Funding for the Company's capital expenditures was provided by funds flow from operations. The Company expects to fund its 2013 exploration and development program of $129.0 million and contractual commitments through the use of working capital and cash generated by operating activities. Fluctuations in commodity prices, product demand, foreign exchange rates, interest rates and various other risks including timely collections of accounts receivable from the Egyptian Government may impact capital resources.
Working capital is the amount by which current assets exceed current liabilities. At March 31, 2013, the Company had working capital of $278.0 million (December 31, 2012 - $262.2 million). The increase to working capital in Q1-2013 is due almost entirely to increased cash and cash equivalents, partially offset by a decrease in accounts receivable. The majority of the Company's accounts receivable are due from Egyptian General Petroleum Company ("EGPC"), and the recent political changes in the country have increased EGPC's credit risk, which has increased the Company's credit risk. The Company is in continual discussions with EGPC and the Egyptian Government to determine solutions to the delayed cash collections, and expects to recover the entire accounts receivable balance in full. During the first quarter of 2013, collections of accounts receivable outpaced billings, resulting in a net decrease in accounts receivable from Q4-2012 to Q1-2013 of $16.4 million.
At March 31, 2013, TransGlobe had $71.0 million available under a Borrowing Base Facility of which $18.5 million was drawn. As repayments on the Borrowing Base Facility are not expected to commence until the second quarter of 2014, the entire balance is presented as a long-term liability on the Condensed Consolidated Interim Balance Sheets. Repayments will be made as required according to the scheduled reduction of the facility.
($000s) March 31, 2013 December 31, 2012--------------------------------------------------------------------------------------------------------------------------------------------------------Bank debt 18,450 18,450Deferred financing costs (1,353) (1,565)----------------------------------------------------------------------------Long-term debt (net of deferred financing costs) 17,097 16,885--------------------------------------------------------------------------------------------------------------------------------------------------------
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:
($000s) Payment Due by Period (1)(2)---------------------------------------------------------------------------- Recognized Less More in Financial Contractual than 1-3 4-5 than Statements Cash Flows 1 year years years 5 years--------------------------------------------------------------------------------------------------------------------------------------------------------Accounts payable and accrued Yes - liabilities Liability 45,145 45,145 - - -Long-term debt Yes - Liability 18,450 - 18,450 - -Convertible Yes - debentures Liability 93,842 - - 93,842 -Office and equipment leases (3) No 14,851 7,424 2,978 2,062 2,387Minimum work commitments (4) No 4,350 4,350 - - -----------------------------------------------------------------------------Total 176,638 56,919 21,428 95,904 2,387--------------------------------------------------------------------------------------------------------------------------------------------------------(1) Payments excluding ongoing operating costs, finance costs and payments made to settle derivatives.(2) Payments denominated in foreign currencies have been translated at March 31, 2013 exchange rates.(3) Office and equipment leases includes all drilling rig contracts(4) Minimum work commitments include contracts awarded for capital projects and those commitments related to exploration and drilling obligations
