Calgary-based oil and gas explorer TransGlobe Energy Corporation (TGA - Free Report) recently provided 2017 capital budget and production outlook. The capital budget of the company is set at $56.4 million which represents an increase of 37.56% than the year-ago estimated capex figure. Out of this $56.4 million, $35.2 million is fixed and $21.2 million is contingent.
TransGlobe Energy’s capex budget includes $40.2 million for Egypt and $16.2 million for Canada.
Of the $40.2 million capex set aside for Egypt, $25.8 is fixed and $14.4 is contingent. The fixed portion of the capex will be allotted toward various exploration and development programs like boring wells in Eastern Desert, Boraq, development projects at Gharib and 3D seismic acquisition programs. The contingent budget of $14.4 is subject to drilling results of the first quarter, oil prices and inventory sales and would be used to increase the West Bakr production and development of NW Gharib discoveries.
Of the $16.2 million capex allocated for Canada, around $9.4 million is firm and $6.8 million is contingent. The fixed portion of the capex will be directed toward drilling four horizontal Cardium wells to improve the performance of the Harmattan area. The contingent budget of $6.8 million will be dependent on commodity prices and drilling performance and would be allotted for boring four wells in Harmattan region to boost the production of Canada.
TransGlobe Energy’s production is expected to be within the range of 15.5 and 18.5 thousand barrels of oil equivalent per day (MBoepd). This marks a growth of 30–55% over 2016 production levels. Expected production for Egypt is to range between 13 and 15 thousand barrels of oil per day (MBopd). Canadian production is estimated to range between 2.5 and 3 MBoepd.
For Jan 2017, the company produced an average of 16.8 MBoepd, attributed to 14 MBopd in Egypt and 2.8 MBoepd in Canada.
Zacks Rank and Key Picks
TransGlobe Energy is an oil and gas exploration and development company and its chief operations are concentrated in Egypt and Canada. The company currently carries a Zacks Rank #4 (Sell) .The company’s stock price has declined by around 44 % since the last two years.
Further, TransGlobe Energy Corporation has significantly underperformed the Zacks categorized Oil & Gas Canadian Exploration & Production industry over the prior three months. During the aforesaid period, shares of the company recorded a negative growth of 4.5 % while the broader industry gained around 7%.
Some better ranked players in the industry include Bellatrix Exploration Ltd , Gran Tierra Energy Inc. (GTE - Free Report) and Crescent Point Energy Corp. (CPG - Free Report) . All the three companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Bellatrix Exploration recorded a positive earnings surprise in three of the last four quarters, the average being 15.21%.
Gran Tierra Energy is expected to post year-over-year growth of 76.12% on its revenue.
Crescent Point Energy recorded a positive earnings surprise in each of the preceding four quarters, the average being 1041.05%.
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