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The 2013 capital program is split 58:42 between development and exploration, respectively. The Company planned to participate in 51 wells in 2013. It is anticipated that the Company will fund its 2013 capital budget from funds flow from operations and working capital.
The Company has begun a process to divest its Yemen assets in 2013.
ADDITIONAL MEASURES
Funds Flow from Operations
This document contains the term "funds flow from operations", which should not be considered an alternative to or more meaningful than "cash flow from operating activities" as determined in accordance with IFRS. Funds flow from operations is a measure that represents cash generated from operating activities before changes in non-cash working capital. Management considers this a key measure as it demonstrates TransGlobe's ability to generate the cash flow necessary to fund future growth through capital investment. Funds flow from operations may not be comparable to similar measures used by other companies.
Reconciliation of Funds Flow from Operations
Three months ended March 31----------------------------------------------------------------------------($000s) 2013 2012--------------------------------------------------------------------------------------------------------------------------------------------------------Cash flow from operating activities 51,900 1,771Changes in non-cash working capital (15,895) 34,317----------------------------------------------------------------------------Funds flow from operations(i) 36,005 36,088--------------------------------------------------------------------------------------------------------------------------------------------------------(i) Funds flow from operations does not include interest costs. Interest expense is included in financing costs on the Condensed Consolidated Interim Statements of Earnings and Comprehensive Income. Cash interest paid is reported as a financing activity on the Condensed Consolidated Interim Statements of Cash Flows.
Debt-to-funds flow ratio
Debt-to-funds flow is a measure that is used to set the amount of capital in proportion to risk. The Company's debt-to-funds flow ratio is computed as long-term debt, including the current portion, plus convertible debentures over funds flow from operations for the trailing twelve months. Debt-to-funds flow may not be comparable to similar measures used by other companies.
Netback
Netback is a measure that represents sales net of royalties (all government interests, net of income taxes), operating expenses and current taxes. Management believes that netback is a useful supplemental measure to analyze operating performance and provide an indication of the results generated by the Company's principal business activities prior to the consideration of other income and expenses. Netback may not be comparable to similar measures used by other companies.
TRANSGLOBE'S BUSINESS
TransGlobe is a Canadian-based, publicly traded, oil exploration and production company whose activities are concentrated in two main geographic areas: the Arab Republic of Egypt ("Egypt") and the Republic of Yemen ("Yemen").
SELECTED QUARTERLY FINANCIAL INFORMATION
2013 2012----------------------------------------------------------------------------($000s, except per share,price and volume amounts) Q-1 Q-4 Q-3 Q-2 Q-1----------------------------------------------------------------------------Average production volumes (Bopd) 18,001 17,875 18,143 16,978 16,720Average sales volumes (Bopd) 17,909 19,148 17,124 16,978 16,720Average price ($/Bbl) 99.21 98.70 96.88 95.84 104.78Oil sales 159,915 173,864 152,624 148,078 159,426Oil sales, net of royalties 79,366 92,281 74,540 73,633 77,212Cash flow from operating activities 51,900 65,250 2,368 24,603 1,771Funds flow from operations(i) 36,005 46,839 35,397 35,174 36,088Funds flow from operations per share - Basic 0.49 0.63 0.49 0.48 0.49 - Diluted 0.44 0.57 0.47 0.43 0.48Net earnings 24,878 34,836 11,774 30,149 10,975Net earnings - diluted 21,427 32,156 11,774 20,821 10,975Net earnings per share - Basic 0.34 0.48 0.16 0.41 0.15 - Diluted 0.26 0.39 0.16 0.25 0.15Total assets 672,675 653,425 635,529 620,937 648,012Cash and cash equivalents 112,180 82,974 45,732 72,230 127,313Convertible debentures 93,842 98,742 102,920 95,043 105,835Total long-term debt, including current portion 17,097 16,885 31,878 37,855 57,910Debt-to-funds flow ratio(ii) 0.7 0.8 1.0 1.0 1.2---------------------------------------------------------------------------- 2011----------------------------------------------------------------------------($000s, except per share,price and volume amounts) Q-4 Q-3 Q-2----------------------------------------------------------------------------Average production volumes (Bopd) 12,054 13,406 11,826Average sales volumes (Bopd) 12,054 13,406 11,826Average price ($/Bbl) 99.12 104.00 105.57Oil sales 109,919 128,265 113,615Oil sales, net of royalties 60,609 71,769 62,513Cash flow from operating activities 2,330 3,456 54,354Funds flow from operations(i) 26,469 37,980 30,597Funds flow from operations per share - Basic 0.36 0.52 0.42 - Diluted 0.35 0.51 0.40Net earnings 30,519 26,110 21,874Net earnings - diluted 30,519 26,110 21,874Net earnings per share - Basic 0.42 0.36 0.30 - Diluted 0.41 0.35 0.29Total assets 525,806 465,262 420,956Cash and cash equivalents 43,884 105,007 122,659Convertible debentures - - -Total long-term debt, including current portion 57,609 57,303 56,998Debt-to-funds flow ratio(ii) 0.5 0.5 0.6----------------------------------------------------------------------------(i) Funds flow from operations is a measure that represents cash generated from operating activities before changes in non-cash working capital and may not be comparable to measures used by other companies.(ii) Debt-to-funds flow ratio is measure that represents total long-term debt (including the current portion) plus convertible debentures over funds flow from operations from the trailing 12 months and may not be comparable to measures used by other companies.
