Calgary, Alberta – TransGlobe Energy Corporation (AIM: TGL) (TSX: TGL) (NASDAQ: TGA) (“TransGlobe” or the “Company”) is pleased to announce its financial and operating results for the three months ended March 31, 2022. All dollar values are expressed in United States dollars unless otherwise stated. TransGlobe’s Condensed Consolidated Financial Statements together with the notes related thereto, as well as TransGlobe’s Management’s Discussion and Analysis for the three months ended March 31, 2022 and 2021, are available on TransGlobe’s website at www.trans-globe.com.
FINANCIAL HIGHLIGHTS:
- First quarter sales averaged 11,964 boe/d including one cargo lifting of 459.6 Mbbls of entitlement crude oil sold for net proceeds of $36.5 million;
- Average realized price for Q1-2022 sales of $75.70/boe; Q1-2022 average realized price on Egypt sales was $81.49/bbl and Canadian sales of $52.11/boe;
- Funds flow from operations of $27.1 million ($0.37 per share) in the quarter;
- First quarter net earnings of $48.8 million ($0.67 per share), inclusive of an $8.0 million gain on concession merger, a $1.4 million unrealized derivative loss on commodity contracts and a $26.0 million non-cash impairment reversal on the Company’s petroleum and natural gas (“PNG”) assets;
- Ended the first quarter with positive working capital of $60.4 million, including cash of $37.2 million;
- Achieved consolidated netbacks of $28.45 per boe, an increase of 54% from the previous quarter primarily due to: the Company’s improved economic interest under the Merged Concession agreement previously announced on January 20, 2022; improved natural gas prices in Canada; and an overall increase in commodity prices;
- Adopted a distribution policy to allocate a minimum of 75% of its annual free cash flow to shareholders through dividends and share buybacks;
- Subsequent to quarter end, the Company sold a ~450 Mbbl cargo of Egypt entitlement crude oil with proceeds expected in early June 2022;
OPERATIONAL HIGHLIGHTS:
- First quarter production averaged 12,446 boe/d (Egypt 10,090 bbls/d, Canada 2,356 boe/d), a decrease of 317 boe/d (2%) from the previous quarter, primarily due to increased watercuts at South Ghazalat and the fall-off in initial flush production from the horizontal wells brought on stream in Q4-2021 in Canada;
- Production in April averaged ~11,580 boe/d (Egypt ~10,043 bbls/d, Canada ~1,537 boe/d), a decrease of 3% from Q1-2022 primarily due to a planned third-party facility outage in Canada;
- Ended the quarter with 43.4 Mbbls of entitlement crude oil inventory, an increase of 43.4 Mbbls from Q4-2021 due to production outpacing sales in Q1-2022 and reflecting the Company’s improved economic interest under the Merged Concession agreement;
- Drilled and cased three development wells in the Eastern Desert of Egypt. A fourth development well was drilled during Q1-2022, with casing run subsequent to the quarter;
- Drilled two horizontal Cardium development wells (one 2-mile, and one 1-mile) in the South Harmattan area of Canada, with stimulation and equipping anticipated in June and July 2022;
- Drilled another two 2-mile horizontal development wells targeting the Cardium reservoir in Harmattan subsequent to the quarter, opportunistically retaining the Canadian rig to accelerate the budgeted drilling program;
CORPORATE HIGHLIGHTS:
- As announced on January 20, 2022, the Company executed its agreement (the “Merged Concession agreement” or “Merged Concession”) with the Egyptian General Petroleum Corporation (“EGPC”) to merge its three existing Eastern Desert concessions with a 15-year primary term and improved Company economics;
- The Company now expects capital spending to be in the range of $70.5 million (before capitalized G&A) to cover drilling program optimization in Canada; and, in Egypt, unexpected drilling problems on K-71 in the Eastern Desert, additional long-lead oil field equipment to manage supply challenges, and general inflation. The Company is screening its asset portfolio for the disposal of non-core assets that do not provide a material contribution to free cashflow to help offset this capital increase; and
- Announced on March 16, 2022 a dividend of $0.10 per share ($7.3 million) payable to shareholders of record on April 29, 2022.
FINANCIAL AND OPERATING RESULTS
Additional financial information is provided in the Company’s Condensed Consolidated Financial Statements together with the notes related thereto, as well as TransGlobe’s Management’s Discussion and Analysis for the three months ended 2022 and 2021. These documents, along with other documents affecting the rights of securityholders and other information relating to the Company, may be found on SEDAR at www.sedar.com and in the Company’s Annual Report on Form 40-F for the fiscal year ended December 31, 2021, filed on EDGAR at www.sec.gov.
(US$000s, except per share, price, volume amounts and % change)
Three Months Ended March 31 | |||||||||
Financial | 2022 | 2021 | % Change | ||||||
Petroleum and natural gas sales | 81,510 | 42,277 | 93 | ||||||
Petroleum and natural gas sales, net of royalties | 52,954 | 18,052 | 193 | ||||||
Realized derivative loss on commodity contracts | 50 | 1,545 | (97 | ) | |||||
Unrealized derivative loss on commodity contracts | 1,356 | 2,970 | (54 | ) | |||||
Production and operating expense | 13,279 | 9,449 | 41 | ||||||
Selling costs | 483 | 34 | 1,321 | ||||||
General and administrative expense | 6,865 | 5,037 | 36 | ||||||
Depletion, depreciation and amortization expense | 6,870 | 4,815 | 43 | ||||||
Income tax expense | 8,558 | 4,660 | 84 | ||||||
Cash flow used in operating activities | (23,782 | ) | (3,940 | ) | 504 | ||||
Funds flow from operations1 | 27,131 | 81 | 33,395 | ||||||
Basic per share2 | 0.37 | 0.00 | |||||||
Diluted per share2 | 0.37 | 0.00 | |||||||
Net earnings (loss) | 48,810 | (11,024 | ) | (543 | ) | ||||
Basic per share | 0.67 | (0.15 | ) | ||||||
Diluted per share | 0.66 | (0.15 | ) | ||||||
Capital expenditures3 | 8,849 | 2,907 | 204 | ||||||
Working capital6 | 60,414 | 7,055 | 756 | ||||||
Long-term debt, including current portion | 3,144 | 21,699 | (86 | ) | |||||
Common shares outstanding | |||||||||
Basic (weighted average) | 72,790 | 72,542 | – | ||||||
Diluted (weighted average) | 74,316 | 72,891 | 2 | ||||||
Total assets | 323,663 | 197,150 | 64 | ||||||
Operating | |||||||||
Average production volumes (boe/d) | 12,446 | 12,221 | 2 | ||||||
Average sales volumes (boe/d) | 11,964 | 9,691 | 23 | ||||||
Inventory (Mbbls) | 43.4 | 455.7 | (90 | ) | |||||
Average realized sales price ($/boe)4 | 75.70 | 48.47 | 56 | ||||||
Production and operating expenses ($/boe)5 | 12.33 | 10.83 | 14 |
1 Non-GAAP financial measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies. The most directly comparable GAAP measure for funds flow from operations is cash flow generated by operating activities. Refer to “Non-GAAP and Other Financial Measures” contained within the Q1-2022 MD&A.
2 Non-GAAP ratio that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies. Includes a non-GAAP financial measure component of funds flow from operations. Refer to “Non-GAAP and Other Financial Measures” contained within the Q1-2022 MD&A.
3 Non-GAAP financial measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies. The most directly comparable GAAP measure for capital expenditures is cash flow used in investing activities. Refer to “Non-GAAP and Other Financial Measures” contained within the Q1-2022 MD&A.
4 Supplementary financial measure that is comprised of petroleum and natural gas sales, as determined in accordance with IFRS, divided by the Company’s average daily production volumes.
5 Supplementary financial measure that is comprised of production and operating expenses, as determined in accordance with IFRS, divided by the Company’s average daily production volumes.
6 Supplementary financial measure that is comprised of current assets less current liabilities, as determined in accordance with IFRS.
2022 | 2021 | ||||||||||||||
Average reference prices and exchange rates | Q-1 | Q-4 | Q-3 | Q-2 | Q-1 | ||||||||||
Crude oil | |||||||||||||||
Dated Brent average oil price ($/bbl) | 100.30 | 79.59 | 73.47 | 68.83 | 60.82 | ||||||||||
Edmonton Sweet index ($/bbl) | 92.64 | 73.19 | 66.61 | 63.01 | 52.54 | ||||||||||
Natural gas | |||||||||||||||
AECO ($/MMBtu) | 3.68 | 3.89 | 2.97 | 2.48 | 2.30 | ||||||||||
US/Canadian Dollar average exchange rate | 1.27 | 1.26 | 1.26 | 1.23 | 1.27 |
CORPORATE SUMMARY
TransGlobe Energy Corporation (“TransGlobe” or the “Company”) produced an average of 12,446 barrels of oil equivalent per day (“boe/d”) during the first quarter of 2022. Egypt production was 10,090 barrels of oil per day (“bbls/d”) and Canada production was 2,356 boe/d. Production for the quarter was within full year 2022 guidance of 12,400 to 13,400 boe/d and 3% lower than the previous quarter. The decrease was primarily due to increased watercuts at South Ghazalat and the fall-off in initial flush production from the horizontal wells brought on stream in Q4-2021 in Canada.
TransGlobe’s Egyptian crude oil is sold at a quality discount to Dated Brent. The Company received an average price of $81.49 per barrel in Egypt during the quarter. In Canada, the Company received an average of $89.19 per barrel of oil, $41.75 per barrel of NGLs and $3.79 per thousand cubic feet (“Mcf”) of natural gas during the quarter.
During Q1-2022, the Company had funds flow from operations of $27.1 million and ended the quarter with positive working capital of $60.4 million, including cash of $37.2 million. The Company had net earnings in the quarter of $48.8 million, inclusive of an $8.0 million gain on concession merger and a $1.4 million unrealized derivative loss on commodity contracts which represents a fair value adjustment on the Company’s hedging contracts at March 31, 2022. Net income was also inclusive of a non-cash impairment reversal of $26.0 million on the Company’s petroleum and natural gas (“PNG”) assets that was recognized as a result of the Company’s improved commercial terms under the Merged Concession and a further increase and stabilization of forecasted commodity prices in Q1-2022.
In Egypt, the Company sold one cargo lifting of 459.6 Mbbls of entitlement crude oil during the quarter for net proceeds of $36.5 million, which were collected in March 2022. Subsequent to the quarter, TransGlobe sold a ~450 Mbbl cargo of entitlement crude oil with proceeds expected in early June. All Canadian production was sold during the quarter.
As announced on January 20, 2022, the agreement with the Egyptian General Petroleum Corporation to merge the Company’s three existing Eastern Desert concessions was executed. In advance of the Minister of Petroleum and Mineral Resources of the Arab Republic of Egypt (the “Minister”) executing the Merged Concession agreement with TransGlobe, the Company paid the first modernization payment ($15.0 million) and signature bonus ($1.0 million) as part of the conditions precedent to the official signing ceremony on January 19, 2022. On February 1, 2022, the Company paid the second modernization payment ($10.0 million). In accordance with the Merged Concession agreement, TransGlobe will make a further four annual equalization payments of $10.0 million each beginning February 1, 2023 until February 1, 2026. The Company also has minimum financial work commitments of $50.0 million per each five-year period of the primary development term, commencing on the February 1, 2020 effective date. The results achieved in Q1-2022 are inclusive of the impact of the Merged Concession.
In Egypt, during the quarter, the Company drilled and cased three development oil wells in the Eastern Desert, while a fourth development oil well was drilled during Q1-2022, with casing run subsequent to the quarter. The K-67 development well was drilled to a total depth of 1,440 meters. The well was completed in the Asl-B and is currently on production at a rate of 153 bbls/d (heavy crude, field estimate). The second well, Arta-76, was drilled to a total depth of 1,074 meters, and encountered an internally estimated 12 meters of net oil pay in the Nukhul reservoir. TransGlobe drilled and cased a third development oil well, NWG-1E, to a total depth of 1,219 meters, encountering an internally estimated 9 meters of oil pay in the Nukhul reservoir. Arta-76 and NWG-1E will be stimulated as part of a multi-well stimulation campaign in Q2-2022, subsequent to which they will be put on production. The Company drilled a fourth development well in the Eastern Desert, K-71, to a total depth of 1,448 meters and encountered an internally estimated 19 meters of net oil pay in the Asl-A reservoir and 23 meters of net oil pay in the Asl-B reservoir. The well was cased subsequent to the quarter and is currently producing at a rate of 480 bbls/d (heavy crude, field estimate) from the Asl-B reservoir.
In Canada, the Company successfully drilled one 2-mile and one 1-mile Harmattan horizontal Cardium reservoir wells in the South Harmattan area, with stimulation and equipping anticipated in June and July. Subsequent to the end of Q1 the Company drilled two additional 2-mile Cardium wells from the 15-11 surface location.
As a result of macroeconomic events precipitated by the conflict in Ukraine and COVID-19 lockdowns in China, the Company evaluated the risks around the 2022/ 2023 capital program and committed to the acquisition of equipment and materials to ensure a continuous drilling program beyond late 2022 and into 2023. In addition, seeking increased development efficiencies in the Company’s Cardium development in Canada and harnessing continued robust product pricing and expected rapid returns, the Board has approved the replacement of three originally budgeted 1-mile horizontal wells with three 2-mile horizontal wells. Finally, significant additional costs were incurred following unforeseen and significant hole problems drilling K-71 in the Eastern Desert.
Due to these factors, along with general inflationary pressures on equipment and services propelled by the macroeconomic situation, the Company now expects capital spending to be in the range of $70.5 million (before capitalized G&A) versus an original budget of $57.7 million. The Company is screening its asset portfolio for the disposal of non-core assets that do not provide a material contribution to free cashflow to help offset this capital increase.
OPERATIONS UPDATE
ARAB REPUBLIC OF EGYPT
EASTERN DESERT
(100% working interest, operated)
Operations and Exploration
The Company continued to use the EDC-64 rig in its Eastern Desert drilling campaign, managing to drill and case three additional development wells in K-Field, Arta Field and the NWG-Field during the quarter.
The K-68 well, drilled at the end of 2021, was completed in the Asl-A reservoir in January and is currently producing at a rate of 91 bbls/d (heavy crude, field estimate).
K-67 was drilled to a total depth of 1,440 meters, and was fully logged and evaluated. The well encountered an internally estimated 16 meters of net oil pay in the Asl-A and 17 meters of net oil pay in the Asl-B. The well was completed in the Asl-B and is currently on production at a rate of 153 bbls/d (heavy crude, field estimate).
Arta-76 was drilled to a total depth of 1,074 meters and was fully logged and evaluated. The well encountered an internally estimated 12 meters of net oil pay in the Nukhul reservoir.
NWG-1E was drilled to a total depth of 1,219 meters and encountered 9 meters of oil pay in the Nukhul reservoir after being fully logged and evaluated.
Both Arta-76 and NWG-1E will be stimulated as part of a multi-well stimulation campaign in Q2-2022, subsequent to which they will be put on production.
The K-71 well experienced unforeseen and significant drilling challenges but was ultimately drilled to a total depth of 1,448 meters, fully logged and evaluated. The well encountered an internally estimated 19 meters of net oil pay in the Asl-A reservoir and 23 meters of net oil pay in the Asl-B reservoir. The well was cased subsequent to the quarter, and is currently producing at a rate of 480 bbls/d (heavy crude, field estimate) from the Asl-B reservoir.
Following K-71, the EDC-64 rig was redeployed to drill the K-78 well.
The Company is currently working to mitigate potential supply chain issues brought about by the conflict in Ukraine and COVID-19 lockdowns in China by engaging alternative materials suppliers and advancing materials orders. To date, TransGlobe’s operations have not been impacted by any material supply shortages.
Production
Production averaged 10,038 bbls/d during the quarter, an increase of 3% (267 bbls/d) from the previous quarter. The increase was primarily due to well optimizations in Egypt.
Production in April 2022 averaged ~9,967 bbls/d.
Sales
The Company sold one cargo lifting of 459.6 Mbbls of entitlement crude oil during the quarter.
Quarterly Eastern Desert Production (bbls/d) | 2022 | 2021 | ||||||||||
Q-1 | Q-4 | Q-3 | Q-2 | |||||||||
Gross production rate1 | 10,038 | 9,771 | 10,653 | 9,917 | ||||||||
TransGlobe production sold (inventoried) | (482 | ) | – | 1,525 | 3,465 | |||||||
Total sales | 9,556 | 9,771 | 12,178 | 13,382 | ||||||||
Government share (royalties and tax) | 4,440 | 5,549 | 6,050 | 5,229 | ||||||||
TransGlobe sales (after royalties and tax)2 | 5,116 | 4,222 | 6,128 | 8,153 | ||||||||
Total sales | 9,556 | 9,771 | 12,178 | 13,382 |
1 Quarterly production by concession (bbls/d):
Eastern Desert – 10,038 (Q1-2022)
West Gharib – 2,648 (Q4- 2021), 2,932 (Q3- 2021), and 3,024 (Q2-2021)
West Bakr – 6,804 (Q4- 2021), 7,257 (Q3-2021), and 6,327 (Q2-2021)
North West Gharib – 319 (Q4- 2021), 464 (Q3-2021), and 566 (Q2-2021)
2 Under the terms of the Production Sharing Concession Agreements, royalties and taxes are paid out of the government’s share of production sharing oil.
WESTERN DESERT
South Ghazalat (100% working interest, operated)
Operations and Exploration
Following the cessation of natural flow of SGZ-6X well at South Ghazalat in December 2021 due to low reservoir pressure, a rigless artificial lift system was successfully deployed to restore production. On artificial lift, the lower Bahariya reservoir at SGZ-6X is currently producing at 130 bbls/d of light crude oil with an 82.5% watercut (field estimate).
Production
Production averaged 52 bbls/d during the quarter, a decrease of 82% (242 bbls/d) from the previous quarter. The decrease was primarily due to higher water cuts than anticipated and natural declines.
Production in April 2022 averaged ~76 bbls/d.
Sales
The Company sold 1,783 bbls of inventoried entitlement crude oil to EGPC during the quarter.
Quarterly Western Desert Production (bbls/d) | 2022 | 2021 | ||||||||||
Q-1 | Q-4 | Q-3 | Q-2 | |||||||||
Gross production rate | 52 | 294 | 623 | 810 | ||||||||
Total sales | 52 | 294 | 623 | 810 | ||||||||
Government share (royalties and tax) | 32 | 183 | 388 | 504 | ||||||||
TransGlobe sales (after royalties and tax)1 | 20 | 111 | 235 | 306 | ||||||||
Total sales | 52 | 294 | 623 | 810 |
1 Under the terms of the Production Sharing Concession Agreements, royalties and taxes are paid out of the government’s share of production sharing oil.
CANADA
Operations and Exploration
Two 100% working interest (one 2-mile, and one 1-mile) horizontal Cardium wells were drilled in the South Harmattan area. Subsequent to the end of the first quarter, two additional 2-mile horizontal wells were drilled and cased. The wells are expected to be completed in June and July.
Production
In Canada, production averaged 2,356 boe/d during the quarter, a decrease of 342 boe/d (13%) from the previous quarter and slightly below full year 2022 guidance of 2,400 to 2,600 boe/d. The decrease in production from the previous quarter is primarily due to the fall-off in initial flush production from the horizontal wells brought on stream in Q4-2021 and the planned shut-in of the highly productive 15-11 horizontal well during drilling operations on the 15-11 surface location.
Production in April 2022 averaged ~1,537 boe/d with ~505 bbls/d of oil. The decrease from Q1-2022 is due to the start of a planned turnaround at a third-party processing facility, which is also expected to impact May reported production.
Quarterly Canada Production | 2022 | 2021 | ||||||||||
Q-1 | Q-4 | Q-3 | Q-2 | |||||||||
Canada crude oil (bbls/d) | 821 | 1,176 | 601 | 687 | ||||||||
Canada NGLs (bbls/d) | 768 | 716 | 677 | 857 | ||||||||
Canada natural gas (Mcf/d) | 4,598 | 4,832 | 4,734 | 4,834 | ||||||||
Total production (boe/d) | 2,356 | 2,698 | 2,066 | 2,350 |
Condensed Consolidated Interim Statements of Earnings (Loss) and Comprehensive Income (Loss)
(Unaudited – Expressed in thousands of U.S. Dollars, except per share amounts)
Three Months Ended March 31 | ||||||
2022 | 2021 | |||||
REVENUE | ||||||
Petroleum and natural gas sales, net of royalties | 52,954 | 18,052 | ||||
EXPENSES | ||||||
Production and operating | 13,279 | 9,449 | ||||
Selling costs | 483 | 34 | ||||
General and administrative | 6,865 | 5,037 | ||||
Foreign exchange (gain) loss | (8 | ) | 33 | |||
Finance costs | 554 | 467 | ||||
Depletion, depreciation and amortization | 6,870 | 4,815 | ||||
Asset retirement obligation accretion | 73 | 66 | ||||
Gain on concession merger | (7,953 | ) | – | |||
Loss on financial instruments | 1,406 | 4,515 | ||||
Impairment reversal | (25,983 | ) | – | |||
(4,414 | ) | 24,416 | ||||
Earnings (loss) before income taxes | 57,368 | (6,364 | ) | |||
Income tax expense – current | 8,558 | 4,660 | ||||
NET EARNINGS (LOSS) | 48,810 | (11,024 | ) | |||
OTHER COMPREHENSIVE INCOME (LOSS) | ||||||
Currency translation adjustments | 732 | 394 | ||||
COMPREHENSIVE INCOME (LOSS) | 49,542 | (10,630 | ) | |||
Net earnings (loss) per share | ||||||
Basic | 0.67 | (0.15 | ) | |||
Diluted | 0.66 | (0.15 | ) |
Condensed Consolidated Interim Balance Sheets
(Unaudited – Expressed in thousands of U.S. Dollars)
As at | As at | |||||
March 31, 2022 | December 31, 2021 | |||||
ASSETS | ||||||
Current | ||||||
Cash | 37,245 | 37,929 | ||||
Accounts receivable | 74,675 | 12,217 | ||||
Prepaids and other | 4,503 | 4,024 | ||||
Product inventory | 726 | – | ||||
117,149 | 54,170 | |||||
Non-Current | ||||||
Intangible exploration and evaluation assets | 2,697 | 2,673 | ||||
Property and equipment | ||||||
Petroleum and natural gas assets | 201,304 | 173,804 | ||||
Other | 2,513 | 2,202 | ||||
Deferred taxes | – | 6,246 | ||||
323,663 | 239,095 | |||||
LIABILITIES | ||||||
Current | ||||||
Accounts payable and accrued liabilities | 41,558 | 26,112 | ||||
Share-based compensation liabilities | 3,645 | 6,174 | ||||
Modernization payment liabilities | 9,374 | – | ||||
Derivative commodity contracts | 1,472 | 88 | ||||
Lease obligations | 686 | 764 | ||||
56,735 | 33,138 | |||||
Non-Current | ||||||
Long-term debt | 3,144 | 3,040 | ||||
Asset retirement obligations | 12,842 | 14,102 | ||||
Share-based compensation liabilities | 6,553 | 3,959 | ||||
Modernization payment liabilities | 24,152 | – | ||||
Lease obligations | 39 | 36 | ||||
Deferred taxes | – | 6,246 | ||||
103,465 | 60,521 | |||||
SHAREHOLDERS’ EQUITY | ||||||
Share capital | 153,118 | 153,021 | ||||
Accumulated other comprehensive income | 2,570 | 1,838 | ||||
Contributed surplus | 24,201 | 24,896 | ||||
Retained earnings (deficit) | 40,309 | (1,181 | ) | |||
220,198 | 178,574 | |||||
323,663 | 239,095 |
Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity
(Unaudited – Expressed in thousands of U.S. Dollars)
Three Months Ended March 31 | ||||||
2022 | 2021 | |||||
Share Capital | ||||||
Balance, beginning of period | 153,021 | 152,805 | ||||
Stock options exercised | (664 | ) | – | |||
Transfer from contributed surplus on exercise of options | 761 | – | ||||
Balance, end of period | 153,118 | 152,805 | ||||
Accumulated Other Comprehensive Income | ||||||
Balance, beginning of period | 1,838 | 1,900 | ||||
Currency translation adjustment | 732 | 394 | ||||
Balance, end of period | 2,570 | 2,294 | ||||
Contributed Surplus | ||||||
Balance, beginning of period | 24,896 | 25,109 | ||||
Share-based compensation expense | 66 | 99 | ||||
Transfer to share capital on exercise of options | (761 | ) | – | |||
Balance, end of period | 24,201 | 25,208 | ||||
Retained Earnings (Deficit) | ||||||
Balance, beginning of period | (1,181 | ) | (41,519 | ) | ||
Net earnings (loss) | 48,810 | (11,024 | ) | |||
Dividends | (7,320 | ) | – | |||
Balance, end of period | 40,309 | (52,543 | ) |
Condensed Consolidated Interim Statements of Cash Flows
(Unaudited – Expressed in thousands of US Dollars)
Three Months Ended March 31 | ||||||
2022 | 2021 | |||||
OPERATING | ||||||
Net earnings (loss) | 48,810 | (11,024 | ) | |||
Adjustments for: | ||||||
Depletion, depreciation and amortization | 6,870 | 4,815 | ||||
Asset retirement obligation accretion | 73 | 66 | ||||
Impairment reversal | (25,983 | ) | – | |||
Share-based compensation | 3,430 | 2,771 | ||||
Finance costs | 554 | 470 | ||||
Unrealized loss on financial instruments | 1,356 | 2,970 | ||||
Unrealized loss on foreign currency translation | 73 | 4 | ||||
Gain on concession merger | (7,953 | ) | – | |||
Asset retirement obligations settled | (99 | ) | 9 | |||
Changes in working capital | (50,913 | ) | (4,021 | ) | ||
Net cash used in operating activities | (23,782 | ) | (3,940 | ) | ||
INVESTING | ||||||
Additions to intangible exploration and evaluation assets | (24 | ) | (563 | ) | ||
Additions to petroleum and natural gas assets | (8,631 | ) | (2,330 | ) | ||
Additions to other assets | (194 | ) | (14 | ) | ||
Changes in working capital | 30 | 1,825 | ||||
Net cash used in investing activities | (8,819 | ) | (1,082 | ) | ||
FINANCING | ||||||
Issue of common shares | (664 | ) | – | |||
Interest paid | (36 | ) | (293 | ) | ||
Increase in long-term debt | 55 | 79 | ||||
Payments on lease obligations | (489 | ) | (592 | ) | ||
Increase in modernization payment liabilities | 59,027 | – | ||||
Payments on modernization payment liabilities | (26,000 | ) | – | |||
Changes in working capital | 32 | (1 | ) | |||
Net cash generated by (used in) financing activities | 31,925 | (807 | ) | |||
Currency translation differences relating to cash | (8 | ) | (12 | ) | ||
NET DECREASE IN CASH | (684 | ) | (5,841 | ) | ||
CASH, BEGINNING OF PERIOD | 37,929 | 34,510 | ||||
CASH, END OF PERIOD | 37,245 | 28,669 |