Featured on INK Research insider reportsOverview: Sentiment and Stocks With Brent crude oil trading above US$50 per barrel on Thursday, this is a good time to look at TransGlobe Energy (TGL) which produces most of its crude oil in Egypt. TransGlobe's Q3 production averaged 12,044 barrels of oil equivalent per day with Egypt accounting for 9,812 boe/d (100% oil) and the remainder coming from Canada (2,232 boe/d, about 30% oil). TGL shares soared after its December 3rd announcement that it had reached a deal with the Egyptian General Petroleum Company to merge three existing concessions into a new merged concession agreement. Key elements of the deal include oil pricing terms scaled to support TransGlobe's returns during lower oil prices and government returns during higher oil prices. The new pricing schedule will be effective February 2020, conditional on final closing approvals. The agreement spans 15 years plus an option for another five years. TransGlobe believes that the combination of the new pricing formula plus a long-term arrangement will allow it to invest in new projects and technologies to help drive production and environmental sustainability. Importantly, TransGlobe believes its new investment projects can arrest the historical production declines (about 22% per year), providing a base of stable production and cash flow. It now has its eye on providing direct returns to shareholders, as soon as practicable. Insiders appear to be anticipating more prosperous days ahead, having bought more shares in the public market since the concession agreement news hit the wires.
From December 4th to December 8th, three TransGlobe Energy (TGL) insiders have bought a total of 131,600 common shares on a direct ownership basis at an average price of $0.98. The most recent purchase was from Vice President of Finance and CFO Edward Ok who picked up 50,000 common shares on a direct ownership basis at US$0.84 on December 4th. Mr. Ok is the fourth-largest insider equity holder at the company with 0.13% of shares outstanding. TransGlobe Energy currently holds a sunny INK Edge outlook on the equally weighted V.I.P. criteria of valuations, insider commitment and price momentum which places it in the top 10% of all stocks ranked. INK outlook categories are designed to identify groups of stocks that have the potential to out or underperform the market. However, any individual stock could surprise on the up or downside. As such, outlook categories are not meant to be stock-specific recommendations. For background on our INK Edge outlook, please watch our short video or visit our FAQ #5 at INKResearch.com.
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