TransGlobe swings to a profit in second quarter

Canadian oil and gas firm TransGlobe Energy swung to a profit in the first half of the year as production volumes came in flat after a slower second quarter.

TransGlobe swung to a profit of $7.36m, which included a $10.8m unrealized loss on derivative commodity contracts, a marked improvement on the $56.62m loss recorded by the group during the same quarter a year earlier. Debt was cut 26% to $62.17m.

The company sold 19,301 barrels of oil per day across the second quarter as the benefits of increased cargo during the period were offset by plant workovers and shutdowns.

This was more than was produced, however, with an average of 13,779 barrels of oil filled per day during the second quarter, a 16% decrease, after production was impacted by an extensive workover program in Egypt at West Bakr and a turnaround in Canada.

TransGlobe completed two cargo liftings throughout the quarter for a total of 902,467 barrels of entitlement crude oil with net proceeds of $53.3m. There was also 82,361 barrels of inventoried entitlement crude oil sold to EGPC.

The AIM- and TSX-listed company saw funds from operations jump 99% to $33.5m and ended the quarter with a positive working capital of $60.5m, including cash and cash equivalents of $38.1m.

Looking forward, TransGlobe reduced the upper end of production guidance as a result of "minor project timing delays" in Egypt and Canada and now expects total corporate production to fall between 14,200 and 14,800 barrels of oil equivalent per day for the year.

As of 0920 BST, TransGlobe shares had slipped 3.23% to 240p.