting a prospect which has an internally estimated gross PIIP of 10.4 MMBbl using the probabilistic P-mean case.
The great news on the East Ghazalat Concession (operated by Vegas Oil & Gas) is that it is very close to Mediterranean coast with plenty of production infrastructue in place. This field could be on-line quick. Note that TGA is not including this in their 2011 production forecast until the development is approved by the government. I cannot imagine why the govt would not approve this.
This project will become a big deal for TGA by the middle of next year. Notice how shallow these wells are, so wells can be drilled and completed quickly. When this project is approved it means TGA could be looking at a 2011 exit rate over 16,000 Bopd.
East Ghazalat Block, Arab Republic of Egypt (50% working interest)
Drilling
During the fourth quarter, the Company drilled two Upper Bahariya oil wells (Sabbar #1 and Safwa #2).
Sabbar #1 was drilled to a total depth of 4,600 feet, cased and completed as a Bahariya oil well. Sabbar #1 encountered 40+ feet of net pay in the Bahariya sandstones, 27 feet structurally higher than the Safwa discovery wells. A 45 foot interval was perforated and flowed naturally at a rate of 500 Bopd on a short test. Sabbar #1 is located approximately 1.7 kilometres northeast of Safwa NW-1 which tested 250 Bopd and Safwa #1 which tested 300 Bopd from the Upper Bahariya (un-stimulated). The positive results at Sabbar #1 have increased the internally estimated gross Petroleum Initially in Place ("PIIP") to 58.0 million barrels of oil ("MMBbl"), up from the initial estimate of 20.6 MMBbl of oil using the respective probabilistic P-mean cases.
Safwa #2 was drilled to a total depth of 7,987 feet and cased as a Bahariya oil well. Safwa #2 encountered 30+ feet of net pay in the Bahariya sandstones and is the fourth Bahariya oil well drilled on the Safwa structure. Safwa #2 is a step-out appraisal well located approximately 350 metres east of Safwa #1. The Safwa #2 well will be completed and tested as part of the early production test program planned for early 2011, subject to Egyptian TransGlobe will update production guidance following approval by the Egyptian Government.
Government approval.
The operator, Vegas Oil and Gas SA, has indicated it plans to file for an early production approval by the first quarter of 2011. The East Ghazalat Safwa project could contribute an additional 600 to 1,000 Bopd to TransGlobe in 2011 based on internal estimates. The drilling rig is currently moving to the Nakhil prospect. Nakhil #1 is located approximately eight kilometres southwest of Safwa #1. The Nakhil #1 exploration well is targeting a prospect which has an internally estimated gross PIIP of 10.4 MMBbl using the probabilistic P-mean case.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: TGA
I've been on the road and have missed this action entirely, both the trading and the fundamental announcement. These index inclusions seem to promote phony action in both directions. I owned DBLE when it was surprisingly thrown into an index, for example. The index funds had to buy it and ran it up, but since there was no real liquidity, the mm's faded the stock to the buyers, posting a large short interest the following month which played havoc with the stock for more than a year. I don't know if this has happened here, but if Dan says buy it under $15, I'll let it be put to me on Saturday also.
Re: TGA
IMO Yes. My Fair Value estimate is $20/share. See my forecast model under the Sweet 16 tab for details on how I arrive at that number.
TGA is funding its entire 2011 from operating cash flow. It is extremely rare to find a company with this much exploration upside to be operating entirely from cash flows and growing at this pace. I believe TGA's year-end reserve report is going to draw a lot of attention.
TGA is funding its entire 2011 from operating cash flow. It is extremely rare to find a company with this much exploration upside to be operating entirely from cash flows and growing at this pace. I believe TGA's year-end reserve report is going to draw a lot of attention.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: TGA
TGA was up on big volume today even with the price of oil down. That tells me the weak hands are gone.
Yes, they drilled a water well in the West Gharib area but there was plenty of great news in the mid-quarter update that seems to have been missed.
TGA is currently involved in two very important deep exploration wells in Yemen. One is being drilled by OXY (TGA has 25%) and one is being drilled by Total (TGA 20%). These are both world class companies. OXY's well is based on high resolution 3D seismic so it has the best chance of success. I have nothing for these prospects in my forecast model. However, dry holes are possible on any exploration well. TGA's share price is likely to dip if they anounce two dry holes in late January. If either well in Yemen finds oil it is big news for TGA. Basement wells in Yemen often produce at over 10,000 Bopd.
Also, the two wells they are going to drill on the Nuqra Concession in southern Egypt are "wildcats" based solely on a few 2D seismic lines. These are shallow and relatively inexpensive wells but if both are dry holes the share price will dip. Even if successful, these wells will not add to production this year because they are out in the middle of nowhere.
The big upside for TGA is in the West Gharib area where TGA holds 100% and the East Ghazalat Block which is operated by Vegas. Both areas have large proven oil pools. East Ghazalat will become a major story when Vegas gets final government approval to move forward with development operations. It is close to infrastructure so the wells can be completed to sales quickly. None of the East Ghazalat production is in the forecast but it has the potential to add up to 2,000 Bopd, net to TGA by late 2011. Also important to understand that the East Ghazalat reserves cannot be included in year-end proven reserves until the project is approved by the government. The minute it is approved, TGA's DD&A rate goes down and earnings per share go up.
TGA is now on-track to exit 2011 at over 15,000 Bopd and it could be much higher than that with three rigs driling in West Gharib by the 2nd quarter. This does not include any exploration success. The deep exploration well that OXY is drilling today on Block S-1 is in the middle of the An Nagyah Field so it can be immediately tied in to production facilities.
Yes, they drilled a water well in the West Gharib area but there was plenty of great news in the mid-quarter update that seems to have been missed.
TGA is currently involved in two very important deep exploration wells in Yemen. One is being drilled by OXY (TGA has 25%) and one is being drilled by Total (TGA 20%). These are both world class companies. OXY's well is based on high resolution 3D seismic so it has the best chance of success. I have nothing for these prospects in my forecast model. However, dry holes are possible on any exploration well. TGA's share price is likely to dip if they anounce two dry holes in late January. If either well in Yemen finds oil it is big news for TGA. Basement wells in Yemen often produce at over 10,000 Bopd.
Also, the two wells they are going to drill on the Nuqra Concession in southern Egypt are "wildcats" based solely on a few 2D seismic lines. These are shallow and relatively inexpensive wells but if both are dry holes the share price will dip. Even if successful, these wells will not add to production this year because they are out in the middle of nowhere.
The big upside for TGA is in the West Gharib area where TGA holds 100% and the East Ghazalat Block which is operated by Vegas. Both areas have large proven oil pools. East Ghazalat will become a major story when Vegas gets final government approval to move forward with development operations. It is close to infrastructure so the wells can be completed to sales quickly. None of the East Ghazalat production is in the forecast but it has the potential to add up to 2,000 Bopd, net to TGA by late 2011. Also important to understand that the East Ghazalat reserves cannot be included in year-end proven reserves until the project is approved by the government. The minute it is approved, TGA's DD&A rate goes down and earnings per share go up.
TGA is now on-track to exit 2011 at over 15,000 Bopd and it could be much higher than that with three rigs driling in West Gharib by the 2nd quarter. This does not include any exploration success. The deep exploration well that OXY is drilling today on Block S-1 is in the middle of the An Nagyah Field so it can be immediately tied in to production facilities.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: TGA
I agree that HAL is a great value at the current share price. As "Shale Mania" continues in 2011 with even more horizontal wells, the demand for fracking crews and equipment will remain very strong. HAL is up at the top of the leader board and they have very strong international business.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group