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Energy Summary for June 23, 2015

2015-06-23 20:25 ET - Market Summary

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by Stockwatch Business Reporter

West Texas Intermediate crude for August delivery added $1.33 to $61.01 on the New York Merc, while Brent for August added $1.11 to $64.45 (all figures in this para U.S.). Western Canadian Select traded at a discount of $10.30 to WTI ($50.71), unchanged. Natural gas for July lost 0.5 cent to $2.72. The TSX energy index added 3.46 points to close at 212.94.

Ross Clarkson's TransGlobe Energy Corp. (TGL) added 50 cents to $5.05 on 649,400 shares. It has reaffirmed its quarterly dividend at five U.S. cents (for a yield of 4.9 per cent) and provided an update from its operations in Egypt. Second quarter production to date is averaging 15,000 barrels of oil a day, well above guidance of 13,800 barrels a day. The original guidance was actually 13,300 barrels a day, but TransGlobe raised it last month because of better-than-expected performance from its West Gharib and West Bakr assets. Those assets are also why current production is exceeding second quarter guidance. TransGlobe said it may try to further increase production by raising its $37.5-million (U.S.) budget if oil prices remain strong. It did not provide specifics, but in its first quarter results and conference call, it said it might boost the budget by $10-million (U.S.) to $14-million (U.S.) if Brent prices hold in the range of $65 (U.S.) to $75 (U.S.). The extra money would go in part toward three development wells at Northwest Gharib, which would be ready to contribute production by year-end 2015, at a total initial rate of around 1,500 to 2,000 barrels a day. Extra money could also go toward a six- to 12-well program at the South K field at West Bakr. Those wells would not be ready to contribute to production until 2016, but are projected to have initial rates of 400 barrels a day each. Any drilling toward year-end would mark a big operational change from the current plan, which called for five wells drilled in the first quarter and then no drilling at all over the rest of the year. The lack of planned drilling does not mean TransGlobe has been sitting idly. It has been, and still is, looking for drill targets by conducting 3-D seismic and mapping programs over its assets. By this fall, as it said during its first quarter conference call, it expects to have a "risked and ranked prospect list ... that should keep us busy for several years."

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