13th May 2020 14:52
(Alliance News) - TransGlobe Energy Corp on Wednesday posted a far wider loss for the first quarter of 2019 after incurring an impairment of more than USD70 million.
The company's pretax loss for the three months ended March 31 was reported at USD50.6 million, wider than the prior year's USD2.6 million loss.
This widened loss resulted from a USD73.5 million impairment incurred in the quarter, compared to an impairment of only USD8.4 million the prior year.
TransGlobe explained: "The net loss was also inclusive of a non-cash impairment loss of USD40.0 million on the company's petroleum and natural gas assets and a non-cash impairment loss of USD33.5 million on the company's exploration and evaluation assets.
"The company recognised impairments on its petroleum and natural gas assets due to a significant decrease in crude oil pricing during the quarter and the resulting reduction in fair value of these assets. The company recognised impairments on its exploration and evaluation assets principally due to the scale of exploration results compared to investments to date and consideration of the uncertainly of the timing of additional exploration activities in these areas given the current economic environment."
This, and a doubling of production and operating expenses to USD23.3 million from USD11.5 million, caused total expenses to jump to USD100.9 million from USD40.1 million.
Total revenue amounted to USD53.3 million, up 42% from USD37.5 million.
No dividend was declared for the period, TransGlobe having declared a 0.035 US cents per share dividend the prior year.
"TransGlobe continues to review its price exposure in the current crude oil price environment and, subsequent to the quarter, entered into additional 2020 hedges to provide further downside protection against a protracted near-term, low price environment," said TransGlobe.
The company added that it "as and will continue to update its economic thresholds for shutting in production in both Canada and Egypt" adding that "all operations including what would normally be routine operations, are subject to a thorough economic review prior to expenditures being approved."
So far, not material production has been shut-in, but this is being monitored.
"The company has had no reported cases of Covid-19 among its staff, contractors or joint venture partners. Business continuity plans have been implemented in all our locations and operations continue as normal," said TransGlobe.
Shares in Transglobe were untraded at 42.50 pence in London on Wednesday afternoon.
By Anna Farley; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
TGL.L