TGA says it received a $9.25M break-up fee from Caracal and plans to reintroduce its previously announced dividend.
Glencore acquired a one-third interest in three oil fields in Chad from Caracal in 2012, and “this transaction deepens our relationship, adding further value and expertise to our growing oil business in Africa," says Alex Beard, head of Glencore’s oil division.
TransGlobe Energy (TGA) and Caracal Energy (CCAXF) agree to merge through an exchange of shares, creating a $1.8B venture focused on oil production in Africa with improved finances and bigger growth potential.
Caracal shareholders are expected to hold ~65.6% of the new company, with the reaminder held by former TGA shareholders.
TransGlobe Energy (TGA -6.5%) says its 1P reserves at year-end 2013 fell 3% Y/Y, representing a production replacement of 85%; on a 2P basis, the Y/Y decrease was 7%, equal to a production replacement of 53%, while on a 3P basis, the drop was 12%, equal to a production replacement of -4%.
TGA says there were minimal new reserve additions to replace the 4.6M barrels produced from West Gharib during 2013, as 2012 undeveloped reserve bookings were brought on production which generally extended producing pools to the outer boundaries of the concession.
Egypt is near agreement on a schedule for repaying $6B in outstanding debt to foreign oil companies which would lead to a rise in investments from the companies to $15B within two years, the prime minister says.
Egypt, racked by political and economic turmoil, has been struggling to meet soaring energy bills caused by high subsidies on fuel products for the country's 84M-plus population.
Financial disclosures by oil companies including BP, Apache (APA), BG Group (BRGYY.PK, BRGXF.PK) and TransGlobe Energy (TGA) show Egypt owed them more than $5.2B at the end of 2012.
TGA plans to more than double output to 40K bbl/day by 2016, with as much as 38% of it coming from lands in Egypt’s western and eastern deserts the company won rights to develop last year.
TGA is trading at about half its net asset value because of the Egypt turmoil, which "feels like an opportunity" to Salman Partners, which rates the company a Buy; Dundee Securities recently cut its rating to Hold, saying TGA may face supply-chain disruptions and delays receiving government approvals and payments.