TRANSGLOBE ENERGY CORPORATION TSX & AIM: TGL NASDAQ: TGA |
Condensed Consolidated Interim Statements of Earnings (Loss) and Comprehensive Income (Loss)
(Unaudited - Expressed in thousands of US Dollars, except per share amounts)
Three Months Ended | Nine Months Ended | |||||||||||||
September 30 | September 30 | |||||||||||||
Notes | 2019 | 2018 | 2019 | 2018 | ||||||||||
REVENUE | ||||||||||||||
Petroleum and natural gas sales, net of royalties | 18 | 31,200 | 42,453 | 111,623 | 135,622 | |||||||||
Finance revenue | 85 | 180 | 401 | 399 | ||||||||||
31,285 | 42,633 | 112,024 | 136,021 | |||||||||||
EXPENSES | ||||||||||||||
Production and operating | 18 | 11,564 | 12,242 | 35,507 | 40,182 | |||||||||
Selling costs | 76 | 527 | 649 | 1,653 | ||||||||||
General and administrative | 4,102 | 5,104 | 12,743 | 16,683 | ||||||||||
Foreign exchange (gain) loss | (67 | ) | 216 | (122 | ) | 195 | ||||||||
Finance costs | 5 | 1,030 | 1,222 | 3,311 | 3,923 | |||||||||
Depletion, depreciation and amortization | 9 | 8,173 | 8,751 | 26,184 | 26,077 | |||||||||
Asset retirement obligation accretion | 10 | 51 | 72 | 156 | 205 | |||||||||
(Gain) loss on financial instruments | 4 | (2,504 | ) | 5,725 | 1,426 | 28,486 | ||||||||
Impairment (recovery) loss | 8 | (409 | ) | 14,138 | 7,982 | 14,138 | ||||||||
Gain on disposition of assets | (114 | ) | (5 | ) | (114 | ) | (207 | ) | ||||||
21,902 | 47,992 | 87,722 | 131,335 | |||||||||||
Net earnings (loss) before income taxes | 9,383 | (5,359 | ) | 24,302 | 4,686 | |||||||||
Income tax expense – current | 6,416 | 6,924 | 20,095 | 19,728 | ||||||||||
NET EARNINGS (LOSS) FOR THE PERIOD | 2,967 | (12,283 | ) | 4,207 | (15,042 | ) | ||||||||
OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||||||||
Currency translation adjustments | (410 | ) | 1,000 | 1,250 | (679 | ) | ||||||||
COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD | 2,557 | (11,283 | ) | 5,457 | (15,721 | ) | ||||||||
Net earnings (loss) per share | 16 | |||||||||||||
Basic | 0.04 | (0.17 | ) | 0.06 | (0.21 | ) | ||||||||
Diluted | 0.04 | (0.17 | ) | 0.06 | (0.21 | ) |
See accompanying notes to the Condensed Consolidated Interim Financial Statements
Q3-2019 | 1 |
TRANSGLOBE ENERGY CORPORATION TSX & AIM: TGL NASDAQ: TGA |
Condensed Consolidated Interim Balance Sheets
(Unaudited - Expressed in thousands of US Dollars)
As at | As at | |||||||
Notes | September 30, 2019 | December 31, 2018 | ||||||
ASSETS | ||||||||
Current | ||||||||
Cash and cash equivalents | 6 | 24,444 | 51,705 | |||||
Accounts receivable | 4 | 24,844 | 12,014 | |||||
Derivative commodity contracts | 4 | 740 | 1,198 | |||||
Prepaids and other | 4,033 | 5,385 | ||||||
Product inventory | 7 | 17,342 | 8,692 | |||||
71,403 | 78,994 | |||||||
Non-Current | ||||||||
Derivative commodity contracts | 4 | 243 | 171 | |||||
Intangible exploration and evaluation assets | 8 | 29,128 | 36,266 | |||||
Property and equipment | ||||||||
Petroleum and natural gas assets | 9 | 197,941 | 195,263 | |||||
Other assets | 9 | 4,225 | 3,079 | |||||
Deferred taxes | 9,714 | 4,523 | ||||||
312,654 | 318,296 | |||||||
LIABILITIES | ||||||||
Current | ||||||||
Accounts payable and accrued liabilities | 13 | 22,963 | 28,007 | |||||
Current portion of lease obligations | 11 | 1,290 | — | |||||
24,253 | 28,007 | |||||||
Non-Current | ||||||||
Long-term debt | 12 | 41,726 | 52,355 | |||||
Asset retirement obligation | 10 | 13,938 | 12,113 | |||||
Other long-term liabilities | 13 | 447 | 1,007 | |||||
Lease obligations | 11 | 865 | — | |||||
Deferred taxes | 9,714 | 4,523 | ||||||
90,943 | 98,005 | |||||||
SHAREHOLDERS’ EQUITY | ||||||||
Share capital | 14 | 152,805 | 152,084 | |||||
Accumulated other comprehensive income (loss) | 311 | (939 | ) | |||||
Contributed surplus | 24,515 | 24,195 | ||||||
Retained earnings | 44,080 | 44,951 | ||||||
221,711 | 220,291 | |||||||
312,654 | 318,296 |
Commitments and Contingencies (Note 13)
See accompanying notes to the Condensed Consolidated Interim Financial Statements
Approved on behalf of the Board:
Signed by:
“Randy C. Neely” | “Steven Sinclair” |
Randy C. Neely | Steven Sinclair |
President & CEO | Audit Committee Chair |
Director | Director |
2 | Q3-2019 |
TRANSGLOBE ENERGY CORPORATION TSX & AIM: TGL NASDAQ: TGA |
Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity
(Unaudited - Expressed in thousands of US Dollars)
Three Months Ended | Nine Months Ended | |||||||||||||
September 30 | September 30 | |||||||||||||
Notes | 2019 | 2018 | 2019 | 2018 | ||||||||||
Share Capital | ||||||||||||||
Balance, beginning of period | 14 | 152,805 | 152,084 | 152,084 | 152,084 | |||||||||
Stock options exercised | 14 | — | — | 547 | — | |||||||||
Transfer from contributed surplus on exercise of options | 14 | — | — | 174 | — | |||||||||
Balance, end of period | 152,805 | 152,084 | 152,805 | 152,084 | ||||||||||
Accumulated Other Comprehensive Income (Loss) | ||||||||||||||
Balance, beginning of period | 721 | 1,114 | (939 | ) | 2,793 | |||||||||
Currency translation adjustment | (410 | ) | 1,000 | 1,250 | (679 | ) | ||||||||
Balance, end of period | 311 | 2,114 | 311 | 2,114 | ||||||||||
Contributed Surplus | ||||||||||||||
Balance, beginning of period | 24,358 | 23,828 | 24,195 | 23,329 | ||||||||||
Share-based compensation expense | 15 | 157 | 164 | 494 | 663 | |||||||||
Transfer to share capital on exercise of options | 14 | — | — | (174 | ) | — | ||||||||
Balance, end of period | 24,515 | 23,992 | 24,515 | 23,992 | ||||||||||
Retained Earnings | ||||||||||||||
Balance, beginning of period | 43,652 | 29,042 | 44,951 | 31,801 | ||||||||||
Net earnings (loss) | 2,967 | (12,283 | ) | 4,207 | (15,042 | ) | ||||||||
Dividends | 17 | (2,539 | ) | (2,527 | ) | (5,078 | ) | (2,527 | ) | |||||
Balance, end of period | 44,080 | 14,232 | 44,080 | 14,232 |
See accompanying notes to the Condensed Consolidated Interim Financial Statements
Q3-2019 | 3 |
TRANSGLOBE ENERGY CORPORATION TSX & AIM: TGL NASDAQ: TGA |
Condensed Consolidated Interim Statements of Cash Flows
(Unaudited - Expressed in thousands of US Dollars)
Three Months Ended | Nine Months Ended | |||||||||||||
September 30 | September 30 | |||||||||||||
Notes | 2019 | 2018 | 2019 | 2018 | ||||||||||
OPERATING | ||||||||||||||
Net earnings (loss) | 2,967 | (12,283 | ) | 4,207 | (15,042 | ) | ||||||||
Adjustments for: | ||||||||||||||
Depletion, depreciation and amortization | 9 | 8,173 | 8,751 | 26,184 | 26,077 | |||||||||
Asset retirement obligation accretion | 10 | 51 | 72 | 156 | 205 | |||||||||
Deferred lease inducement | — | (23 | ) | — | (68 | ) | ||||||||
Impairment (recovery) loss | 8 | (409 | ) | 14,138 | 7,982 | 14,138 | ||||||||
Share-based compensation | 15 | 406 | 1,624 | 1,749 | 5,309 | |||||||||
Finance costs | 5 | 1,030 | 1,222 | 3,311 | 3,923 | |||||||||
Unrealized (gain) loss on financial instruments | 4 | (2,616 | ) | 3,295 | 385 | 20,157 | ||||||||
Unrealized (gain) loss on foreign currency translation | (49 | ) | 227 | (119 | ) | 205 | ||||||||
Gain on asset dispositions | (114 | ) | (5 | ) | (114 | ) | (207 | ) | ||||||
Asset retirement obligations settled | 10 | (10 | ) | — | (41 | ) | (257 | ) | ||||||
Changes in non-cash working capital | 19 | 2,613 | 30,621 | (22,604 | ) | 4,930 | ||||||||
Net cash generated by operating activities | 12,042 | 47,639 | 21,096 | 59,370 | ||||||||||
INVESTING | ||||||||||||||
Additions to intangible exploration and evaluation assets | 8 | (56 | ) | (5,455 | ) | (844 | ) | (7,036 | ) | |||||
Additions to petroleum and natural gas assets | 9 | (9,197 | ) | (7,185 | ) | (24,621 | ) | (15,859 | ) | |||||
Additions to other assets | 9 | (39 | ) | (143 | ) | (471 | ) | (378 | ) | |||||
Proceeds from asset dispositions | 114 | 5 | 114 | 207 | ||||||||||
Changes in non-cash working capital | 19 | (2,177 | ) | 3,229 | (2,478 | ) | 2,594 | |||||||
Net cash used in investing activities | (11,355 | ) | (9,549 | ) | (28,300 | ) | (20,472 | ) | ||||||
FINANCING | ||||||||||||||
Issue of common shares for cash | 14 | — | — | 547 | — | |||||||||
Interest paid | 5 | (893 | ) | (1,233 | ) | (2,874 | ) | (3,714 | ) | |||||
Increase in long-term debt | 12 | 114 | 146 | 370 | 395 | |||||||||
Payments on lease obligations | 11 | (540 | ) | — | (1,430 | ) | — | |||||||
Repayments of long-term debt | 12 | (6,523 | ) | (10,000 | ) | (11,523 | ) | (17,797 | ) | |||||
Dividends paid | 17 | (2,539 | ) | (2,527 | ) | (5,078 | ) | (2,527 | ) | |||||
Changes in non-cash working capital | 19 | — | (3 | ) | (200 | ) | (3 | ) | ||||||
Net cash used in financing activities | (10,381 | ) | (13,617 | ) | (20,188 | ) | (23,646 | ) | ||||||
Currency translation differences relating to cash and cash equivalents | 13 | 102 | 131 | (38 | ) | |||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (9,681 | ) | 24,575 | (27,261 | ) | 15,214 | ||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 34,125 | 38,088 | 51,705 | 47,449 | ||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | 24,444 | 62,663 | 24,444 | 62,663 |
See accompanying notes to the Condensed Consolidated Interim Financial Statements
4 | Q3-2019 |
TRANSGLOBE ENERGY CORPORATION TSX & AIM: TGL NASDAQ: TGA |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at September 30, 2019 and December 31, 2018 and for the three and nine month periods ended September 30, 2019 and 2018
(Unaudited - Expressed in US Dollars)
1. CORPORATE INFORMATION
TransGlobe Energy Corporation ("TransGlobe" or the "Company") and its subsidiaries are engaged in oil and natural gas exploration, development and production, and the acquisition of oil and natural gas properties. The Company's shares are traded on the Toronto Stock Exchange (“TSX”), the London Stock Exchange's Alternative Investment Market ("AIM") and the Global Select Market of the NASDAQ Stock Market (“NASDAQ”). TransGlobe is incorporated in Alberta, Canada and the address of its registered office is 2300, 250 – 5th Street SW, Calgary, Alberta, Canada, T2P 0R4.
2. BASIS OF PREPARATION
These Condensed Consolidated Interim Financial Statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, using accounting policies consistent with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. The accounting policies used in the preparation of these Condensed Consolidated Interim Financial Statements were the same as those used in the preparation of the most recent audited Consolidated Financial Statements for the year ended December 31, 2018, except for the adoption of a new accounting standard discussed in Note 3.
These Condensed Consolidated Interim Financial Statements were authorized for issue by the Board of Directors on October 29, 2019.
These Condensed Consolidated Interim Financial Statements do not contain all the disclosures required for full annual financial statements and should be read in conjunction with the December 31, 2018 audited Consolidated Financial Statements.
3. CHANGES IN ACCOUNTING POLICIES
New accounting standards
IFRS 16 "Leases"
In January 2016, the IASB issued IFRS 16 which replaced IAS 17 Leases and IFRIC 4 Determining Whether an Arrangement Contains a Lease. IFRS 16 requires the recognition of a right-of-use (“ROU”) asset and lease liability on the balance sheet for most leases where the entity is acting as a lessee, as opposed to the dual classification model (operating and capital leases) under IAS 17. Lessors still apply the dual classification model to their recognized leases.
TransGlobe adopted IFRS 16 as of January 1, 2019 using the modified retrospective approach. The modified retrospective approach does not require restatement of prior period financial information as the cumulative effect is recognized as an adjustment to opening retained earnings and the Company applies the standard prospectively. There was no effect on the Company's retained earnings or prior period amounts as a result of adopting this standard. The cumulative effect of initially applying the standard was recognized as a $3.4 million increase to ROU assets (included in Property and equipment - "Petroleum and natural gas assets" and "Other assets") with a corresponding increase recorded in "Lease obligations". The ROU assets recognized were measured at amounts equal to the lease obligations. The weighted average incremental borrowing rate used to determine the lease obligation at adoption was approximately 9.9%. The assets and lease obligations recognized largely relate to the Company's head office lease in Calgary and drilling rigs in Egypt.
TransGlobe applied the following expedients in adopting IFRS 16:
• | Certain short-term leases and leases of low value assets identified at January 1, 2019 were not recognized on the balance sheet. |
• | At January 1, 2019, TransGlobe recognized the lease payments due within one year as current lease obligations, and those payments outside of one year as non-current lease obligations. |
• | At initial measurement, a single discount rate was applied to leases with similar characteristics. |
As a result of this adoption, TransGlobe has revised the description of its accounting policy for leases as follows:
Leases
A contract is, or contains, a lease if the contract provides the right to control the use of an identified asset for a period of time in exchange for consideration. A lease obligation is recognized at the commencement of the lease term measured as the present value of the lease payments not already paid at that date. Interest expense is recognized on the lease obligations using the effective interest rate method and net payments are applied against the lease obligation. At the commencement date, a corresponding right-of-use asset is recognized at the amount of the lease obligation, adjusted for lease incentives received and initial direct costs. Depreciation is recognized on the right-of-use asset over the lease term.
CRITICAL JUDGMENTS AND ACCOUNTING ESTIMATES
Timely preparation of financial statements in conformity with IFRS as issued by the International Accounting Standards Board requires that management make estimates and assumptions and use judgments that affect the application of accounting policies and the reported amounts of assets, liabilities, revenues and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the Consolidated Financial Statements. Accordingly, actual results may differ from estimated amounts as future confirming events occur. Key areas where management has made judgments, estimates, and assumptions related to the application of IFRS 16 include:
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TRANSGLOBE ENERGY CORPORATION TSX & AIM: TGL NASDAQ: TGA |
• | Incremental borrowing rate: Incremental borrowing rates are based on judgments including economic environment, term, currency, and the underlying risk inherent to the asset. The carrying amount of the right-of-use assets, lease obligations, and the resulting interest and depletion and depreciation expense, may differ due to changes in the market conditions and lease term. |
• | Lease term: Lease terms are based on assumptions regarding extension terms that allow for operational flexibility and future market conditions. |
4. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
Fair values of financial instruments
The Company has classified its cash and cash equivalents as assets at fair value through profit or loss and its derivative commodity contracts as financial liabilities at fair value through profit or loss. Both are measured at fair value with subsequent changes recognized through earnings (loss). Accounts receivable are classified as assets at amortized cost; accounts payable and accrued liabilities, and long-term debt are classified as liabilities at amortized cost, all of which are measured initially at fair value, and subsequently at amortized cost. Transaction costs attributable to financial instruments carried at amortized cost are included in the initial measurement of the financial instrument and are subsequently amortized using the effective interest rate method.
Carrying value and fair value of financial assets and liabilities are summarized as follows:
As at September 30, 2019 | As at December 31, 2018 | |||||||||||
($000s) | Carrying | Fair | Carrying | Fair | ||||||||
Classification | Value | Value | Value | Value | ||||||||
Financial assets at fair value through profit or loss | 25,427 | 25,427 | 53,074 | 53,074 | ||||||||
Financial assets at amortized cost | 24,844 | 24,844 | 12,014 | 12,014 | ||||||||
Financial liabilities at amortized cost | 64,689 | 65,282 | 80,362 | 81,228 |
Assets and liabilities as at September 30, 2019 that are measured at fair value are classified into levels reflecting the method used to make the measurements. Fair values of assets and liabilities included in Level 1 are determined by reference to quoted prices in active markets for identical assets and liabilities. Assets and liabilities in Level 2 include valuations using inputs other than quoted prices for which all significant inputs are observable, either directly or indirectly. Level 3 valuations are based on inputs that are unobservable and significant to the overall fair value measurement.
The Company’s cash and cash equivalents and derivative commodity contracts are assessed on the fair value hierarchy described above. TransGlobe’s cash and cash equivalents are classified as Level 1. Derivative commodity contracts are classified as Level 2. Assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy level. There were no transfers between levels in the fair value hierarchy in the period.
Derivative commodity contracts
The nature of TransGlobe’s operations exposes it to fluctuations in commodity prices, interest rates and foreign currency exchange rates. TransGlobe monitors and, when appropriate, uses derivative financial instruments to manage its exposure to these fluctuations. All transactions of this nature entered into by TransGlobe are related to an underlying financial position or to future crude oil and natural gas production. TransGlobe does not use derivative financial instruments for speculative purposes. TransGlobe has elected not to designate any of its derivative financial instruments as accounting hedges and thus accounts for changes in fair value in net earnings (loss) at each reporting period. TransGlobe has not obtained collateral or other security to support its financial derivatives as management reviews the creditworthiness of its counterparties prior to entering into derivative contracts. The derivative financial instruments are initiated within the guidelines of the Company's corporate hedging policy. This includes linking all derivatives to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions.
In conjunction with the prepayment agreement (see Note 12), TransGlobe has also entered into a marketing contract with Mercuria Energy Trading S.A. ("Mercuria") to market nine million barrels of TransGlobe's entitlement crude oil production. The pricing of the crude oil sales will be based on market prices at the time of sale.
The following table summarizes TransGlobe’s outstanding derivative commodity contract positions as at September 30, 2019, the fair values of which have been presented on the Condensed Consolidated Interim Balance Sheet:
Financial Brent Crude Oil Contracts | |||||||||||
Period Hedged | Contract | Remaining Volume bbl | Monthly Volume bbl | Bought Put USD$/bbl | Sold Call USD$/bbl | Sold Put USD$/bbl | |||||
Jul 2020 - Dec 2020 | 3-Way Collar | 300,000 | 50,000 | 54.00 | 70.00 | 45.00 | |||||
Jan 2020 - Jun 2020 | 3-Way Collar | 300,000 | 50,000 | 54.00 | 70.00 | 46.50 | |||||
Jan 2020 - Jun 2020 | 3-Way Collar | 150,000 | 25,000 | 55.00 | 72.70 | 45.00 | |||||
Oct 2019 - Dec 2019 | 3-Way Collar | 49,500 | 16,500 | 53.00 | 62.10 | 46.00 | |||||
Oct 2019 - Dec 2019 | 3-Way Collar | 50,000 | 16,667 | 54.00 | 61.35 | 46.00 | |||||
Oct 2019 - Dec 2019 | Bear Put Spread | 49,500 | 16,500 | 53.00 | — | 46.00 | |||||
Oct 2019 - Dec 2019 | Bear Put Spread | 50,000 | 16,667 | 54.00 | — | 46.00 | |||||
October 2019 | Collar | 195,000 | 195,000 | 55.00 | 63.15 | — |
6 | Q3-2019 |
TRANSGLOBE ENERGY CORPORATION TSX & AIM: TGL NASDAQ: TGA |
The gains and losses on financial instruments for the three and nine months ended September 30, 2019 and 2018 are comprised as follows:
Three Months Ended | Nine Months Ended | ||||||||
September 30 | September 30 | ||||||||
($000s) | 2019 | 2018 | 2019 | 2018 | |||||
Realized derivative loss on commodity contracts settled during the period | 112 | 2,430 | 1,041 | 8,329 | |||||
Unrealized derivative (gain) loss on commodity contracts outstanding at period end | (2,616 | ) | 3,295 | 385 | 20,157 | ||||
(Gain) loss on financial instruments | (2,504 | ) | 5,725 | 1,426 | 28,486 |
Credit risk
Credit risk is the risk of financial loss if a customer or counterparty to a financial instrument fails to fulfill their contractual obligations. The Company’s exposure to credit risk primarily relates to cash equivalents and accounts receivable, the majority of which are in respect of oil and natural gas operations. The Company generally extends unsecured credit to these parties and therefore the collection of these amounts may be affected by changes in economic or other conditions. The Company has not experienced any material credit losses in its cash investments or in the collection of accounts receivable to date.
TransGlobe's accounts receivable related to the Canadian operations are with customers and joint interest partners in the petroleum and natural gas industry, and are subject to normal industry credit risks. Receivables from petroleum and natural gas marketers are normally collected in due course. The Company currently sells its production to several purchasers under standard industry sale and payment terms. Purchasers of TransGlobe's natural gas, crude oil and natural gas liquids are subject to a periodic internal credit review to minimize the risk of non-payment. The Company has continued to closely monitor and reassess the creditworthiness of its counterparties, including financial institutions.
Trade and other receivables are analyzed in the table below.
($000s) | As at September 30, 2019 | As at December 31, 2018 | ||||
Neither impaired nor past due | 22,864 | 5,540 | ||||
Not impaired and past due in the following period: | ||||||
Within 30 days | 26 | 829 | ||||
31-60 days | 9 | 212 | ||||
61-90 days | 912 | 102 | ||||
Over 90 days | 1,033 | 5,331 | ||||
Accounts receivable | 24,844 | 12,014 |
The Company did not complete any direct crude sale shipments in Egypt to third-party buyers during the three months ended September 30, 2019. Depending on the Company's assessment of the credit of crude purchasers, they may be required to post irrevocable letters of credit to support the sales prior to the cargo liftings. The Company sold 489.1 mbbls of entitlement crude oil to EGPC in June for net proceeds of $29.1 million. As at September 30, 2019 the Company had collected $28.2 million. During the third quarter of 2019, the Company sold 380.4 mbbls of inventoried entitlement crude oil to EGPC for $20.8 million. As at September 30, 2019, $21.7 million (December 31, 2018 - $7.2 million) of the total accounts receivable balance of $24.8 million (December 31, 2018 - $12.0 million) is due from EGPC, of which $20.8 million is current. All accounts receivable are in good standing and collection is not considered to be at risk.
5. FINANCE COSTS
Finance costs recognized in net earnings (loss) were as follows:
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||
($000s) | 2019 | 2018 | 2019 | 2018 | ||||||||
Interest on long-term debt | 772 | 1,018 | 2,511 | 3,320 | ||||||||
Interest on borrowing base facility | 102 | 118 | 331 | 331 | ||||||||
Amortization of deferred financing costs | 93 | 86 | 273 | 272 | ||||||||
Interest on lease obligations | 63 | — | 196 | — | ||||||||
Finance costs | 1,030 | 1,222 | 3,311 | 3,923 | ||||||||
Interest paid | (893 | ) | (1,233 | ) | (2,874 | ) | (3,714 | ) |
6. CASH AND CASH EQUIVALENTS
The following table reconciles TransGlobe's cash and cash equivalents:
($000s) | As at September 30, 2019 | As at December 31, 2018 | ||||
Cash | 19,444 | 33,893 | ||||
Cash equivalents | 5,000 | 17,812 | ||||
Cash and cash equivalents | 24,444 | 51,705 |
As at September 30, 2019, the Company's cash equivalents balance consisted of short-term deposits with an original term to maturity at purchase of one month or less. All of the Company's cash and cash equivalents are on deposit with high credit-quality financial institutions.
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TRANSGLOBE ENERGY CORPORATION TSX & AIM: TGL NASDAQ: TGA |
7. PRODUCT INVENTORY
Product inventory consists of the Company's entitlement crude oil barrels, which are valued at the lower of cost and net realizable value. Costs include operating expenses and depletion associated with crude oil entitlement barrels and are determined on a concession by concession basis. These amounts are initially capitalized and expensed when sold.
As at September 30, 2019, the Company held 902.6 mbbls of entitlement crude oil in inventory valued at approximately $19.21 per barrel (December 31, 2018 - 568.1 mbbls valued at approximately $15.30 per barrel).
8. INTANGIBLE EXPLORATION AND EVALUATION ASSETS
The following table reconciles the changes in TransGlobe's exploration and evaluation assets:
($000s) | |||
Balance as at December 31, 2018 | 36,266 | ||
Additions | 844 | ||
Impairment loss | (7,982 | ) | |
Balance as at September 30, 2019 | 29,128 |
The Company was unsuccessful in its attempts to secure military approval to access a potential drilling location in South Alamein. Based on the 2017 well results in the Boraq area, the limited commerciality of the original Boraq 2 discovery (2009) and continued access restrictions in the eastern area of the concession, the Company relinquished the concession in Q2-2019. The Company had fully impaired the remaining carrying value of South Alamein in Q1-2019.
During the third quarter of 2019 the Company received a final settlement report from EGPC regarding the relinquished North West Sitra concession. The resolution of the residual financial commitment audit matters has resulted in a refinement of the original costs incurred on this concession and has reduced the impairment loss by $0.4 million.
The ending balance of intangible exploration and evaluation assets as at September 30, 2019 includes $28.6 million in South Ghazalat (December 31, 2018 - $23.2 million), $0.5 million in Canada (December 31, 2018 - $0.5 million), and $nil in South Alamein (December 31, 2018 - $12.5 million).
9. PROPERTY AND EQUIPMENT
The following table reconciles the changes in TransGlobe's property and equipment assets:
($000s) | |||||||||
Cost | Petroleum and Natural Gas Assets | Other Assets | Total | ||||||
Balance as at December 31, 2018 | 679,905 | 16,111 | 696,016 | ||||||
Increase in right-of-use assets (Note 3) | 1,307 | 2,082 | 3,389 | ||||||
Additions | 24,621 | 471 | 25,092 | ||||||
Changes in estimate for asset retirement obligations | 1,339 | — | 1,339 | ||||||
Balance as at September 30, 2019 | 707,172 | 18,664 | 725,836 | ||||||
Accumulated depletion, depreciation, amortization and impairment losses | |||||||||
Balance as at December 31, 2018 | 483,272 | 13,032 | 496,304 | ||||||
Depletion, depreciation and amortization for the period1 | 26,753 | 1,407 | 28,160 | ||||||
Balance as at September 30, 2019 | 510,025 | 14,439 | 524,464 | ||||||
Foreign exchange | |||||||||
Balance as at December 31, 2018 | (1,370 | ) | — | (1,370 | ) | ||||
Currency translation adjustments | 2,164 | — | 2,164 | ||||||
Balance as at September 30, 2019 | 794 | — | 794 | ||||||
Net book value | |||||||||
As at December 31, 2018 | 195,263 | 3,079 | 198,342 | ||||||
As at September 30, 2019 | 197,941 | 4,225 | 202,166 | ||||||
1 Depletion, depreciation and amortization for the period includes amounts capitalized to product inventory for barrels produced but not sold in the period. |
The following table discloses the carrying amount and depreciation charge for right-of-use assets by class of underlying asset as at and for the nine months ended September 30, 2019:
($000s) | Petroleum and Natural Gas Assets | Other Assets | Total | ||||||
Depreciation for the nine months ended September 30, 2019 | 676 | 704 | 1,380 | ||||||
Net book value as at September 30, 2019 | 600 | 1,404 | 2,004 |
8 | Q3-2019 |
TRANSGLOBE ENERGY CORPORATION TSX & AIM: TGL NASDAQ: TGA |
10. ASSET RETIREMENT OBLIGATION
The following table reconciles the change in TransGlobe's asset retirement obligation:
($000s) | ||
Balance as at December 31, 2018 | 12,113 | |
Changes in estimates for asset retirement obligations and additional obligations recognized | 1,339 | |
Obligations settled | (41 | ) |
Asset retirement obligation accretion | 156 | |
Effect of movements in foreign exchange rates | 371 | |
Balance as at September 30, 2019 | 13,938 |
TransGlobe has estimated the net present value of its asset retirement obligation to be $13.9 million as at September 30, 2019 (December 31, 2018 - $12.1 million). These payments are expected to be made between 2020 and 2066. TransGlobe calculated the present value of the obligations using discount rates between 1.36% and 1.57% (December 31, 2018 - 1.86% and 2.18%) to reflect the market assessment of the time value of money as well as risks specific to the liabilities that have not been included in the cash flow estimates. The inflation rate used in determining the cash flow estimate was 2% per annum (December 31, 2018 - 2%).
11. LEASE OBLIGATIONS
The following table reconciles TransGlobe's lease obligations:
($000s) | As at September 30, 2019 | ||
Less than 1 year | 1,558 | ||
1 - 3 years | 927 | ||
Total lease payments | 2,485 | ||
Amounts representing interest | 330 | ||
Present value of net lease payments | 2,155 | ||
Current portion of lease obligations | 1,290 | ||
Non-current portion of lease obligations | 865 |
During the first nine months of 2019, the Company spent $0.2 million (September 30, 2018 - $nil) on interest expense and paid a total cash outflow of $1.4 million (September 30, 2018 - $nil) relating to lease obligations.
12. LONG-TERM DEBT
As at September 30, 2019, interest-bearing debt was comprised as follows:
($000s) | As at September 30, 2019 | As at December 31, 2018 | ||||
Prepayment agreement | 34,407 | 44,134 | ||||
Reserves-based lending facility | 7,319 | 8,221 | ||||
Balance, end of period | 41,726 | 52,355 |
As at September 30, 2019 and December 31, 2018, the Company had in place a $75.0 million crude oil prepayment agreement with Mercuria, of which $35.0 million (December 31, 2018 - $45.0 million) was drawn. During the nine months ended September 30, 2019, the Company repaid $10 million on the Mercuria prepayment agreement.
As at December 31, 2018, the Company had in place a revolving Canadian reserves-based lending facility with ATB totaling C$30.0 million ($22.0 million). As at September 30, 2019, the ATB facility was renewed for C$25.0 million ($18.9 million), of which C$9.7 million was drawn (December 31, 2018 - C$11.2 million). During the nine months ended September 30, 2019, the Company repaid C$2.0 million ($1.5 million) on the revolving facility.
The following table reconciles the changes in TransGlobe's long-term debt:
($000s) | ||
Balance as at December 31, 2018 | 52,355 | |
Draws on revolving credit facility | 370 | |
Repayment of long-term debt | (11,523 | ) |
Amortization of deferred financing costs | 273 | |
Effect of movements in foreign exchange rates | 251 | |
Balance as at September 30, 2019 | 41,726 |
The Company's interest-bearing loans and borrowings are measured at amortized cost. The prepayment agreement and reserves-based lending facility are subject to certain covenants. The Company was in compliance with its covenants as at September 30, 2019.
Q3-2019 | 9 |
TRANSGLOBE ENERGY CORPORATION TSX & AIM: TGL NASDAQ: TGA |
Based on the Company's current forecast of future production and prices the estimated future debt payments on long-term debt as of September 30, 2019 are as follows:
($000s) | Prepayment Agreement | Reserves Based Lending Facility | Total | ||||||
2019 | — | — | — | ||||||
2020 | — | — | — | ||||||
2021 | 34,407 | 7,319 | 41,726 | ||||||
Total | 34,407 | 7,319 | 41,726 |
13. COMMITMENTS AND CONTINGENCIES
As part of its normal business, the Company entered into arrangements and incurred obligations that will impact the Company’s future operations and liquidity. The principal commitments of the Company are as follows:
Payment Due by Period 1,2 | |||||||||||
($000s) | Recognized in Financial Statements | Contractual Cash Flows | Less than 1 year | 1-3 years | |||||||
Accounts payable and accrued liabilities | Yes - Liability | 22,963 | 22,963 | — | |||||||
Other long-term liabilities | Yes - Liability | 447 | — | 447 | |||||||
Total | 23,410 | 22,963 | 447 | ||||||||
1 Payments exclude ongoing operating costs, finance costs and payments made to settle derivatives. | |||||||||||
2 Payments denominated in foreign currencies have been translated at September 30, 2019 exchange rates. |
Pursuant to the PSCs of North West Sitra in Egypt, the Company had a minimum financial commitment of $10.0 million and a work commitment for two wells and 300 square kilometers of 3-D seismic during the initial three-and-a-half year exploration period, which commenced on January 8, 2015. The Company requested and received a six month extension of the initial exploration period to January 7, 2019. The Company met its financial and operating commitments and based on well results did not elect to enter the second exploration phase. The concession was relinquished in Q2-2019.
Pursuant to the approved South Ghazalat development lease, the Company is committed to drill one exploration well during the initial four year period of the 20 year development lease. The Company has issued a production guarantee in the amount of $1 million which will be released when the commitment well has been drilled.
In the normal course of its operations, the Company may be subject to litigation and claims. Although it is not possible to estimate the extent of
potential costs, if any, management believes that the ultimate resolution of such contingencies would not have a material adverse impact on the
results of operations, financial position or liquidity of the Company.
The Company is not aware of any material provisions or other contingent liabilities as at September 30, 2019.
14. SHARE CAPITAL
Authorized
The Company is authorized to issue an unlimited number of common shares with no par value.
Issued
Nine Months Ended | Year Ended | |||||||||||
September 30, 2019 | December 31, 2018 | |||||||||||
(000s) | Shares | Amount ($) | Shares | Amount ($) | ||||||||
Balance, beginning of period | 72,206 | 152,084 | 72,206 | 152,084 | ||||||||
Stock options exercised | 337 | 547 | — | — | ||||||||
Contributed surplus re-class on exercise | — | 174 | — | — | ||||||||
Balance, end of period | 72,543 | 152,805 | 72,206 | 152,084 |
10 | Q3-2019 |
TRANSGLOBE ENERGY CORPORATION TSX & AIM: TGL NASDAQ: TGA |
15. SHARE-BASED PAYMENTS
Stock options
The following table summarizes information about the stock options outstanding and exercisable at the dates indicated:
Nine Months Ended | Year ended | |||||||||||
September 30, 2019 | December 31, 2018 | |||||||||||
(000s except per share amounts) | Number of Options | Weighted-average Exercise Price (C$) | Number of Options | Weighted-average Exercise Price (C$) | ||||||||
Options outstanding, beginning of period | 4,876 | 3.60 | 4,959 | 5.10 | ||||||||
Granted | 976 | 2.83 | 1,071 | 2.62 | ||||||||
Exercised | (337 | ) | 2.18 | — | — | |||||||
Expired | (1,034 | ) | 6.55 | (1,154 | ) | 9.13 | ||||||
Options outstanding, end of period | 4,481 | 2.86 | 4,876 | 3.60 | ||||||||
Options exercisable, end of period | 2,586 | 3.01 | 2,766 | 4.52 |
Compensation expense of $0.5 million was recorded in general and administrative expenses in the Condensed Consolidated Interim Statements of Earnings (Loss) and Comprehensive Income (Loss) and Contributed Surplus during the nine month period ended September 30, 2019 (September 30, 2018 - $0.7 million) for equity-settled share-based payment transactions. The fair value of all common stock options granted is estimated on the date of grant using the lattice-based trinomial option pricing model.
All options granted vest annually in equal installments over a three-year period and expire five years after the grant date. During the nine month period ended September 30, 2019 employees exercised 337,000 stock options (September 30, 2018 - nil). The fair value related to these options was $0.5 million at the time of grant and has been transferred from contributed surplus to share capital. As at September 30, 2019 and December 31, 2018, the entire balance in contributed surplus related to previously recognized share-based compensation expense on equity-settled stock options.
Restricted share unit ("RSU"), performance share unit ("PSU") and deferred share unit ("DSU") plans
The number of RSUs, PSUs and DSUs outstanding as at September 30, 2019 are as follows:
(000s) | RSU | PSU | DSU | |||||
Units outstanding, beginning of period | 864 | 1,683 | 828 | |||||
Granted | 386 | 529 | 190 | |||||
Vested / released | (336 | ) | (636 | ) | (454 | ) | ||
Forfeited | (70 | ) | (13 | ) | — | |||
Expired | (15 | ) | — | — | ||||
Reinvested | 41 | 77 | 25 | |||||
Units outstanding, end of period | 870 | 1,640 | 589 |
During the nine month period ended September 30, 2019, compensation expense of $1.3 million (September 30, 2018 - $4.6 million) was recorded in general and administrative expenses in net earnings (loss) for share units granted under the three plans described above. The expense related to the share units granted under these plans is measured at fair value using the lattice-based trinomial option pricing model and is recognized over the vesting period, with a corresponding liability recognized in the Condensed Consolidated Interim Balance Sheets. Until the liability is ultimately settled, it is re-measured at each reporting date with changes to fair value recognized in net earnings (loss).
16. PER SHARE AMOUNTS
The basic weighted-average number of common shares outstanding for the three and nine months ended September 30, 2019 was 72,542,071 (September 30, 2018 - 72,205,369) and 72,504,081 (September 30, 2018 - 72,205,369), respectively. The diluted weighted-average number of common shares outstanding for the three and nine months ended September 30, 2019 was 72,542,071 (September 30, 2018 - 73,951,085) and 72,509,233 (September 30, 2018 - 73,124,103), respectively. These outstanding share amounts were used to calculate net earnings (loss) per share in the respective periods.
In determining diluted net earnings (loss) per share, the Company assumes that the proceeds received from the exercise of “in-the-money” stock options are used to repurchase common shares at the average market price. In calculating the weighted-average number of diluted common shares outstanding for the period ended September 30, 2019, the Company excluded 2,653,284 stock options (September 30, 2018 – 1,640,000) as their exercise price was greater than the average common share market price in the period.
17. DIVIDENDS
During the nine months ended September 30, 2019, the Company paid a dividend of $0.035 per share ($2.5 million) on September 13, 2019 to shareholders of record on August 30, 2019, and $0.035 per share ($2.5 million) on April 18, 2019 to shareholders of record on March 29, 2019.
Q3-2019 | 11 |
TRANSGLOBE ENERGY CORPORATION TSX & AIM: TGL NASDAQ: TGA |
18. SEGMENTED INFORMATION
The Company has two reportable operating segments for the three and nine months ended September 30, 2019 and 2018: the Arab Republic of Egypt and Canada. The Company, through its operating segments, is engaged primarily in oil exploration, development and production and the acquisition of oil and gas properties. In presenting information on the basis of operating segments, segment revenue is based on the geographical location of assets which is also consistent with the location of the segment customers. Segmented assets are also based on the geographical location of the assets. There are no inter-segment sales. The accounting policies of the operating segments are the same as the Company’s accounting policies.
Three Months Ended September 30 | ||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||
($000s) | Egypt | Canada | Corporate | Total | ||||||||||||||||||||
Revenue | ||||||||||||||||||||||||
Oil sales | 59,900 | 68,861 | 3,060 | 3,131 | — | — | 62,960 | 71,992 | ||||||||||||||||
Natural gas sales | — | — | 365 | 528 | — | — | 365 | 528 | ||||||||||||||||
Natural gas liquids sales | — | — | 1,063 | 1,825 | — | — | 1,063 | 1,825 | ||||||||||||||||
Less: royalties | (32,726 | ) | (31,278 | ) | (462 | ) | (614 | ) | — | — | (33,188 | ) | (31,892 | ) | ||||||||||
Petroleum and natural gas sales, net of royalties | 27,174 | 37,583 | 4,026 | 4,870 | — | — | 31,200 | 42,453 | ||||||||||||||||
Finance revenue | — | 27 | — | — | 85 | 153 | 85 | 180 | ||||||||||||||||
Total segmented revenue | 27,174 | 37,610 | 4,026 | 4,870 | 85 | 153 | 31,285 | 42,633 | ||||||||||||||||
Segmented expenses | ||||||||||||||||||||||||
Production and operating | 9,821 | 10,677 | 1,743 | 1,565 | — | — | 11,564 | 12,242 | ||||||||||||||||
Selling costs | 76 | 527 | — | — | — | — | 76 | 527 | ||||||||||||||||
General and administrative | 1,411 | 1,133 | 168 | 345 | 2,523 | 3,626 | 4,102 | 5,104 | ||||||||||||||||
Foreign exchange (gain) loss | — | 26 | — | 268 | (67 | ) | (78 | ) | (67 | ) | 216 | |||||||||||||
Finance costs | 913 | (2,474 | ) | 109 | 104 | 8 | 3,592 | 1,030 | 1,222 | |||||||||||||||
Depletion, depreciation and amortization | 6,140 | 6,679 | 1,828 | 1,995 | 205 | 77 | 8,173 | 8,751 | ||||||||||||||||
Asset retirement obligation accretion | — | — | 51 | 72 | — | — | 51 | 72 | ||||||||||||||||
(Gain) loss on financial instruments | (2,504 | ) | 5,725 | — | — | — | — | (2,504 | ) | 5,725 | ||||||||||||||
Impairment (recovery) loss | (409 | ) | 14,138 | — | — | — | — | (409 | ) | 14,138 | ||||||||||||||
Gain on disposition of assets | — | — | (114 | ) | (5 | ) | — | — | (114 | ) | (5 | ) | ||||||||||||
Income tax expense | 6,416 | 6,924 | — | — | — | — | 6,416 | 6,924 | ||||||||||||||||
Segmented net earnings (loss) | 5,310 | (5,745 | ) | 241 | 526 | (2,584 | ) | (7,064 | ) | 2,967 | (12,283 | ) | ||||||||||||
Capital expenditures | ||||||||||||||||||||||||
Exploration and development | 4,579 | 10,113 | 4,659 | 2,636 | — | — | 9,238 | 12,749 | ||||||||||||||||
Corporate | — | — | — | — | 54 | 34 | 54 | 34 | ||||||||||||||||
Total capital expenditures | 4,579 | 10,113 | 4,659 | 2,636 | 54 | 34 | 9,292 | 12,783 |
12 | Q3-2019 |
TRANSGLOBE ENERGY CORPORATION TSX & AIM: TGL NASDAQ: TGA |
Nine Months Ended September 30 | ||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||
($000s) | Egypt | Canada | Corporate | Total | ||||||||||||||||||||
Revenue | ||||||||||||||||||||||||
Oil sales | 198,378 | 209,310 | 10,935 | 9,356 | — | — | 209,313 | 218,666 | ||||||||||||||||
Natural gas sales | — | — | 1,815 | 1,975 | — | — | 1,815 | 1,975 | ||||||||||||||||
Natural gas liquids sales | — | — | 3,600 | 5,875 | — | — | 3,600 | 5,875 | ||||||||||||||||
Less: royalties | (101,520 | ) | (88,624 | ) | (1,585 | ) | (2,270 | ) | — | — | (103,105 | ) | (90,894 | ) | ||||||||||
Petroleum and natural gas sales, net of royalties | 96,858 | 120,686 | 14,765 | 14,936 | — | — | 111,623 | 135,622 | ||||||||||||||||
Finance revenue | 25 | 77 | — | — | 376 | 322 | 401 | 399 | ||||||||||||||||
Total segmented revenue | 96,883 | 120,763 | 14,765 | 14,936 | 376 | 322 | 112,024 | 136,021 | ||||||||||||||||
Segmented expenses | ||||||||||||||||||||||||
Production and operating | 30,003 | 34,344 | 5,504 | 5,838 | — | — | 35,507 | 40,182 | ||||||||||||||||
Selling costs | 649 | 1,653 | — | — | — | — | 649 | 1,653 | ||||||||||||||||
General and administrative | 4,503 | 3,659 | 571 | 871 | 7,669 | 12,153 | 12,743 | 16,683 | ||||||||||||||||
Foreign exchange (gain) loss | — | — | — | — | (122 | ) | 195 | (122 | ) | 195 | ||||||||||||||
Finance costs | 2,934 | — | 353 | 331 | 24 | 3,592 | 3,311 | 3,923 | ||||||||||||||||
Depletion, depreciation and amortization | 19,953 | 20,043 | 5,625 | 5,800 | 606 | 234 | 26,184 | 26,077 | ||||||||||||||||
Asset retirement obligation accretion | — | — | 156 | 205 | — | — | 156 | 205 | ||||||||||||||||
Loss on financial instruments | 1,426 | 28,190 | — | 296 | — | — | 1,426 | 28,486 | ||||||||||||||||
Impairment loss | 7,982 | 14,138 | — | — | — | — | 7,982 | 14,138 | ||||||||||||||||
Gain on disposition of assets | — | — | (114 | ) | (207 | ) | — | — | (114 | ) | (207 | ) | ||||||||||||
Income tax expense | 20,095 | 19,728 | — | — | — | — | 20,095 | 19,728 | ||||||||||||||||
Segmented net earnings (loss) | 9,338 | (992 | ) | 2,670 | 1,802 | (7,801 | ) | (15,852 | ) | 4,207 | (15,042 | ) | ||||||||||||
Capital expenditures | ||||||||||||||||||||||||
Exploration and development | 20,279 | 20,063 | 5,470 | 3,142 | — | — | 25,749 | 23,205 | ||||||||||||||||
Corporate | — | — | — | — | 187 | 68 | 187 | 68 | ||||||||||||||||
Total capital expenditures | 20,279 | 20,063 | 5,470 | 3,142 | 187 | 68 | 25,936 | 23,273 |
The carrying amounts of reportable segment assets and liabilities are as follows:
As at September 30, 2019 | As at December 31, 2018 | |||||||||||||||||
($000s) | Egypt | Canada | Total | Egypt | Canada | Total | ||||||||||||
Assets | ||||||||||||||||||
Accounts receivable | 22,273 | 2,089 | 24,362 | 9,031 | 2,525 | 11,556 | ||||||||||||
Derivative commodity contracts | 983 | — | 983 | 1,369 | — | 1,369 | ||||||||||||
Intangible exploration and evaluation assets | 28,598 | 530 | 29,128 | 35,735 | 531 | 36,266 | ||||||||||||
Property and equipment | ||||||||||||||||||
Petroleum and natural gas assets | 121,859 | 76,082 | 197,941 | 123,043 | 72,220 | 195,263 | ||||||||||||
Other assets | 2,693 | 16 | 2,709 | 2,222 | 22 | 2,244 | ||||||||||||
Other | 38,563 | 3,047 | 41,610 | 58,518 | 1,296 | 59,814 | ||||||||||||
Deferred taxes | 9,714 | 9,714 | 4,523 | — | 4,523 | |||||||||||||
Segmented assets | 224,683 | 81,764 | 306,447 | 234,441 | 76,594 | 311,035 | ||||||||||||
Non-segmented assets | 6,207 | 7,261 | ||||||||||||||||
Total assets | 312,654 | 318,296 | ||||||||||||||||
Liabilities | ||||||||||||||||||
Accounts payable and accrued liabilities | 12,545 | 5,523 | 18,068 | 13,407 | 8,010 | 21,417 | ||||||||||||
Long-term debt | 34,407 | 7,319 | 41,726 | 44,134 | 8,221 | 52,355 | ||||||||||||
Asset retirement obligation | — | 13,938 | 13,938 | — | 12,113 | 12,113 | ||||||||||||
Lease obligations | 985 | 324 | 1,309 | — | — | — | ||||||||||||
Deferred taxes | 9,714 | — | 9,714 | 4,523 | — | 4,523 | ||||||||||||
Segmented liabilities | 57,651 | 27,104 | 84,755 | 62,064 | 28,344 | 90,408 | ||||||||||||
Non-segmented liabilities | 6,188 | 7,597 | ||||||||||||||||
Total liabilities | 90,943 | 98,005 |
Q3-2019 | 13 |
TRANSGLOBE ENERGY CORPORATION TSX & AIM: TGL NASDAQ: TGA |
19. SUPPLEMENTAL CASH FLOW INFORMATION
Changes in non-cash working capital consisted of the following:
Three Months Ended | Nine Months Ended | |||||||||||
September 30 | September 30 | |||||||||||
($000s) | 2019 | 2018 | 2019 | 2018 | ||||||||
Operating activities | ||||||||||||
(Increase) decrease in current assets | ||||||||||||
Accounts receivable | 1,671 | 30,558 | (12,830 | ) | 7,158 | |||||||
Prepaids and other | (1,167 | ) | 427 | 1,043 | 1,101 | |||||||
Product inventory | (3,354 | ) | (666 | ) | (6,674 | ) | 1,371 | |||||
Increase (decrease) in current liabilities | ||||||||||||
Accounts payable and accrued liabilities | 5,380 | (791 | ) | (3,783 | ) | (5,793 | ) | |||||
Other long-term liabilities | 83 | 1,093 | (360 | ) | 1,093 | |||||||
Total changes in non-cash working capital | 2,613 | 30,621 | (22,604 | ) | 4,930 | |||||||
Investing activities | ||||||||||||
(Increase) decrease in current assets | ||||||||||||
Prepaids and other | — | 3 | 4 | — | ||||||||
Increase (decrease) in current liabilities | ||||||||||||
Accounts payable and accrued liabilities | (2,177 | ) | 3,226 | (2,482 | ) | 2,594 | ||||||
Total changes in non-cash working capital | (2,177 | ) | 3,229 | (2,478 | ) | 2,594 | ||||||
Financing activities | ||||||||||||
Decrease in current liabilities | ||||||||||||
Other liabilities | — | (3 | ) | (200 | ) | (3 | ) | |||||
Total changes in non-cash working capital | — | (3 | ) | (200 | ) | (3 | ) |
14 | Q3-2019 |